RSJH PROPERTY LIMITED
Executive Summary
RSJH Property Limited holds a valuable investment property securing a substantial mortgage but currently exhibits weak liquidity and negative net assets, limiting its ability to service short-term obligations independently. Credit approval can be considered conditionally, subject to satisfactory cash flow projections or enhanced security. Ongoing monitoring of working capital, mortgage repayments, and director support is essential to mitigate credit risk.
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This analysis is opinion only and should not be interpreted as financial advice.
RSJH PROPERTY LIMITED - Analysis Report
Credit Opinion: CONDITIONAL APPROVAL
RSJH Property Limited is an active private limited company operating in property letting with a relatively recent incorporation date (Nov 2021). The company owns investment property valued at £361,153, secured by a mortgage of £260,875. However, it shows persistent net current liabilities of approximately £106k and net negative shareholders’ funds (~£5,884) as at 31 December 2023. The company’s current assets (mainly cash and debtors) are minimal (£4,945), while current liabilities are substantial (£111,107), indicating liquidity constraints. Given these factors, credit approval should be conditional on further assessment of cash flow forecasts or additional security, as the company’s ability to meet short-term obligations is currently weak but long-term asset backing is reasonable.Financial Strength:
The balance sheet shows a concentrated asset base in one investment property valued consistently at £361,153, with no revaluation gains or losses in 2023. The mortgage secured on this property equals £260,875, representing a loan-to-value ratio of about 72%, which is moderately high but within typical commercial property lending ranges. Negative net assets and shareholders’ funds reflect accumulated losses or initial capital deficits, though these are relatively small in absolute terms (£~6k). Overall, the company’s financial position is stretched, with negative working capital and reliance on the underlying property asset and director support.Cash Flow Assessment:
Cash on hand is low (£4,532), and trade debtors are minimal (£413), which limits operational liquidity. Current liabilities of £111,107, predominantly other creditors and accruals, far exceed current assets. The company is dependent on servicing a large mortgage (£260,875) with repayments falling due over more than five years, implying long-term financing. The accounts note no audit was required, and the profit and loss account was not delivered, so profitability and cash generation capacity cannot be directly assessed, increasing risk. The going concern statement references director support as necessary for continuity, indicating external liquidity or capital injections may be needed.Monitoring Points:
- Liquidity metrics: monitor changes in current assets vs current liabilities to avoid worsening working capital deficits.
- Mortgage servicing: confirm timely interest and principal repayments; assess impact of interest rate changes.
- Property valuation: watch for fluctuations in the investment property market affecting collateral value and loan-to-value ratio.
- Director involvement: track any changes in director support or equity injections that may affect going concern status.
- Filing compliance: ensure continued timely filing of accounts and confirmation statements to avoid regulatory issues.
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