MCJT LTD

Executive Summary

MCJT LTD demonstrates improving net asset value backed by significant investment property assets but relies heavily on large unsecured related-party debt with no formal repayment terms. Liquidity is constrained with reduced cash balances and increased intercompany receivables, necessitating careful monitoring of cash flows and related-party transactions. Conditional credit approval is advised, contingent on confirmation of sustainable cash flows and formalization of debt repayment arrangements.

MCJT LTD - Analysis Report

Company Number: 13166289

Analysis Date: 2025-07-20 19:04 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   MCJT LTD shows equity growth and asset stability but carries significant related-party debt with no formal repayment schedule. The company’s ability to service external debt independently is unclear, given the large intra-group loan (£1.43M) classified as non-interest bearing and unsecured. Conditional approval is recommended, subject to confirmation of cash flow sufficiency, repayment plans for intercompany loans, and ongoing monitoring of related-party transactions to mitigate credit risk.

2. Financial Strength:
   The company is classified as a Small entity with Total Exemption Full accounts filed timely. Net assets have grown from £69.5k in 2022 to £124.9k in 2023, reflecting retained profits (£122.4k). The fixed asset base is substantial (£1.48M investment property at fair value), providing collateral value. However, current liabilities are low (£17.7k), and long-term liabilities are dominated by a £1.43M related-party loan with no formal repayment terms, increasing financial leverage risk. Share capital is minimal (£2.5k), indicating limited external equity buffer.

3. Cash Flow Assessment:
   Cash at bank decreased from £69.6k in 2022 to £16k in 2023, while debtors increased substantially due to amounts owed by group companies (£70k). The company maintains positive net current assets (£71.6k), but liquidity is reliant on related parties. The intra-group loan repayments of £52k in 2023 suggest some cash outflow to reduce liabilities, but the absence of formal repayment terms and interest reduces predictability. The company’s operational cash generation capacity is difficult to assess due to lack of profit and loss disclosure.

4. Monitoring Points:

• Verify the existence and enforceability of repayment schedules for related party loans.
• Monitor cash flow statements and working capital trends for liquidity sufficiency.
• Watch for any changes in intercompany balances that could affect liquidity or solvency.
• Track real estate asset valuations to ensure collateral value remains intact.
• Review any future profit and loss disclosures for operational profitability and debt servicing ability.