Company Number: 13347218

Analysis Date: 2025-07-29 20:31 UTC

1. Risk Rating: MEDIUM

Justification: SRCJ Construction Limited shows signs of financial strain reflected in a net current liability position for the latest year and a significant reduction in net assets. However, the company remains active with no overdue filings and positive retained earnings, indicating some operational continuity. The relatively low cash balance and increased borrowings via hire purchase contracts introduce moderate liquidity and solvency concerns.

2. Key Concerns:

• Liquidity Pressure: Current liabilities (£30,722) exceed current assets (£26,817) by £3,905 at 31 March 2025, indicating potential short-term cash flow difficulties, especially with only £9 in cash.
• Increasing Debt Burden: Hire purchase liabilities have increased both within one year (£5,915) and after one year (£10,843), placing pressure on future cash outflows and asset encumbrance.
• Declining Net Assets: Net assets dropped sharply from £933 in 2024 to £172 in 2025, suggesting erosion of equity possibly from losses or asset write-downs.

3. Positive Indicators:

• Compliance: No overdue accounts or confirmation statements, demonstrating good regulatory adherence.
• Established Directors: The two directors have been in place since incorporation with no adverse records noted.
• Asset Base Growth: Tangible fixed assets increased notably from £10,912 to £18,420, indicating investment in operational capacity.

4. Due Diligence Notes:

• Review Profit and Loss Details: The absence of the income statement limits assessment of profitability and cash generation—obtaining this is critical.
• Investigate Debtor Quality: Debtors form a high proportion of current assets; assess collectability and aging to evaluate liquidity risk.
• Examine Hire Purchase Terms: Understand repayment schedules, interest rates, and security terms to gauge impact on solvency and cash flow.
• Assess Future Contracts and Pipeline: Evaluate operational sustainability and revenue prospects given recent financial deterioration.