The directors present their annual report and the audited financial statements of the company and the Group for the year ended 31 December 2025.

Lexia Solutions Group Limited and its subsidiaries (the “Group”) is a leading specialist enabling works provider and support services organisation. The Group provides a range of specialist inter-related services delivered via two distinct brands: Rhodar and Thermac:

• Rhodar - a market-leading provider of asbestos abatement, demolition, land remediation and passive fire protection services. These services are delivered either individually or as part of an integrated enabling works package.

• Thermac - a specialist supplier to the asbestos and decontamination sectors, providing the hire, sale and servicing of plant and equipment.

Together, the businesses operate across a national network of UK offices and maintain one of the largest dedicated operative workforces in the industry. This scale and geographic reach enable the Group to deliver a consistent, professional service to clients throughout the UK.

The Group is recognised as a technical innovator and maintains industry‑leading standards in the highly regulated environment in which it operates. The business model is centred around establishing long-term relationships with blue‑chip clients across both private and public sectors. A significant proportion of revenue is generated through long-term agreements and frameworks, providing a stable foundation of recurring income.

A key strategic priority continues to be the expansion of the integrated enabling works offering across the Group’s four core disciplines: asbestos, demolition, remediation and passive fire protection. The successful rebranding of Rhodar has further strengthened its position as a comprehensive enabling works provider, enhancing cross‑divisional collaboration and broadening opportunities with major clients.

Amid a steadily evolving economic environment, and building on our strategic objectives, the Group delivered another strong performance in 2025. Turnover exceeded £70 million, exceeding prior‑year levels and outperforming profit expectations.

The Employee Ownership Trust, established in November 2020, continues to play a significant role in the Group’s culture and performance. In 2025, all employees once again benefited from a tax-free EOT bonus, recognising their contribution to the Group’s continued growth and success. The EOT remains central to fostering engagement, alignment and a collective commitment to the long‑term success of the business.

Building on a robust 2025 performance and a strengthened enabling works proposition, the Group is well positioned for sustained growth. Continued investment in people, innovation and service integration remains a strategic priority as the Group looks ahead to capitalising on opportunities across its core markets.

Reviewing the past year for Rhodar from the perspective of these four disciplines:

Asbestos:    

The Division delivered an exceptional year, achieving strong growth in both turnover and profit, driven by standout performance across the education, local authority, infrastructure, rail, defence, and nuclear sectors.

The award of Principal Contractor Status within the nuclear sector in late 2024 has been transformational, enabling the business to manage significantly larger schemes, and has established a robust platform for continued expansion into 2026 and beyond. In addition, activity within the defence sector exceeded expectations, delivering higher-than-anticipated revenues through large-scale projects across air and maritime programmes.

We remain a Priority One Framework Contractor within the rail sector, working with major infrastructure and Tier One contractors, with the framework agreement successfully extended through to March 2027. Our strong positioning in this sector has enabled the successful delivery of major infrastructure projects, alongside ongoing maintenance, property, and trackside programmes.

Across the defence sector, the Division has continued to deliver its core services, strengthening key relationships with strategic partners and securing extended framework agreements with major contractors. These partnerships underpin a strong and visible pipeline of work extending into 2026.

Building on the strategic changes implemented in 2024, we have continued to restructure project delivery into a national operating model. This has streamlined processes, clarified reporting lines, optimised resource allocation, and driven improved efficiency and consistency across delivery.

Demolition:

The Demolition division delivered a strong performance in 2025, exceeding both turnover and profit targets and entering 2026 with a robust forward order book. Results were driven by a disciplined and selective bidding strategy, with a clear focus on higher‑quality opportunities secured through preferred contractor lists and framework arrangements.

During the year, the division secured and progressed several key projects across the residential and urban regeneration sectors, with major schemes commencing during 2025. In addition, further projects within the retail redevelopment and cultural infrastructure sectors were secured and are scheduled to commence in 2026.

The division also continued to generate a steady pipeline of opportunities through strategic framework relationships, supporting consistent workflow and long-term visibility.

Remediation:

The division experienced a mixed year, beginning with sluggish new sales and lower‑than‑budgeted turnover due to challenging market conditions and delays in higher‑value enabling works, before seeing a strong uplift in workload from August onward.

Despite the slow start, key strategic initiatives progressed, including investment in new plant to improve efficiency, establishment of a professional development programme for technical staff, and targeted recruitment to broaden services and increase capacity.

Project delivery included successful completion of works across the healthcare sector alongside multiple remediation schemes addressing contaminated land and groundwater within urban regeneration environments. The division also delivered its first DNAPL recovery project in the North East, demonstrating an advancing level of technical capability. In addition, major contract awards were secured across regional industrial and energy infrastructure sectors, including projects aligned to Net Zero initiatives.

Looking ahead, the division is focused on strengthening delivery procedures, enhancing the sales pipeline through improved pre‑contract and estimating resources, expanding in‑house civil engineering capability, and appointing a Project Director to reinforce governance and project oversight.

Passive Fire Protection:

Over the past year, the division has focused on establishing a consistent operational approach while stabilising and strengthening our team through key strategic appointments. This has enhanced our internal expertise, supported steady growth, and reinforced strong relationships with preferred clients, resulting in valued repeat business across the education, healthcare, and mixed-use development sectors.

The strategic direction prioritises controlled, well‑managed expansion, ensuring high standards, operational efficiency, and consistent client satisfaction across all projects. With planned growth in 2026, aligned with the updated Building Safety Act and supported by revised internal procedures to ensure full legislative compliance, we are well positioned to advance our role as a trusted Principal Contractor for large‑scale fire remediation works.

In 2025, Thermac continued to advance its strategic, profit‑focused approach, delivering results that exceeded profit expectations. This was driven by a targeted review of the existing client base and the development of strategies aimed at maximising higher‑margin revenue streams, particularly through the growth of product hire activities. Alongside this, Thermac maintained its reputation for industry‑leading innovation by introducing new product alternatives to support ongoing market growth.

During 2025, Thermac also evaluated opportunities for diversification beyond its core market of Licensed Asbestos Removal Contractors (LARCs). Through analysis of relevant tradeshows, seminars, and industry events, the business identified promising avenues for expansion. As a result, Thermac has established an initial presence within the Energy & Utilities sector, leveraging its existing product range to support new applications. Investment in this sector will continue throughout 2026, with early focus on strengthening activity with Scottish Power and BT.

The company’s, and the wider Group’s, decision‑making framework remains firmly centred on maintaining a comprehensive understanding of the risks and exposures faced across the organisation. Identifying risks to the achievement of both business and strategic objectives - supported by detailed analysis to inform and prioritise mitigating actions - continues to be fundamental to ensuring that risk is managed in line with the Group’s defined risk appetite.

Operating within a highly regulated market, the potential loss of the company’s HSE asbestos licence represents a key business risk. The company currently holds a maximum three‑year licence, which is due to expire in September 2026. Ensuring that all operations are conducted safely, and that a Zero Harm environment is maintained for employees and stakeholders, remains paramount to sustaining compliance and protecting this critical licence.

In the context of a competitive and evolving economic backdrop for the construction sector, securing work at acceptable margins continues to be a core business risk. The company mitigates this through robust delegated authorities governing tendering activity and customer acceptance. Established processes and procedures ensure that all work is delivered in accordance with the required contractual conditions, helping to manage potential contractual and commercial exposures effectively.

Key performance indicators (“KPIs”)

The directors consider that our key performance indicators are those that communicate a summary of the performance and the strength of the Group as a whole; those being turnover, gross profit margin, operating profit and retained reserves.

The results for the years ended 31 December 2025 and 31 December 2024 are as follows:

Given the diverse nature of the business, the company’s directors are of the opinion that analysis of the business is best done through the review of the business divisions. The directors consider gross profit to be the principal measure of the operating divisions and for the business as a whole as disclosed in the table above. The directors also consider earnings before interest, depreciation and amortisation (‘EBITDA’) to be a KPI. A reconciliation of EBITDA has been summarised below.

Future developments

Following the rebrand and strategic realignment of Rhodar towards the delivery of integrated enabling works packages, we are now actively operating within this dynamic and growing market. Alongside the continued expansion of each of our four core service lines as standalone offerings, we are proactively identifying opportunities to combine multiple services into fully integrated solutions. This approach enables us to deliver enhanced value for our clients through improved cost efficiency, reduced programme risk, and more streamlined project delivery.

Our continued focus on securing targeted framework appointments is enhancing confidence in our medium- to long-term revenue outlook. This provides greater visibility for forward planning, supports improved operational forecasting, and underpins the sustained growth of the business.

The Group’s focus for the forthcoming financial period will be on the continued delivery of integrated enabling works solutions while maintaining disciplined cost control and risk management. Market conditions are expected to remain competitive, however demand for early-stage construction and enabling works, particularly within urban regeneration, infrastructure-led development, and funded residential schemes, is anticipated to remain resilient.

Our diversified sector exposure enables the Group to remain agile, allowing us to pivot and capitalise on the most compelling growth opportunities, especially during periods of uncertainty in other parts of the market. Ongoing investment in people, systems, and operational capability will support sustainable growth, margin protection, and the efficient execution of future projects. The Directors remain confident that the Group is well positioned to respond to changing market conditions and to capitalise on opportunities aligned with its strategic objectives.

Section 172 Companies Act 2006

This report sets out how the Directors comply with the requirements of Section 172 Companies Act 2006 and how these requirements have impacted the Board’s decision making throughout 2025.

The Board’s primary responsibility is to promote the long-term success of the Group by creating and delivering sustainable value as well as contributing to wider society. The successful delivery of the long-term plans relies on key inputs and positive relationships with a wide range of stakeholders. The Board seeks to achieve this by setting out its strategy, monitoring performance against the Group’s strategic objectives and reviewing the implementation of the strategy. The Board also monitors the effectiveness of the Group’s systems of internal control, governance and risk management.

Engaging with stakeholders to deliver long term success is a key area of focus for the Board and all decisions take into account the impact on stakeholders. Obviously, stakeholders are impacted by, or benefit from, decisions made by the Board in different ways. However, it is the Board’s priority to ensure that the Directors have acted both individually and collectively in the way that they consider, in good faith, would be most likely to promote the success of the Group for the benefit of the members as a whole with regard to all its stakeholders and to the matters set out in paragraphs a-f of Section 172 of the Companies Act 2006.

Engagement with employees

The Group remains committed to fostering an engaging, inclusive and high‑performing working environment in which employees can build rewarding careers and contribute meaningfully to the Group’s long‑term success. Our aim is to provide clear career pathways, competitive benefits, and a culture that empowers colleagues to take ownership of our shared vision.

Employee engagement continues to play a vital role in achieving the Group’s strategy, reflected in our ongoing accreditation with Investors in People, which recognises our commitment to people development and organisational excellence.

Employment of disabled persons

Lexia is fully committed to equality, fairness and inclusion in all aspects of employment. Recruitment, promotion and training decisions are made solely on the basis of capability, qualifications and experience. Our policies - embedded consistently across the Group - ensure that all employees have equal opportunities to develop and progress.

We actively support applicants and employees with disabilities, making reasonable adjustments to working practices, environments and equipment where required. Adjustments are also made for any employee who becomes disabled during the course of their employment to ensure continued inclusion and support.

Employee involvement

Employee involvement is integral to our culture, and we continuously seek staff views through ongoing engagement activities. Participation is encouraged at every level of the organisation, including through recognition initiatives such as our Values Awards.

Our performance management framework, In Pursuit of Excellence (IPOE), supports employees in their development journey. IPOE encompasses performance appraisal, management and leadership training, and opportunities for wider personal development such as charitable participation and community initiatives.

Staff Wellbeing

Staff wellbeing remains a cornerstone of our organisational success and a priority for maintaining a positive, productive workplace. The Group is committed to supporting the physical, mental and emotional health of employees through a broad range of wellbeing initiatives. These include flexible working arrangements, access to wellbeing and mental-health support programmes, and initiatives that promote a healthy work-life balance.

By investing in wellbeing, we aim to reduce stress, enhance job satisfaction and strengthen overall engagement across the workforce.

The Board regularly reviews how the Group maintains constructive and collaborative relationships with suppliers, customers, community stakeholders and other external partners, recognising the importance of these relationships to the Group’s long‑term success.

Suppliers

The Directors acknowledges the critical role played by the Group’s supply chain in delivering long‑term plans. Maintaining strong relationships with suppliers begins with ensuring payments are made on time and in accordance with agreed terms.

The Group adopts a flexible approach to payment practices, aligning terms with the needs and capabilities of individual suppliers. Where appropriate, the Group also considers early payment to suppliers experiencing financial pressure, helping to sustain continuity and resilience within the supply chain.

Customers

Our diverse customer base spans multiple sectors, and we place great emphasis on strong, collaborative relationships built on clear communication, transparency and mutual understanding. Engaging with customers closely enables us to respond to evolving needs and continuously enhance our service offering.

During the year, we continued to deliver our Built Environment Knowledge Seminar Roadshows, showcasing our four core services and demonstrating the advantages of integrated enabling works packages. Held at venues across the UK, these events positioned Rhodar as a leading subject‑matter expert and trusted solutions provider. They reached hundreds of existing and prospective clients, offering valuable opportunities for face‑to‑face interaction, technical knowledge sharing and relationship building.

Community and Social Value

The Group remains committed to delivering meaningful social value and supporting the communities in which we operate. Throughout 2025, we undertook a broad programme of charitable fundraising, community engagement and environmental initiatives, reflecting our ongoing commitment to social responsibility and our culture of giving back.

We raised over £40,000 for Martin House Children’s Hospice through the Yorkshire Three Peaks Challenge, supported by 61 colleagues and partners. Our Charity‑6 programme also returned, raising funds for six employee‑nominated charities through a series of colleague‑led events, including a record £10,135 for Zoe’s Place Baby Hospice.

In Scotland, we supported several education, environmental and community programmes, including Water Safety Awareness training and biodiversity projects delivered through WGM Engineering’s APM Challenge. As part of our social value commitments on the University of Edinburgh’s Darwin Tower project, we contributed over £40,000 to local organisations over the year.

The Group is proud of the collective effort shown across all regions and remains committed to delivering meaningful social value in the year ahead.

Sustainability

As a Group operating under ISO 14001, we continue to maintain robust environmental management programmes across the business. Building on this foundation, 2025 saw significant progress in strengthening our sustainability capabilities. Working alongside our Sustainability Consultancy partner - appointed in 2024 - we advanced the development of our long‑term carbon emissions reduction strategy and enhanced our internal carbon management processes.

This partnership has supported improvements in data collection, reporting accuracy and the upskilling of colleagues across key operational areas. To further embed sustainability and social value across the organisation, we also appointed our first dedicated Sustainability Coordinator in 2025. This role provides focused support for meeting increasing legislative requirements, strengthening project‑specific sustainability inputs during bidding and delivery, and helping drive the Group’s long‑term environmental and social commitments.

Further information is included within the Directors Report, where we have disclosed our Energy and Carbon Report for the year ended 31 December 2025.

The company, and the wider Group, continue to recognise the economic and trading uncertainties arising from ongoing geopolitical tensions. While the direct impact of the conflict in Ukraine has reduced compared with prior years, it continues to exert some influence on global commodity markets and supply chains. Although the Group does not trade outside the UK, disruption to the supply of key materials and ongoing price volatility - especially in metals, energy‑intensive products, and other construction inputs - may continue to impact the supply chain. The wider construction industry remains sensitive to geopolitical shocks, with global disruptions still presenting risks of increased costs and delays.

After considering the factors and sensitivities outlined above for a range of scenarios, the Directors consider that the Group has adequate resources to continue operational for the foreseeable future. Uncertainties and risk inherent in the construction industry may impact future performance, and management remain vigilant in monitoring and addressing these challenges proactively.

The Directors regularly review the working capital requirements of the company, and wider Group, while reviewing sensitivities to future performance. The Directors have reviewed budgets and future forecasts and have satisfied themselves that the company has sufficient financial and liquid resources to continue to operate for a period of at least 18 months from the date these financial statements are signed.

Overall, the Directors remain confident in their strategy and the strength of the business.

Accordingly, the Directors continue to adopt the going concern basis in preparing the company and the wider Group accounts. Further details regarding the adoption of the going concern basis can be found in the Accounting Policies.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

The profit for the year, after taxation, amounted to £5,275,000 (2024 - £3,862,000).

A dividend of £4,019,000 was paid during the year (2024 - £1,007,000).

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Following shareholder approval the company has provided an indemnity for its directors and the secretary throughout the year, which is a qualifying third party indemnity provision for the purposes of the Companies Act 2006.

Research and development (R&D) activities are undertaken with the prospect of gaining new scientific or technical knowledge and understanding. R&D is a critical component of the Group’s growth strategy, enabling us to stay competitive by developing innovative products and services that meet the changing needs of customers.

The Group invests in R&D to improve the quality of its products and services, reduce costs, and increase efficiency. R&D helps the company to differentiate itself from competitors and maintain its market position.

The Group is committed to ensuring it maintains strong relationships with all stakeholders (including employees) and actively engages with them on an ongoing basis. Further details are provided in the Strategic Report.

Sumer Auditco Limited were appointed as auditor to the group following BHP LLP becoming part of the Sumer Group on 31 December 2025, which required a change in audit firm to comply with applicable regulatory requirements.

In accordance with section 487(2) of the Companies Act 2006, Sumer Auditco Limited are deemed to be reappointed annually.

There has also been a marked increase in year-on-year emissions generated by employee-owned vehicles used for business travel (Scope 3). However, this is due to significantly improved data quality and capture of grey fleet mileage. We will re-calculate and re-baseline 2024 and baseline emissions for this category during 2026.

The Group’s full annual carbon footprint, including all applicable categories of Scope 3 and initiatives taken to reduce emissions, will be published later in 2026 as part of the Group’s wider Carbon Reduction Plan.

Lexia Solutions Group GHG emissions and energy use data for period 1st January 2024 to 31st December 2025:

Mandatory Greenhouse Gas Report intensity ratios are calculated by dividing emissions by an organisation-specific metric.

In the case of Lexia Solutions Group, the metrics chosen to normalise emissions: Turnover (GBP), FTE (FTE).

The intensity ratios as well as the business metrics are detailed below. The intensity ratio is calculated based on total emissions (location based).

Disclosures required under S416(4) of the Companies Act 2006 are commented upon in the Strategic Report in accordance with S414C(11) as the Directors considers them to be of strategic importance to the Group.true

The Group's activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

Risk management is carried out on a group-wide basis under policies approved by the Board of Directors.

Market risk

Interest rate risk

The Group's interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the group to cash flow interest rate risk. Borrowings issued at fixed rates expose the group to fair value interest rate risk. During 2025, the Group's borrowings were denominated solely in Sterling.

The Group manages its cash flow interest rate risk by using fixed interest rate borrowings where possible.

Credit risk

Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks, as well as exposure to outstanding receivables. The Group’s policy is to manage credit exposure to trading counterparties within defined trading limits. All of the Group’s significant counterparties are assigned internal credit limits.

If any of the Group’s customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, the group assesses the credit quality of the customer taking into account its financial position, past experience and other factors.

Liquidity risk

The Group is subject to the risk that it will not have sufficient borrowing facilities to fund its existing business and its future plans for growth. The Group manages its liquidity requirements with the use of both short and long term cash flow forecasts. These forecasts are supplemented by a financial headroom position which is used to demonstrate funding adequacy for at least an 18 month period. The current funding arrangements continue on a rolling basis. The Directors fully expect to arrange equivalent facilities of at least the same level as present.

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. Due to the nature of the underlying businesses, the treasury function aims to maintain flexibility in funding by keeping committed credit lines available.

Capital risk management

The Group's objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders. The objectives are also to maintain an optimal capital structure to reduce the cost of capital in the Group and to ensure financial covenants contained in the bank facility agreement are met throughout the year. In order to maintain or adjust the capital structure, the group may vary the amount of dividends paid to shareholders.

The directors are responsible for preparing the Annual 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 prepared the group and parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 group and parent company, 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 and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and parent company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent company, and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

We have audited the financial statements of Lexia Solutions Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including 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).

In our opinion the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2025 and of the group's profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the group's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or parent company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the Group through discussions with directors and other management, and from our commercial knowledge and experience of the trade;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Group;

• we assessed the extent of compliance with the laws and regulations considered above through making enquiries of management; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by;

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risks of fraud through management bias and override controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

• investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• reading the minutes of meetings of those charged with governance;

• enquiring of management as to actual and potential litigation and claims; and

• discussions with senior management regarding relevant regulations and reviewing the company’s legal and professional fees.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the director’s and other management and the inspection of regulatory and legal correspondence.

As part of our audit, we addressed the risk of management override of internal controls, including testing of journals and review of the nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £4,134,000 (2024: £780,000).

Lexia Solutions Group Limited is a private company, limited by shares, incorporated in England and Wales under the Companies Act 2006. The address of the registered office is shown on the Company Information page and the nature of the Group's operations and its principal activity is set out in the Strategic Report.

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 presentation currency of these financial statements is sterling. All amounts in the financial statements have been rounded to the nearest £1,000.

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 judgement in applying the Group’s accounting policies (see note 2).

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.

In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available to qualifying entities:

• only one reconciliation of the number of shares outstanding at the beginning and end of the period has been presented as the reconciliations for the group and the parent company would be identical;

• no cash flow statement or net debt reconciliation has been presented for the parent company;

• disclosures in respect of the parent company’s income, expense, net gains and net losses on financial instruments measured at amortised cost have not been presented as equivalent disclosures have been provided in respect of the group as a whole; and

• no disclosure has been given for the aggregate remuneration of the key management personnel of the parent company as their remuneration is included in the totals for the group as a whole.

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.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

The uncertainty as to the future impact on the company, and the wider Group, of the UK economy and the wider macroeconomic conditions has been separately considered as part of the Director’s consideration of the going concern basis of preparation.

The Directors have prepared cash flow forecasts, based on a series of current trading forecasts and taking into account current borrowing facilities, for a period of 18 months from the date of approval of these financial statements, which indicate that the Group will have sufficient funds to meet its liabilities as they fall due for that period. Under this scenario there would be no breach of working capital facility as there is sufficient headroom. There are no material capital repayments of debt falling due within the forecast period.

The Directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

Turnover is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the Group and value added taxes.

Turnover from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, turnover is recognised only to the extent of the expenses recognised that are recoverable.

Turnover from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer, the Group retains no continuing involvement or control over the goods, the amount of turnover can be measured reliably and it is probable that future economic benefits will flow to the entity.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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 or reducing balance basis.

Depreciation is recognised within 'administrative expenses' in the Statement of Comprehensive Income.

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 the Consolidated Statement of Comprehensive Income.

Investments in subsidiaries are measured at cost less accumulated impairment.

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

In accordance with FRS 102.22, financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions:

• they include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and

• where the instrument will or may be settled in the entity’s own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the entity's own equity instruments or is a derivative that will be settled by the entity exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the entity’s own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares.

Trade and other debtors/creditors

Trade and other debtors are recognised initially at transaction price less attributable transaction costs. Trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade debtors. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of instrument for a similar debt instrument.

Interest-bearing borrowings classified as basic financial instruments

Interest-bearing borrowings are recognised initially at the present value of future payments discounted at a market rate of interest. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses. Transaction costs are expensed over the life of the facility.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits.

Financial assets (including trade and other debtors)

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. For financial instruments measured at cost less impairment an impairment is calculated as the difference between its carrying amount and the best estimate of the amount that the Group would receive for the asset if it were to be sold at the reporting date. Interest on the impaired asset continues to be recognised through the unwinding of the discount. Impairment losses are recognised in profit or loss. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

An impairment loss is reversed if and only if the reasons for the impairment have ceased to apply.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

The tax expense represents the sum of the tax currently payable and deferred tax.

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:

• The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;

• Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and

• Where they relate to timing differences in respect of interests in subsidiaries, associates,branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the Group.

Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the Consolidated Statement of Comprehensive Income so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Amounts due from lessees under finance leases are recognised as receivables at the amount of the group's net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the group’s net investment outstanding in respect of leases.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Whilst there are controls in place, debtor recoverability is inherently susceptible to the financial stability of the respective customers. Management must therefore make estimates for provision levels to be made.

The judgements, estimates and associated assumptions necessary to calculate the above provisions are based on historical experience, current industry knowledge and other reasonable factors.

The Group conducts a significant portion of its business under contracts with customers. The group accounts for revenue on projects as performance on contracts progresses. This method places considerable importance on accurate estimates of the extent of progress towards completion and may involve estimates on the scope of deliveries and services required for fulfilling the contractually defined obligations. These significant estimates include total contract costs, total contract revenues, contract risks and other judgements. Such changes in estimates may lead to an increase or decrease of revenues.

All of the turnover arose solely within the United Kingdom.

The average monthly number of persons (including directors) employed by the group and company during the year was:

Their aggregate remuneration comprised:

During the year retirement benefits were accruing to 2 Directors (2024 - 1) in respect of defined contribution pension schemes.

The actual credit for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Factors that may affect future tax charges

The Group has tax losses of £10.0m as at 31 December 2025 (2024: £14.5m). A deferred tax asset of £1,857k (2024: £1,356k) in respect of £6,644k (2024: £5,424k) of those losses has been recognised based on forecast taxable profits. There is uncertainty in use of other losses hence no further asset has been recognised other than a deferred tax asset of £631,000 (2024: £531,000) to offset the deferred tax liability of £631,000 (2024: £531,000) in respect of fixed asset and other timing differences.

The software is under development and the development of the software was still being contributed during the financial year. Once the software is fully developed and in use amortisation will be charged on a 5 year straight line basis.

Included within tangible fixed assets are assets held under finance leases or hire purchase contracts, as follows:

During the year the finance leases have come to an end so the assets held are no longer subject to finance leases.

Details of the company's subsidiaries at 31 December 2025 are as follows:

Thermac (Hire) Limited, Rhodar Demolition Limited and Rhodar Limited have taken advantage of the exemption from audit available under section 479A of the Companies Act 2006

The difference between purchase price or production cost of stocks and their replacement cost is not material.

Impairment losses totalling £Nil (2024: £Nil) were recognised in profit and loss.

All amounts due from group undertakings are interest free and are repayable on demand.

Included within other debtors in the prior year for the company and group is a balance owed from a Director. See note 25 for further detail.

The impairment loss recognised in profit or loss for the period in respect of bad and doubtful trade debtors was £40,000 (2024: £64,000).

All amounts owed to group undertakings are interest free, carry no security and are repayable on demand.

The obligations under finance lease agreements are secured against the asset to which they relate.

During the year the finance leases have come to an end so the assets held are no longer subject to finance leases.

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

The borrowing facilities in place at the year end are secured by unlimited debenture against the assets of the company and its subsidiary undertakings.

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The company has taken advantage of the available exemption conferred by Section 33.1A of FRS102 not to disclose transactions with wholly owned members of the Group.

During the year the Group leased property from one of the director's pension schemes. The lease cost paid to the directors' pension scheme during the year was £186,000 (2024: £166,000).

During the prior year the Group acquired services from Tradeslink Asbestos Services Limited, a wholly owned company of a subsidiary director, J M Davy, for a total value of £453,000. There was no balance outstanding at the prior year end in relation to these transactions and no transactions during the current year.

During the prior year the Group acquired services from East Riding Laboratories Limited, a wholly owned company of connected parties to D Hart, a subsidiary director, for a total value of £3,000. The balance outstanding at the prior year end in relation to these transactions was £100. There were no transactions in the current year and no balance outstanding at the year end.

During the year, the Group disposed of a motor vehicle to a Director at a market rate of £nil, (NBV: £22,500).

The Directors consider the members of key management to be the directors of principal trading subsidiaries. Total compensation of key management personnel in the year amounted to £1,071,000 (2024: £1,258,000).

During the year the company made a capital contribution of £4,019,000 (2024: £1,070,000) to The Lexia Solutions Employee Ownership Trust. J M Davy, a Director, is also a director of the trustee company of the Trust.

The ultimate controlling party is Lexia Solutions Trustees Limited, a company limited by guarantee incorporated in the United Kingdom, with registered office at Unit C Astra Park, Parkside Lane, Leeds, West Yorkshire, United Kingdom, LS11 5SZ.