Company Number: 13371145

Analysis Date: 2025-07-29 16:05 UTC

Financial Health Assessment for S&J GRACE LIMITED

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1. Financial Health Score: D

Explanation:
S&J GRACE LIMITED exhibits clear symptoms of financial stress marked by persistent negative net current assets and negative shareholders’ funds (equity). The company has been operating with a deficit in working capital and equity for multiple years, indicating a fragile financial position. While the directors have confirmed ongoing support and external finance, the current financial indicators suggest the company is under strain and requires careful management to avoid further deterioration.

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2. Key Vital Signs

Metric	Latest (FY 2024)	Interpretation
Current Assets	£1,265,929	Adequate short-term assets but declining trend.
Cash	£645	Alarmingly low liquidity; cash on hand is minimal.
Current Liabilities	£1,411,039	High short-term obligations, exceeding assets.
Net Current Assets	-£145,110	Negative working capital; indicates liquidity strain.
Shareholders’ Funds	-£145,107	Negative equity; company owes more than it owns.
Bank Loans (Current Liabilities)	£815,481	Large secured debt; significant financial burden.
Trade Creditors & Other Creditors	£572,383	Substantial owed to suppliers and others.
Turnover	(Not disclosed)	Unable to assess revenue generation or profitability.

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3. Diagnosis

Symptoms Analysis:

• Negative Working Capital: The company’s current liabilities consistently exceed current assets by a significant margin, indicating a “symptom of distress” similar to a patient with insufficient breathing capacity. This implies the company may struggle to meet its short-term obligations without further external funding or asset sales.
• Negative Shareholders’ Funds: Persistent negative equity is akin to a chronic illness where the company’s liabilities surpass its total assets, signaling a reliance on debt and funding guarantees by directors rather than organic financial strength.
• Minimal Liquid Cash: Having only £645 in cash severely limits the company’s ability to react swiftly to unexpected expenses or opportunities—a warning signal equivalent to a patient having critically low blood pressure.
• Heavy Reliance on Bank Loans: Over £815k of bank loans secured against property development assets place the company under financial pressure, especially if property sales or project completions are delayed.
• Directors’ Support: The directors have confirmed personal guarantees and ongoing funding, which provides a degree of “life support” but is not a sustainable substitute for operational profitability and positive cash flow.
• Lack of Profit & Loss Disclosure: Without turnover or profit data, it is challenging to fully assess the company’s operational health or earning capacity, leaving the diagnosis incomplete on this front.

Overall Condition:
The company is in a vulnerable financial state, displaying symptoms of liquidity constraints and capital erosion. It resembles a patient with a chronic but manageable condition that requires immediate intervention to prevent further deterioration or possible insolvency.

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4. Recommendations

1. Improve Liquidity and Cash Reserves:

   • Accelerate collection of receivables and review payment terms with creditors to manage cash flow better.
   • Maintain a cash buffer to handle short-term obligations and unexpected costs.

2. Reduce Debt Burden:

   • Explore refinancing options with lenders to extend loan maturities or reduce interest costs, relieving short-term pressure.
   • Consider asset disposals or equity injections to improve the balance sheet.

3. Enhance Financial Transparency:

   • Provide detailed turnover and profit data in future filings to allow better performance monitoring.
   • Regularly update stakeholders on financial progress and liquidity management.

4. Operational Efficiency:

   • Review project timelines and costs in property development to ensure timely completions and revenue recognition.
   • Implement tighter cost controls and budgeting to reduce overheads and improve margins.

5. Director and External Support:

   • Continue leveraging director guarantees and external finance as a temporary measure while pursuing sustainable financial health.
   • Consider professional financial advisory support for restructuring and turnaround planning.

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