JJ DEVELOPMENTS NEWQUAY LTD

Executive Summary

JJ DEVELOPMENTS NEWQUAY LTD shows a solid fixed asset base and positive net assets but faces liquidity challenges due to negative working capital. The company has taken on long-term debt to ease short-term pressures, yet must carefully manage cash flow and debt servicing. Immediate focus on improving working capital and cash flow forecasting is essential to stabilize financial health and sustain operations.

JJ DEVELOPMENTS NEWQUAY LTD - Analysis Report

Company Number: 13182399

Analysis Date: 2025-07-29 18:15 UTC

Financial Health Assessment for JJ DEVELOPMENTS NEWQUAY LTD (as of 28 February 2024)

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1. Financial Health Score: C

Explanation:
JJ DEVELOPMENTS NEWQUAY LTD shows a mix of solid asset holdings but also significant liquidity stress. The company has meaningful fixed assets and shareholder equity, indicating underlying value, but the current liabilities exceed current assets by a substantial margin, signaling working capital issues. The recent introduction of long-term creditors adds complexity to the financial structure. Overall, the company is stable but exhibits symptoms of financial strain that require attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	569,053	Healthy investment in long-term assets, stable from prior years—indicates asset base strength.
Current Assets	1,216,418	Current assets have more than doubled compared to prior years—potentially positive if realized.
Current Liabilities	1,703,113	Current liabilities have increased by ~20%, exceeding current assets—sign of liquidity stress.
Net Current Assets (Working Capital)	-486,695	Negative working capital is a symptom of short-term financial distress; ability to cover debts is strained.
Creditors > 1 Year (Long-term Liabilities)	379,142	New long-term debt has appeared, possibly to refinance short-term obligations—mixed signal.
Net Assets (Shareholders’ Funds)	296,784	Positive net assets, increased from 277,700, showing retained value; however, relatively thin equity base.
Average Employees	0	No employees reported, suggesting either a holding company structure or subcontracted operations.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity Stress ("Symptoms of Distress"): The company’s current liabilities exceed current assets by approximately £486,695, indicating a working capital deficit. This is like a patient whose immediate cash reserves are insufficient to cover short-term debts, a classic symptom of financial strain. Although current assets have increased, they have not kept pace with liabilities.

• Asset Base Stability ("Underlying Health"): The fixed asset base remains stable at £569,053, indicating the company has a consistent investment in long-term resources such as equipment or property. This is a positive sign of “structural health” as it shows tangible value on the balance sheet.

• Financing Shift ("Treatment Change"): The appearance of £379,142 in creditors falling due after more than one year suggests the company may have refinanced some short-term obligations into longer-term debt. This can relieve immediate pressure but increases long-term obligations, so it must be managed carefully.

• Net Asset Position ("Overall Vitality"): Shareholders’ funds have increased slightly to £296,784, which is positive. However, the equity base is still relatively thin compared to total liabilities, meaning the company’s buffer against losses or shocks is limited.

• Operational Activity: The company reports zero employees, which may indicate a reliance on subcontractors or that it is an asset-holding entity rather than an operational business. This implies the cash flow dynamics could be heavily influenced by project-based income and payments.

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4. Recommendations: Specific Actions for Improvement

• Improve Working Capital Management:
  The primary concern is the negative working capital. The company should focus on accelerating receivables collection, negotiating better payment terms with suppliers, or reducing inventory levels. Like a patient needing immediate hydration, the company must boost short-term liquidity to avoid default.

• Monitor and Manage Debt Structure:
  The new long-term liabilities are a double-edged sword. While they ease short-term pressure, the company must ensure it can service this debt without compromising future operations. A debt restructuring plan or refinancing with favourable terms may be beneficial.

• Enhance Cash Flow Forecasting:
  Detailed cash flow forecasts will help anticipate liquidity crunches and manage payment schedules proactively. This “health monitoring” tool will alert management early to potential cash shortages.

• Evaluate Business Model and Revenue Streams:
  With no employees and significant liabilities, management should review operational efficiency and revenue generation. Identifying stable, recurring income or expanding contract pipelines will strengthen financial resilience.

• Engage Professional Financial Advice:
  Given the signs of liquidity strain, consulting with financial advisors or accountants to explore funding options, cost controls, and tax efficiencies would be prudent.

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