The directors present the strategic report for the year ended 30 September 2024.
The group’s principal activities are waste management and power generation. Waste management consists of waste collection, disposal and recycling and provides a biomass fuel for the power plant. At the statement of financial position date, the group has one subsidiary, Enviropower Limited.
Performance across the group has been good, given the continued volatility in the electricity markets.
Revenue at £10.96m was just over 3% higher than the previous year, however cost of sales at £3.32m was 16% below the corresponding period in 2023. The group returned an operating profit of £835k compared to £176k the previous year.
The directors consider that the performance for the year has been more than satisfactory given the present trading climate. They also believe that the group is well positioned to continue to move the business forwards, given that it will be largely debt free by early 2025.
There are a number of risks and uncertainties that can affect the performance of the business, some of which are outside the control of the group and its board, particularly in respect to electricity trading markets, interest rate rises and cost of living increases.
Revenue is a key issue and power prices have been contracted to 30 September 2025. The 6 months to 31 March 2025 previously negotiated with our existing customer and the next 6 months to 30 September 2025 on the open market with a new customer. We constantly review trading prices and should the right opportunity come we will secure contracts beyond September 2025.
Management monitor business performance continually and they are the focus of weekly management meetings, where performance is compared to the business plan and key performance indicators. Actions required can and therefore be addressed on a timely basis.
Due to the nature of the group’s business, regulatory risk is a key consideration. Due to the implementation of Best available techniques reference documents (BREF) regulations, emission limits for the power plant reduced in December 2023. Investment has been made in the plant over the last year and the company remains compliant with its Environment Agency licence. Further to this Enviropower operates an Environmental Management System, which is accredited under ISO 14001 by Lloyd’s Register.
The group has very few transactions that are not conducted in sterling and therefore currency risk is considered to be minimal.
Management believes there may be a risk, albeit small, with the increase in bank base rates, though we believe these have now plateaued and should show a downward trend. However the company has adopted an aggressive repayment profile and present bank loans will be repaid by early 2025. The directors consider that the profitability in 2024/25 will be sufficient to outweigh any change in interest rates.
The group has in place numerous metrics to assess the performance of the business and these are provided to senior management on a daily, weekly and monthly basis. The directors believe these are comprehensive and the systems and procedures in place are robust enough for the day-to-day management of the business.
On behalf of the board
The directors present their report and financial statements for the year ended 30 September 2024.
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £50,000. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.
The group operates a number of policies to ensure there is sufficient liquidity and cash. Regular cash flow forecasts are prepared to ensure the company is able to cover its interest payments.
Investments of cash surpluses and borrowings are made through banks and companies which must fulfil credit rating criteria approved by the Board. All customers who wish to trade on credit terms are subject to credit verification procedures. Trade receivables are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
The directors believe that there are currently no major future developments requiring disclosure.
The auditor, Sumer Audit, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of Rabbit Waste Management Limited (the 'parent company') and its subsidiary (the 'group') for the year ended 30 September 2024 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’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.
Conclusions relating to going concern
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 group's and parent 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.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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 group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
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 auditor's 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.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
Obtaining an understanding of the legal and regulatory framework that the group operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
Obtaining an understanding of the group’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud; and
Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the group and company and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the group for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: Environmental agency regulations, health & safety, employment law and compliance with the UK Companies Act.
In addition to the above, our procedures to respond to risks identified included the following:
Making enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud;
Assessment of matters recorded on the company’s health & safety incident register;
Challenging assumptions and judgements made by management in their significant accounting estimates such as depreciation; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
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 auditor's 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.
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the year was £80,474 (2023 - £475,991 loss).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Rabbit Waste Management Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit 1-2, 37 Chartwell Road, Lancing Business Park, Lancing, England, BN15 8TU
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in Sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
The consolidated financial statements incorporate those of Rabbit Waste Management Limited and its subsidiary (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All financial statements are made up to 30 September 2024. All intra-group transactions, balances and unrealised gains on transactions between the two group companies are eliminated on consolidation.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The directors have considered relevant information, including the group’s principal risks and uncertainties, the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.
Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from skip hire is recognised in full from the date of delivery. Provision is made for the associated costs of collection and waste disposal in respect of skip in issue to customers at the statement of financial position date, and is included within creditors due within one year.
Revenue from the sale of electricity is recognised at the date of exporting the electricity to the grid.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
In the parent company financial statements, investment in subsidiary is initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
At each reporting period end date, the group 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
The group company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group 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 group enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and loans from related parties.
Debt instruments like loans and other accounts receivable and payable are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method; Debt instruments that are payable or receivable within one year are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity. Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The costs of short-term employee benefits are recognised as a liability and an expense.
The company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the company to the fund in respect of the year.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Tangibles fixed assets are depreciated over their useful lives taking into account residual values as appropriate. The rates of depreciation used and residual values are assessed annually by management and vary depending on a number of factors. In re-assessing assets lives factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal value.
An analysis of the group's revenue, which is all generated in the UK, is as follows:
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
The directors are considered the only key management personnel of the group.
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 30 September 2024 are as follows:
Bank loans are secured by a first legal charge over the freehold land and property of the group, a debenture over all assets of the group, a guarantee of £1.2m, and a guarantee of £30,000 from a director. Interest on the bank loan is charged at the Bank of England base rate plus 2.38%.
The hire purchase obligations included within other payables are secured on the applicable assets.
The loan included within other loans is secured by a fixed charge on the group's property, plant and equipment, except those assets held under hire purchase, and interest is charged on this loan at LIBOR plus 3.42%.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
The directors have considered the deferred tax liabilities note above and concluded that it is not possible to state the estimated liabilities which will reverse within the next 12 months. This is due to the level of reversal being dependent on events which are not yet known.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year the group and company had the following transactions with related parties, all of whom are related parties by virtue of having either common directors or shareholders, and all transactions were entered into on a commercial arms length basis.
The group and company made sales of £37,971 (2023 - £70,831) to Rabbit Demolition and Excavation Limited and incurred costs of £522 (2023 - £nil). At the statement of financial position date, an amount of £18,692 (2023 - £7,282) was owed to the group and company and is included with other receivables.
The group and company made sales of £73,028 (2023 - £68,480) to Rabbit and Dowling Plant Hire Limited and incurred costs of £88,677 (2023 - £72,069). At the statement of financial position date, a net amount of £3,382 (2023 - £2,642 debtor) was owed by the group and company and is included within other payables.
The group and company made sales of £1,310 (2023 - £2,427) to Briant Broadband Ltd. At the statement of financial position date, an amount of £nil (2023 - £26) was owed to the group and company and is included with other receivables.
The group and company incurred costs of £nil (2023 - £7,112) from Rabbit Skips Limited. At the statement of financial position date, an amount of £nil (2023 - £3,809) was owed by the group and company and is included within other payables.
The group and company made sales of £nil (2023 - £7,007) to HELG Properties Ltd.
The group and company incurred costs of £18,101 (2023 - £13,122) from Gremlin Air LLP during the year.
The group and company made sales of £13,779 (2023 - £10,085) to Sussex Cricket Board. At the statement of financial position date, an amount of £1,808 (2023 - £1,186) was owed to the group and company and is included within trade receivables.
The group and company incurred costs of £24,000 (2023 - £24,000) from Byrpark Limited.
The group and company incurred costs of £180,000 (2023 - £216,000) from HELG Commercial Properties Ltd. The group made payments of £150,000 (2023 - £290,000) and had receipts of £150,000 (2023 - £260,000) in respect of the settlement of liabilities and balances with other parties.
At the statement of financial position date an amount of £99,761 (2023 - £3,973) was owed to the directors' by the group. No interest is charged on these loan.
At the statement of financial position date an amount of £94,891 (2023 - £3,312) was owed to the directors' by the company. No interest is charged on these loan.