ALJ PROPERTY MANAGEMENT LIMITED

Executive Summary

ALJ Property Management Limited demonstrates significant liquidity and solvency risks due to persistent negative working capital and substantial bank debt relative to cash reserves. While recent positive net assets and regulatory compliance are encouraging, the company’s ability to meet short-term liabilities and sustain operations requires further cash flow and loan covenant scrutiny. Investors should exercise caution and conduct detailed financial due diligence before engagement.

ALJ PROPERTY MANAGEMENT LIMITED - Analysis Report

Company Number: 12628789

Analysis Date: 2025-07-20 16:19 UTC

1. Risk Rating: HIGH
   The company shows persistent net current liabilities and substantial long-term debt, with current liabilities greatly exceeding cash balances. Despite recent improvement in net assets, liquidity pressures and high gearing indicate significant solvency and liquidity risk.

2. Key Concerns:

• Liquidity Shortfall: Cash on hand (£3,555) is minimal compared to current liabilities (£24,223), with net current assets negative (£-20,668), signaling a potential inability to meet short-term obligations.
• High Long-Term Debt: Bank loans of £230,737 represent a significant liability relative to the company’s net assets (£86,241), indicating high leverage and potential solvency risk if cash flows are insufficient.
• Negative Working Capital History: The company has reported negative net current assets for multiple years, reflecting ongoing operational cash flow challenges that may threaten sustainable operations.

3. Positive Indicators:

• Improvement in Net Assets: The company moved from negative shareholders’ funds in prior years to positive £86,241 as of January 2024, suggesting some recovery or capital injection.
• Active and Compliant: The company is active with no overdue filings, indicating good regulatory compliance and governance.
• Ownership and Control Transparency: The single director and beneficial owner are clearly identified, facilitating accountability.

4. Due Diligence Notes:

• Examine Cash Flow Statements: Detailed cash flow analysis is necessary to assess operational cash generation and ability to service debt.
• Review Bank Loan Terms: Investigate the maturity, covenants, and interest rates of the £230k bank loan to assess refinancing risk and repayment schedule.
• Investigate Related Party Transactions: The director’s advances and repayments should be reviewed for any financial support or risks associated with these balances.
• Assess Asset Valuation: Confirm the valuation basis of tangible fixed assets (£337,646) to ensure they reflect realizable values supporting the balance sheet strength.