NAVIGATOR PUBS LIMITED

Executive Summary

Navigator Pubs Limited shows improving financial health with increased net assets and positive working capital after prior deficits. However, elevated short-term liabilities, particularly tax-related, and concentration of debtors pose liquidity risks. Conditional credit approval is recommended with close monitoring of cash flow and debtor management to ensure continued repayment capacity.

NAVIGATOR PUBS LIMITED - Analysis Report

Company Number: 12623397

Analysis Date: 2025-07-20 18:23 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Navigator Pubs Limited demonstrates a stable equity base and positive net asset growth over recent years, indicating financial growth and asset accumulation. However, its current liabilities remain high, particularly tax and social security liabilities, which have increased significantly year-on-year. The company’s net current assets turned positive in 2024 after previous shortfalls, signaling improved working capital management. Given the sector risk inherent in public houses and bars, coupled with relatively modest cash reserves and a note of increased short-term liabilities, credit facilities should be extended with conditions, including monitoring of liquidity and timely settlement of tax obligations.

2. Financial Strength:
   The balance sheet reflects a solid financial foundation with net assets increasing from £101,960 in 2023 to £132,250 in 2024. Fixed assets stood stable at approximately £124k, indicating consistent investment in tangible assets like land, buildings, and fixtures. Shareholders’ funds closely track net assets, showing no significant external equity dilution. The company has managed to improve its net current assets from a negative £20,346 in 2023 to a positive £14,529 in 2024, evidencing improving liquidity. However, rising short-term creditors, especially taxation and social security liabilities, require close scrutiny.

3. Cash Flow Assessment:
   Cash at bank is modest at £15,322, a slight decrease from £18,603 the prior year, but overall current assets have increased, primarily driven by a substantial rise in debtors (£89,008 from £49,208). This debtor concentration may present collection risk impacting cash flow if not managed carefully. The positive net current assets indicate some working capital buffer, but the high current liabilities of £115,226, including tax liabilities of £66,172, underscore potential liquidity pressure. Management should ensure debtor collections are timely, and tax obligations are met promptly to avoid cash flow constraints.

4. Monitoring Points:

• Monitor debtor aging and collection efficiency to mitigate liquidity risk.
• Closely track tax and social security liabilities to prevent accrual build-up that could strain cash resources.
• Watch cash balances relative to short-term liabilities to ensure ongoing liquidity sufficiency.
• Assess impact of economic or sector-specific disruptions on trading performance, given the hospitality industry’s sensitivity to external shocks.
• Review director changes and governance continuity, especially noting the recent resignation of one director.