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Registered number: 11057296 ANCALA WATER SERVICES BIDCO LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
ANCALA WATER SERVICES BIDCO LIMITED COMPANY INFORMATION
Directors | S M Clunie
| A P R Hough
| D W Owens
Registered number | 11057296
Registered office | Unit 1B Redbrook Business Park
| Wilthorpe Road
| Barnsley
| South Yorkshire
| S75 1JN
Independent auditors | BDO LLP
| Central Square
| 29 Wellington Street
| Leeds
| LS1 4DL
Bankers | Royal Bank of Scotland PLC
| PO Box 39952
| 2 1/2 Devonshire Square
| London
| EC2M 4XJ
ANCALA WATER SERVICES BIDCO LIMITED CONTENTS
| Page
Strategic report | 1 - 5
Directors' report | 6 - 7
Independent auditors' report | 8 - 11
Statement of comprehensive income | 12
Balance sheet | 13
Statement of changes in equity | 14 - 15
Notes to the financial statements | 16 - 25
ANCALA WATER SERVICES BIDCO LIMITED STRATEGIC REPORT FOR THE YEAR ENDED 31 MARCH 2025 The directors present their strategic report and the audited financial statements for the year ended 31 March 2025.
Principal activities
The company was incorporated on 9 November 2017 and the principal activity is that of a holding company to the below companies. Trading Companies: Ancala Water Services (Estates) Limited Ancala Water Services (Defence) Limited As Ancala Water Services Bidco Limited is a holding company the following reports refer to the group rather than the company. Ancala Water Services (Estates) Limited and Ancala Water Services (Defence) Limited Ancala Water Services (Estates) Limited (AWSE) operates a Public Private Partnership Concession Contract with the Ministry of Defence (MOD) for water and waste water services covering the areas of Wales and the South West of England for a 25-year period which commenced on 1 December 2003. Since commencement all operational activities required in delivering the contract as specified by the MOD on behalf of Ancala Water Services (Estates) Limited (AWSE) have been carried out under contract by Ancala Water Services (Defence) Limited (AWSD).
Financial performance and outlook
This year, the group delivered strong financial performance. Company profit before tax was £4,465k (2024 - £15,078k). Net assets at the conclusion of the financial year were £40,919k (2024 - £39,831k). Profit for the year was £3,888k (2024 - £14,945k). Dividend payments were £2,800k (2024 - £15,457k).
Regulatory performance
The health and safety of employees and contractors remains a top priority for the company, with regular board level oversight of safety performance, risks, and practices. All statutory reporting requirements were met, with investment in training, simulated health and safety exercises, and comprehensive health surveillance and health insurance provided for all employees, reinforcing our commitment to wellbeing. Environmental performance and water quality standards are closely monitored, enabling proactive risk management and compliance. No formal penalties or enforcement actions were issued by regulatory bodies during the year, reflecting strong environmental governance and operational discipline. Page 1
ANCALA WATER SERVICES BIDCO LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025
Key performance indicators
The group measures overall performance by monitoring activities against four key strategic priorities: ∙Deliver our customer and regulatory commitments. ∙Develop and engage our people. ∙Improve performance, efficiency and effectiveness. ∙Deliver sustainable growth. Deliver our customer and regulatory commitments The group delivered strong operational performance, achieving 99.96% compliance with water and wastewater quality standards. It remains focused on maintaining and enhancing its infrastructure through a targeted asset investment plan aimed at meeting required condition standards. Leakage performance reached 1.71 Mm³, outperforming both the industry average and the company’s internal target of 1.94 Mm³. In addition, Health and Safety performance was robust, achieving an internal Health and Safety Index score of 5.54 against an internal benchmark of 5.50. Develop and engage our people The group remains committed to investing in its people, processes, training, and development, with employee wellbeing and engagement continuing to be strategic priorities. A range of development initiatives and process improvements are in place to ensure the workforce is skilled, motivated, and aligned with organisational goals. The annual independent employee engagement survey, conducted independently by Workbuzz, achieved an engagement score of 83% with a 92% response rate, exceeding the internal target of 80%, maintaining upper quartile performance and outperforming national and industry benchmarks. These results reflect strong levels of employee satisfaction, alignment, and organisational trust. To further support employee wellbeing, the company offers a robust benefits package, including life assurance, critical illness cover, a health cash plan, enhanced pension contributions, and full top-ups on statutory payments for all permanent employees. In addition, the company car allowance scheme was reviewed and enhanced with the introduction of a new salary sacrifice scheme to deliver additional financial benefits to employees. These efforts reflect the company’s ongoing commitment to fostering an inclusive, supportive, and high-performing workplace. Improve performance, efficiency and effectiveness Profit before tax is a key indicator of performance throughout the year and was £4,465k (2024 - £15,078k). The business will continue to prioritise improvements in operational performance and efficiency, leveraging recent investments in advanced systems and technologies. These will be complemented by sustained investment in upskilling and developing our workforce to ensure we remain agile, capable, and future-ready. In addition to operational excellence, we are committed to creating lasting value beyond our core services. We will proactively seek opportunities to give back to society by supporting charitable causes, engaging with local initiatives, and contributing to the wellbeing and development of the communities in which we operate. Deliver sustainable growth We will continue to work in partnership with our current customers and actively seek new opportunities to grow the business. Page 2
ANCALA WATER SERVICES BIDCO LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025
Principal risks and uncertainties
Strategic, financial, commercial, operational, social, environmental and ethical risks are all considered as part of the groups’ controls, which are designed to manage rather than eliminate the risk of failure to achieve business objectives. Therefore, they can only provide reasonable, not absolute, assurance against material misstatement or loss provided for in the contract. At present there are no immediate risks identified which are considered likely to have a significant impact on the short or long-term value of the group. The company continues to monitor risks associated with inflation, global geopolitical tensions, interest rate pressures, potential political changes, and cybersecurity. Inflation has been a more prominent factor over the past 24 months, however, its impact has been limited due to contractual protections with primary customers, whereby charge-out tariffs are adjusted annually in line with inflation. Ongoing global conflicts have not negatively impacted performance to date, and no material change is anticipated in the next 12 months. Any rise in interest rates is expected to have limited impact, as the group successfully refinanced in September 2023 through to 2028, and all interest-bearing debt is fully hedged via interest rate swaps. Management notes the change in UK government and resultant changes in policy and no material adverse effects on business performance are expected. While cybersecurity remains a key risk, the company has continued to enhance its systems and provides quarterly training and awareness updates to all employees. The primary 25 year contract with MOD runs to 30 November 2028 and the strategic partnership and relationship with the customer, the Defence Infrastructure Organisation (DIO), remains positive. In the 2025/26 financial year, the Defence Infrastructure Organisation (DIO) will conclude its quinquennial review of asset condition grading. The risk of an adverse outcome is assessed as very low, with Ancala Water Services fully committed to meeting all obligations under the Aquatrine contract. Over the past three years, the company has invested £25.9 million in Ministry of Defence (MOD) assets, demonstrating a sustained focus on asset quality and service delivery. A further £4.2 million of capital investment is planned for the coming year to continue supporting infrastructure improvements and contractual commitments.
Financial risk management
The company’s non-derivative financial instruments comprise bank balances, intercompany balances, trade debtors and trade creditors. The main purpose of these instruments is to finance the company’s operations. The liquidity risk of trade creditors is managed by ensuring sufficient funds are available to meet amounts due. In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the operation of intercompany cash management and forecasting. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance by monitoring levels of debt finance and the related finance costs. Page 3
ANCALA WATER SERVICES BIDCO LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025 Price risk Due to the relatively small size of the group’s operations and the nature of its contracts with MOD, there is little exposure to commodity price risk. Given the rise in inflation, management has recognised this will need to be continually assessed, however, the costs of managing exposure to commodity price risk currently exceeds any potential benefits. The directors will revisit the appropriateness of this policy should the group’s operations change by monitoring levels of debt finance and the related finance costs. The company does have some exposure to the recent price review by the water companies (PR24) which is in part set off by the indexation mechanism in the principal contract. Management has undertaken a sensitivity analysis and assessment of the risk and impact of PR24 price review OFWAT determination which has been modelled and included in future financial plans through to the end of the principal contract. Credit risk The MOD is the primary customer of AWSE. AWSE is the primary customer of AWSD, and therefore credit risk is assessed as very low. Liquidity risk The group actively maintains a mixture of long-term and short-term debt finance that is designed to ensure the group has sufficient available funds for operations. Interest rate cash flow risk The group uses a derivative financial instrument in the form of an interest rate swap to reduce its exposure to interest rate fluctuations on its floating rate bank loan. Following the refinancing that took place in September 2023 the Interest rate swap was settled in full. AWS Holdco Limited entered into a new Interest rate swap which is back-to-back with the new loan. This is inline with the group’s strategy to continue to reduce its exposure to interest rate fluctuations.
Directors' statement of compliance with duty to promote the success of the company
The board of directors consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1) Companies Act 2006) in the decisions taken during the year ended 31 March 2025. The group is committed to being a responsible business. Our mission is to own and manage water and waste water assets and optimise operations to create value for customers and shareholders. The core values that underpin the strategy and objectives are Integrity, Passion, Ambition and Inclusivity. This is demonstrated and actively encouraged in dealings with our employees, customers, suppliers and stakeholders in the wider community. Internal communications play a key part in keeping the company employees engaged and aligned to the overall strategy, the CEO provides regular updates to employees via the monthly business update, to ensure that timely and consistent messages are provided to all employees. As the Board of Directors, our intention is to behave responsibly and ensure that management operate the business in a responsible manner, operating within the high standards of business conduct and good governance expected for a business such as ours and in doing so, will contribute to the delivery of our plan. The intention is to nurture our reputation, through both the construction and delivery of our plan, that reflects our responsible behaviour. Our Governance structure through Board, Committee (for example: EMT, Ops Sub Group, H&S groups, Employee Forum, etc) and audit fosters a culture of openness, scrutiny and challenge. Good working relationships have been developed, with regular Board interactions and the opportunity for Board members to get involved in Group wide business. Page 4
ANCALA WATER SERVICES BIDCO LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025 As the Board of Directors, our intention is to behave responsibly toward our shareholders and treat them fairly and equally, so they too may benefit from the successful delivery of our plan. These items are given as examples of the Directors’ application of the principles of s172 Companies Act across the year, and is not an exhaustive list. This report was approved by the board on 12 August 2025 and signed on its behalf.
................................................ A P R Hough Director
Page 5
ANCALA WATER SERVICES BIDCO LIMITED DIRECTORS' REPORT FOR THE YEAR ENDED 31 MARCH 2025 The directors present their report and the financial statements for the year ended 31 March 2025. The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. 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; ∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; ∙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.
Results and dividends
The profit for the year, after taxation, amounted to £3,888 k (2024 - £14,945 k). Interim dividends of £2,800k (2024 - £15,457k) were paid during the year. The Directors do not recommend the payment of a final dividend.
Going concern
After due consideration of all relevant factors, including the current economic environment, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future taking into account additional bank covenants that have arisen following the refinancing on 28th September 2023. The directors have prepared forecasts for at least 12 months from the date of approval of these financial statements, which takes into account their trading forecasts. The directors have also taken into account the financing available to the company & group, including consideration of compliance with loan covenants. The directors have performed sensitivity analysis and concluded that the level of decline in revenues to result in a covenant breach is not plausible due to the nature of the contract with the MOD. Accordingly, the directors do not believe there are any material uncertainties which may cast significant doubt on the ability of the company & group to continue as a going concern, as such, they continue to adopt the going concern basis in preparing the annual report and accounts. Page 6
ANCALA WATER SERVICES BIDCO LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2025
Directors
The directors who served during the year were:
S M Clunie
A P R Hough
D W Owens
Important adjusting events after the financial period
There have been no significant events affecting the company since the year end.
Directors indemnity
As permitted by the Articles of Association, the directors have the benefit of an indemnity which is a qualifying third-party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force. The group also purchased and maintained Directors’ and Officers' liability insurance in respect of itself and its Directors throughout the financial year.
Disclosure of information to auditors
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.
Auditors
The auditors, BDO LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. This report was approved by the board on 12 August 2025 and signed on its behalf.
................................................ A P R Hough Director
Page 7
ANCALA WATER SERVICES BIDCO LIMITED INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ANCALA WATER SERVICES BIDCO LIMITED Opinion on the financial statements In our opinion, the financial statements: ∙give a true and fair view of the state of the Company’s affairs as at 31 March 2025 and of its profit for the year then ended; ∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and ∙have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements of Ancala Water Services Bidco Limited (“the Company”) for the year ended 31 March 2025 which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity 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 Financial Reporting Standard 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the 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. 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 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 Directors are responsible for the other information. The other information comprises the information included in the Annual Report and Financial Statements, other than the financial statements and our auditor’s report thereon. 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. Page 8
ANCALA WATER SERVICES BIDCO LIMITED INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ANCALA WATER SERVICES BIDCO LIMITED 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. Other Companies Act 2006 reporting 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. 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, or returns adequate for our audit have not been received from branches not visited by us; or ∙the 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. Responsibilities of Directors 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 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 Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements 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. Page 9
ANCALA WATER SERVICES BIDCO LIMITED INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ANCALA WATER SERVICES BIDCO LIMITED Extent to which the audit was capable of detecting irregularities, including fraud 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: Non-compliance with laws and regulations Based on: ∙Our understanding of the Company and the industry in which it operates; ∙Discussion with management and those charged with governance; and ∙Obtaining an understanding of the Company’s policies and procedures regarding compliance with laws and regulations. We considered the significant laws and regulations to be, including but not limited to, the applicable accounting framework, UK company law and UK tax legislation. The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to include compliance with Environment Agency permits, health and safety regulations and GDPR regulations, among others. Our procedures in respect of the above included: ∙Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations; ∙Review of financial statement disclosures and agreeing to supporting documentation; ∙Review of legal expenditure accounts to understand the nature of expenditure incurred; and ∙Review correspondence with relevant parties including the Environment Agency. Fraud We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included: ∙Enquiry with management and those charged with governance regarding any known or suspected instances of fraud; ∙Obtaining an understanding of the Company’s policies and procedures relating to: °Detecting and responding to the risks of fraud; and °Internal controls established to mitigate risks related to fraud. ∙Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud; ∙Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; ∙Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and ∙Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these. Page 10
ANCALA WATER SERVICES BIDCO LIMITED INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ANCALA WATER SERVICES BIDCO LIMITED Based on our risk assessment, we considered the areas most susceptible to fraud to be the override of controls through posting of inappropriate journals. Our procedures in respect of the above included: ∙Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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. Neil Ebdon (Senior statutory auditor) for and on behalf of BDO LLP, Statutory Auditor Leeds, UK 13 August 2025 BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). Page 11
ANCALA WATER SERVICES BIDCO LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2025
| 2025 | 2024
Note | £000 | £000
Turnover | 3 | 50 | 50
Gross profit |  | 50 | 50
Administrative expenses |  | (7) | (20)
Operating profit |  | 43 | 30
Dividends from shares in subsidiaries |  | 2,800 | 13,454
Interest receivable and similar income | 6 | 2,185 | 2,001
Interest payable and similar expenses | 7 | (563) | (407)
Profit before tax |  | 4,465 | 15,078
Tax on profit | 8 | (577) | (133)
Profit for the financial year |  | 3,888 | 14,945
There was no other comprehensive income for 2025 (2024:£NIL).
The notes on pages 16 to 25 form part of these financial statements.
Page 12
ANCALA WATER SERVICES BIDCO LIMITED REGISTERED NUMBER: 11057296 BALANCE SHEET AS AT 31 MARCH 2025
| 2025 | 2025 | 2024 | 2024
Note | £000 | £000 | £000 | £000
Fixed assets |  |  |  |  |
Investments | 9 |  | 20,828 |  | 20,828
|  |  | 20,828 |  | 20,828
Current assets |  |  |  |  |
Debtors: amounts falling due after more than one year | 10 | 16,382 |  | 17,593 |
Debtors: amounts falling due within one year | 10 | 12,509 |  | 9,611 |
Cash at bank and in hand | 11 | 230 |  | 224 |
|  | 29,121 |  | 27,428 |
Creditors: amounts falling due within one year | 12 | (3,963) |  | (425) |
Net current assets |  |  | 25,158 |  | 27,003
Total assets less current liabilities |  |  | 45,986 |  | 47,831
Creditors: amounts falling due after more than one year | 13 |  | (5,067) |  | (8,000)
Net assets |  |  | 40,919 |  | 39,831
Capital and reserves |  |  |  |  |
Called up share capital | 15 |  | - |  | -
Share premium account | 16 |  | 37,605 |  | 37,605
Profit and loss account | 16 |  | 3,314 |  | 2,226
Total equity |  |  | 40,919 |  | 39,831
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 12 August 2025.
................................................ A P R Hough
Director
The notes on pages 16 to 25 form part of these financial statements. Page 13
ANCALA WATER SERVICES BIDCO LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2025
| Called up share capital | Share premium account | Profit and loss account | Total equity
| £000 | £000 | £000 | £000
At 1 April 2024 | - | 37,605 | 2,226 | 39,831
Comprehensive income for the year |  |  |  |
Profit for the year | - | - | 3,888 | 3,888
Total comprehensive income for the year | - | - | 3,888 | 3,888
Contributions by and distributions to owners |  |  |  |
Dividends: Equity capital | - | - | (2,800) | (2,800)
Total transactions with owners | - | - | (2,800) | (2,800)
At 31 March 2025 | - | 37,605 | 3,314 | 40,919
| The notes on pages 16 to 25 form part of these financial statements.
Page 14
ANCALA WATER SERVICES BIDCO LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2024
| Called up share capital | Share premium account | Profit and loss account | Total equity
| £000 | £000 | £000 | £000
At 1 April 2023 | - | 37,605 | 2,738 | 40,343
Comprehensive income for the year |  |  |  |
Profit for the year | - | - | 14,945 | 14,945
Total comprehensive income for the year | - | - | 14,945 | 14,945
Contributions by and distributions to owners |  |  |  |
Dividends: Equity capital | - | - | (15,457) | (15,457)
Total transactions with owners | - | - | (15,457) | (15,457)
At 31 March 2024 | - | 37,605 | 2,226 | 39,831
| The notes on pages 16 to 25 form part of these financial statements.
Page 15
ANCALA WATER SERVICES BIDCO LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 1.Accounting policies
| 1.1 | Statutory information
Ancala Water Services Bidco Limited is a private company, limited by shares and incorporated in England and Wales, company number 11057296. The registered office is at Unit 1B Redbrook Business Park, Wilthorpe Road, Barnsley, S75 1JN.
| 1.2 | Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
| 1.3 | Basis of preparation of financial statements
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. 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 2).
| 1.4 | Financial Reporting Standard 102 - reduced disclosure exemptions
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; ∙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) and 12.29A; ∙the requirements of Section 33 Related Party Disclosures paragraph 33.7. This information is included in the consolidated financial statements of Ancala Water Services Investco Limited as at 31 March 2025 and these financial statements may be obtained from Companies House.
| 1.5 | Exemption from preparing consolidated financial statements
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. Page 16
ANCALA WATER SERVICES BIDCO LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 1.Accounting policies (continued)
| 1.6 | Going concern
After due consideration of all relevant factors, including the current economic environment, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future taking into account additional bank covenants that have arisen following the refinancing on 28th September 2023. The directors have prepared forecasts for at least 12 months from the date of approval of these financial statements, which takes into account their trading forecasts. The directors have also taken into account the financing available to the company & group, including consideration of compliance with loan covenants. The directors have performed sensitivity analysis and concluded that the level of decline in revenues to result in a covenant breach is not plausible due to the nature of the contract with the MOD. Accordingly, the directors do not believe there are any material uncertainties which may cast significant doubt on the ability of the company & group to continue as a going concern, as such, they continue to adopt the going concern basis in preparing the annual report and accounts.
| 1.7 | Revenue recognition
Turnover relates to management services provided and are recognised as revenue over the period that the services are provided.
| 1.8 | Interest income
Interest income is recognised in profit or loss using the effective interest method.
| 1.9 | Finance costs
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
| 1.10 | Taxation
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that: ∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and ∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is Page 17
ANCALA WATER SERVICES BIDCO LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 1.Accounting policies (continued)
| 1.10 | Taxation (continued)
determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
| 1.11 | Valuation of investments
Investments in subsidiaries are measured at cost less accumulated impairment.
| 1.12 | Debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
| 1.13 | Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
| 1.14 | Creditors
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
| 1.15 | Borrowings
All borrowing costs are recognised in the Statement of Comprehensive Income in the year in which they are incurred.
| 1.16 | Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
| 1.17 | Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
| 1.18 | Financial instruments
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 Balance sheet when the company becomes party to the contractual provisions of the instrument. Page 18
ANCALA WATER SERVICES BIDCO LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 1.Accounting policies (continued)
| 1.18 | Financial instruments (continued)
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. Basic financial assets Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments. Impairment of financial assets Financial assets are assessed for indicators of impairment at each reporting date. Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate. If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss. Financial liabilities Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the company after the deduction of all its liabilities. Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. Page 19
ANCALA WATER SERVICES BIDCO LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025 1.Accounting policies (continued)
| 1.18 | Financial instruments (continued)
2. | Judgements in applying accounting policies and key sources of estimation uncertainty
In preparing these financial statements, the directors have made the following judgements: • Investments (Note 9) Determine whether there are indicators of impairment of the company's investments. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of each investment.
3. | Turnover
The whole of the turnover is attributable to management fees to group companies.
| All turnover arose within the United Kingdom.
4. | Auditors' remuneration
| Auditor's remuneration of £3.9k (2024 - £3.5k) has been borne by other group companies for the period.
| The company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent company.
5. | Employees
| The Company has no employees other than the directors, who did not receive any remuneration (2024 - £NIL).
| The company's Director's are remunerated via their Directorships of Ancala Water Services (Defence) Limited, it is not practicable to ascertain the proportion of the Directors emoluments that relate to this company.
6. | Interest receivable
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Interest from subsidiaries | 2,185 | 2,001
|  | 2,185 | 2,001
Page 20
ANCALA WATER SERVICES BIDCO LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
7. | Interest payable and similar expenses
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Interest payable to group companies | 563 | 407
|  | 563 | 407
8. | Taxation
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Corporation tax |  |
| Current tax on profits for the year | 416 | 133
| Adjustments in respect of previous periods | 161 | -
|  | 577 | 133
| Total current tax | 577 | 133
| Factors affecting tax charge for the year
| The tax assessed for the year is lower than (2024 - lower than) the standard rate of corporation tax in the UK of 25% (2024 - 25%). The differences are explained below:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Profit on ordinary activities before tax | 4,465 | 15,078
| Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%) | 1,116 | 3,769
| Effects of: |  |
| Adjustments to tax charge in respect of prior periods | 161 | -
| Non-taxable income | (700) | (3,363)
| Group relief | - | (273)
| Total tax charge for the year | 577 | 133
| Factors that may affect future tax charges
There were no factors that may affect future tax charges. Page 21
ANCALA WATER SERVICES BIDCO LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
9. | Fixed asset investments
|  | Investments in subsidiary companies
|  | £000
| Cost or valuation |
| At 1 April 2024 | 20,828
| At 31 March 2025 | 20,828
| Subsidiary undertakings
| The following were subsidiary undertakings of the company:
| Name | Registered office | Principal activity | Class of shares | Holding
| Ancala Water Services (Estates) Limited | Unit 1b Redbrook Business Park, Wilthorpe Road, Barnsley, South Yorkshire, S75 1JN | Water and waste water services | Ordinary | 100%
| Ancala Water Services (Defence) Limited | Unit 1b Redbrook Business Park, Wilthorpe Road, Barnsley, South Yorkshire, S75 1JN | Water and waste water services | Ordinary | 100%
Page 22
ANCALA WATER SERVICES BIDCO LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
10. | Debtors
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Due after more than one year |  |
| Amounts owed by group undertakings | 16,382 | 17,593
|  | 16,382 | 17,593
| The amounts owed by group undertakings due after one year relate to intercompany loan notes which are unsecured, at an interest rate of 10% and are repayable 30 November 2028.
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Due within one year |  |
| Amounts owed by group undertakings | 12,509 | 9,546
| Corporation tax | - | 65
|  | 12,509 | 9,611
| The amounts owed by group undertakings due within one year relate to interest on intercompany loan notes and a current intercompany balance with Ancala Water Services Holdco Limited, which are payable immediately.
11. | Cash and cash equivalents
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Cash at bank and in hand | 230 | 224
|  | 230 | 224
Page 23
ANCALA WATER SERVICES BIDCO LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
12. | Creditors: Amounts falling due within one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Amounts owed to group undertakings | 3,503 | 403
| Corporation tax | 459 | -
| Other taxation and social security | 1 | 5
| Accruals and deferred income | - | 17
|  | 3,963 | 425
| The amounts owed to group undertakings are interest on unsecured loan notes payable to Ancala Water Services Holdco Limited and are payable immediately.
13. | Creditors: Amounts falling due after more than one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Amounts owed to group undertakings | 5,067 | 8,000
|  | 5,067 | 8,000
| The amounts owed to group undertakings are unsecured loan notes payable to Ancala Water Services Holdco Limited at an interest rate of 10% and are repayable 30 November 2028.
14. | Dividends
|  |  |  |  | 2025 | 2024
|  |  |  |  | £000 | £000
| Interim dividend of £1,400 (2024 - £7,728) per each Ordinary share | 2,800 | 15,457
|  | 2,800 | 15,457
15. | Share capital
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
|  | Allotted, called up and fully paid |  |
|  | 2,000 (2024 - 2,000) Ordinary shares of £0.01 each | 20 | 20
| The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
Page 24
ANCALA WATER SERVICES BIDCO LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
16. | Reserves
Called up share capital This reserve represents the nominal value of equity shares issued. Share premium account This reserve represents the premium on issue of equity shares, net of any issue costs. Profit and loss account This reserve represents the cumulative profits or losses, net of dividends and other adjustments.
17. | Related party transactions
| Key management personnel include all directors across the group who together have authority and responsibility for planning, directing and controlling the activities of the group. The total compensation paid to directors in the group for services provided was £535k (2024 - £589k). The company has taken advantage of the FRS102 exemption in relation to balances with other group companies.
18. | Controlling party
The company's immediate parent is Ancala Water Services Holdco Limited, registered in England and Wales. This company prepares consolidated accounts which include the Company and are available from Companies House. The largest parent is Ancala Water Services Investco Limited, registered in England and Wales. This company prepares consolidated accounts which include the Company and are available from Companies House. Whilst Ancala Water Services Investco Limited has no single ultimate controlling party, funds managed by Ancala Partners LLP collectively control the entity.
Page 25