AJD PLUMBING AND HEATING LTD

Executive Summary

AJD Plumbing and Heating Ltd operates in plumbing and heating installation but faces significant financial risks marked by persistent negative working capital and minimal net assets. Despite maintaining regulatory compliance and tangible assets, the company's liquidity position and reliance on creditors raise concerns about its ability to meet obligations and sustain operations without intervention. Further investigation into debtor quality, creditor terms, and cash flow projections is recommended to clarify risk exposure.

AJD PLUMBING AND HEATING LTD - Analysis Report

Company Number: 13828014

Analysis Date: 2025-07-29 18:46 UTC

1. Risk Rating: HIGH

   Justification: AJD Plumbing and Heating Ltd exhibits significant solvency and liquidity concerns, with net current liabilities persisting and a very low net asset base. The company is in an early stage of operation with minimal equity, negative working capital, and outstanding long-term creditor balances that indicate financial stress.

2. Key Concerns:

   • Negative Net Current Assets: As of 31 March 2024, the company had net current liabilities of £4,117 and previous years showed similar or worsening positions, suggesting ongoing cash flow and short-term liquidity problems.
   • Minimal Net Assets and Equity: Net assets stand at only £89, marginally above zero, which provides little buffer to absorb losses or meet unforeseen obligations.
   • Significant Long-Term Creditors: The company carries £10,383 in creditors due after one year, highlighting reliance on external financing or deferred obligations that may strain future cash flows.

3. Positive Indicators:

   • Compliance with Filing Requirements: The company is up to date with its accounts and confirmation statement filings, indicating good regulatory compliance and governance.
   • Single Director Ownership: Full control by a single director, Ashley James David Danahy, may enable agile decision-making and clear accountability.
   • Tangible Fixed Assets: The company holds £14,589 in tangible fixed assets, which could provide some collateral or operational capacity.

4. Due Diligence Notes:

   • Examine Debtor Quality and Collectability: Debtors increased to £12,323 in 2024, which represents a significant proportion of current assets. Assess aging and recoverability of these receivables to determine liquidity risk.
   • Review Creditor Terms and Financing Arrangements: Investigate the nature and terms of the long-term creditors (£10,383) and short-term liabilities to understand repayment schedules and any potential refinancing risks.
   • Evaluate Cash Flow Forecasts and Business Model Sustainability: Given limited cash on hand (£10) and negative working capital, detailed cash flow analysis and business viability assessment are critical.
   • Confirm No Director or Regulatory Issues: While no disqualifications are noted, confirm the director's background and any contingent liabilities or disputes that may affect operational stability.

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