Company Number: 12602712

Analysis Date: 2025-07-29 13:13 UTC

1. Credit Opinion: APPROVE with monitoring conditions.

OJ Group Ltd is a relatively young private limited company operating in the development of building projects (SIC 41100). The company demonstrates a solid improving financial position with increasing net assets and working capital over the past three years. Although the company carries hire purchase debt, current assets comfortably exceed current liabilities, supporting short-term liquidity. The director has full control, and there is no indication of adverse director conduct or overdue filings. However, the high debtor balance, particularly amounts owed by a related party, warrants ongoing monitoring to ensure collection reliability and avoid potential liquidity strain.

2. Financial Strength:

• Net assets increased from £105k in 2023 to £170k in 2024, indicating positive retained earnings accumulation.
• Tangible fixed assets grew significantly to £52k, reflecting investment in plant and machinery, partly financed by hire purchase contracts (£41.7k total hire purchase debt).
• Shareholders’ funds represent 100% of net assets, supporting a clean equity base.
• The leverage through hire purchase debt is moderate and manageable given the asset backing and improving equity.

3. Cash Flow Assessment:

• Cash balances decreased sharply from £126.5k (2023) to £28.6k (2024), raising a note of caution on immediate liquidity despite strong working capital.
• Debtors rose markedly to £181k, largely due to £100k amounts owed by a related party and £61k trade debtors.
• Current liabilities increased moderately to £52k but remain well covered by current assets (£210k), resulting in a healthy net current assets position (£158k).
• The reliance on related party debtors could delay cash inflows; therefore, working capital quality should be monitored closely.

4. Monitoring Points:

• Collection of trade and related party debtors to ensure conversion into cash and avoid cash flow constraints.
• Ongoing management of hire purchase repayment obligations to prevent financial strain.
• Maintain or improve cash reserves to support operational needs and potential growth.
• Watch for any changes in director or ownership structure that could affect credit risk.
• Industry sector risks related to construction project delays or market downturns.