NJD SOUTHWEST PROPERTIES LTD

Executive Summary

NJD Southwest Properties Ltd exhibits liquidity and solvency challenges characterized by negative net current assets and net liabilities, alongside significant secured borrowings. However, the company’s expanding fixed asset base and compliant filing record are positive factors. Further investigation into cash flows, loan terms, and asset valuations is essential to fully assess financial stability and operational sustainability.

NJD SOUTHWEST PROPERTIES LTD - Analysis Report

Company Number: 13756840

Analysis Date: 2025-07-29 18:58 UTC

1. Risk Rating: MEDIUM

Justification: NJD Southwest Properties Ltd shows significant negative net current assets and net liabilities, indicating potential solvency concerns. However, the company holds substantial fixed assets (property) and has no overdue filings, which mitigates immediate regulatory risks. The company is relatively young (incorporated in 2021) and operates in real estate, a capital-intensive sector with long-term asset holdings.

2. Key Concerns:

• Negative Net Current Assets: Current liabilities (£420,470) exceed current assets (£11,343), resulting in a working capital deficit of approx. £175k as of the latest accounts, highlighting liquidity pressure.
• Negative Net Assets and Shareholders’ Funds: The company’s net liabilities are small but persistent (£1,390 negative in 2023), suggesting accumulated losses or financing structure issues.
• High Reliance on Debt Financing: Long-term bank loans of £420,470 secured against assets indicate leverage that may pressure cash flows, especially given limited current asset liquidity and no reported turnover or employees.

3. Positive Indicators:

• Tangible Fixed Assets Growth: The company increased fixed assets from £350k in 2022 to £594k in 2023, reflecting investment and asset base expansion.
• No Overdue Filings: Both accounts and confirmation statement are up to date, indicating compliance with Companies House requirements and governance discipline.
• Single Shareholder Control: Ownership and direction by Nicole June Dommett (75-100% shares and voting rights) may facilitate agile decision-making.

4. Due Diligence Notes:

• Verify Revenue Generation and Cash Flow: The accounts do not disclose turnover or profit and loss details; confirm if the company generates rental income or other operating cash flows sufficient to service debt.
• Assess Loan Terms and Covenants: Review the structure, interest rates, and repayment terms of the £420k bank loans and director’s loan (£184k current liabilities) to understand refinancing risks.
• Investigate Asset Valuation and Market Conditions: Confirm the valuation basis and marketability of fixed assets (real estate) to assess collateral strength and potential impairments.
• Confirm Related Party Transactions: Examine director’s loan details and any related party dealings for potential conflicts or financial support mechanisms.
• Review Future Business Plans: Given the company’s age and financial position, understanding strategic outlook and capital requirements is critical.