PEARCE PUBS LIMITED

Executive Summary

Pearce Pubs Limited is currently financially distressed with negative equity, substantial net current liabilities, and weak liquidity, indicating an inability to meet short-term obligations reliably. Given the limited operating history and ongoing losses, credit provision would be high risk without significant improvement in financial metrics or external support. Continuous monitoring of liquidity and capital structure is essential before reconsidering credit exposure.

PEARCE PUBS LIMITED - Analysis Report

Company Number: 13885579

Analysis Date: 2025-07-29 14:15 UTC

1. Credit Opinion: DECLINE
   Pearce Pubs Limited exhibits significant financial distress evidenced by persistent net liabilities and negative shareholders' funds worsening from -£40,711 in 2023 to -£55,112 in 2024. The substantial net current liabilities (-£60,499) indicate liquidity strain and potential difficulty meeting short-term obligations. Given the company's micro size, limited operating history since 2022, and absence of profitability or positive net asset growth, credit exposure involves high risk. The director's sole control and publican occupation do not sufficiently mitigate financial weakness. Therefore, credit facilities are not recommended without substantial financial improvement or external guarantees.

2. Financial Strength
   The balance sheet shows fixed assets around £21,678, which are modest and declining slightly, indicating no significant capital investment or expansion. Current assets are minimal at £8,599 against creditors due within one year of £69,509, reflecting poor working capital management. The company has negative net assets and shareholders’ funds, demonstrating an erosion of equity and potential insolvency risk. Long-term liabilities remain at £13,488, further leveraging the fragile capital structure. Overall, the financial strength is weak, with ongoing losses and no accumulated reserves.

3. Cash Flow Assessment
   Current liabilities significantly exceed current assets causing a negative net working capital position. This suggests constrained liquidity, likely requiring reliance on external financing or owner support to meet operating costs and creditor demands. The company’s inability to generate positive net current assets over the last two years raises concerns about cash flow sufficiency to service debt or absorb financial shocks. Lack of available cash or equivalents implies limited flexibility and higher default risk under stress conditions.

4. Monitoring Points

• Improvement in net current assets and overall liquidity position
• Movement towards positive net assets and shareholders’ funds
• Consistent filing of accounts and confirmation statements to ensure compliance
• Changes in director appointments or ownership that could impact governance
• Evidence of operational profitability or capital infusion to strengthen balance sheet