JR CONSTRUCTION GROUP LTD

Executive Summary

JR Construction Group Ltd exhibits weak financial health with negative working capital and substantial provisions for liabilities impacting net assets. The company’s liquidity position has deteriorated sharply, raising concerns over its ability to meet short-term obligations. Given these factors, extending credit at this stage is not recommended without substantial mitigation or guarantees.

JR CONSTRUCTION GROUP LTD - Analysis Report

Company Number: 14151504

Analysis Date: 2025-07-29 14:17 UTC

1. Credit Opinion: DECLINE. JR Construction Group Ltd shows several concerning points from a credit perspective. Despite being an active micro-entity in the construction finishing sector, the latest financials reveal a net current liability position and significant provisions for liabilities that heavily erode the company’s net assets. The company is relatively newly incorporated (2022) with minimal share capital and a decline in net assets from £44,376 in 2023 to £38,825 in 2024, suggesting financial strain. The negative working capital and large provisions indicate potential cash flow difficulties and risk in meeting short-term obligations. The lack of detailed cash flow data and absence of audit further limit transparency. The combination of these factors does not inspire confidence in the company’s ability to service new credit without substantial improvement or additional security.

2. Financial Strength: The balance sheet shows low fixed assets (£12,742) and a deterioration in current assets from £19,037 in 2023 to £5,542 in 2024. Current liabilities appear understated in the 2024 filings as £5,562 falling due within one year but there is a creditors amount of £7,036 falling due after one year and very notably provisions for liabilities of £33,139. This large provision heavily impacts net assets and shareholder funds, which have fallen by approximately £5,500 year-on-year. The net current liabilities of £20 and the substantial provisions indicate weak financial resilience and possible contingent liabilities or pending claims that could further pressure the balance sheet. Overall, the financial strength is weak for a lender’s comfort.

3. Cash Flow Assessment: Cash specifically is not separately disclosed for 2024 but current assets have shrunk markedly from £19,037 to £5,542, implying a significant deterioration in liquidity. The prior year’s cash of £14,417 is no longer apparent, and combined with net current liabilities, this suggests a working capital deficit. The company’s ability to generate sufficient operating cash flow to cover short-term liabilities and provisions is questionable. Without positive net current assets or cash reserves, repayment capacity is limited, increasing credit risk.

4. Monitoring Points:

• Track changes in provisions for liabilities to understand exposure to contingent claims.
• Monitor quarterly or interim cash flow statements if available to assess liquidity trends.
• Watch for improvements in net current assets and overall working capital management.
• Review any new director appointments or changes in ownership that might affect governance or financial strategy.
• Confirm timely filing of accounts and confirmation statements to ensure compliance and transparency.