REDTHORN PUBS LTD

Executive Summary

Redthorn Pubs Ltd, a newly incorporated private limited company operating in the public house sector, currently faces high liquidity risk due to net current liabilities exceeding current assets and a modest equity base. Despite maintaining adequate cash balances and timely company filings, the limited scale and negative working capital position raise concerns about its short-term financial stability and operational sustainability. Further review of liabilities and cash flow projections is advised to substantiate ongoing viability.

REDTHORN PUBS LTD - Analysis Report

Company Number: 13951791

Analysis Date: 2025-07-20 13:48 UTC

1. Risk Rating: HIGH
   The company exhibits significant liquidity pressures with net current liabilities of £38,588 and a provision for deferred tax of £4,819, resulting in very limited net assets (£4,218). Despite maintaining cash balances, current liabilities exceed current assets substantially. The company is also very young (incorporated in 2022), with limited operational history and only one employee (the director), raising concerns about operational sustainability.

2. Key Concerns:

• Negative working capital position: Current liabilities (£117,562) exceed current assets (£78,974), indicating potential cash flow difficulties in meeting short-term obligations.
• Deferred tax provision of £4,819 emerged in the latest year, which may reflect timing differences or potential future tax liabilities affecting financial flexibility.
• Very limited scale and resources: Only one employee (director), small equity base (£100 in share capital), and minimal fixed assets, increasing operational risk and dependence on the sole director.

3. Positive Indicators:

• Cash at bank has increased year-on-year from £59,736 to £69,158, suggesting some improvement in cash holdings.
• No overdue filings: The company is current on both accounts and confirmation statement submissions, indicating regulatory compliance so far.
• Ownership concentration: The sole director and 75-100% shareholder, Mr. Marc Allinson, provides clear accountability and control.

4. Due Diligence Notes:

• Investigate the nature and timing of the £117k current liabilities to assess whether any are overdue or subject to restructuring.
• Clarify the cause of the deferred tax provision and its potential impact on cash flow.
• Review operational cash flow statements (not provided) to evaluate cash generation capability.
• Assess the business plan and revenue streams given the small scale and limited staffing.
• Confirm ongoing compliance with relevant licensing and sector-specific regulations for public houses.