J AND SM PROPERTIES LTD

Executive Summary

J AND SM PROPERTIES LTD exhibits high financial risk primarily due to negative net assets, significant reliance on director and related party loans, and minimal liquidity. While the company holds investment property as a key asset and maintains regulatory compliance, its operational scale and cash flow generation appear insufficient to cover liabilities without ongoing insider funding. Further investigation into loan arrangements and operational performance is advised before considering investment.

J AND SM PROPERTIES LTD - Analysis Report

Company Number: 14356076

Analysis Date: 2025-07-20 15:20 UTC

1. Risk Rating: HIGH

The company shows significant solvency and liquidity concerns, with net current liabilities exceeding £230,000 and negative net assets approaching £15,000 as of the latest accounts. The balance sheet reveals reliance on director loans and related party creditors to fund operations, indicating potential financial distress. The going concern statement relies on continued director financial support, which may not be sustainable.

2. Key Concerns:

• Negative net assets and net current liabilities: The company’s liabilities substantially exceed its current assets, raising doubts about its ability to meet short-term obligations.
• Director and related party loans: Over £400,000 of creditor balances are due to the director and connected entities, suggesting dependence on insider funding rather than external financing or operational cash flow.
• Limited operational scale and activity: With only one employee (the director), no reported profit and loss information, and minimal cash on hand (£108), the company’s operational sustainability and cash generation capability appear weak.

3. Positive Indicators:

• Investment property held at a stable fair value (£398,898) provides a tangible asset base that could be monetized if needed.
• Timely filing of accounts and confirmation statements, with no overdue filings or regulatory compliance issues.
• Ownership and control are clearly disclosed with two PSCs holding equal shares and voting rights, indicating transparent governance.

4. Due Diligence Notes:

• Verify the nature and terms of the director’s loan and related party creditor balances, including repayment schedules and interest arrangements.
• Obtain or review the company’s profit and loss account or management accounts to assess revenue generation and operating cash flow.
• Confirm valuation methodology and market comparables used for the investment property to ensure asset values are not overstated.
• Assess the director’s capacity and willingness to continue providing financial support, as the going concern is contingent on this.