Company Number: 14305681

Analysis Date: 2025-07-20 17:18 UTC

Risk Rating: LOW

Justification: SJ Stephen Limited demonstrates a strong liquidity position with cash and current assets comfortably exceeding current liabilities. The company shows consistent growth in net assets and shareholder funds, and there are no overdue filings or indications of regulatory non-compliance.

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Key Concerns:

1. Concentration of Control and Dependence: The company has only one employee (the director) and limited operational scale, which may pose operational risks if the director is unavailable or if succession is not planned.

2. Director’s Loan Account: There is a significant director’s loan balance (£14,557 at year-end) that fluctuates and is interest-bearing. While repaid within nine months post-year end, this reliance on director advances could be a liquidity consideration.

3. Limited Disclosure on Profitability: As a small company filing under exemption, the absence of a detailed profit and loss statement limits insight into operational profitability and sustainability.

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Positive Indicators:

• Strong Liquidity Position: Cash balances increased substantially from £3,492 to £86,355 in the latest year, contributing to healthy net current assets of £143,602.

• Growing Net Assets and Equity: Net assets rose from £88,229 to £145,532 year-over-year, indicating capital growth and retention of earnings.

• Regulatory Compliance: The company’s accounts and confirmation statements are filed on time, with no outstanding overdue filings or audit requirements due to exemption status.

• Low Leverage: Current liabilities are modest (£45,614) relative to assets, suggesting low short-term financial risk.

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Due Diligence Notes:

• Profitability and Cash Flow Analysis: Obtain detailed income statements and cash flow statements to assess operational profitability and cash generation, currently unavailable due to exemption.

• Director Loan Account Terms: Review formal agreements, repayment schedules, and interest terms related to the director’s loan account to understand potential financial impact or related party risks.

• Operational Model and Dependency: Investigate the business model and dependency on a sole director/employee to assess sustainability and risk of operational disruption.

• Nature of Holding Company Activities: Clarify the specific activities under SIC code 64209 (holding company activities not elsewhere classified) to evaluate asset composition, subsidiary risks, and overall business strategy.

• Future Capital Requirements: Assess plans for capital injection or financing given the company’s growth and any planned expansion or acquisitions.

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