NetBuild Infrastructure Limited: When Growth Becomes a Cash Trap

Client profile

NetBuild Infrastructure Limited is a Nairobi-based company delivering fibre rollout, tower maintenance, civil works, and enterprise connectivity for telecoms, ISPs, developers, and institutions.

Between 2022 and 2025 the order book grew quickly — but payroll slipped, suppliers tightened terms, tax exposure mounted, overdraft limits bit, and site progress lived on WhatsApp while finance lacked a reliable WIP schedule.

The pattern mirrors many project-based MSMEs: impressive turnover masking weak controls, slow collections, stock and WIP gaps, VAT risk, and permanent cash strain.

Directors believed they had a growth problem. In reality they had a financial control problem — distinguishing profit, cash, and net worth while breakeven, margin, and working capital went unmanaged.

March to June 2025

In March 2025 NetBuild won three major contracts: fibre rollout for a gated estate, network installation for a private university, and tower maintenance for a telecom subcontractor. Revenue rose — cash stretched.

By June 2025 payroll was delayed, suppliers threatened to stop deliveries, and the bank declined further overdraft support because management accounts were incomplete.

• Declining gross margins

  Discounting to win contracts pushed margin well below sustainable levels.

• Underpriced contracts

  Quotes did not reflect full labour, materials, transport, and variation risk.

• Rising labour & subcontractor costs

  Technician and subcontractor spend grew faster than priced revenue.

• Material wastage

  Fibre, poles, ducts, routers, and concrete works leaked margin on site.

• Weak project costing

  Finance could not tie spend to individual projects in real time.

• Uncontrolled variations

  Site changes were approved informally without margin impact analysis.

• Poor pricing discipline

  No minimum margin gate — busy work replaced profitable work.

• 60–120 day client cycles

  Major clients paid long after mobilisation and payroll deadlines.

• 14–30 day supplier cycles

  Suppliers demanded fast payment while receivables stretched for months.

• Uninvoiced WIP

  Completed work sat unbilled — cash trapped in progress, not invoices.

• Retention not tracked

  Retention balances were invisible until clients released them.

• Equipment ahead of cash

  Pickups and bulk fibre were bought before projects generated cash.

• VAT not ring-fenced

  Output VAT was charged but not separated — arrears risk mounted.

1. 1

   Phase 1

   Stabilize Cash — First 30 Days

   • Freeze non-essential purchases
   • Prepare a 13-week cash flow forecast
   • Ring-fence VAT and statutory deductions
   • Collect top 10 overdue debtors
   • Convert completed WIP into invoices
   • Renegotiate supplier terms
   • Pause new contracts below minimum margin
2. 2

   Phase 2

   Restore Control — 60 Days

   • Introduce project-level profit and loss reports
   • Create job cards for every project
   • Track labour, materials, subcontractors, transport, and variations
   • Approve procurement only against project budgets
   • Create debtor aging and collection dashboard
   • Set credit limits by client
   • Introduce weekly management accounts
3. 3

   Phase 3

   Controlled Growth — 90 Days

   • Set minimum gross margin at 28%
   • Use milestone billing
   • Negotiate advance payments of 20–40%
   • Lease equipment instead of buying where possible
   • Introduce project acceptance criteria
   • Build a board dashboard around profit, cash, working capital, and net worth

• Gross MarginMinimum 28%
• Debtor DaysBelow 45 days
• WIP DaysBelow 21 days
• Creditor Days45–60 days
• VAT Ring-Fenced100%
• Project ProfitabilityEvery project above 25% margin
• Overdraft DependenceReduce by 50% in 6 months
• Breakeven RevenueReduce from KSh 155M to below KSh 110M

• Question 1

  Is NetBuild growing profitably or just getting busier?

• Question 2

  Which projects create cash and which projects consume cash?

• Question 3

  Are debtors and WIP being managed as assets or ignored as paperwork?

• Question 4

  Is the company using bank overdraft to fund client delays?

• Question 5

  What level of growth can the balance sheet safely support?

• Question 6

  Should the company reject low-margin contracts even if they increase turnover?

• Control Spend

  Budgets, payables, procurement, and project spend discipline.

• Cashflow

  13-week forecasts, cash gaps, and collection rhythm.

• Portal

  Management accounts and board-ready finance packs.

• OKR

  Align growth targets with measurable financial outcomes.

• Sustainability

  Long-term balance sheet health beyond the order book.

“Our order book looked great while payroll slipped. ClariFi made us see we were funding clients with our overdraft.”

“The 28% margin gate was uncomfortable for two months — then it stopped the busy-fool projects.”

“Once WIP was tracked weekly, we converted KSh 18M of completed work into invoices in a single quarter.”