AJB COURIERS LTD

Executive Summary

AJB Couriers Ltd shows operational activity and staff growth but is currently financially fragile, with negative net assets and reliance on director loans. Conditional credit approval is advised, subject to stringent monitoring of liquidity, director support, and equity position. The company’s ability to manage cash flow and restore profitability will be key to sustainable creditworthiness.

AJB COURIERS LTD - Analysis Report

Company Number: 12587113

Analysis Date: 2025-07-20 17:39 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   AJB Couriers Ltd is a micro private limited company operating in freight transport by road. The company shows signs of financial strain, with net liabilities of £402 as of May 2024, down from net assets of £4,543 the previous year. This deterioration, coupled with a significant director loan balance (£51,476), indicates reliance on shareholder support to maintain operations. However, the company remains active, files accounts on time, and has increased staff from 2 to 4, evidencing operational growth. Credit approval is recommended with conditions requiring close monitoring of liquidity, debt servicing ability, and director support continuation.

2. Financial Strength:
   The balance sheet reveals a decline in fixed assets (£23,921 from £28,069) and current assets (£28,543 from £43,228) year-on-year. Current liabilities have reduced to £20,696 but are offset by £40,000 of long-term creditors, resulting in net liabilities of £402. Shareholders’ funds have turned negative, reflecting accumulated losses or withdrawals exceeding retained earnings. The director loan balances are substantial and suggest the company depends on director advances to fund operations. Overall, financial strength is weak, with limited equity buffer and potential solvency concerns if external funding or director support ceases.

3. Cash Flow Assessment:
   Current assets include cash, debtors, and prepayments totaling £28,543 plus £8,340 in prepayments/accrued income. Current liabilities of £20,696 give positive net current assets of £16,187, indicating reasonable short-term liquidity. However, the high level of long-term creditors (£40,000) and director loans may pressure cash flows, especially if revenue streams fluctuate. The company’s ability to convert receivables to cash and manage payables prudently will be critical. Working capital is positive but declining compared to prior years, signaling cautious cash flow management is necessary.

4. Monitoring Points:

• Track changes in net assets and shareholder funds to detect further erosion of equity.
• Monitor director loan balances and assess the ongoing willingness and capacity of directors to support the company financially.
• Review timely payment of current liabilities and adherence to credit terms with suppliers.
• Observe operational cash flows and profitability once full P&L data becomes available.
• Watch employee growth and cost control as indicators of business scalability and financial discipline.