Registered number: 02045340
For the Year Ended 30 April 2025
MTS Cleansing Services Limited
Company Information
MTS Cleansing Services Limited
Contents
MTS Cleansing Services Limited
Strategic Report
For the Year Ended 30 April 2025
The directors present the strategic report for the year ended 30 April 2025.
The principal activity of the company continues to be that of providing liquid waste management and drainage solutions to the utilities industry as well as individuals and small businesses.
The year ended 30th April 2025 saw a reduction in turnover from the previous year’s record high. This was mainly driven by reduced spending from the water utility customers as AMP7 ended in March 2025.
The impact of climate change over the past few years is extremely evident within our region, as we regularly experience periods of very wet and very dry periods. This coupled with the increasing demand for housing development within our region, increases the pressures placed upon the sewage infrastructure.
However, there were fewer wet weather periods in this period (especially in early 2025 and the southern area of our operations) which also impacted the company’s turnover with less demand of emergency call outs from our customers.
This reduction in turnover was the main driver of the loss in the year. The company’s resources and overheads had previously scaled up to meet the high demand of the last few years, and this was not covered by the reduced income experienced in the period. Resources were not immediately adjusted as there was an expectation that they would be required for future workstreams along with the requirement to meet existing contractual obligations.
Although the cost of living crisis lessened somewhat during the reporting period, the company is still experiencing inflationary pressure especially with regard to vehicle and staff costs. It is not always possible to increase our charging rates to cover these rising costs due to contractual terms.
Unfortunately, turnover continues to decrease in the following year as the changes in the Southern Water contract come into effect from September 2025.
The reduced turnover and profitability are now being felt in the company’s cashflow, and the Directors have embarked on a plan to reposition the business to ensure it is robust to continue to service its customers in the future. This is a wide-ranging operational plan that is allied with a refinancing process to ensure sufficient working capital is available. The company has secured a bridging facility due to be drawn down in mid-May 2026 to allow transition to permanent refinancing facilities June/July 2026.
The company is subject to key performance indicators to the water authorities in relation to levels of service, recycling, health & safety, response times and financial performance and such KPI’s always average in the high 90 percentages. General key performance indicators in the year were as follows:
The year ended 30th April 2025 saw a reduction in turnover from the previous year’s record high. This was mainly driven by reduced spending from the water utility customers as AMP7 ended in March 2025.
The impact of climate change over the past few years is extremely evident within our region, as we regularly experience periods of very wet and very dry periods. This coupled with the increasing demand for housing development within our region, increases the pressures placed upon the sewage infrastructure.
However, there were fewer wet weather periods in this period (especially in early 2025 and the southern area of our operations) which also impacted the company’s turnover with less demand of emergency call outs from our customers.
This reduction in turnover was the main driver of the loss in the year. The company’s resources and overheads had previously scaled up to meet the high demand of the last few years, and this was not covered by the reduced income experienced in the period. Resources were not immediately adjusted as there was an expectation that they would be required for future workstreams along with the requirement to meet existing contractual obligations.
Although the cost of living crisis lessened somewhat during the reporting period, the company is still experiencing inflationary pressure especially with regard to vehicle and staff costs. It is not always possible to increase our charging rates to cover these rising costs due to contractual terms.
Unfortunately, turnover continues to decrease in the following year as the changes in the Southern Water contract come into effect from September 2025.
The reduced turnover and profitability are now being felt in the company’s cashflow, and the Directors have embarked on a plan to reposition the business to ensure it is robust to continue to service its customers in the future. This is a wide-ranging operational plan that is allied with a refinancing process to ensure sufficient working capital is available. The company has secured a bridging facility due to be drawn down in mid-May 2026 to allow transition to permanent refinancing facilities June/July 2026.
The company is subject to key performance indicators to the water authorities in relation to levels of service, recycling, health & safety, response times and financial performance and such KPI’s always average in the high 90 percentages. General key performance indicators in the year were as follows:
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MTS Cleansing Services Limited
Strategic Report (continued)
For the Year Ended 30 April 2025
The Directors do not believe there is a risk to turnover resulting from performance or quality of service. However, the Directors do recognise that a significant proportion of turnover is derived from reactionary work for water utility companies. This work may be subject to the prevailing weather conditions and demand is expected to be reduced in dry periods. The Directors are also mindful that the water utility customers are subject to regulatory periods which may make demand cyclical.
The main risks to the company come from some of our direct costs, however, the company can charge some of these costs directly onto the client. With the assistance of its sister company Composting Facilities Services Limited, disposal costs can also be controlled.
With such a large fleet, fuel costs can have a significant impact from price fluctuations and these need to be monitored and managed on a regular basis. The Directors are aware fuel prices fluctuate and wherever possible new contracts tend to have clauses included which allow an annual increase on prices within an agreed range to accommodate such fluctuations. There are also situations, as is the case at the time of writing, whereby events outside of our control have an impact on the business pushing prices up. The recent events in Iran have resulted in fuel prices rising sharply.
Credit risk related to trade receivables is limited. Credit control is extremely good, and the majority of turnover is derived from water authorities. Invoicing is issued on an agreed basis with the client who has full access to time and work logs to confirm work as it is completed.
Liquidity risk is monitored by day to day and weekly cash flow management which is further enhanced by a system of monthly financial reporting and forecasting.
The Directors consider therefore that they have taken all reasonable steps to minimise areas of risk and uncertainty.
The main risks to the company come from some of our direct costs, however, the company can charge some of these costs directly onto the client. With the assistance of its sister company Composting Facilities Services Limited, disposal costs can also be controlled.
With such a large fleet, fuel costs can have a significant impact from price fluctuations and these need to be monitored and managed on a regular basis. The Directors are aware fuel prices fluctuate and wherever possible new contracts tend to have clauses included which allow an annual increase on prices within an agreed range to accommodate such fluctuations. There are also situations, as is the case at the time of writing, whereby events outside of our control have an impact on the business pushing prices up. The recent events in Iran have resulted in fuel prices rising sharply.
Credit risk related to trade receivables is limited. Credit control is extremely good, and the majority of turnover is derived from water authorities. Invoicing is issued on an agreed basis with the client who has full access to time and work logs to confirm work as it is completed.
Liquidity risk is monitored by day to day and weekly cash flow management which is further enhanced by a system of monthly financial reporting and forecasting.
The Directors consider therefore that they have taken all reasonable steps to minimise areas of risk and uncertainty.
The Directors believe that the general economic outlook in the UK is more stable compared to the last few years with inflation better controlled.
However, the company is subject to economic shocks such as the war in Iran which has had an impact on both costs and lead times.
General economic growth remains sluggish, and The Directors are mindful that lack of confidence in the wider economy, may decrease investment by the company’s customers in the construction and maintenance sectors.
However, the company is subject to economic shocks such as the war in Iran which has had an impact on both costs and lead times.
General economic growth remains sluggish, and The Directors are mindful that lack of confidence in the wider economy, may decrease investment by the company’s customers in the construction and maintenance sectors.
Since the year end the company has undertaken a refinance process. At the time of writing, the company has secured a bridging facility that will allow it to move to longer-term facilities in the near future.
This statement is intended by the Board of Directors to set out how they have approached and met their responsibilities under s172(1)(a) to (f) of the Companies Act 2006 in the financial period ending 30 April 2025.
Stakeholders of the Company include employees, shareholders, customers, suppliers, creditors of the business and the community in which it operates.
The directors’, both individually and collectively, consider that they have acted in good faith to promote the success of the Company for the benefit of its stakeholders as a whole (having regard to the matters set out in s172 of the Act) in the decisions taken during the period. In particular:
Stakeholders of the Company include employees, shareholders, customers, suppliers, creditors of the business and the community in which it operates.
The directors’, both individually and collectively, consider that they have acted in good faith to promote the success of the Company for the benefit of its stakeholders as a whole (having regard to the matters set out in s172 of the Act) in the decisions taken during the period. In particular:
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MTS Cleansing Services Limited
Strategic Report (continued)
For the Year Ended 30 April 2025
This report was approved by the board and signed on its behalf.
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MTS Cleansing Services Limited
Directors' Report
For the Year Ended 30 April 2025
The directors present their report and the financial statements for the year ended 30 April 2025.
The loss for the year, after taxation, amounted to £4,108,636 (2024 - profit £2,839,586).
Ordinary dividends were paid amounting to £nil (2024: £675,920).
The directors who served during the year were:
The directors have prepared a Strategic Report incorporating post balance sheet events and consideration of the Company's customers, suppliers and employees and the greenhouse gas emissions disclosure.
The audit registration of Kreston Reeves LLP was transferred to Kreston Reeves Audit LLP on 6 October 2025. Kreston Reeves Audit LLP were formally appointed as auditor to the company on 6 October 2025.
Under section 487(2) of the Companies Act 2006, Kreston Reeves Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
Under section 487(2) of the Companies Act 2006, Kreston Reeves Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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MTS Cleansing Services Limited
Directors' Responsibilities Statement
For the Year Ended 30 April 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.
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MTS Cleansing Services Limited
Independent Auditors' Report to the Members of MTS Cleansing Services Limited
We have audited the financial statements of MTS Cleansing Services Limited (the 'Company') for the year ended 30 April 2025, which comprise the Profit and loss account, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We draw attention to note 2.3 in the financial statements, which indicates that the loss of a major contract with Southern Water post year end will have a significant impact on the Company. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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. Our evaluation of the directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included an evaluation of expected cashflows and restructuring options.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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MTS Cleansing Services Limited
Independent Auditors' Report to the Members of MTS Cleansing Services Limited (continued)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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MTS Cleansing Services Limited
Independent Auditors' Report to the Members of MTS Cleansing Services Limited (continued)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Capability of the audit in detecting irregularities, including fraud
The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks.
Based on our understanding of the Company and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, taxation and pension legislation. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure and management bias in accounting estimates and judgemental areas of the financial statements such as provisions. Audit procedures performed by the engagement team included:
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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MTS Cleansing Services Limited
Independent Auditors' Report to the Members of MTS Cleansing Services Limited (continued)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditor
12 May 2026
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MTS Cleansing Services Limited
Profit and Loss Account
For the Year Ended 30 April 2025
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MTS Cleansing Services Limited
Registered number: 02045340
Balance Sheet
As at 30 April 2025
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 31 form part of these financial statements.
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MTS Cleansing Services Limited
Statement of Changes in Equity
For the Year Ended 30 April 2025
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MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
MTS Cleansing Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is Stanley House, Anthonys Way, Medway City Estate, Rochester, Kent, ME2 4NF.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The Company is itself a parent undertaking and is exempt from the requirement to prepare group accounts by virtue of section 400 of the Companies Act 2006. These financial statements therefore present information about the Company as an individual undertaking and not about its group. The consolidated financial statements of MTS Cleansing Group Limited as at 30 April 2024 may be obtained from Companies House.
The Company's functional currency is Pounds Sterling.
The Company's financial statements are presented to the nearest £.
The Company's functional currency is Pounds Sterling.
The Company's financial statements are presented to the nearest £.
The following principal accounting policies have been applied:
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 MTS Cleansing Group Limited as at 30 April 2025 and these financial statements may be obtained from Companies House.
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MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
2.Accounting policies (continued)
Following the balance sheet date, the company has experienced further turnover reduction and losses. The change to the Southern Water contract came into effect in September 2025 and this has reduced income especially in reactive work. In the October – March period, like-for-like sales on this contract reduced by 56%. However, this has been partly mitigated by the start of work for Southern Water’s Clean Rivers and Seas Taskforce. This has been ongoing since May 2025, and a formal tender is expected to be released soon. The client has been very pleased with the work carried out on this initiative.
The company is also waiting on an award decision for tendered work with Thames Water.
It has become clear that the company needs to adjust to reflect the new level of income. A plan has been drafted to address issues identified by the Directors and is currently being implemented. This plan forecasts a return to profitability in summer 2026 but is sensitive to several factors such as being able to reduce the reliance on subcontractors.
To be able to affect this plan, the company has embarked on a refinancing process. It is envisaged that this will generate enough headroom and time for the plan to be put into action and for the results to be seen in cashflow.
The Company has secured a bridging facility of £6.5 million (gross), with a net initial advance of approximately £6.0 million, secured against the Company's freehold property together with personal guarantees from shareholders. Following the settlement of existing liabilities, the Company received net cash proceeds of £2.4 million on 11 May 2026. The facility is repayable on demand, however, there is a repayment date of 12 months which is expected to be honoured.
This bridging facility is expected to provide financial support until July 2026, by which time the Company anticipates that longer-term financing arrangements will be in place. These longer-term financing arrangements are not currently in place and are still under negotiation.
The Directors are confident that the refinancing will be successful but the sensitivity of future forecasts and securing longer term finance for the Company's turnaround plan creates a material uncertainty in relation to going concern.
The company is also waiting on an award decision for tendered work with Thames Water.
It has become clear that the company needs to adjust to reflect the new level of income. A plan has been drafted to address issues identified by the Directors and is currently being implemented. This plan forecasts a return to profitability in summer 2026 but is sensitive to several factors such as being able to reduce the reliance on subcontractors.
To be able to affect this plan, the company has embarked on a refinancing process. It is envisaged that this will generate enough headroom and time for the plan to be put into action and for the results to be seen in cashflow.
The Company has secured a bridging facility of £6.5 million (gross), with a net initial advance of approximately £6.0 million, secured against the Company's freehold property together with personal guarantees from shareholders. Following the settlement of existing liabilities, the Company received net cash proceeds of £2.4 million on 11 May 2026. The facility is repayable on demand, however, there is a repayment date of 12 months which is expected to be honoured.
This bridging facility is expected to provide financial support until July 2026, by which time the Company anticipates that longer-term financing arrangements will be in place. These longer-term financing arrangements are not currently in place and are still under negotiation.
The Directors are confident that the refinancing will be successful but the sensitivity of future forecasts and securing longer term finance for the Company's turnaround plan creates a material uncertainty in relation to going concern.
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MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
2.Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
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MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
2.Accounting policies (continued)
Assets that are subject to depreciation or amortisation are assessed at each balance sheet date due to determine whether there is any indication that the assets are impaired. Where there is any indication that the assets are impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.The recoverable amount is the higher of an asset's (or CGU'S) fair value less costs to sell and value in use. For the purpose of assessing impairment assets are grouped at the lowest levels for which they are separately identifiable cash flows (CGUs). Non-Financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
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.
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.
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MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
2.Accounting policies (continued)
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) 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 debtors due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
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.
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is 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 creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments 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.
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MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
2.Accounting policies (continued)
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors 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.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
Tangible fixed assets
The Company has recognised tangible fixed assets with a carrying value of £22,837,464 at the reporting date (see note 13). The company has adopted the revaluation model for the measurement of land and buildings, other assets are stated at their cost less provision for depreciation and impairment.
In order to determine the fair value of land and buildings the Company's directors have used openly available market data to determine a fair value after previously engaging an independent valuation specialist with experience in the location and nature of the property being valued. They have used a valuation technique based on comparable market data. Valuations are obtained with sufficient regularity to ensure that the carrying value of revalued assets reflects current market conditions. The determined fair value of the investment property is most sensitive to fluctuations in the property market.
The Company’s accounting policy sets out the approach to calculating depreciation for immaterial assets acquired. For material assets such as land and buildings the Company determines at acquisition or the date of revaluation reliable estimates for the useful life of the asset, its residual value and decommissioning costs. These estimates are based upon such factors as the expected use of the acquired asset and market conditions. At subsequent reporting dates the directors consider whether there are any factors such as technological advancements or changes in market conditions that indicate a need to reconsider the estimates used.
Where there are indicators that the carrying value of tangible assets may be impaired the Company undertakes tests to determine the recoverable amount of assets. These tests require estimates of the fair value of assets less cost to sell and of their value in use. Wherever possible the estimate of the fair value of assets is based upon observable market prices less incremental cost for disposing of the asset. The value in use calculation is based upon a discounted cash flow model, based upon the Company’s forecasts for the foreseeable future which do not include any restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well expected future cash flows and the growth rate used for extrapolation purposes.
Taxation
Provision has been made in the financial statements for deferred tax amounting to £1,703,085 at the reporting date (see note 22). This provision is based upon estimates of the availability of future taxable profits, the timing of the reversal of timing differences upon which the asset is based and the tax rates that will be in force at that time together with an assessment of the impact of future tax planning strategies.
Going concern
As disclosed in note 2.3 of these financial statements the directors consider the going concern basis to be the most appropriate basis for the preparation of the financial statements. This is in part based on the estimations made by management around working capital requirements as well as expected cashflows in order to estimate the liabilities of the Company that are likely to fall due over the next twelve months. These estimates have been based on detailed forecasting undertaken by the board, including securing additional longer term finance and the significant cost cutting exercise which includes reducing reliance on subcontractors and a reduction of overheads in order to match expected levels of future profitability.
Page 20
MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
Analysis of turnover by country of destination:
Page 21
MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
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MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
Page 23
MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
11.Taxation (continued)
There were no factors that may affect future tax charges.
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MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
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Page 25
MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
13.Tangible fixed assets (continued)
Cost or valuation at 30 April 2025 is as follows:
Page 26
MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
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Page 27
MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
Page 28
MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
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Page 29
MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
22.Deferred taxation (continued)
Revaluation reserve
Profit and loss account
Page 30
MTS Cleansing Services Limited
Notes to the Financial Statements
For the Year Ended 30 April 2025
The company contributes towards personal pension schemes for certain employees. The assets of these schemes are held separately from those of the company by independently administered funds. The pension cost charge represents contributions payable by the Company to the funds which amounted to £251,640 (2024: £453,254). Contributions totalling £39,865 (2024: £39,681) were payable to the fund at the balance sheet date.
The immediate parent company of MTS Cleansing Services Limited is, from 28 October 2021, MTS Cleansing Group Limited, which is registered in England.
The Company is ultimately controlled by Mr B S Crust and Mr K A Crust, by virtue of their combined shareholding.
The Company is ultimately controlled by Mr B S Crust and Mr K A Crust, by virtue of their combined shareholding.
Page 31