Investment Risk Analysis: GJD Solutions Limited

1. Risk Rating: HIGH

The company is balance sheet insolvent with net liabilities of £208,037, has severe working capital deficiencies, and its continuation as a going concern is entirely dependent on the ongoing forbearance of creditors and directors. The financial trajectory shows consistent deterioration over multiple years.

2. Key Concerns

1. Balance Sheet Insolvency and Worsening Trajectory The company has been in a net liability position since at least FY2017 (with the exception of FY2020, which showed a brief positive position at £34,568). The deficit has accelerated significantly, growing from (£159,886) in FY2024 to (£208,037) in FY2025 – an increase of approximately £48,000 in accumulated losses. The retained losses now stand at (£208,137), wiping out the £100 share capital many times over. This is a deeply insolvent entity on paper.

2. Severe Liquidity Shortfall Current liabilities (£297,904) vastly exceed current assets (£159,743), resulting in net current liabilities of £138,161. The current ratio is approximately 0.54:1. Critically, £94,563 of current assets are held in stock – typically the least liquid current asset category. If stock is excluded, the quick ratio falls to approximately 0.22:1, meaning the company has only ~£65,000 in immediately realisable assets against nearly £298,000 due within one year.

3. Going Concern Dependency on Creditor Forbearance The accounts explicitly state the going concern basis relies on "the support of its directors and creditors." This is a material qualification. Bank loans of £63,826 are secured by personal guarantees from a director, and £51,389 is secured by a fixed and floating charge over company assets. The company's survival depends on creditors not enforcing their rights and directors continuing to provide financial support – neither of which can be guaranteed.

3. Positive Indicators

• Regulatory Compliance: Accounts and confirmation statements are filed on time with no overdue filings. The company has maintained its Active status throughout its 14-year history.

• Stable Cash Position: Despite the balance sheet deterioration, cash at bank has remained relatively consistent in the £42,000–£44,000 range over the past three years, suggesting some operational cash generation capability.

• Director Loan Account Cleared: The overdrawn director's loan of £17,312 reported in FY2024 has been fully repaid by FY2025, with interest charged at HMRC's official rate. This demonstrates some commitment to proper governance and reducing related-party indebtedness.

• Longevity: The company has traded since 2011, suggesting some resilience and operational continuity despite persistent financial difficulties.

4. Due Diligence Notes

a) Creditor Composition and Terms: The nature of the £297,904 in current liabilities requires urgent clarification. How much represents trade creditors, how much is related-party debt, and what are the repayment expectations? If a significant portion is owed to directors or connected parties, this may explain the continued trading despite insolvency – but it also means the company is extremely vulnerable to any withdrawal of that support.

b) Stock Valuation and Realisability: Stock represents 59% of current assets (£94,563). Given the registered office references "The Plastic Bottles Co," this likely represents inventory for resale. The accounting policy states stock is held at the lower of cost and net realisable value, but the age, condition, and marketability of this stock should be assessed. Any write-down would further erode the already critical balance sheet.

c) Profitability Assessment: The abridged accounts do not include a profit and loss statement. However, the movement in retained losses from (£159,986) to (£208,137) implies a loss of approximately £48,000 for FY2025 (before any adjustments for dividends or capital changes). The underlying trading profitability – and whether any path to breakeven exists – is essential to understand.

d) FY2020 Anomaly: The FY2020 accounts showed a positive net asset position of £34,568, which then reversed to (£31,631) in FY2019 (prior year) and (£32,958) in FY2021. This warrants investigation – was there a capital injection, asset revaluation, or debt restructuring that briefly improved the position?

e) PSC Complexity: Multiple PSC entries for Glenn Alexander Doherty with overlapping ownership thresholds, combined with trust/firm structures, suggest potential complexity in the ultimate control structure. The relationship between the PSCs and the creditor base should be mapped.

f) Director Capacity: Julie Elizabeth Doherty appears as both a director and a PSC. Collette Cheryl Butterworth is listed as Managing Director. Olivia Jayne Doherty serves as Secretary. The Doherty family's involvement across multiple roles and shareholdings should be examined for concentration risk and governance adequacy.