BARNSLEY HOUSE TRADING LIMITED

Executive Summary

BARNSLEY HOUSE TRADING LIMITED is currently experiencing financial distress with negative working capital and shareholders' funds, indicating significant operational losses and liquidity challenges. The company relies heavily on group financial support to maintain solvency. Immediate actions to improve cash flow, reduce costs, and strengthen the capital base are essential to stabilize its financial health and ensure sustainable operations.

BARNSLEY HOUSE TRADING LIMITED - Analysis Report

Company Number: 13522241

Analysis Date: 2025-07-20 11:35 UTC

Financial Health Assessment Report for BARNSLEY HOUSE TRADING LIMITED

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1. Financial Health Score: D

Explanation:
BARNSLEY HOUSE TRADING LIMITED exhibits significant financial strain as reflected by net current liabilities and negative shareholders' funds. The company's balance sheet shows a deficit in net assets and an accumulated loss, indicating it is operating in a loss-making position and is reliant on external group support. While the company remains active and not overdue on filings, the financials reveal symptoms of distress that require urgent attention to avoid further deterioration.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	767,383	Indicates available short-term assets including cash and receivables.
Cash on Hand	86,816	Limited cash reserves, which may constrain liquidity.
Current Liabilities	1,076,085	Short-term debts exceed current assets, creating working capital deficiency.
Net Current Assets (Working Capital)	-308,702	Negative working capital suggests liquidity risk and potential difficulty meeting short-term obligations.
Shareholders' Funds (Equity)	-308,702	Negative equity indicates accumulated losses exceed invested capital, a sign of financial distress.
Loss for Period	309,702	Operating loss undermines financial stability and equity base.
Related Party Debt	240,931	Significant reliance on intra-group funding to meet liabilities.
Average Employees	88	Sizeable workforce indicating fixed operational costs.
Lease Commitments (Operating)	100,000 (within 1 year)	Fixed financial obligations that further pressure cash flow.

Interpretation:
The company's financial vital signs reveal a "patient" with poor liquidity ("healthy cash flow" absent), strained working capital ("symptoms of distress" in short-term solvency), and accumulated losses that have eroded net worth. The dependence on related party support is a critical life-support mechanism keeping the company solvent but underscores vulnerability.

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3. Diagnosis

BARNSLEY HOUSE TRADING LIMITED is currently in a fragile financial state. The balance sheet reveals negative net current assets and shareholders' funds, reflecting accumulated operational losses and a working capital deficit. The company’s cash reserves are low relative to liabilities and lease commitments. This indicates the company is struggling to generate sufficient internal cash flows to cover short-term debts and ongoing expenses.

This financial "illness" is mitigated somewhat by the support of its parent and group companies, which have provided financial backing and guarantees. The directors have prepared cash flow forecasts and have confirmed ongoing group support, which supports the going concern assumption. However, this reliance on external aid denotes a precarious prognosis if group support is withdrawn or operational performance worsens.

The company's industry classification as a hospitality business (hotels, licensed and unlicensed restaurants, and public houses) suggests exposure to sector-specific risks such as fluctuating consumer demand, regulatory impacts, and fixed cost pressures (e.g., leases, staff costs). The average staffing level of 88 employees indicates significant fixed overheads that require stable revenue generation.

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4. Recommendations

To improve financial wellness and stabilize operations, the company should consider the following actions:

• Enhance Liquidity Management:
  Strengthen cash flow forecasting and monitor daily liquidity to avoid cash crunches. Prioritize converting debtors to cash faster and managing creditor payment terms prudently.

• Reduce Operating Costs:
  Evaluate staffing levels, renegotiate leases where possible, and identify non-essential expenditures to improve operating margins and reduce the cash burn rate.

• Improve Profitability:
  Reassess pricing, menu offerings, and marketing strategies to increase revenues in the hospitality sector. Consider focusing on higher-margin services or customer segments.

• Strengthen Capital Structure:
  Engage with parent company stakeholders to plan for possible equity injections or debt restructuring to restore net asset positivity and reduce reliance on short-term related party debt.

• Risk Management and Contingency Planning:
  Develop contingency plans for potential withdrawal of group support. Explore alternative financing options and operational efficiencies to withstand market volatility.

• Regular Financial Monitoring:
  Establish key financial KPIs (working capital ratio, cash conversion cycle, EBITDA margins) and implement monthly reviews akin to clinical monitoring to detect early signs of financial distress.

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