JME TRANSPORT & DISTRIBUTION LTD

Executive Summary

JME Transport & Distribution Ltd shows high financial risk stemming from ongoing liquidity deficits and a substantial related-party loan. Despite timely regulatory compliance and improved cash balances, the company’s negative working capital and shareholders’ deficit highlight solvency challenges. Detailed due diligence on operational performance and financing arrangements is recommended to fully assess sustainability.

JME TRANSPORT & DISTRIBUTION LTD - Analysis Report

Company Number: 13816482

Analysis Date: 2025-07-29 15:40 UTC

1. Risk Rating: HIGH
   JME Transport & Distribution Ltd exhibits significant solvency and liquidity concerns, as evidenced by persistent negative net current assets and shareholders' funds. The company has substantial current liabilities exceeding current assets by over £1.1 million as of the latest accounts, indicating an inability to meet short-term obligations without additional financing.

2. Key Concerns:

• Negative Working Capital: Net current liabilities of £1,182,027 in 2023, worsening from £775,580 in 2022, suggest ongoing liquidity strain.
• Persistent Shareholders' Deficit: Shareholders' funds are deeply negative at £963,351, reflecting accumulated losses or high indebtedness, undermining financial stability.
• Significant Related-Party Interest-Free Loan: The company owes £1.75 million to a connected party (BCD Logistics Limited), which may pose refinancing or governance risks if the loan’s conditions change or if the related party withdraws support.

3. Positive Indicators:

• Timely Filing and Compliance: No overdue accounts or confirmation statements; filings are up to date, indicating good regulatory compliance.
• Stable Director Team and Control: Directors and persons with significant control are identified clearly, with no disqualifications or governance red flags noted.
• Growth in Cash Holdings: Cash at bank increased from £98,214 in 2022 to £230,119 in 2023, possibly reflecting some improvement in cash management or liquidity buffer.

4. Due Diligence Notes:

• Review Loan Agreement with BCD Logistics Ltd: Understand terms, maturity, and any covenants or risks associated with the £1.75 million interest-free loan.
• Examine Profit & Loss and Cash Flow Trends: The accounts provided are filleted with no P&L or cash flow statements; investigate operational profitability and cash generation capacity to assess sustainability.
• Assess Debtor Quality and Collectability: Debtors have decreased substantially from £1.09 million to £492k; investigate aging and collectability to confirm actual liquidity available.
• Investigate Amortisation of Goodwill and Asset Impairments: Goodwill amortisation is ongoing, with a net book value of £206k; ensure no impairment indicators threaten asset valuation.
• Operational Viability and Market Position: Given the freight transport sector’s competitive nature, review contracts, customer base, and business model resilience.

Executive Summary:
JME Transport & Distribution Ltd currently demonstrates high financial risk due to significant negative net current assets and shareholders' funds, compounded by reliance on a large related-party loan. While compliance with filing requirements is maintained and cash holdings have improved, liquidity pressure and solvency concerns suggest the company’s operational and financial stability warrant thorough further investigation before investment consideration.