NEOBROS LTD

Executive Summary

NEOBROS LTD operates with significant fixed assets but exhibits liquidity challenges due to high current and long-term liabilities relative to current assets and equity. The company is compliant with filing requirements and appears operationally stable under its current directors. However, the high leverage and negative working capital warrant careful scrutiny of creditor terms and cash flows to fully assess financial resilience.

NEOBROS LTD - Analysis Report

Company Number: SC684969

Analysis Date: 2025-07-29 20:23 UTC

1. Risk Rating: MEDIUM

Justification: NEOBROS LTD holds significant fixed assets, primarily freehold property valued at £290,239, supporting its net asset base. However, the company’s net assets are minimal (£3,215 in 2024) and current liabilities are substantial, leading to a negative net working capital position. The company’s solvency is constrained by high long-term creditors (£224,756), which raises concerns about its ability to meet obligations without sufficient liquid assets or cash flow.

2. Key Concerns:

• Liquidity Risk: Negative net current assets of £62,268 indicate the company’s current liabilities exceed current assets, suggesting potential short-term cash flow difficulties.
• High Leverage: Long-term creditors nearly match the total fixed assets, indicating a high level of debt financing and potential solvency risk if asset values decline or income generation is insufficient.
• Minimal Share Capital and Equity: The company’s share capital is nominal (£2.00) and shareholders’ funds are very low, which reduces the equity buffer against financial stress.

3. Positive Indicators:

• Asset Base Stability: Fixed assets have remained stable year-over-year with no impairment or depreciation charges, implying the property is fully owned and potentially valuable collateral.
• Timely Compliance: Company filings including accounts and confirmation statements are up to date with no overdue submissions, indicating good regulatory compliance.
• Experienced Control: Both directors have maintained control since incorporation and have relevant professional backgrounds (electrician, cost estimator), which may support operational continuity.

4. Due Diligence Notes:

• Investigate the nature and terms of the long-term creditors (£224,756) to assess repayment schedules, interest obligations, and any covenants.
• Review cash flow statements or management accounts to evaluate operational cash generation and liquidity buffers beyond balance sheet snapshots.
• Confirm market value and liquidity of the fixed asset (freehold property) to understand realizable value in a distressed scenario.
• Assess related party transactions and director remuneration for potential conflicts or capital injections.
• Verify absence of director disqualifications or legal proceedings that might impair management’s ability to operate.