ROBERT K C JOHN LTD

Executive Summary

Robert K C John Ltd exhibits moderate liquidity but a significant increase in long-term borrowings has eroded net assets, raising leverage concerns. While cash reserves have improved, careful monitoring of debt servicing and equity levels is essential. Credit approval is conditional upon conservative lending terms and ongoing financial review to mitigate risk.

ROBERT K C JOHN LTD - Analysis Report

Company Number: 13134909

Analysis Date: 2025-07-20 17:49 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Robert K C John Ltd shows moderate financial stability but recent financials indicate a sharp decline in net assets and an increase in bank loan liabilities. The company has a small equity base (£8.46k at 31 March 2024) and significant long-term debt (£40.5k) which raises concerns about leverage and repayment capacity. Approval is possible if lending is structured conservatively with clear monitoring conditions, due to the company’s rising debt burden and reduced net worth. The company’s ability to service debt depends on operating cash flows, which need close review considering the company's small scale and the SIC code indicating domestic personnel activities, which may have variable cash flow profiles.

2. Financial Strength:

• Net assets declined from £36.33k in 2023 to £8.46k in 2024, indicating erosion of equity possibly due to losses or loan drawdowns.
• Current assets increased slightly to £77.7k, with a strong cash position (£44.8k) but debtors dropped from £54.8k to £32.9k, possibly reflecting lower sales or tighter credit control.
• Current liabilities rose slightly to £28.95k, but long-term liabilities jumped from zero to £40.5k, showing new bank loans taken on.
• Share capital is minimal (£100), typical of a small private company.
• The company holds very limited fixed assets (£250), showing asset-light operations.

3. Cash Flow Assessment:

• Cash on hand improved substantially from £8.7k to £44.8k, which is positive for liquidity.
• Net current assets remain positive at £48.8k, indicating adequate short-term liquidity to cover current liabilities.
• However, the increase in long-term loans implies future cash outflows for principal and interest that must be serviced reliably.
• The absence of employees suggests low fixed overheads, but also raises questions about scalability and reliance on the director.
• Debtor levels have decreased noticeably, which could impact cash inflows depending on the nature and timing of collections.

4. Monitoring Points:

• Track net asset trends to ensure no further equity erosion.
• Monitor debt servicing capability, especially interest coverage and loan repayments against operating cash flow.
• Review debtor aging and cash conversion cycles to verify liquidity stability.
• Watch for changes in current liabilities, particularly tax and VAT obligations.
• Assess any operational changes that could impact revenue or cost structure, given the company’s very small size and niche activity.
• Confirm continued compliance with filing deadlines and no adverse director conduct or legal issues.