Company Number: 13887905

Analysis Date: 2025-07-20 17:25 UTC

1. Credit Opinion: CONDITIONAL

JGC Construction Limited is a newly incorporated small private limited company engaged in construction of domestic and commercial buildings. The company shows minimal net assets (£221) with a working capital deficit of £5,884 as of 28 February 2023. Current liabilities (£17,916) exceed current assets (£12,032), raising liquidity concerns. However, a significant portion of debtors (£10,815) represents a director’s loan to Mr. Jamie Clark, who holds full ownership and control, with a 2% interest rate and repayment on demand. This intra-group support partially mitigates liquidity risk but depends heavily on the director’s capacity and willingness to continue funding. Overall, the company’s financial base is fragile, typical of a startup, and credit approval should be conditional on close monitoring of cash flows and additional security or guarantees.

2. Financial Strength:

The balance sheet reflects a very modest capital base with total net assets of £221 and shareholders’ funds of £121. Fixed assets amount to £7,159, mainly motor vehicles and fixtures, depreciated by £2,355 in the first year. The company has deferred tax liabilities of £1,054, indicating some timing differences in taxable profits. The current liabilities are dominated by taxation and social security liabilities (£17,887), which might relate to payroll or VAT obligations. The company’s financial position is weak, with negative working capital and very limited equity buffer, which restricts its ability to absorb shocks or fund growth independently.

3. Cash Flow Assessment:

Cash at hand is low at £1,217, with debtors of £10,815 primarily comprising a director loan, which is repayable on demand and accrues interest. This loan provides a liquidity cushion but is not guaranteed to be immediately available for operational needs. The company’s current liabilities exceed current assets by £5,884, indicating potential short-term liquidity issues. Without additional financing or improved cash conversion from trade debtors, the company may struggle to meet its short-term obligations. Cash flow management and timely collection of trade receivables will be critical. The company’s reliance on director funding is a risk factor for external creditors.

4. Monitoring Points:

• Track timely settlement of tax and social security liabilities to avoid penalties or enforcement action.
• Monitor collection of trade debtors and the director loan repayment status.
• Review future filings for improvement in working capital and net asset position.
• Assess any new borrowing or capital injections to strengthen liquidity.
• Watch for any changes in director support or control that could affect funding.
• Evaluate contract wins and revenue growth to establish sustainable cash flows.