11 BERKELEY STREET LIMITED

Executive Summary

11 Berkeley Street Limited operates in the competitive licensed restaurant sector in central London but currently exhibits significant financial distress, with mounting losses and a deeply negative net asset position. While the company benefits from a prime location and asset base, it faces critical challenges in liquidity and cost management amid broader sector pressures such as rising operational costs and changing consumer behaviors. Without strategic intervention, its niche position and financial weaknesses limit its competitiveness relative to more stable sector peers.

11 BERKELEY STREET LIMITED - Analysis Report

Company Number: 12430535

Analysis Date: 2025-07-20 19:14 UTC

1. Industry Classification
   11 Berkeley Street Limited operates within the licensed restaurant sector, classified under SIC code 56101. This sector encompasses establishments primarily engaged in the preparation and sale of food and beverages for consumption on the premises, often with alcohol licensing. Key characteristics of this industry include high fixed costs, intense competition, sensitivity to consumer discretionary spending, and the need for strong brand identity and location advantage.

2. Relative Performance
   Financially, 11 Berkeley Street Limited is currently reporting significant losses and a negative net asset position. For the year ended January 31, 2024, the company reported a loss before tax of approximately £2.4 million, worsening from a loss of £1.66 million the prior year. Net liabilities stand at over £5.3 million, which is a material deterioration compared to the prior year’s net liabilities of nearly £2.9 million. The company has substantial fixed assets (notably in long leasehold land and buildings valued at £3.87 million) but also has very high current and long-term liabilities (current liabilities around £831k and long-term liabilities exceeding £9.4 million as of 2024). Working capital is negative, reflecting a liquidity strain, which is critical in the restaurant sector where cash flow management is vital.

Compared to typical industry metrics, well-performing licensed restaurants usually aim for positive EBITDA margins, manageable debt levels, and positive net assets. The company’s ongoing losses and large deficit equity position indicate that it is currently underperforming relative to healthier peers in the sector, which often show break-even or profitability within 1-3 years of operation, especially in London’s competitive market.

3. Sector Trends Impact
   The licensed restaurant sector has faced significant headwinds over recent years, including pandemic-related restrictions, rising input costs (food, labour, energy), and changing consumer preferences toward delivery and casual dining. Post-pandemic recovery has been uneven, with increased operational costs squeezing margins. London’s high rental and staffing costs further pressure profitability. Additionally, consumer trends toward sustainability and experience-driven dining require constant innovation and investment.

Given 11 Berkeley Street Limited’s high fixed asset base and elevated liabilities, the company may be exposed to risk from these sector dynamics, particularly if revenue growth does not keep pace with rising costs. The increase in gross profit from £771k to £1.49m suggests some revenue growth, but this has not translated into profitability due to disproportionately rising administrative expenses.

4. Competitive Positioning
   11 Berkeley Street Limited appears to be a niche player focused on a potentially high-profile London location (W1J postcode), which can be an advantage if leveraged properly. However, the company’s financials reveal weaknesses in cost control and capital structure. The significant negative equity and losses imply funding challenges and risk of insolvency if turnaround strategies are not implemented. Unlike sector leaders who typically have scalable operations, brand recognition, and operational efficiencies, this company’s financial distress places it in a vulnerable position relative to competitors.

The turnover to employee ratio is unclear given the reported zero employees in 2024 despite prior employment of 117 staff, which might suggest restructuring or outsourcing. The capital-intensive nature of the business with high leasehold assets contrasts with its liquidity constraints, indicating a need for strategic financial restructuring and operational optimization.

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