AJA STEELWORKS LTD

Executive Summary

AJA Steelworks Ltd demonstrates a stable equity base and positive working capital, supported by compliant regulatory filings. However, a marked reduction in cash balances alongside director loan activity suggests potential liquidity management issues. Concentrated ownership and control highlight governance considerations for investors.

AJA STEELWORKS LTD - Analysis Report

Company Number: 13224688

Analysis Date: 2025-07-19 12:13 UTC

1. Risk Rating: MEDIUM
   The company shows positive net assets and net current assets with no overdue filings, which supports operational continuity and regulatory compliance. However, the low cash balance relative to debtors and the presence of director loans indicate potential liquidity constraints that warrant caution.

2. Key Concerns:

• Liquidity Risk: Cash at bank decreased significantly from £11,487 in 2023 to £1,252 in 2024, despite stable current assets, suggesting potential cash flow pressures.
• Concentration of Control: The majority shareholding (75-100%) and voting rights are held by a single individual (Mr. Anthony Fedelmesi), which may pose governance risks for external investors.
• Director Loan Account Activity: The director loan account saw large advances and repayments, with a balance of £3,953 at year end. Frequent director loans can indicate funding reliance on insiders rather than external financing.

3. Positive Indicators:

• Positive Working Capital: Net current assets improved from £25,666 in 2023 to £31,471 in 2024, indicating the company can cover short-term liabilities.
• Profitability and Growth in Equity: Shareholders’ funds increased from £30,578 to £35,435, showing retained earnings growth and strengthening equity base.
• Timely Regulatory Compliance: No overdue accounts or confirmation statements were noted, suggesting good compliance and governance practices.

4. Due Diligence Notes:

• Review detailed cash flow statements and debtor aging reports to assess the quality and collectability of trade receivables and the reasons behind reduced cash balances.
• Investigate the nature and terms of director loans and repayment schedules to understand financial reliance on directors.
• Evaluate the impact of the recent name change (from Fedz Steelworks & Construction Ltd to AJA Steelworks Ltd) on business operations and any related restructuring.
• Confirm any potential related party transactions given the family-connected directorship and shareholding structure.