Registered number: 13687157
For the Period Ended 30 April 2025
MTS Cleansing Group Limited
Company Information
MTS Cleansing Group Limited
Contents
MTS Cleansing Group Limited
Group Strategic Report
For the Period Ended 30 April 2025
The Directors present the strategic report for the period ended 30 April 2025.
The principal activity of the group 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 group’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 group 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 group’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 group 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 group 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:
2025 2024
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 group’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 group 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 group’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 group 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 group 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:
2025 2024
Turnover £114,955,407 £150,336,591
Operating Profit/(Loss) (£4,611,604) £4,477,361
Shareholders' Funds £16,552,709 £20,904,937
Average number of employes510 499
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MTS Cleansing Group Limited
Group Strategic Report (continued)
For the Period 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.
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MTS Cleansing Group Limited
Group Strategic Report (continued)
For the Period Ended 30 April 2025
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 group 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.
Post balance sheet events
Since the year end the group has undertaken a refinance process. At the time of writing, the group has secured a bridging facility that will allow it to move to longer-term facilities in the near future.
Directors' statement of compliance with duty to promote the success of the Group
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 group 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 Group 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:
Post balance sheet events
Since the year end the group has undertaken a refinance process. At the time of writing, the group has secured a bridging facility that will allow it to move to longer-term facilities in the near future.
Directors' statement of compliance with duty to promote the success of the Group
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 group 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 Group 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:
∙To ensure the Board take account of the likely consequences of their decisions in the long term, they receive regular and timely information on all the key areas of the business including financial performance, operational matters, health & safety, environmental reports, risks and opportunities - all supported by Key Performance Indicators (KPIs). The Group's performance and progress is also reviewed regularly at Board and senior management meetings.
∙The Group’s employees are fundamental to the success of the business. The directors understand that it is critical to engage with and understand their views and to ensure that all employees’ interests are considered. To strengthen employee engagement, the directors’ promote and encourage all employees to raise any concerns or suggestions with senior management without hesitation. During the period, the Company continued to invest in its departmental resources and I.T infrastructure to further support and enhance the working environment for its employees.
∙The Group's customers and suppliers are also fundamental to the success of the business and as a leading supplier of liquid waste management services in the UK, it is essential that the Group maintains its reputation for high quality service, sustainability and high standards of business conduct.
∙The Group strives to continually improve and strengthen its service for the mutual benefit of all of its stakeholders.
∙The directors take environmental matters into deep consideration as part of their decision-making process and strive to be a responsible member of the local and wider community, minimising the Group’s impact on the environment wherever possible, and working hard to help their own customers reduce their impact too.
∙The directors’ intentions are to behave responsibly toward all stakeholders and treat them fairly and equally, so that they all benefit from the long-term success of the Group.
The directors’ have overall responsibility for determining the Group’s purpose, values and strategy and for ensuring high standards of governance. The primary aim of the directors’ is to promote the long-term sustainable success of the Group, generating value for stakeholders and contributing to the wider society. Throughout the remainder of 2025 and into 2026, the Board will continue to review and challenge how the company can improve engagement with its employees and other stakeholders.
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MTS Cleansing Group Limited
Group Strategic Report (continued)
For the Period Ended 30 April 2025
Greenhouse gas emissions, energy consumption and energy efficiency action
The Group's greenhouse gas emissions and energy consumption are as follows:
We have followed the HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard.
The Group's greenhouse gas emissions and energy consumption are as follows:
We have followed the HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard.
During the year the Group invested in a large scale solar array and battery storage at its Head Office. We also continue to invest in electric vehicles and have explored the possibility of using HVO fuel in our fleet.
The chosen intensity measurement ratio is total gross emission in metric tonnes CO2e per £M turnover. This was 106.8 for the year (2024: 89.5).
This report was approved by the board and signed on its behalf.
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MTS Cleansing Group Limited
Directors' Report
For the Period Ended 30 April 2025
The directors present their report and the financial statements for the period ended 30 April 2025.
The loss for the period, after taxation, amounted to £4,352,228 (2024 - profit £2,524,673).
Ordinary dividends were paid amounting to £Nil (2023: £675,920).
The directors who served during the period were:
Matters covered in the Strategic Report
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 Group Limited
Directors' Responsibilities Statement
For the Period Ended 30 April 2025
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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MTS Cleansing Group Limited
Independent Auditor's Report to the Members of MTS Cleansing Group Limited
We have audited the financial statements of MTS Cleansing Group Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the period ended 30 April 2025, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company 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 will have a signficiant impact on the group. 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 Group's or the Parent 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 Group'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 Group Limited
Independent Auditor's Report to the Members of MTS Cleansing Group Limited (continued)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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MTS Cleansing Group Limited
Independent Auditor's Report to the Members of MTS Cleansing Group 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 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 Group 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 Group 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 group 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 Group Limited
Independent Auditor's Report to the Members of MTS Cleansing Group 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 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.
for and on behalf of
Statutory Auditor
Chatham Maritime
12 May 2026
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MTS Cleansing Group Limited
Consolidated Statement of Comprehensive Income
For the Period Ended 30 April 2025
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MTS Cleansing Group Limited
Registered number: 13687157
Consolidated 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 17 to 39 form part of these financial statements.
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MTS Cleansing Group Limited
Registered number: 13687157
Company 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 17 to 39 form part of these financial statements.
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MTS Cleansing Group Limited
Consolidated Statement of Changes in Equity
For the Period Ended 30 April 2025
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MTS Cleansing Group Limited
Company Statement of Changes in Equity
For the Period Ended 30 April 2025
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MTS Cleansing Group Limited
Consolidated Statement of Cash Flows
For the Period Ended 30 April 2025
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MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period Ended 30 April 2025
MTS Cleansing Group 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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The Group's functional currency is Pounds Sterling.
The Group's financial statements are presented to the nearest £.
The Group's financial statements are presented to the nearest £.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
In the opinion of the directors, the creation of the group was a reconstruction rather than an acquisition since the equity holders of the company remain the same as the former equity holders and the rights of the equity holders are unchanged and no minority interest in the net assets of the Group has arisen.
The directors have adopted the merger accounting principles in drawing up these financial statements. The main consequence of adopting merger rather than acquisition accounting is that the balance sheet of the merged group includes the assets and liabilities of each of the Group's combining entities at their carrying values prior to the merger, subject to any adjustments to achieve uniformity of accounting policies, rather than their fair values at the date of the merger.
In the opinion of the directors, the creation of the group was a reconstruction rather than an acquisition since the equity holders of the company remain the same as the former equity holders and the rights of the equity holders are unchanged and no minority interest in the net assets of the Group has arisen.
The directors have adopted the merger accounting principles in drawing up these financial statements. The main consequence of adopting merger rather than acquisition accounting is that the balance sheet of the merged group includes the assets and liabilities of each of the Group's combining entities at their carrying values prior to the merger, subject to any adjustments to achieve uniformity of accounting policies, rather than their fair values at the date of the merger.
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MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period Ended 30 April 2025
2.Accounting policies (continued)
Following the balance sheet date, the group 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 group is also waiting on an award decision for tendered work with Thames Water.
It has become clear that the group 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 group 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 group has secured a bridging facility of £6.5 million (gross), with a net initial advance of approximately £6.0 million, secured against the group's freehold property together with personal guarantees from shareholders. Following the settlement of existing liabilities, the group 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 group 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 group turnaround plan creates a material uncertainty in relation to going concern..
The group is also waiting on an award decision for tendered work with Thames Water.
It has become clear that the group 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 group 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 group has secured a bridging facility of £6.5 million (gross), with a net initial advance of approximately £6.0 million, secured against the group's freehold property together with personal guarantees from shareholders. Following the settlement of existing liabilities, the group 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 group 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 group turnaround plan creates a material uncertainty in relation to going concern..
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MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period 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 Group Limited
Notes to the Financial Statements
For the Period 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 Group 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 Group's Balance Sheet when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period 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 Group'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.
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MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period Ended 30 April 2025
2.Accounting policies (continued)
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 Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies 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.
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 assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group 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 Group 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 Group's contractual obligations expire or are discharged or cancelled.
Page 22
MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period 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.
Page 23
MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period Ended 30 April 2025
2.Accounting policies (continued)
Page 24
MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period Ended 30 April 2025
The following judgements have had the most significant impact on amounts recognised in the financial statements:
Lease commitments
The Group has entered into a range of lease commitments in respect of plant and machinery and motor vehicles. The classification of these leases as either financial or operating leases requires the directors to consider whether the terms and conditions of each lease are such that the Group has acquired the risks and rewards associated with the ownership of the underlying assets.
The following are the Group's key sources of estimation uncertainty:
Tangible fixed assets
The Group has recognised tangible fixed assets with a carrying value of £23,250,369 at the reporting date (see note 13). The Group 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 Group has engaged independent valuation specialists 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 Group’s accounting policy sets out the approach to calculating depreciation for immaterial assets acquired. For material assets such as land and buildings the Group 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 Group 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 Group’s forecasts for the foreseeable future which do not include any restructuring activities that the Group 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 £1,755,363 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.
Page 25
MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period Ended 30 April 2025
3.Judgments in applying accounting policies (continued)
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 group 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.
Analysis of turnover by country of destination:
Page 26
MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period Ended 30 April 2025
Page 27
MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period Ended 30 April 2025
Page 28
MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period Ended 30 April 2025
11.Taxation (continued)
There were no factors that may affect future tax charges.
Page 29
MTS Cleansing Group Limited
Notes to the Financial Statements
For the Period Ended 30 April 2025
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