MR CAPTAIN FOOD HUB LIMITED

Executive Summary

MR CAPTAIN FOOD HUB LIMITED shows clear signs of financial distress with ongoing liquidity issues and negative net assets, primarily supported by director loans. Recent improvements are noted but insufficient to signal recovery without strategic financial management. Immediate focus on cash flow, cost control, and financing diversification is recommended to improve its financial health.

MR CAPTAIN FOOD HUB LIMITED - Analysis Report

Company Number: 13563489

Analysis Date: 2025-07-29 13:13 UTC

Financial Health Assessment for MR CAPTAIN FOOD HUB LIMITED (formerly DIXY CHICKEN MANCHESTER LIMITED)

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1. Financial Health Score: D

Explanation:
The company exhibits clear symptoms of financial distress, reflected by persistent negative net assets and significant working capital deficits over recent years. Although there has been a slight improvement in net liabilities in the latest year, the overall financial condition remains fragile. The reliance on director loans to fund operations and the inability to generate positive net current assets indicate a stressed financial system, akin to a patient struggling to maintain stable vital signs.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Fixed Assets	41,935	Stable base of long-term assets, moderate size for a micro/small company.
Current Assets	7,630	Very low liquid and short-term assets. Risk of liquidity issues.
Cash at Bank	841	Extremely low cash reserves; "weak pulse" for daily operations.
Debtors (Loans to company)	2,500	Likely related party loan, not easily liquidated cash.
Current Liabilities	52,204	High short-term debts due within one year; critical burden.
Net Current Assets (Working Capital)	-44,574	Negative working capital: symptoms of liquidity distress; unable to meet short-term obligations.
Net Assets (Equity)	-2,639	Negative net worth; "underweight" balance sheet, showing accumulated losses or over-leverage.
Director's Loan	51,884	Major funding source; indicates reliance on internal support rather than external financing.

Trend:

• Net current liabilities have improved from -£62,522 in 2023 to -£44,574 in 2024, indicating some reduction in immediate liquidity strain.
• Shareholder funds improved from -£14,952 to -£2,639, suggesting reduced accumulated losses, yet still negative and concerning.
• Cash reserves increased slightly but remain critically low.

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3. Diagnosis

The company is exhibiting symptoms of financial distress typical of a business struggling with liquidity and solvency:

• Liquidity Crisis: Negative net current assets suggest the company does not have enough liquid resources to cover short-term debts, akin to a patient with low blood volume unable to sustain vital functions.
• Balance Sheet Weakness: Negative net assets (shareholder funds) indicate the company's liabilities exceed its assets, a sign of financial "ill-health" or insolvency risk.
• Dependency on Director Loans: Over 99% of short-term creditors are director loans, implying the business has been kept alive primarily through internal financing rather than operational cash flow or external credit. This is like an emergency life support system keeping a patient stable temporarily.
• Limited Cash Reserves: Very low cash at hand restricts operational flexibility and ability to handle unexpected expenses.
• Stable Long-Term Assets: Fixed assets have decreased slightly but remain a base; however, they are not easily convertible to cash if needed urgently.

Underlying Causes:

• The business likely faces operational or profitability challenges leading to recurring losses or insufficient cash generation.
• The reliance on director loans indicates external funding has been limited or exhausted.
• Negative working capital points to either slow receivables, high payables, or inventory management issues.

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4. Prognosis

If current trends continue without intervention, the company risks further deterioration of financial health, potentially leading to insolvency or the need for restructuring. However, the recent modest improvement in net assets and reduction in liabilities could be early signs of stabilisation if management implements corrective measures.

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5. Recommendations to Improve Financial Wellness

• Improve Cash Flow Management: Focus on accelerating receivables and managing payables to improve liquidity. Strict control of cash outflows is critical to avoid "cash starvation."
• Reduce Reliance on Director Loans: Seek alternative financing options such as small business loans, grants, or equity injections to reduce concentrated risk and improve financial independence.
• Cost Control and Profitability Review: Conduct a detailed operational review to identify cost-saving opportunities and enhance profit margins. Consider pricing strategies and overhead reduction.
• Inventory and Stock Management: Optimize stock levels to avoid capital being tied up unnecessarily, improving working capital.
• Financial Forecasting and Monitoring: Implement regular financial monitoring and forecasting to promptly detect "symptoms" of distress and allow timely management response.
• Consider Professional Restructuring Advice: If financial stress persists, seek specialist advice on restructuring or turnaround strategies to avoid more severe outcomes like insolvency.

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Summary

MR CAPTAIN FOOD HUB LIMITED is currently in a financially vulnerable state, with persistent negative net assets and working capital deficits indicating liquidity and solvency challenges. The company is heavily reliant on director loans to sustain operations, and cash reserves are critically low. While some improvement has occurred, urgent financial management actions are necessary to stabilise and restore health to the business's financial condition.