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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2025
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NEOS 2 LTD
COMPANY INFORMATION
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NEOS 2 LTD
CONTENTS
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NEOS 2 LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors present their Strategic Report and audited financial statements for NEOS 2 Ltd (the 'Company') for the year ended 31 December 2025.
The principal activity of the Company during the period continued to be the operation of branded venues within the UK hospitality sector.
The profit and loss account for the year is set out on page 10 of the financial statements. Turnover for the year to 31 December 2025 was £4.0m, a 46% decrease on prior year turnover of £7.4m. This reduction is largely as a result of transferring the lease, trade and assets of two separate venues from the Company, with one going to NEOS 21 Ltd and the other to NEOS 22 Ltd. At the reporting date, the Company had net assets of £1.2m (2024: £0.9m).
The management team’s Key Performance Indicators ('KPIs') for the year are as follows:
Year ended Year ended 31 December 2025 31 December 2024 Revenue £4.0m £7.4m Gross profit £3.2m £5.8m EBITDA* before exceptionals £0.7m (£0.1m)
* EBITDA refers to earnings before interest, taxation, depreciation and amortisation.
The directors were satisfied with revenue and EBITDA generated by the Company in 2025.
The management of the business and the execution of the Company's strategy are subject to a number of key risks, typically relating to the economic environment, regulatory and licensing risk, staff recruitment and retention, competition and upwards cost pressures.
Mitigation measures include ongoing cost reviews, supplier renegotiations, energy management initiatives, and continuous staff training and engagement. Customer behaviour and demand The hospitality industry is experiential and is constantly evolving. As such, the Company needs to be able to adapt to the changes in the market and what people demand. There is a risk that changes in customer behaviour and spending patterns will affect revenue. To address this, the Company invests heavily in its venues, brands and engagement with guests, as well as training staff in venues to give our guests an exceptional experience. Competition The industry can be highly competitive and a new venue opening near to one of our venues can pose a threat to revenue and profitability, at least in the short term. Competition can vary in terms of quality or price, and both can have an impact on guest demographic. The Company constantly monitors local competitor activity in order to respond to threats.
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NEOS 2 LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Licensing & crime
Licensing requirements mean that maintaining strong relationships with both local authorities and the police is essential. The Company’s experienced team work hard to build these close working relationships and they are supported by an experienced head office team, as well as specialist external licensing solicitors. NEOS carries out regular operational compliance and health and safety audits of all sites and ensures that sufficient safety procedures are in place in all of our venues. Health and safety NEOS is committed to creating a safe, environmentally friendly organisation, fostering a culture where everyone takes responsibility for their own safety and the safety of others. Our leaders understand the risks within their operational areas and continually aspire to minimise those risks. We continue to embed a culture of health and safety into the DNA of our business. Financial risk management The Company’s operations expose it to a variety of financial risks that include the effect of changes in market prices, credit risk, liquidity risk and interest rate cash flow risk. NEOS has risk management strategies in place that seek to limit the adverse effects of debt finance and the related finance costs on the performance of the Company. Given the size of NEOS, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policy set by the board is implemented by the Company’s finance department.
The directors expect the Company to continue generating positive EBITDA while progressing its venue investment and growth strategy.
People are central to the success of our business, and each employee plays a significant role in ensuring the delivery of our growth and transformation projects.
The directors are extremely mindful of the importance of employee engagement. The Company uses social media sites and regular team meetings to keep employees informed about developments that are relevant to them and to gather their thoughts and feedback. Regular social events and incentives are encouraged to foster strong working relationships and team building. The health and wellbeing of our staff remain a top priority and we provide all employees with mental health support via our employee assistance programme and financial assistance through our payday support programme.
It is the Company’s policy to encourage and offer equal consideration to disabled persons applying for employment within the Company, having regard to their aptitudes and abilities. The nature of the business and prevailing working conditions limit the employment of personnel with certain disabilities defined by health and safety regulations.
NEOS is an equal opportunities employer committed to providing equal employment opportunities to all employees and prohibiting all forms of discrimination.
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NEOS 2 LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors are committed to ensuring the health, safety and wellbeing of the Company’s employees and to conducting its business in a way that creates social, environmental and economic value for all of its stakeholders. The directors have taken steps to ensure that the Company’s statutory duties are met at all times and have identified a number of key metrics such as reportable accidents, lost time injury frequency and severity rate and appropriate targets to improve such measures.
This report was approved by the board and signed on its behalf.
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NEOS 2 LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The directors present their report and the financial statements for the year ended 31 December 2025.
The profit for the year, after taxation, amounted to £295,692 (2024: loss of £450,896).
No dividends were paid in the year (2024: £Nil). The directors do not recommend the payment of any final dividends.
The directors who served during the year were:
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Company has chosen to set out information required to be contained in the Directors' Report by medium-sized Companies (Accounts and Reports) Regulations 2008, Sch. 7 in the Strategic Report, in accordance with Companies Act 2006, s. 414C(11). It has done so with respect to a business review, future outlook and engagement with stakeholders.
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NEOS 2 LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The auditors, HaysMac LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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NEOS 2 LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEOS 2 LTD
We have audited the financial statements of NEOS 2 Ltd (the 'Company') for the year ended 31 December 2025, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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NEOS 2 LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEOS 2 LTD (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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NEOS 2 LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEOS 2 LTD (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations are compliance with health & safety laws, Food Standards Agency laws and alcohol licensing, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and sales tax. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:
∙inspecting correspondence with regulators and tax authorities;
∙inquiries with management including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;
∙evaluating management’s controls designed to prevent and detect irregularities;
∙identifying and testing accounting journal entries, in particular those journal entries which exhibited the characteristics we had identified as risk indicators; and
∙challenging assumptions and judgements made by management in their critical accounting estimates.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
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NEOS 2 LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NEOS 2 LTD (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditors
10 Queen Street Place
EC4R 1AG
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NEOS 2 LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
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NEOS 2 LTD
REGISTERED NUMBER: 13068585
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 32 form part of these financial statements.
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NEOS 2 LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
NEOS 2 Ltd is a private company, limited by shares and incorporated in England and Wales. The Company's registered number is 13068585 and its registered office address is NEOS Hospitality, Wharton Place, 13 Wharton Street, Cardiff, Wales, CF10 1GS.
The Company's principal activity is disclosed in the Strategic Report.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
On 27 March 2024, the FRC issued ‘Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and other FRSs Periodic Review 2024’. The effective date for most amendments is accounting periods beginning on or after 1 January 2026, with earlier adoption permitted.
The Company has chosen to early adopt the amendments to FRS 102 from the Periodic Review 2024 during the year. The Company's date of initial application is 1 January 2025 and the application of the amendments has resulted in changes to accounting policies for revenue and leases. The impact of these amendments is explained in note 2.4. Due to the application of the modified retrospective approach on transition, the accounting policies in some areas will differ between 2024 and 2025 and where this is the case, both policies have been included. The financial statements are prepared in sterling, which is the functional currency of the entity. Amounts are rounded to the nearest £.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following material accounting policies have been applied:
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows in the case of paragraph 7.20C, that disclosures equivalent to those required by FRS 102 are included in the consolidated financial statements in which the qualifying entity is included;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b), 12.29A and 12.30;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of NEOS Topco Ltd as at 31 December 2025 and these financial statements may be obtained from NEOS Hospitality, Wharton Place, 13 Wharton Street, Cardiff, Wales, CF10 1GS.
The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.
On 27 March 2024, the FRC issued ‘Amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and other FRSs Periodic Review 2024’. The effective date for most amendments is accounting periods beginning on or after 1 January 2026, with earlier adoption permitted.
The most significant amendments are the replacement of Section 23, now renamed ‘Revenue from Contracts with Customers’, and Section 20 ‘Leases’. The other less significant changes include a new Section 2A ‘Fair Value Measurement’, uncertain tax positions, business combinations and the revised Section 2 ‘Concepts and Pervasive Principles’ but these do not have a material impact on the Company. The Company has chosen to early adopt the amendments to FRS 102 from the Periodic Review 2024 during the year and implemented these changes from 1 January 2025, using the modified retrospective approach to apply the new Section 23 and Section 20 requirements. In applying this approach, comparative information has not been restated, and any retrospective cumulative effect of initial application is recognised as an adjustment to the opening balance of the profit and loss account. Any changes to the Company's recognition and accounting methods for revenue and leases following early adoption of the FRS 102 Periodic Review 2024 are detailed within the relevant accounting policy and notes to the financial statements.
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Revenue
The revised policy introduces the five-step model for revenue recognition, aligning recognition with the transfer of control rather than risks and rewards. Management have considered the new additional requirements of Section 23 'Revenue from Contracts with Customers' and deem there to be no material changes on transition to the recognition of the Company's revenue.
Leases
Under the previous version of FRS 102 Section 20, each lease contract for a lessee was classified as either a finance lease or an operating lease. However, with the lease accounting amendments to FRS 102, as a lessee, a lease contract is now recognised as a lease liability with a corresponding right-of-use asset. In the prior period before transition, the Company classified its venue leases as operating leases. The Company has taken the practical expedient to not reassess whether a contract is, or contains, a lease at the date of initial application. The Company also applied the practical expedient to rely on its assessment of whether leases are onerous immediately before the date of initial application as an alternative to applying Section 27 Impairment of Assets to right-of-use assets at the date of initial application. On 1 January 2025, a lease liability of £1,823,095 was recognised and measured at the present value of the remaining lease payments, discounted using the lessee’s obtainable borrowing rate. A right-of-use asset was recognised and measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the Statement of Financial Position immediately before 1 January 2025. Venue leases have been treated as short term if the lease term ends within 12 months of the date of initial application. Hindsight has been used in determining the lease term for contracts containing options to extend or terminate the lease. The impact on the current period of applying the recognition requirements of the revised Section 20 compared to the previous Section 20 is a decrease in profit of £59,101.
The financial statements have been prepared on the going concern basis, assuming the Company will continue to trade for the foreseeable future. The directors have assessed the Company's ability to continue as a going concern and believe it remains appropriate. This assessment considers the availability of financial support which the Company continues to receive from the wider group headed by NEOS Topco Ltd, which has confirmed its commitment to provide necessary funding for at least the next 12 months from the reporting date.
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Turnover is recognised when goods or services are transferred to customers and the Company has satisfied its performance obligations under the contract, and at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Turnover is mainly derived from food and beverage sales, and admission fees, with one performance obligation that is satisfied when control is transferred to the customer at the point of sale which is usually when payment is received. Turnover is measured as the consideration received less Value Added Taxes.
The Company’s leasing activities involve the rental of hospitality venue spaces.
The Company, at contract inception, assesses whether a contract is, or contains, a lease. This means the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company recognises right-of-use assets representing the right to use the underlying assets and lease liabilities representing obligations to make lease payments. Before the Company's early adoption of the FRS 102 periodic amendments to Section 20, rentals paid under operating leases were charged to profit or loss on a straight-line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease were recognised on a straight-line basis over the lease term, unless another systematic basis was representative of the time pattern of the lessee's benefit from the use of the leased asset.
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Goodwill
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Following the Company's early adoption of the amendments from the FRS 102 Periodic Review 2024, lease premiums previously recognised within intangible fixed assets have subsequently been reclassified to tangible fixed assets to be recognised within right-of-use assets in line with the new requirements of Section 20 Leases.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following bases:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
At the commencement date of the lease, the Company recognises a right-of-use asset which is measured at cost. The cost of the right-of-use asset comprises:
∙the amount of the initial measurement of the lease liability;
∙lease payments made at or before the commencement date, less any lease incentives received;
∙initial direct costs incurred; and
∙amounts recognised in provisions at the commencement date as an estimate of costs to be incurred for restoring the underlying asset to the condition required under the terms of the lease.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives. When impairment indicators exist, the right-of-use asset is assessed for impairment in line with the Company's policy for impairment of fixed assets. For leases where it is highly probable that the purchase option will be exercised and ownership of the underlying asset transferred to the lessee by the end of the lease term, the right-of-use asset is depreciated from the commencement date to the end of the useful life of the underlying asset. Right-of-use assets are presented within the tangible fixed assets line in the Statement of Financial Position.
At each reporting period end date, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of impairment is recognised immediately in profit or loss.
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. The estimates and underlying assumptions are reviewed on a continuing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The directors consider the following to be sources of significant judgements or estimates in the preparation of these financial statements:
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
3.Judgements in applying accounting policies (continued)
The recoverability of amounts owed by group undertakings is considered to be an area of significant judgement. The directors consider these amounts to be fully recoverable and are repayable on demand. As at the reporting date, the Company was owed an amount of £4.2m (2024: £0.9m) by other members of its group, and is therefore dependent on financial support from its group. At 31 December 2025, the group was in a sufficient net asset position to repay all of its debts as they fall due. Exceptional expenditure classification The Company exercised judgement in determining whether certain items of income or expense should be classified as exceptional. The classification is inherently subjective and may differ from practices adopted by other entities. Changes in circumstances or management's assessment could result in different classification in future periods. Impairment of fixed assets Intangible and tangible fixed assets are reviewed for impairment when there is an indication that the assets might be impaired by comparing the carrying value of the assets with their recoverable amounts. The recoverable amount of an asset or cash-generating unit ('CGU') is determined on value in use calculations prepared on the basis of the directors' estimates and assumptions. Individual sites are viewed as separate CGUs. In calculating the value in use, the present value of future cash flows until the end of the lease was considered along with any expected cash flows required to maintain the estate in its current condition. No uplift has been assumed from future refurbishments. The impairment testing assumes that each site achieves the budgeted financial performance for 2026 and continues to grow in line with expectation. The key risk is therefore that the budgeted performance is not achieved. The NEOS group's weighted average cost of capital ('WACC') is used as a discount rate in the value in use calculations and is therefore considered to be a key assumption. As at 31 December 2025, the discount rate used was 12.5% (2024: 10%). Useful economic lives of fixed assets The amortisation and depreciation charges are dependent upon the assumptions used regarding the useful economic lives of assets. Therefore this is also considered to be an area of significant judgement. Right-of-use assets and lease liabilities The application of the lease accounting model requires management to exercise judgement in determining the lease term, identifying lease payments to be included in the measurement of the lease liability, and selecting an appropriate discount rate to calculate the present value of future lease payments. Lease liabilities are initially measured at the present value of future lease payments that are unpaid at the commencement date. As the interest rate implicit in the lease is not readily determinable for the Company's leases, management has applied an incremental borrowing rate to discount future lease payments. Determining the appropriate incremental borrowing rate requires judgement and consideration of factors including the lease term, the nature of the underlying asset, prevailing market interest rates, the Company's credit risk, and the availability of comparable financing. Changes in these assumptions and judgements could have a material impact on the measurement of the recognised right-of-use assets and lease liabilities, the related depreciation charge, and finance costs recognised in future reporting periods.
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 23
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 25
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 27
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 28
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Company as a lessee
The Company’s leasing activities involve the rental of venues. Leases of venues have lease terms of between 2 and 23 years. The Company’s obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets. There are no other covenants imposed by the lease contracts. There are several lease contracts that include extension and termination options. The Company applied the revised Section 20 retrospectively with the cumulative effect of initially applying the amendments recognised at the date of initial application of 1 January 2025. The comparative information as at, and for the year ended 31 December 2024 is not restated. The carrying amounts of right-of-use assets recognised and the movements during the period are shown below:
Lease liabilities are due as follows:
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Discount rates used in lease measurement
The Company uses the incremental borrowing rate in calculating its lease liabilities. The rates employed are as follows: Incremental borrowing rate: 7.75 - 8.75%
The following amounts in respect of leases, where the Company is a lessee, have been recognised in profit or loss:
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Profit and loss account
In 2024, as part of the NEOS group’s ongoing strategic review, management continued to implement its plan to exit leases of underperforming sites where no viable plan existed to return the locations to profitability. In line with this strategy, the Company exited four sites during the previous year which met the criteria to be classified as discontinued operations.
In 2024, the exited sites contributed £553,462 of post-tax loss for the prior period. The Company received no cash consideration in respect of these disposals.
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NEOS 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £10,294 (2024: £23,919). Contributions totalling £1,024 (2024: £2,760) were payable to the fund at the reporting date and are included in creditors.
The Company's immediate parent undertaking is NEOS Holdco Ltd, a company incorporated in England and Wales, with its registered office address at NEOS Hospitality, Wharton Place, 13 Wharton Street, Cardiff, Wales, CF10 1GS.
The smallest group in which the results of the Company are consolidated is that headed by NEOS Holdco Ltd. The largest group in which the results of the Company are consolidated is that headed by NEOS Topco Ltd. NEOS Holdco Ltd and NEOS Topco Ltd are companies incorporated in England and Wales and their consolidated financial statements are available at Companies House. HGB Hospitality Ltd, a company incorporated in Jersey, and the Company’s ultimate parent undertaking, is deemed to be the Company's ultimate controlling party. The registered office address of HGB Hospitality Ltd is 28 Esplanade, St. Helier, JE2 3QA, Jersey.
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