J P CONTRACTS (2023) LTD

Executive Summary

J P CONTRACTS (2023) LTD is a micro-entity construction company with a very short operating history and a modest net asset base overshadowed by significant long-term liabilities. While current liquidity appears adequate, the substantial creditor balance and single-person control introduce notable solvency and governance risks. Further due diligence on creditor terms and operational plans is recommended to fully assess financial stability.

J P CONTRACTS (2023) LTD - Analysis Report

Company Number: NI693977

Analysis Date: 2025-07-29 19:03 UTC

1. Risk Rating: MEDIUM
   The company exhibits a modest net asset position (£2,729) against substantial long-term liabilities (£293,481), which raises concerns about solvency despite positive net current assets. The short operating history (incorporated in 2023) limits trend analysis and increases uncertainty.

2. Key Concerns:

• High Long-term Liabilities: Creditors falling due after more than one year (£293,481) vastly exceed net assets, indicating potential solvency risk if cash flows do not materialize as planned.
• Limited Operating History: Incorporated in January 2023 with only one year of accounts, there is insufficient financial history to assess performance or operational sustainability.
• Single Director and Shareholder Control: Full control vested in one individual may pose governance and continuity risks, especially if not supported by robust oversight.

3. Positive Indicators:

• Positive Net Current Assets: £145,085 in net current assets suggests short-term liquidity is manageable, supporting operational cash flow needs.
• No Overdue Filings: Compliance with filing deadlines for accounts and confirmation statements indicates good regulatory discipline.
• Micro-Entity Status: Simplified reporting requirements reduce administrative burden and suggest a lean operational structure.

4. Due Diligence Notes:

• Investigate the nature and terms of the long-term creditors (£293k) to understand repayment schedules and covenants.
• Review cash flow forecasts and working capital management to assess liquidity sustainability.
• Examine director's plans for business growth and risk mitigation given single director/shareholder control.
• Verify any contingent liabilities or off-balance sheet obligations not evident in micro-entity accounts.
• Confirm if there is any external financing or guarantees supporting the liabilities.