COPA CAFFE LTD

Executive Summary

Copa Caffe Ltd is a licenced restaurant operating in a competitive Sheffield market, backed by a controlling parent group that provides strategic support. While its asset base and ownership structure are strengths, the company faces material financial challenges including negative equity and high short-term liabilities, which constrain operational flexibility. Strategic focus on financial restructuring, operational efficiency, and market expansion is critical to unlock growth potential and mitigate liquidity risks.

COPA CAFFE LTD - Analysis Report

Company Number: 13249814

Analysis Date: 2025-07-20 17:57 UTC

1. Executive Summary
   Copa Caffe Ltd operates as a licenced restaurant in Sheffield, positioned as a private limited company within the competitive hospitality sector. Despite being a relatively new entrant since 2021, it benefits from strong backing by its parent entity, Evogo Group Ltd, which controls a majority stake, providing strategic support. However, the company is currently facing significant financial challenges, including negative net current assets and shareholder funds, which constrain its immediate operational resilience and growth capacity.

2. Strategic Assets

• Market Location & Industry: Situated in Sheffield, Copa Caffe operates in the licenced restaurant sector (SIC 56101), a vibrant but highly competitive market, benefiting from consumer demand for dining experiences.
• Ownership & Control: The controlling interest by Evogo Group Ltd and the active involvement of experienced directors provide strategic oversight and potential access to financial and operational resources.
• Asset Base: The company has invested in tangible fixed assets (£131,443 net book value) including property improvements and equipment, which are vital for its restaurant operations.
• Intangible Assets: Goodwill of £35,000 indicates acquisition or brand value that could support customer recognition.
• Workforce: Employing approximately 12 staff supports operational capacity to deliver service.

3. Growth Opportunities

• Capital Structure Optimization: Addressing the current negative equity position through capital injection or restructuring could stabilize the balance sheet and enable investment in growth initiatives.
• Expansion of Service Offerings: Leveraging the licenced restaurant status to expand menu variety, events, or partnerships could increase revenues and market share.
• Market Penetration: Enhancing marketing efforts within Sheffield and surrounding areas can attract new customers and build brand loyalty.
• Operational Efficiency: Streamlining operations to reduce high short-term liabilities (£358,688) and improve working capital will increase financial flexibility.
• Digital and Delivery Channels: Developing online ordering or delivery partnerships could tap into broader customer segments and alternative revenue streams.

4. Strategic Risks

• Financial Health: The significant net current liabilities (-£322,292) and negative shareholder funds (-£155,949) pose liquidity risks that could threaten ongoing operations if not managed.
• Reliance on Related Party Financing: A large portion of current liabilities are owed to associates (£333,797), suggesting dependency on group support which may limit autonomy and risk exposure if group dynamics change.
• Market Competition: The licenced restaurant sector is highly competitive, with risks from established players and changing consumer preferences.
• Economic Sensitivity: The hospitality industry is vulnerable to macroeconomic factors, including inflation, labour costs, and public health issues which could impact demand.
• Limited Financial Transparency: The absence of detailed profit and loss information limits insight into operational profitability and cost management effectiveness.