DJC HEATING SOLUTIONS LIMITED

Executive Summary

DJC Heating Solutions Limited demonstrates ongoing solvency with positive net assets and working capital; however, the significant decline in net assets and cash balances alongside increased finance lease debt raises moderate concerns regarding liquidity and operational sustainability. The company maintains good regulatory compliance and shows signs of operational activity growth, but further analysis of profitability and debt servicing capacity is recommended to fully assess risk.

DJC HEATING SOLUTIONS LIMITED - Analysis Report

Company Number: 13163382

Analysis Date: 2025-07-20 12:22 UTC

1. Risk Rating: MEDIUM
   The company shows positive net assets and working capital, indicating solvency, but a significant decline in net assets and cash balances in the latest year coupled with substantial finance lease liabilities presents moderate risk to liquidity and operational stability.

2. Key Concerns:

• Declining Net Assets: Net assets decreased from £66,470 (2024) to £38,083 (2025), a substantial drop (approx. 43%) in one year, which may indicate operating losses or asset impairments.
• Liquidity Reduction: Cash reserves fell markedly from £50,703 to £35,473, while current liabilities remained fairly stable, reducing liquidity cushion.
• Significant Finance Lease Obligations: Total finance lease liabilities (current + long term) increased to nearly £40k, representing a material debt burden relative to asset size, which may pressure cash flows.

3. Positive Indicators:

• Positive Net Current Assets: Despite decreases, net current assets remain positive (£15,364), indicating the company can meet short-term liabilities.
• Consistent Filing and Compliance: Accounts and confirmation statements are up to date with no overdue filings, suggesting good regulatory compliance.
• Growing Employee Base: Increase from 2 to 3 employees suggests potential business growth or operational scaling.

4. Due Diligence Notes:

• Investigate the cause of the sharp net asset and cash decline in the latest year — review profit and loss details and any extraordinary expenses or asset write-downs.
• Assess terms and impact of finance lease obligations on cash flow and whether these are sustainable.
• Review debtor aging and collectability given the drop in trade debtors from £10,797 to £2,725.
• Confirm completeness of financial information, as the profit and loss account was not filed publicly (common for small companies but restricts insight).
• Verify ownership and director integrity, noting that directors are recently appointed and no disqualifications or governance issues are evident from provided data.