NEXTGEN AUTOMATION LIMITED

Executive Summary

Nextgen Automation Limited is a micro to small niche service provider in the broadly defined "other service activities" sector, demonstrating steady financial growth and sound liquidity. Industry trends around automation and digital transformation provide growth opportunities, though the company faces competitive pressures from larger technology firms. Its founder-led structure and growing working capital position it well for sustained small-scale operations, albeit with limitations typical of its size and sector niche.

NEXTGEN AUTOMATION LIMITED - Analysis Report

Company Number: 12626768

Analysis Date: 2025-07-20 18:08 UTC

1. Industry Classification
   Nextgen Automation Limited is classified under SIC code 96090, which corresponds to "Other service activities not elsewhere classified." This is a broadly defined sector often encompassing niche or specialized service providers that do not fit into standard categories. Companies in this segment typically offer bespoke automation, consulting, or technical services that may support various industries indirectly. The sector is characterized by relatively low fixed asset intensity, a focus on intellectual property or specialized knowledge, and often a reliance on a small team given the company’s micro/small scale.

2. Relative Performance
   Financially, Nextgen Automation Limited is a micro to small private limited company, with total net assets of approximately £98k as of July 2023, up from £42k in May 2022, indicating steady growth in retained earnings and working capital. The company holds modest fixed assets (£6.5k), a relatively strong current asset base primarily in stock (£152k) and cash (£99k), and current liabilities of £215k. The net current asset position of £91k is a positive indicator of liquidity and working capital management, especially for a business of its size. The increase in net assets and working capital over a roughly one-year period suggests effective operational scaling or improved profitability, albeit at a modest absolute scale. Compared to typical micro-entities in the service sector, Nextgen’s asset base and working capital ratios suggest reasonable financial health and growth potential, though it remains small relative to the broader industry.

3. Sector Trends Impact
   The broader "Other service activities" sector is influenced by trends such as increased automation adoption, digital transformation, and demand for bespoke technical solutions. Post-pandemic recovery has accelerated interest in automation to reduce operational costs and improve efficiency. However, companies in this niche must continuously innovate and often face pressure from larger technology firms entering the automation space. Supply chain disruptions also impact stock management, as seen in the company’s significant stock holdings. Inflationary pressures on input costs and labor availability may affect margins. Additionally, regulatory compliance and data security standards are increasingly critical, potentially raising operating costs but also creating opportunities for specialized service providers.

4. Competitive Positioning
   Nextgen Automation Limited operates as a niche player within its broad SIC category, likely focusing on specialized automation services. Its modest scale and asset base denote a small enterprise potentially agile enough to serve bespoke client needs with flexibility. The company’s growth in working capital and net assets, paired with a single director holding full control, suggests a founder-led, closely managed operation—typical for niche firms in this sector. Strengths include its liquidity position and growing retained earnings, which support operational stability and potential reinvestment. Weaknesses include limited scale, which may constrain market reach and susceptibility to competitive pressures from larger firms or emerging technologies. Compared to industry norms, Nextgen’s financials are consistent with small, early-stage service companies focusing on developing market presence and client base rather than large-scale operations.