Palace Scenery Construction grew revenue 105.2% while operations burned cash

Palace Scenery Construction, a UK company, grew revenue by 105.2% to GBP 85.7m in FY2026, up from GBP 41.8m. Operating profit rose to GBP 5.9m and net profit to GBP 4.4m. The cash flow statement tells a different story: operations used GBP -5.6m over the same year. Cash on the balance sheet still rose to GBP 11.4m from GBP 7.9m, so the money came from somewhere other than trading.

A gap like this is common when sales double. Receivables and work in progress grow before customers pay, and revenue booked on contracts can run ahead of billing. Margins also thinned: operating margin fell to 6.8% from 8.7%, and the equity ratio slipped to 78.0%. Headcount grew to 193 from 104, and personnel costs reached GBP 20.7m. I would watch the cash line next year, because profit that has not yet arrived as cash is still a promise from customers.