AJ'S MOBILE VALETING SERVICES LTD

Executive Summary

AJ's Mobile Valeting Services Ltd shows concerning financial deterioration in the latest accounts with negative net assets and working capital, driven by a sharp rise in borrowings and operating losses despite revenue growth. While compliance and asset investment are positive factors, significant liquidity and solvency risks merit detailed due diligence on debt structure and cash flow sustainability to assess ongoing viability.

AJ'S MOBILE VALETING SERVICES LTD - Analysis Report

Company Number: 12796670

Analysis Date: 2025-07-20 11:54 UTC

1. Risk Rating: HIGH
   The company exhibits significant financial distress indicators, including negative net assets and a large increase in borrowings leading to a negative working capital position. These factors present a high solvency and liquidity risk.

2. Key Concerns:

• Negative Net Assets and Shareholders' Deficit: As at 31 August 2024, net assets stand at -£1,336, a deterioration from a positive £6,160 the previous year. This indicates the company’s liabilities exceed its assets, signaling solvency concerns.
• Negative Net Current Assets (Working Capital): The company’s current liabilities (£14,503) exceed current assets (£9,180) by £5,323, worsening from a positive £602 net current asset position in 2023. This implies potential liquidity issues to meet short-term obligations.
• Sharp Increase in Borrowings: Total borrowings have escalated from £2,515 in 2023 to £27,393 in 2024 (current and non-current combined), including substantial non-current loans of £17,681. The interest expense has also increased notably, leading to operating losses and an overall loss before tax of £7,496 in 2024 compared to a modest profit previously.

3. Positive Indicators:

• Increasing Turnover: Turnover increased from £23,897 in 2023 to £33,862 in 2024, indicating growth in sales revenue.
• Asset Investment: There has been a significant increase in tangible fixed assets, especially motor vehicles (£19,912 net in 2024 vs £5,752 in 2023), which may support future operations and revenue generation.
• No Overdue Filings and Compliance: The company remains active, with no overdue accounts or confirmation statements, suggesting regulatory compliance is maintained.
• Single Shareholder with Full Control: The sole director and controlling shareholder (Mr. Anthony Lloyd Johnson) provides clear accountability and decision-making authority.

4. Due Diligence Notes:

• Investigate the nature and terms of the borrowings, particularly the large non-current loans, to assess repayment schedules, security, and interest terms.
• Review cash flow forecasts and management plans addressing the negative working capital and operating losses to understand going concern viability.
• Assess the collectability of the significant increase in "Other debtors" (£4,093 in 2024 vs £24 in 2023) and the adequacy of impairment provisions.
• Confirm the sustainability of revenue growth and margin trends given the increased administrative expenses and interest costs.
• Examine director’s statements or external auditor commentary (if any) on going concern and potential contingent liabilities.
• Consider the impact and risks of personal guarantees on borrowings provided by the director.