JADE SECURITY SERVICES LIMITED
Company number 03549438 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Analysis: JADE SECURITY SERVICES LIMITED
1. Credit Opinion: CONDITIONAL
Reasoning: The company presents a fundamentally sound balance sheet with substantial net assets (£2.47M) and negligible leverage, but the most recent financial year reveals a significant deterioration. Retained earnings fell by approximately £406,000 (from £1.49M to £1.08M), indicating a material trading loss. While the balance sheet remains robust enough to absorb this loss, the trajectory is concerning and requires explanation before full credit confidence can be established. The company's 26-year operating history and membership within the Tate Group provide structural support, but the sharp earnings reversal and declining liquidity warrant enhanced due diligence.
2. Financial Strength
Balance Sheet Composition (FY2025):
| Metric | FY2025 | FY2024 | Movement |
|---|---|---|---|
| Tangible Fixed Assets | £316,516 | £351,831 | -£35,315 |
| Net Current Assets | £2,290,855 | £2,724,338 | -£433,483 |
| Long-term Creditors | £67,191 | £121,266 | -£54,075 |
| Provisions | £68,267 | £76,992 | -£8,725 |
| Net Assets | £2,471,913 | £2,877,911 | -£405,998 |
Key Observations:
- Strong Asset Base: Net assets of £2.47M represent a solid foundation, though they have declined 14.1% year-on-year
- Minimal Leverage: Long-term creditors of only £67,191 against net assets of £2.47M gives a gearing ratio of approximately 2.7% — exceptionally conservative
- Capital Structure: Share capital of just £100 with other reserves of £1.39M suggests historic capital contributions or revaluations; retained earnings at £1.08M remain the primary accumulated profit reserve
- Asset Quality Concern: The balance sheet is dominated by debtors (£2.68M), representing 98.4% of current assets. This concentration in a single asset class creates vulnerability to bad debts or client payment delays
Trend Analysis:
| Year | Net Assets | Year-on-Year Change |
|---|---|---|
| FY2023 | £2,699,140 | — |
| FY2024 | £2,877,911 | +6.6% |
| FY2025 | £2,471,913 | -14.1% |
The reversal from growth to significant decline requires investigation. The abridged accounts filing (permitted under section 444(2A)) means no income statement is publicly available, obscuring the drivers of this loss.
3. Cash Flow Assessment
Liquidity Position:
| Metric | FY2025 | FY2024 |
|---|---|---|
| Cash & Equivalents | £28,812 | £40,115 |
| Client Bank Balances | £14,592 | £47,144 |
| Current Liabilities | £437,126 | £358,089 |
| Current Ratio | 6.24x | 8.60x |
Working Capital Analysis:
- Net current assets remain substantial at £2.29M, providing ample short-term coverage
- Current ratio has weakened from 8.60x to 6.24x — still very strong but the downward trend is notable
- Current liabilities increased by 22% (£79k) year-on-year, suggesting increased trade creditor pressure or accruals
Cash Concerns:
- Readily available cash (excluding client bank balances which may be restricted) totals only £28,812 — a thin liquidity cushion for a company of this size
- Cash has declined 28% year-on-year while client bank balances dropped 69%
- The significant debtor balance (£2.68M) suggests cash conversion may be slow — typical in cash management/security services where client billing cycles can be extended, but this needs verification
Debt Service Capacity:
With minimal long-term borrowings and strong net current assets, the company has considerable capacity to service new debt obligations. However, the recent loss raises questions about whether operating cash flows can sustain additional leverage.
4. Monitoring Points
Immediate Priority:
- Profitability Investigation: Obtain and review the full income statement to understand the £406k decline in retained earnings — distinguish between trading losses, one-off write-offs, and any dividend distributions
- Debtor Quality: With 98.4% of current assets concentrated in debtors, obtain aged debtor analysis and assess provision adequacy; identify top 5 debtor concentrations and related-party exposure
- Cash Conversion: Monitor debtor days and cash conversion cycle; the low cash balance relative to the debtor book is a warning signal
Ongoing Surveillance:
- Group Intercompany Position: Clarify the nature of transactions with Tate Group Holdings Limited and any intercompany balances included within debtors/creditors
- Provisions Movement: Track the provisions balance (£68,267) — understand composition (likely pension or employment-related given the business type) and any anticipated calls on these
- Working Capital Trend: Monitor current ratio trajectory; further deterioration below 4x would warrant concern
- Filing Compliance: Company is currently up to date with filings — continue monitoring for timeliness as late filing often precedes financial difficulty
Industry Context:
The cash management/security services sector (SIC 82990) is typically defensive in economic downturns but faces margin pressure from labour costs and regulatory requirements. As a provider of cash-in-transit and ATM services, the company faces operational risk from cash handling and potential client concentration in the banking/retail sector.