Keith Griggs FCA AI Financial Architect | Redbox Financial January 2026
Data Foundation
Data Integrity Verified
Your financial records have been thoroughly reconciled and validated. The underlying data is accurate, complete, and reliable for strategic decision-making.
No material errors or inconsistencies were identified during our audit process. All figures presented in this report are derived from verified accounting records and can be used with confidence for planning, forecasting, and investment decisions.
Foundation Established: With data integrity confirmed, we can now focus on extracting actionable insights and identifying genuine value-creation opportunities within your business.
Performance Analysis
The Bottom Line
Profit Down £14,126
Despite strong top-line growth, profit declined year-on-year. Understanding the component drivers reveals structural challenges that require immediate attention.
Revenue Growth
+£242,259
19.3% increase year-on-year demonstrates strong market demand and sales execution
Margin Erosion
–5.5 percentage points
Cost structure deterioration eliminated £155,996 of potential profit
Overhead Creep
+£97,409
Fixed cost base expanded faster than revenue, diluting operational efficiency
The Critical Insight: Revenue growth masked structural weakness. EBITDA margin fell from 20.9% to 17.0%, indicating that whilst you're winning customers, you're losing profitability on each transaction. This trend, if unchecked, creates a dangerous cycle where growth actually destroys value rather than creating it.
Valuation Impact
The Valuation Gap
£21,574,634
Value Left on the Table
£1.5M
Current Business Value
Based on existing performance and profitability trajectory
£23.0M
Year 5 Potential Value
Achievable with focused execution on identified profit levers
£21.6M
The Opportunity Gap
Value the business is not currently producing
This is not theoretical upside or optimistic projection. This represents quantifiable value that the business is not currently producing due to identifiable inefficiencies and unrealised opportunities. The gap between current state and achievable potential is substantial, measurable, and actionable.
The valuation methodology applies industry-standard multiples to projected EBITDA, adjusted for risk factors including margin volatility, working capital efficiency, and revenue concentration. The £21.6 million gap is the direct consequence of profit leakage across revenue, margin, and overhead dimensions.
Strategic Levers
Where the Money Is Hiding
5-Year EBITDA Upside: £8,318,018
Primary Lever: Revenue Scale — The business demonstrates strong revenue-generation capability, with £6.4 million of the total upside dependent on maintaining current growth momentum. However, this lever only creates genuine value if margin discipline is simultaneously restored.
Critical Dependency: Margin Recovery — The Performance Analysis confirms that margin volatility represents the single greatest risk to sustainability. Without addressing the 5.5-point margin erosion, revenue growth becomes a treadmill that increases turnover whilst destroying shareholder value. The £2.4 million margin opportunity is not additive to revenue growth; it is the prerequisite for revenue growth to create value.
Overhead efficiency, whilst showing a negative net impact in the projection, reflects necessary investment in infrastructure to support scale. The focus must be on ensuring overhead growth rate remains below revenue growth rate, maintaining operating leverage.
Working Capital
The Cash Trap
Whilst profit appears on the income statement, cash is not arriving in the bank account. Growth is being funded by the overdraft facility rather than by customer receipts, creating a dangerous liquidity dynamic.
Cash Position Metrics
Cash Tied Up in Working Capital
Total Cash Trapped: £211,000
Debtor book alone costs £192,202 of cash
25-day increase in collection time year-on-year
Working capital cycle deteriorated by 27.9 days
Customers are effectively using your business as a bank, holding £192k of your capital whilst you service debt to fund operations.
The Core Issue: Revenue is being recognised, but cash is not being collected. The business is profitable on paper but cash-constrained in practice. This creates a structural dependency on external financing that increases cost of capital and reduces strategic flexibility.
The 55-day debtor position, combined with 44-day creditor terms, means you are funding nearly two weeks of working capital from your own resources or overdraft. As revenue grows, this gap widens proportionally, turning growth into a cash consumption exercise rather than a value-creation mechanism.
Action Plan
What Happens Next
01
Execute the Revenue Lever
Protect and accelerate the £6.4 million revenue-led EBITDA opportunity. Maintain current growth trajectory whilst implementing margin controls to ensure revenue growth translates to value creation.
02
Restore Margin Discipline
Address the £2.4 million of profit leakage through systematic margin recovery. Focus on pricing discipline, cost structure optimisation, and product/service mix management.
03
Release Trapped Cash
Implement working capital controls to release £211,000 of immediately visible cash. Reduce debtor days, optimise payment terms, and align the cash conversion cycle with operational requirements.
04
Implement Monthly Tracking
Establish dashboard reporting for key metrics: revenue, margin percentage, overhead ratio, debtor days, and cash position. Drift kills value; monthly visibility prevents it.
The financial architecture is clear. The levers are quantified. The value opportunity is substantial.
The gap between current performance and achievable potential represents £21.6 million of enterprise value. Execution begins with focus: protect revenue momentum, restore margin integrity, release working capital, and track relentlessly.