Risk Analysis: J&I Cleaning Services Ltd (06920478)

1. Risk Rating: MEDIUM

The company demonstrates concerning volatility in its most recent financial year, with net assets declining approximately 59.5% from £1,669,827 to £676,149. However, the business maintains a solvent position with positive net assets, adequate cash reserves, and a 16-year trading history. The absence of the profit and loss statement (permitted under small company filing exemptions) limits full assessment of whether this decline stems from trading losses or other factors.

2. Key Concerns

a) Dramatic Decline in Net Assets (2024→2025) Net assets fell by £993,678 (59.5%) in a single year. Total assets dropped from £2,536,344 to £1,090,926. Without visibility of the income statement, it is impossible to determine whether this reflects operational losses, asset impairments, significant dividend extractions, or a combination thereof. This magnitude of decline warrants urgent clarification.

b) Debtors Volatility and Concentration Risk Trade debtors fell from £2,059,065 (2024) to £768,952 (2025)—a reduction of £1.29 million. The 2024 debtors figure appears disproportionately high relative to the company's size (32 employees in a cleaning services business). This raises questions about whether the 2024 balance included significant overdue or impaired receivables, whether there has been loss of a major client, or whether there were substantial bad debt write-offs in 2025.

c) Corporate PSC Opacity Collective Holdings Ltd holds over 75% of shares, voting rights, and director appointment power. The financial position and jurisdiction of this corporate entity are not visible from the available data. This concentration of control in an opaque holding structure introduces counterparty risk and limits transparency regarding ultimate beneficial ownership and potential related-party transactions.

3. Positive Indicators

• Consistent Trading History: The company has been active since 2009, demonstrating longevity in a competitive sector.
• Adequate Cash Position: Cash at bank stands at £321,974, providing reasonable liquidity headroom against current liabilities of £623,120 (approximate cash ratio of 0.52).
• Positive Net Assets: Despite the significant decline, the company remains solvent with £676,149 in net assets and positive retained earnings of £675,949.
• Compliance Record: Accounts and confirmation statements are filed and up to date with no overdue filings.
• Workforce Growth: Employee numbers increased from 32 to 35, suggesting ongoing operational activity rather than contraction.
• Liabilities Reduced: Total liabilities decreased from £1,098,502 to £623,120, indicating some deleveraging.

4. Due Diligence Notes