The directors present their strategic report of ABSL Power Solutions Ltd for the year ended 31 March 2025. ABSL Power Solutions Ltd is a subsidiary of EnerSys Inc, a publicly traded Group listed on the New York Stock Exchange.
The profit for the year after taxation amounted to £197,000 (2024 profit: £1,263,000).
The company is a wholly owned subsidiary of Enersys Inc., a company incorporated in the United States of America, whose financial statements are publicly available.
On top of local management and operations, Enersys manages its operations through a Line of Business Structure. Additional details regarding performance of the Speciality in which the company is included are reported in the annual results of Enersys, the ultimate parent company.
Inflationary impact & supply chain
The Company has successfully navigated the complexities of aerospace supply chain lead times, overcoming significant logistical challenges. Through strategic planning and agile operations, the company has consistently met customer requirements, reinforcing its reputation for reliability and excellence in the aerospace sector. Long term partnerships with key raw materials has again yielded below inflation price increases and cost savings.
Foreign currency risks
The company’s export sales are principally made in Euros, with a portion in US dollars, and it is therefore exposed to the movements in exchange rates. The group’s treasury function takes out contracts to manage this risk at a group level.
Credit risks & interest rate risks
The company is financed by a fixed rate loan from its parent and has no third party debt. It therefore has no interest rate exposure.
Group risks are discussed in the group’s annual report which does not form part of this report.
Geopolitical Risks
The Directors have considered the potential impact of ongoing geopolitical uncertainties, including the conflict in Ukraine, the imposition of trade tariffs by the United States, and broader global economic tensions. While these matters continue to create volatility in international markets, the Company’s operations, financial position, and performance have not been materially affected during the reporting period. The Directors will continue to monitor developments closely, but at present, these risks are not expected to have a significant adverse impact on the Company.
Climate change risks
The Board of Directors recognizes the impact of climate change on the company and divides climate-related risks into two major categories: (1) risks related to the transition to a lower-carbon economy and (2) risks related to the physical impacts of climate change.
Transitioning to a lower-carbon economy may entail extensive policy, legal, technology, and market changes to address mitigation and adaptation requirements related to climate change. Depending on the nature, speed, and focus of these changes, transition risks may pose varying levels of financial and reputational risk to organizations. The Board of Directors has identified a potential risk resulting from transitioning to a lower-carbon economy as it could lead to increased energy prices, necessary capital expenditures and costs of compliance with new regulations, all of which can affect the company’s operations and profitability.
Physical risks resulting from climate change can be event driven (acute) or longer-term shifts (chronic) in climate patterns. Physical risks may have financial implications for organizations, such as direct damage to assets and indirect impacts from supply chain disruption. The Board of Directors has assessed the physical risk resulting from the climate change to be low due to location of the business and diversified supply chain.
Given the straightforward nature of the business, the directors use standard KPI's to maintain their understanding of the development, performance or position of the business including Revenue and Operating Profits.
Metric | 2025 £’000 | 2024 £’000 |
|
Turnover | 8,248 | 8,910 | Decrease primarily driven by a shift in resource allocation towards training, internal readiness and operational alignment, impacting project-related utilisation.
|
Operating profit | 81 | 1,596 | Decrease a result of temporary challenges with expanded workforce utilisation and work in progress write-offs made during the year.
|
Trade debtors | 1,292 | 1,392 | Trade debtors are impacted by timing of project deliverable milestones and monitored closely for timely receipt |
Work in progress | 2,751 | 2,231 | Growth in delivered projects and orderbook is reflected in WIP and monitored closely for project performance. |
On behalf of the board
The directors present their annual report and the audited financial statements of ABSL Power Solutions Ltd ("the company") for the year ended 31 March 2025. The Company's registered number is 02840892.
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The directors take their responsibility in this area seriously and have in place appropriate reporting procedures which ensure that all incidents are notified and actions reviewed. Where qualified exemptions exist, in respect of batteries, the Company is working with its suppliers to meet the requirements ahead of time.
Disclosures on financial risk management is presented in note 3 of these financial statements. On this basis no discussion of financial risk management is made in the directors' report.
The company's policy is to agree terms of trading which are appropriate for suppliers' markets and to abide by such terms where suppliers' obligations have been met.
The average creditor payment period at 31 March 2025 was 73 days (2024: 44 days).
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and financial instruments.
The auditor, BHP LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Basis for qualified 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 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.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the stock quantities of £3.4m held at 31 March 2025 and recognised in the balance sheet. We have concluded that where the other information refers to the inventory balance or related balances such as cost of sales, it may be materially misstated for the same reason.
Opinions on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the company's trade;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company;
we assessed the extent of compliance with the laws and regulations considered above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by;
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risks of fraud through management bias and override controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
discussions with senior management regarding relevant regulations and reviewing the company’s legal and professional fees.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the director’s and other management and the inspection of regulatory and legal correspondence.
As part of our audit, we addressed the risk of management override of internal controls, including testing of journals and review of the nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
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.
ABSL Power Solutions Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Building F4 Culham Science Centre, Culham, Abingdon, Oxfordshire, United Kingdom, OX14 3ED.
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 £000.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
the requirements of IFRS 7 Financial Instruments: Disclosures;
the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements ("IAS 1') to present comparative information in respect of:
(i) paragraph 79(a)(iv) of IAS 1 Presentation of financial statements;
(ii) paragraph 73(e) of IAS 16 Property, Plant and Equipment;
(iii) paragraph 118(e) of IAS 38 Intangible Assets; and
the requirements of paragraphs 10(d), 10(f), 39(c) and 134-136 of IAS 1 Presentation of Financial statements;
the requirements of IAS 7 Statement of Cash Flows;
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
the requirements of paragraph 17 of IAS 24 Related Party Disclosures ('IAS 24');
the requirements in IAS 24 to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the income statement.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. These leases are considered pending transactions and the expenses are recognised in the material costs in the period in which they arise.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. The interest rates were calculated on the basis of the remaining term of the leases.
Lease payments included in the measurement of the lease liability comprise:
fixed lease payments (including in-substance fixed payments), less any lease incentives
The lease liability is included in 'Creditors' on the Balance Sheet. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised discount rate.
the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
The depreciation starts at the commencement date of the lease. The right-of-use assets are included in the Tangible Fixed Assets in the Balance Sheet.
The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss in Exceptional Items.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has not used this practical expedient.
Research and development
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects relating to developing new integrated power systems are recognised as intangible assets when it is probable that the project will be a success, considering its commercial and technological feasibility, and costs can be measured reliably. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the income statement.
Liabilities
Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Borrowings
Borrowings are recognised upon origination at fair value of the sums paid or received in exchange for the liability, and subsequently measured at amortised cost using the effective interest method. Interest free payables are booked at their nominal value.
In the application of the company’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, 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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Profit on long term contracts is recorded as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated to reflect the proportion of the work carried out at the year end, by recording revenue and related costs as contract activity progresses. Revenue applicable to long term contracts represents the value of work completed during the year, calculated with reference to the total expected hours to complete the contracts. Revenues derived from change orders on contracts are recognised at estimated amounts when they become probable. Amounts included on the balance sheet in relation to contracts are shown in note 12.
Financial risk factors
The Company’s activities expose it to a variety of financial risks: market risk (primarily currency risk), credit risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance.
(a) Market risk
(i) Foreign exchange risk
The Company is exposed to foreign exchange risk arising from various currency exposures, predominantly with the Eurozone as a proportion of the company’s sales are to customers in those countries. During the year, net transactions in currencies other than GBP amounted to approximately £2.7m. (2024: £1.6m), If the currencies above had weakened/strengthened by 10% against the GBP with all other variables held constant, the post-tax profit for the year would have been approximately £0.27m higher/lower.
(ii) Cash flow and fair value interest rate risk
The Company has interest bearing liabilities. Short and medium term financing requirements are provided by a current account arrangement with EnerSys Luxembourg Finance Sarl. The balance owed to which was £4.7m as at 31 March 2025 (2024: £2.8m). These borrowings currently bear interest at a rate of 5.75% per annum (2024: 6.75%). This is repayable on demand.
The Company has made a long-term loan to EnerSys Luxembourg Finance Sarl with a balance of £4.75m at 31st March 2025 (2024 £4.75m). The accrued interest on the borrowing at 31st March 2025 owed by EnerSys Luxembourg Finance Sarl was £2.4m (2024, owed by EnerSys Luxembourg Finance Sarl, £2.2m). This is repayable in 2026.
As such, management consider that the Company is not significantly exposed to cash flow and fair value interest rate risk.
(b) Credit risk
Credit risk arises from cash and cash equivalents, and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions. For banks and financial institutions, only independently rated parties with a minimum rating of “A” are accepted. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, the credit quality of the customer is assessed taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by management. Management monitors the utilisation of credit limits regularly.
Concentrations of credit risk with respect to trade receivables are limited due to the Company's customer base being largely ‘Blue Chip’ organisations. Due to this, management believe there is no further credit risk provision required in excess of normal provision for doubtful receivables.
(c) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet its cash commitments as they fall due. Liquidity risk may result from either the inability to realise financial assets quickly at their fair values or from the inability to generate cash inflows as anticipated. Management monitors rolling forecasts of the Company’s liquidity reserve and cash and cash equivalents on the basis of expected cash flow.
Capital risk management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders. The Company have focused on maximising shareholder value.
At 31 March 2025, the Company is organised on a worldwide basis into three main geographical segments. A geographical analysis of turnover is as follows:
At 31 March 2025, the Company was operating in only one industrial sector, further analysis would provide no further information.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The aggregate remuneration paid to Directors was nil (2024: nil). The Directors are paid by other Group companies.
The charge for the year can be reconciled to the profit per the profit and loss account as follows:
Other classes of fixed assets which have been fully depreciated in previous periods are no longer presented in the table above.
Included within amounts owed by fellow group undertakings is a loan of £4.75m due to the Company from EnerSys Luxembourg Finance Sarl. at 31 March 2025 (2024: £4.75m in non-current). Interest accrues on this balance at a rate of 3.5% per annum and is repayable by 24 March 2026.
Amounts due to group undertakings relate to a current working capital arrangement and will be repaid as and when funds are available. Interest is charged at a variable rate of 1.5% above the UK Base rate and in FY25 amounted to £180k (2024: £96k).
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
Unrecognised deferred tax assets in relation to fixed asset differences amounted to £nil (2024: £4k).
Each holder of an ordinary share is entitled to one vote for each share held at all meetings of shareholders and will be entitled to any dividends declared by the Board of Directors.
Share premium represents the amount paid for shares in excess of par value.
The capital redemption reserve represents the difference between the nominal value of company shares previously redeemed or purchased and the amount paid to repurchase the shares.
At 31 March 2025, guarantees were in place in relation to the Company's operations totalling £790k (2024: £561k). This comprised Performance bonds of £497k (2024: £461k) and VAT / Duty deferment guarantee of £100k (2024: £100k).
No economic outflow is expected as a result of these contingencies.
Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows: