THE VERY GOOD HOSPITALITY GROUP LTD

Executive Summary

The Very Good Hospitality Group Ltd operates as a small but growing player within the competitive UK licenced restaurant sector, showing strong asset growth and improved liquidity over the past year. While it benefits from increased operational scale and cash reserves, the company remains exposed to typical sector risks including cost pressures and regulatory challenges. Its niche positioning and reinvestment strategy suggest potential for continued expansion, albeit with ongoing caution regarding market uncertainties.

THE VERY GOOD HOSPITALITY GROUP LTD - Analysis Report

Company Number: 13030210

Analysis Date: 2025-07-19 12:53 UTC

1. Industry Classification
   The Very Good Hospitality Group Ltd operates in the licenced restaurant sector, classified under SIC code 56101. This sector primarily comprises businesses offering food and beverage services with alcoholic and non-alcoholic drinks, often including on-site consumption. Key characteristics of this industry include high fixed costs related to premises and staffing, sensitivity to consumer discretionary spending, and strong competition from both independent establishments and large chains. The sector is also influenced heavily by regulatory factors concerning licensing and health standards.

2. Relative Performance
   The company is a relatively small player within the licenced restaurant sector, classified as a private limited company and filing under the "Total Exemption Full" category, indicative of a smaller scale operation compared to large public restaurant chains. Financially, The Very Good Hospitality Group Ltd shows growth in net assets from £5,385 in 2022 to £42,903 in 2023, reflecting increased investment in fixed assets (notably fixtures and fittings) and improved net working capital (net current assets rising from £3,157 to £23,942). Cash reserves also more than doubled to £85,762, indicating improved liquidity. The increase in average employees from 14 to 29 suggests expansion. Compared to industry norms, many licenced restaurants operate with tight margins and often struggle with cash flow; this company demonstrates positive capital growth and liquidity improvement, which is a favorable sign in a sector often challenged by rising operational costs.

3. Sector Trends Impact
   The licenced restaurant industry has been navigating challenges such as rising costs for ingredients, labour shortages, and fluctuating consumer confidence especially following the COVID-19 pandemic. Trends like increased demand for quality dining experiences, emphasis on sustainability, and digital ordering platforms are reshaping the sector. The company’s investment in tangible fixed assets and doubling of its workforce suggest it is positioning itself to capitalize on recovery and growth trends. However, the sector is also impacted by regulatory changes around licensing and potential increases in business rates, which can pressure profitability. The director’s note on material uncertainties in going concern reflects these ongoing sector risks, despite the current positive financial position.

4. Competitive Positioning
   Within the licenced restaurant sector, The Very Good Hospitality Group Ltd appears to be a niche player rather than a market leader or follower. Its relatively modest share capital (£100) and scale of operations indicate a small-to-medium enterprise focusing perhaps on a specific market segment or unique hospitality offering. The company’s strong cash position and significant reinvestment in fixed assets (fixtures and fittings increased by over £16,000) are strengths, enabling it to maintain and potentially enhance customer experience and capacity. The increase in working capital provides operational flexibility. However, the company faces competitive pressures typical of the sector: high fixed overheads, competition from both independent and chain restaurants, and vulnerability to shifts in consumer demand. Its growth trajectory and financial health position it well against many small competitors but it lacks the scale and brand recognition to compete directly with large chains.