NJS PROJECTS LTD

Executive Summary

NJS Projects Ltd shows stable net asset value supported by investment property but faces ongoing liquidity challenges due to large current liabilities exceeding cash and current assets. The company’s financial position is stable but working capital deficits pose short-term risk, requiring close monitoring of cash flows and creditor management. Conditional credit approval is recommended, contingent on evidence of liquidity improvements or secured financing.

NJS PROJECTS LTD - Analysis Report

Company Number: 12396438

Analysis Date: 2025-07-20 18:55 UTC

1. Credit Opinion: CONDITIONAL APPROVAL. NJS Projects Ltd operates in the real estate sector focusing on investment properties. The company shows stable net assets and consistent shareholder funds over recent years, indicating some financial stability. However, the company has significant current liabilities (£158,971) far exceeding its cash holdings (£7,460), resulting in persistent negative net current assets (~£-151,500). This liquidity mismatch suggests potential short-term cash flow stress and reliance on external financing or asset disposals to meet obligations. Approval is conditional on monitoring liquidity improvements or securing committed credit facilities to cover working capital needs.

2. Financial Strength: The company’s total net assets stand at £48,117, supported mainly by a £210,000 investment property valued at fair market value. There is a non-distributable reserve of £46,317 relating to unrealised gains on these investment properties, which provides some cushion. The balance sheet shows minimal share capital (£100), confirming a small equity base. Over the last five years, net assets have modestly increased from £43,560 to £48,117, indicating slow but steady value retention. The company’s fixed assets (investment property) provide collateral value but current liabilities significantly exceed current assets, signalling a working capital deficit.

3. Cash Flow Assessment: Current cash balances are very low (£7,460) relative to current liabilities (£158,971), resulting in negative net current assets of approximately £-151,511. This implies the company does not generate sufficient short-term liquid resources to cover immediate debts. The persistent negative working capital position over multiple years is a liquidity risk. Given the nature of the business (investment property leasing), cash inflows may be stable but timing of rental receipts and creditor payments must be carefully managed. Without evidence of committed financing or additional cash reserves, the company’s ability to meet short-term obligations is constrained.

4. Monitoring Points:

• Liquidity: Track monthly cash flow and working capital position to ensure the company can meet current liabilities.
• Rental Income Stability: Monitor rental income trends and tenant occupancy to assess cash inflow reliability.
• Property Valuations: Watch for changes in investment property values that could affect asset base and collateral.
• Debt Profile: Review creditor terms and seek details on financing arrangements supporting current liabilities.
• Management Actions: Assess any steps management takes to improve liquidity, such as refinancing, equity injection, or asset sales.