M SAJJAD LTD

Credit Opinion: CONDITIONAL

M SAJJAD LTD is an active, long-established micro company that has met its filing obligations to date. The balance sheet shows fixed assets of £463,700 and net assets of £49,540 as at 30 April 2025, indicating an underlying asset base. However, liquidity is critically weak: current assets are £78 against current liabilities of £216,960, producing net current liabilities of £216,882. The accounts are filleted under the micro-entity regime, so no profit and loss account is publicly available to evidence debt-servicing capacity. Total liabilities of approximately £414,000 leave a thin equity cushion relative to borrowings.

Any credit facility should therefore be conditional on a legal charge over the heritable property, a debenture, personal support from the person with significant control, and regular receipt of management accounts including cash flow forecasts. Unsecured lending should be declined.

Financial Strength: Balance Sheet Health

• Company category: Micro; accounts prepared under FRS 105 and audit exempt.
• Fixed assets: £463,700 (2025), unchanged from 2024, consistent with a long-term property holding. The accounts state fixed assets at this value.
• Net assets: £49,540 (2025), up from £31,022 (2024). The balance sheet has recovered from a negative position of £-47 in 2016, though net assets fell to £4,462 in 2023 before rebounding. Without a profit and loss account, the driver of the recent improvement cannot be verified from filed data.
• Liabilities: £216,960 falling due within one year and £197,278 due after more than one year. Combined liabilities materially exceed shareholders’ funds, indicating high gearing and limited equity headroom.
• Asset composition: The balance sheet is heavily weighted toward a single illiquid fixed asset, with minimal current assets.

Cash Flow Assessment: Liquidity and Working Capital

• Working capital: Deeply negative, with net current liabilities of £216,882.
• Liquid resources: Current assets of £78 (2025) versus £35 (2024). The company effectively holds no cash buffer.
• Debt service: Cannot be assessed from filed accounts because the profit and loss account has not been delivered to the Registrar. Repayment would depend entirely on undisclosed income, likely rental receipts.
• Resilience: With no cash reserves and substantial short-term creditors, any void period, unexpected property cost, or tenant default could quickly impair the ability to meet obligations as they fall due.

Monitoring Points

• Monthly management accounts, including profit and loss, cash flow statement, and aged creditor/debtor listings.
• Confirmation of the registered office address (the Companies House overview and the latest accounts note show different addresses).
• Property valuation and any additional charges or security granted over the asset.
• Rental income performance, void periods, and tenant concentration.
• Movement in creditors, particularly amounts due to HMRC and trade suppliers.
• Changes to directors, persons with significant control, or share capital.
• Continued timeliness of accounts and confirmation statement filings.