EJC CONTRACTS (PAYROLL) LIMITED

Executive Summary

Ejc Contracts (Payroll) Limited demonstrates compliance with filing requirements and an improving working capital position; however, liquidity is constrained by negligible cash balances and reliance on debtors. The minimal equity base and frequent director and control changes suggest potential governance and capitalization vulnerabilities. Further analysis of debtor quality and governance structure is recommended to fully assess financial stability and operational sustainability.

EJC CONTRACTS (PAYROLL) LIMITED - Analysis Report

Company Number: NI678029

Analysis Date: 2025-07-29 18:02 UTC

1. Risk Rating: MEDIUM
   The company shows a modest positive net current asset position for 2023, but with minimal cash on hand and a negligible shareholder equity base. The reliance on debtors as current assets and recurring changes in corporate control raise some concerns.

2. Key Concerns:

• Liquidity Risk: Cash balances are extremely low (£1), indicating potential difficulties meeting immediate obligations despite positive net current assets mainly driven by debtors, which may not be readily collectible.
• Minimal Equity and Capitalization: Share capital and shareholders’ funds remain at £1, suggesting very limited capital buffer to absorb losses or support growth.
• Frequent Changes in Control and Directors: Multiple corporate directors and director appointments/resignations in a short time frame could indicate instability in governance or ownership structure.

3. Positive Indicators:

• Timely Filing and Compliance: No overdue filings for accounts or confirmation statements reflect good regulatory compliance and governance discipline.
• Improved Working Capital Position: Net current assets improved from negative in 2022 to a positive £4,425 in 2023, indicating some operational improvement.
• Exemption from Audit: Qualification as a small company under FRS 102 and exemption from audit reduces administrative burden and cost.

4. Due Diligence Notes:

• Verify the quality and collectability of the £87,619 debtor balance, as it represents the majority of current assets.
• Investigate the cash flow cycle and working capital management to understand how liquidity is maintained with minimal cash.
• Review the rationale and implications behind frequent changes of corporate directors and PSC entities to assess governance stability and control risks.
• Confirm whether the defined benefit pension liability noted in 2023 has any material impact on future cash flows or solvency.