HAWSON JEFFERIES LIMITED

1. Risk Rating: LOW Justification: Hawson Jefferies Limited demonstrates a long track record of operation (incorporated 1995), consistent profitability evidenced by growing retained earnings, and a solid net asset position of £147,646 as of March 2025. The company has no bank loans or overdrafts outstanding and maintains compliance with filing requirements. While liquidity requires monitoring due to a reliance on trade debtors, the overall financial stability and low leverage suggest a low risk of insolvency in the near term.

2. Key Concerns:

   • Debtor Concentration and Liquidity Risk: Trade debtors stand at £215,149, representing over 82% of total assets and 95% of current assets. Cash holdings have dropped from £27,028 (2024) to £10,341 (2025). With creditors falling due within one year at £114,606, the company is heavily reliant on the timely collection of these debts to meet its obligations, particularly the £69,088 owed for taxation and social security.
   • Cash Conversion Discrepancy: Retained earnings increased by approximately £36,689 during the year, yet cash reserves fell by £16,687. This divergence suggests that while the company is profitable on paper, cash is tied up in working capital (debtors) or has been distributed/allocated elsewhere (such as the £3,750 capital expenditure on computer equipment), which pressures immediate liquidity.
   • Unamortised Goodwill: The balance sheet includes £30,000 of goodwill (stemming from acquisitions in 1995 and 2021) that is not being amortised. While permissible under FRS 102 Section 1A if no impairment exists, this policy inflates the net asset value. The tangible net asset backing is lower than the reported figures suggest.

3. Positive Indicators:

   • Strong Profitability and Growth: The company has shown a significant growth trajectory in recent years. Net assets/shareholders' funds have grown from £41,802 in 2021 to £147,646 in 2025, indicating robust retained profits and a strengthening balance sheet over the medium term.
   • Absence of Debt: The 2025 accounts show no bank loans or overdrafts (down from a nominal £604 in 2024). The company's liabilities consist entirely of trade creditors, other creditors, and taxation/social security, meaning it is not exposed to interest rate fluctuations or bank covenant pressures.
   • Regulatory Compliance: The company is active, its accounts are filed up to date (not overdue), and it has a 30-year operating history. The reduction in average employee count from 15 to 14 appears manageable and typical for a professional services firm of this size.

4. Due Diligence Notes:

   • Aged Debtors: Request the aged debtors schedule to assess the collectability of the £215k outstanding. Given the size of the debtor book relative to cash, identifying any aged or disputed balances is critical.
   • PSC Register: The data indicates only a "Persons with significant control statement" rather than naming specific individuals. It should be verified who the ultimate beneficial owners are, especially given the potential for dividend extraction which could explain the cash flow discrepancy.
   • Director Discrepancy: The filed accounts list "A A Jefferies" as a director on the company information page, but the current officer list provided only shows Hawson, Xxxxxxxname shown to subscribers, and Xxxxxxxname shown to subscribers. Clarification should be sought on whether this director has recently resigned or if this is an administrative anomaly.
   • Other Creditors: The "Other creditors" balance dropped significantly from £44,356 in 2024 to £16,996 in 2025. Investigation into the nature of these balances is recommended to ensure no contingent liabilities are lurking off-balance sheet.

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