The directors present the strategic report for the year ended 28 February 2026.
Business Unit Overview (continued)
The operating units exemplify our commitment to combining environmental and social impact, creating value while changing lives through meaningful employment and skills development. Both our battery and display sites demonstrate ‘best in class’ capabilities and are at the forefront of the ongoing health and safety, legislative and regulatory developments in the UK.
Resource & Logistics
Our Resource and Logistics business unit serves as the primary point of contact for customers, providing end-to-end waste management solutions through:
Consultative support to minimise landfill disposal and optimise waste streams.
Comprehensive logistics management utilising a network of vetted, audited suppliers.
An innovative ‘connected’ customer portal offering instant access to critical data.
Streamlined documentation and collection processes, ensuring ease of use for clients.
The unit’s focus on customer convenience and efficiency sets the foundation for our integrated approach, ensuring smooth operations from collection to processing.
Compliance Schemes
The Compliance Schemes business unit completes our circular model by:
Supporting producers in meeting UK and international recycling obligations.
Generating and managing recycling evidence for regulatory compliance.
Contributing to national recycling targets.
Creating sustainable funding streams for UK recycling infrastructure.
This unit’s work ensures that our environmental efforts are properly documented and contribute to broader national sustainability goals, while providing economic benefits to all stakeholders.
The current financial year of trading for the Group has resulted in a pleasing financial performance that provides a strong platform for growth in 2026 and beyond.
Financial performance in the year was impacted by a range of factors, including:
Continued one-off and non-recurring integration and business improvement costs linked to the carve out of the Group in January 2024.
Impact of a material bad debt within the Compliance Services business that has caused wider market disruption for all industry participants.
Active working capital management to ensure appropriate funding headroom and compliance with banking facilities.
We are pleased with the operating performance of each of the core business units, with notable achievements including:
The WEEE, Packaging and Battery compliance schemes have achieved producer obligations for the scheme year ended 31 December 2025.
Profitable operating site performance, including a significant improvement in the profitability of the display dismantling site in the second half of the year.
Business Review (continued)
Investment into capital equipment across all operating sites to optimise material recovery rates, enhance efficiency and health and safety, as well as improve profit margins.
Successful new client wins that have created long-term contractual relationships with a range of industry participants and blue-chip corporates. These new contractual relationships cover all aspects of the Group’s trading activity, including the provision of waste management solutions, and security of electrical and battery materials in respect of the operating sites and compliance schemes.
Achieved ongoing improvement in a range of operational metrics, including sorting 1,662 tonnes of batteries (2025: 1,042) and dismantling 7,873 tonnes of display equipment (2025: 5,717) in the financial year.
Financial performance summary and key indicators
Revenue for the year was £36.1m (2025: £34.8m), with gross profit of £8.9m (2025: £8.2m). The gross profit margin for the year was 24.5% (2025: 23.6%). In all instances, the current year financial performance was an improvement on prior year.
The Group generated an operating loss of £3.0m during the current financial year (2025: £2.8m).
This included £3.5m of amortisation and depreciation (with £3.1m of this representing amortisation of goodwill arising on acquisition), as well as £0.2m of exceptional costs.
Adjusting for these items resulted in earnings before interest, taxation, depreciation and amortisation (“EBITDA”) of £0.7m. This represents a pleasing performance in what is the Group’s second full year of trading and provides a strong platform for future growth.
On a post-tax basis, the Group generated a loss of £7.2m in the current financial year. This not only includes the amortisation of goodwill noted earlier, but also £4.2m of non-cash interest arising on loan notes issued by TH Frag II S.a.r.l, the Group’s intermediary parent company. The interest on these loan notes will cease from 1 April 2026, and this will significantly reduce losses in future years (albeit this is non-cash interest so has no bearing on liquidity).
As a result of these non-cash goodwill and loan note interest items, the Group has generated a loss after tax in the current financial year, but these losses do not reflect the financial strength and liquidity of the Group.
From a cash perspective, the Group generated £0.5m of cash from operations in the financial year.
This was partially used to fund term loan interest arising on the Group’s external banking facilities, invest in capital equipment across the operating sites and support working capital requirements. The Directors have undertaken a comprehensive going concern review as part of the 2026 statutory accounts process, augmented by regular and routine cash planning linked to the preparation of short and medium-term forecasts. The Directors are confident that the Group has sufficient headroom within its committed facilities to support a range of downside risk scenarios that could arise.
Inevitably for a business that is in its second year of trading, the Group has had to contend with credit appetite that is below what the Directors consider is reasonable and would be achievable in the future. Despite this, we have proactively engaged with our supply chain to manage the impact of this and ensure all liabilities are settled in a timely and reasonable manner. In addition to this, our credit rating has improved from prior year linked to a variety of factors, but including the transparent and pro-active manner in which we have engaged with our supply chain on this matter. Our supply chain is a vital component of our business model, and we intend to adopt a sensible, pragmatic and mutually beneficial approach to payment terms going forward.
From a balance sheet perspective, the Group had net liabilities of £14.2m at 28 February 2026. The net liability position is solely a function of the Group’s funding structure and the non-cash items noted earlier.
The Directors note that a term loan due to RBS Invoice Finance Limited has been treated as a short-term liability in the consolidated group statutory accounts. The Directors are compelled to treat the loan as falling due within one year in line with current UK accounting legislation.
Financial performance summary and key indicators (continued)
In the opinion of the Directors, the substance of the loan is that of a long-term liability (reflected by the fact subsequently to the balance sheet date, the loan now has an agreed maturity date of 31 March 2028), and the treatment does not reflect the intentions of the stakeholders as to its eventual settlement.
The Directors note that the treatment as presented in no way impacts ongoing working capital and liquidity, nor the Group’s ability to settle its short-term liabilities as they fall due. As at 28 February 2026, the Group reported net current liabilities of £9.7m (2025: £9.8m). This position includes the following items:
Term Loan – RBS Invoice Finance Limited (£6.2m)
Invoice Discounting Facility – RBS Invoice Finance Limited (£3.7m):
This represents a revolving working capital facility which remains available to the Group in the normal course of business.
After adjusting for the reclassification of the term loan, the Group’s net current liabilities would reduce to £3.5m, which the Directors believe provides a more accurate reflection of the Group’s underlying working capital position and liquidity.
ESG and Sustainability
Over the past 12 months, Recycling Lives Services has continued to strengthen its approach to environmental, social and governance (ESG) performance, with significant progress made across carbon reporting, sustainability governance and independent accreditation.
Carbon Assessment and Net Zero Planning
During the year, Recycling Lives Services completed its first full carbon assessment covering Scope 1, Scope 2 and Scope 3 emissions across the organisation. The assessment was undertaken with support from Greenheart, a specialist consultancy focused on carbon measurement, sustainability strategy and ESG advisory services.
Emissions have been reported using a consolidation, operational control approach, as defined by the Greenhouse Gas (GHG) Protocol. All calculations were completed in line with the GHG Protocol Corporate Accounting and Reporting Standard together with the principles of ISO14064-1. The reporting period covered March 2024 to February 2025.
The assessment provided the business with its first complete baseline across the full value chain and has significantly improved understanding of where the organisation’s largest environmental impacts sit.
The results showed that approximately 95% of total emissions relate to Scope 3 activities, with around 75% of those emissions linked specifically to upstream transportation and distribution. These emissions are primarily associated with the nationwide movement of waste and recyclable materials across the UK supply chain.
This reflects the operational nature of the business and the importance of logistics within the recycling and resource management sector. As a result, the focus for 2026/27 will be on reducing transport-related emissions through:
locating recycling and recovery facilities closer to collection locations where operationally viable;
increasing engagement with suppliers operating lower emission fleets and alternative fuel vehicles;
improving routing, logistics efficiency and load optimisation; and
continuing to enhance emissions reporting and operational data visibility across the supply chain.
The next stage of the business’ sustainability journey will focus on aligning its carbon reduction strategy to the Science Based Targets initiative (SBTi). The SBTi is an internationally recognised framework that supports organisations in developing scientifically validated emissions reduction targets aligned to the goals of the Paris Agreement and the transition to a net zero economy.
During 2026/27, Recycling Lives Services intends to develop a realistic long-term net zero pathway that reflects both the operational requirements of the sector and the wider market environment, including increasing operating costs and the pace of technological development within transportation and infrastructure.
B Corp Recertification
Recycling Lives Services also successfully completed its three-year B Corp recertification process during the year.
The recertification involved a detailed six-month assessment process requiring evidence across policies, procedures and operational practices relating to governance, environmental performance, employee engagement, customer relationships, supplier management and wider community impact.
As part of the process, the directors formally recommitted to considering all stakeholders as part of business decision making thorough amendments to the company’s Articles of Association.
Achieving recertification is an important milestone for the business and reflects the standards, culture and values embedded throughout the organisation. It reinforces the company’s ongoing commitment to operating responsibly while balancing commercial performance with positive environmental and social impact.
Ongoing ESG Commitments
Alongside the progress made this year, the business remains committed to continuing the wider ESG initiatives and objectives previously outlined within earlier sustainability reporting.
This includes maintaining high standards of governance and compliance, supporting the creation of measurable social value, investing in operational efficiency and environmental improvements, and continuing to develop services that contribute positively to both customers and communities.
Full Carbon Assessment Mar-24 to Feb-25 (Baseline)
Emissions Scope | tCO2e (Location based1) | tCO2e (Market based2) |
Scope 1 | 176.66 | 176.66 |
Scope 2 | 114.76 | 165.17 |
Scope 3 | 5,157.32 | 5,157.32 |
Total | 5,448.74 | 5,499.15 |
Location-based1 method reflects the average emissions intensity of grids through which energy consumption occurs. This is defined by the geographic location and can be from local, subnational or national boundaries.
Market-based2 method reflects a company’s energy production or procurement decisions by deriving emission factors from contractual instruments. For example, a company can report electricity emissions as zero if renewable electricity is purchased from the supplier and all consumption is backed by Renewable Energy Certificates (RECs) for the reporting period. Emissions not purchased from renewable contracts must be reported based on the residual mix of the country e.g., emissions from all non-renewable energy sources.
Future developments
The Directors have set out below the key developments that will underpin the Group’s strategic aims in the medium term:
Social impact and value – our prison workshop programme provides meaningful employment and rehabilitation opportunities. This will be supplemented by a range of new initiatives, in particular the development of a reuse offering that enhances our urban mining and circular economy credentials for the benefit of all stakeholders. We have undertaken our first trial reuse joint venture and expect this to form a key pillar of our value proposition going forward.
Technological enhancement of sorting / dismantling processes – the Group has already commenced a programme of technological enhancements that are designed to drive capacity and efficiency of sorting / dismantling processes and generate further value for the materials that are harvested from waste. We have developed a timetable in respect of capital improvement projects that will drive this initiative over the next three years.
Digitisation – we have rolled out AI based software and other digitisation initiatives that are designed to enhance the experience of our Resource & Logistics and Compliance Scheme customers, ensuring we put ease of use and compliance at the forefront of our customer experience.
Principal risks and uncertainties
The Directors have set out below the principal risks facing the Group. The Directors are of the opinion that a thorough risk management process has been adopted which involves the formal review of all risks identified below. Where possible, processes are in place to monitor and mitigate such risks, including a risk register that is subject to regular review by the Directors.
Macroeconomic conditions
The Group has exposure to a range of commodity prices and volumes which are inherently influenced by the global economic environment. Consequently, changes in the levels of consumer and industrial activity will have a direct impact on the supply of, and demand for, recycled materials, as well as the prices available in the wider market. These factors in turn can influence activity levels and results achieved by the Group.
In response to this risk, senior management are tasked with ensuring that they are fully informed as to wider social, political and economic conditions and to modify strategies accordingly to mitigate risk.
Financial
The Waste Battery and WEEE Regulations do not permit a compliance scheme to terminate a producer's membership part way through a compliance year, so to avoid placing financial risk on other schemes members, it is essential that a compliance scheme operates in a financial robust manner.
The Group operates an invoicing and payment policy that obtains funds in advance of its commitments and supplements this policy with regular credit reviews and credit insurance.
Competition
The market in which the Group operates is competitive and can result in downward margin pressures. Policies of constant price monitoring and ongoing market analysis are in place to mitigate such risks.
The Group is also reliant on ensuring regular sources of recyclable materials for its operating sites and has the benefit of various long-standing contracts and relationships to mitigate the risk of materials being procured by competitors.
Health, safety and compliance with legislative and regulatory requirements
The Group's success is dependent on conducting its business safely and in accordance with applicable legislative and regulatory requirements. The existence of an adverse health and safety incident could potentially damage the Group commercially, and the Directors uphold the highest standards in respect of their duty of care towards all stakeholders.
Principal risks and uncertainties (continued)
The Group employs experienced health and safety and compliance staff to mitigate risk and enforce Group policy. The Directors conduct monthly reviews of key health, safety and compliance statistics, and maintain a risk register that is regularly reviewed and updated as the business evolves.
Furthermore, the Group has an active policy of review and audit of all suppliers engaged in the movement of hazardous or dangerous waste (as defined by UK legislation) as a means of protecting employees, suppliers, other stakeholders and the wider environment.
Recruitment and retention of key staff
The Group's success is dependent on recruiting and retaining high calibre staff in all areas of the business. Failure to attract and retain personnel with an appropriate skillset could have an adverse impact on the Group and its performance.
Succession and talent development is a key aspect of our strategic planning and is the subject of ongoing review by the Directors. The Group has a strategy in place to attract, retain and motivate key individuals to ensure their commitment to the ongoing success of the business. The Group’s salary and benefits package is extensive and competitive within its marketplace and includes a range of wellbeing benefits to support our employees inside and outside the workplace.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group's receivables due from customers.
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Directors also consider factors that may influence the credit risk of the Group's customer base, including the industry default risk and country in which the client operates.
The majority of trade debt is covered by credit insurance. The credit status of each new client is reviewed as part of client set-up procedures, including external credit referencing where possible. Outstanding balances are reviewed regularly by management. In the period ended 28 February 2026, the Group incurred one significant bad debt but this was deemed to be extraordinary in nature and impacted the wider compliance scheme market.
Legislative risk
The Group’s compliance schemes operate under producer responsibility legislation. The Group must also comply with other relevant legislation and standards, including in respect of its operating sites. Changes to either the underlying legislation or applicable standards may have a material impact on the Group’s operating activities.
The Group maintains active dialogue with the Government and relevant enforcement authorities, both individually and collectively through the various organisations it participates in to ensure it is aware of changes (actual or proposed) such that the interests of its stakeholders (including schemes and its members) are represented appropriately.
Liquidity Risk
The Group seeks to mitigate liquidity risk in a variety of ways. Active short-term cash flow forecasting is undertaken on a weekly basis to support day-to-day trading decisions and facility headroom. This is augmented by medium-term budget and forecasting activity by business unit and statutory entity, which is used to monitor monthly performance and ensure appropriate levels of debt and working capital funding facilities are available to support growth and manage periods of working capital lock up.
The Group has access to adequate credit limits and terms with its supply chain but has inevitably been impacted post-acquisition by entity level credit ratings that are lower than those that the Directors would consider appropriate for the business. The Directors are proactive in engaging with the Group’s supply chain to ensure mutually beneficial payment terms are in place for all suppliers and note that the net liability and loss generation of the Group do not fully reflect the liquidity and funding availability of the Group, and hence the credit risk arising thereon.
On behalf of the board
The directors present their annual report and financial statements for the year ended 28 February 2026.
The results for the year are set out on page 14.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Going concern
The 2026 financial year was the second trading year of the Company post its acquisition of Recycling Lives Compliance Services Limited, Recycling Lives (Environmental Services) Limited, RLS Propco limited and RLS EfW Limited (together with the Company, “the Group”).
The transaction benefited the Company and the Group’s long-term trading and liquidity prospects, and the financial year has witnessed ongoing development and improvement in a range of key commercial and operational activities.
The Directors have prepared detailed financial forecasts covering a period of at least twelve months from the date of the approval of the financial statements. These forecasts contain prudent scenarios as to future trading performance and cash generation. The forecasts consider the headroom available within the existing working capital funding facilities available to the Company and the Group, as well as the potential challenges that may exist in the future, many of which are linked to the impact on market conditions of wider global events. These forecasts demonstrate profitable trading, cash generation and compliance with the financial covenants in place for the committed banking facilities.
The Group undertakes pooled cash and treasury arrangements with other group entities under the new ownership structure. As such, cash generated across the Group is available to the other group entities for ongoing trading purposes.
The Directors have considered the banking facilities available via RBS Invoice Finance Limited, as well as the working capital funding made available via its ultimate controlling party and believe that the Company and Group can continue in operational existence for the foreseeable future and meet liabilities as they fall due for payment.
Cash headroom remains within acceptable parameters throughout the forecast period and the expected trading profits provide sufficient headroom on the covenants set out under the banking facilities (even under a range of downside sensitivity scenarios that have been considered by the Directors).
The Group has long established relationships with a number of customers and suppliers across different geographic areas and industries, and the Directors believe the Group is well placed to manage its business risks successfully.
Taking all of the above into consideration, the Directors continue to adopt the going concern basis in preparing the Company and Group Financial Statements and do not consider there to be any material uncertainties arising.
United Kingdom company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare 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.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of RLS Topco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 28 February 2026 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, 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).
Basis for 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
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.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with directors and by updating our understanding of the sector in which the group and parent company operates.
Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 loss for the year was £4,647,496 (2025 - £4,337,769 loss).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
RLS Topco Limited (“the company”) is a private company limited by shares incorporated in England and Wales. The registered office is 1a Essex Street, Preston, England, PR1 1QE.
The group consists of RLS Topco Limited and all of its subsidiaries.
The comparative values represent a period of 13 months. The reporting period was extended to 28 February 2025 in the previous year after incorporation on 23 January 2024, in order to bring the parent company's year end in line with that of other group companies.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £000.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investment properties. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company RLS Topco Limited together with all entities controlled by the parent company (its subsidiaries). All financial statements are made up to 28 February 2026. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The 2026 financial year was the second trading year of the Company post its acquisition of Recycling Lives Compliance Services Limited, Recycling Lives (Environmental Services) Limited, RLS Propco limited and RLS EfW Limited (together with the Company, “the Group”).
The transaction benefited the Company and the Group’s long-term trading and liquidity prospects, and the financial year has witnessed ongoing development and improvement in a range of key commercial and operational activities.
The Directors have prepared detailed financial forecasts covering a period of at least twelve months from the date of the approval of the financial statements. These forecasts contain prudent scenarios as to future trading performance and cash generation. The forecasts consider the headroom available within the existing working capital funding facilities available to the Company and the Group, as well as the potential challenges that may exist in the future, many of which are linked to the impact on market conditions of wider global events. These forecasts demonstrate profitable trading, cash generation and compliance with the financial covenants in place for the committed banking facilities.
The Group undertakes pooled cash and treasury arrangements with other group entities under the new ownership structure. As such, cash generated across the Group is available to the other group entities for ongoing trading purposes.
The Directors have considered the banking facilities available via RBS Invoice Finance Limited, as well as the working capital funding made available via its ultimate controlling party and believe that the Company and Group can continue in operational existence for the foreseeable future and meet liabilities as they fall due for payment.
Cash headroom remains within acceptable parameters throughout the forecast period and the expected trading profits provide sufficient headroom on the covenants set out under the banking facilities (even under a range of downside sensitivity scenarios that have been considered by the Directors).
The Group has long established relationships with a number of customers and suppliers across different geographic areas and industries, and the Directors believe the Group is well placed to manage its business risks successfully.
Taking all of the above into consideration, the Directors continue to adopt the going concern basis in preparing the Company and Group Financial Statements and do not consider there to be any material uncertainties arising.
Turnover comprises the fair value of the consideration received or receivable for provision of services in the ordinary course of the group's activities. Turnover is shown net of value added tax, returns, rebates and discounts and after eliminating sales within the group.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the group's activities.
The group generates turnover from a range of activities, including:
Waste management and site services: Revenue is recognised upon delivery of services to the customer, when control has passed and the performance obligation is satisfied. This includes end-to-end waste management, resource and site solutions.
Consultancy services: Turnover represents net invoiced sales excluding value added tax in respect to consultancy services provided to third parties.
Property rental: Turnover represents net invoiced sales excluding value added tax in respect to commercial property rental.
Environmental compliance and recycling services: Revenue from evidence notes is recognised in the period in which the waste equipment is processed and the evidence note is accepted by the customer. Membership fees are recognised in the period to which they relate. Revenue from processing and treatment of recycled materials, dismantling services, gating fees, and sale of recycled components is recognised when the relevant performance obligations are satisfied.
All turnover is generated within the United Kingdom.
Where individual entities apply different revenue recognition policies due to the nature of their operations, adjustments are made on consolidation to ensure consistency with the group’s accounting policy.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
Investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit and loss account, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the profit and loss account, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 the profit and loss account.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the profit and loss account.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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 deducting all of its liabilities.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to the profit and loss account on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
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.
Termination benefits
Termination benefits are recognised when the group is demonstrably committed to terminating the employment of an employee or group of employees before the normal retirement date, or when the group is committed to providing termination benefits as a result of an offer made to encourage voluntary redundancy.
A provision is made for termination benefits when a detailed formal plan for the termination exists and there is no realistic possibility of withdrawal. Termination benefits are measured at the best estimate of the expenditure required to settle the obligation at the reporting date and are recognised as an expense immediately.
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. Management do not believe that there are any judgments, key assumptions or estimates of sufficient significance to require disclosure.
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.
The assessment of whether investments are impaired requires management to exercise judgement in estimating future cash flows and selecting appropriate discount rates. These estimates are derived from the latest approved forecasts and discount rates benchmarked against comparable entities. The use of discounted cash flow models to assess recoverable amounts involves inherent uncertainty, particularly in relation to long-term assumptions about market conditions, performance, and economic outlook. Changes in these assumptions could materially affect the carrying value of the investments. The directors review investments for indicators of impairment on at least an annual basis.
Accrued income and costs are recognised in respect of compliance scheme evidence generated but not yet sold or purchased at the balance sheet date. The volume of evidence is determined based on actual collections and purchases, net of any sales made up to the reporting date. This volume is valued using the most recent tonnage selling prices available at the balance sheet date. These prices are subject to regular review and update as part of management’s internal accounting controls.
Management exercises judgement in determining the appropriate valuation methodology and in assessing the recoverability of accrued balances. While the evidence notes typically retain value through sale within the scheme year, any unsold evidence at the end of the scheme year becomes void and holds no residual value. Management considers the likelihood of such unsold balances to be remote, based on market conditions and dynamics, historical trends and operational controls in place.
All turnover relates to sales to UK customers.
Within the Company, there are £nil (2025: £220k) of costs in relation to business combination fees, £nil (2025: £76k) in relation to professional fees regarding the set up of the MIP and the share valuation needed to value the business for this purpose. There are also £nil (2025: £12k) of costs which were incurred as part of the final work to carve the group out of RLL linked to the completion of the property assignments, included in business combination.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2025 - 2).
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Included within tangible fixed assets are assets held under finance leases or hire purchase contracts, as follows:
Investment property comprises a building for industrial, office and residential use. The fair value of the investment property at 28 February 2026 has been determined by reference to the agreed sale price arising from an agreement to sell the property entered into subsequent to the reporting date. The directors consider the agreed sale price provides the best available evidence of the fair value of the property at 28 February 2026.
The revaluation uplift has been recognised in the revaluation reserve net of the deferred tax liability arising on the revaluation.
Details of the company's subsidiaries at 28 February 2026 are as follows:
Registered office addresses (all UK unless otherwise indicated):
All entities are included within the group consolidation.
There is no material difference between the replacement cost of stocks and the amounts stated above.
Obligations under finance leases are secured on the assets concerned.
Obligations under finance leases are secured on the assets concerned.
The bank loans are secured by a first legal fixed and floating charge over the assets of the group. Interest is charged at the Bank of England base rate plus 4.25%.
Subsequent to the year end, the group agreed an extension of its bank loan facility with the lender. Under the revised terms, the loan is due for repayment on or before 31 March 2028.
The other loans comprise loan notes issued by TH Frag II S.a.r.l., the group's intermediary parent company. The loan notes are secured by a fixed and floating charge over the assets of the group. Interest is charged at a rate of 15%, compounding semi-annually.
The group is currently in the process of agreeing amendments to the loan note terms. The proposed amendments include an extension of the maturity date to 31 March 2028 and a reduction in the interest rate to nil with effect from 1 April 2026. As at the date of approval of these financial statements, the amended loan note agreement has not yet been formally executed.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The provisions are in respect of the expected property dilapidations expense, expected to arise at the end of the lease period. The expected costs are accrued evenly over the term of the lease.
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.
At the year end, pension contributions outstanding amounted to £34k (2025: £35k).
On 2 June 2025, 2,250 B Ordinary shares of £0.01 each were issued at £1.05 per share, a premium of £1.04 per share.
The A Ordinary shares have full rights in the company with respect to voting, dividends and distributions of capital on winding up of the company. The B Ordinary shares have no rights to voting or dividends, but have rights to capital on distribution on winding up of the company and rank equally with the A Ordinary shares in this respect.
There is a cross company guarantee in place across all group companies in favour of the main lending bank. The total amount committed under these group facilities as at 28 February 2026 was £7,612k (2025: £7,088k).
There is a cross company guarantee in place across all group companies in favour of the loan notes issued by TH FRAG II S.À R.L to the parent company. The total amount outstanding as at 28 February 2026 was £31,924k (2025: £27,182k).
As security for these facilities and loan notes, both the main lending bank and TH FRAG II S.À R.L hold fixed and floating charges, as well as a negative pledge, over the group’s land and buildings. The floating charge extends to all property and undertaking of the company.
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:
As lessor
At the reporting end date the group had contracted with tenants for the following minimum payments:
Amounts contracted for but not provided in the financial statements:
The company has taken advantage of the available exemption conferred by Section 1AC.35 of FRS102 not to disclose transactions with wholly owned members of the group.
After a management review of the Company's intercompany balances held at 28 February 2025, it was found that all balances held with individual group entities were grouped together and netted off as 'amounts owed by group undertakings', FRS102 states that balances should not be netted off against each other in order to show a true and fair view of the balance sheet at that date.
Therefore a prior period restatement has been made to gross up the intercompany balances held, resulting in 'amounts owed by group undertakings' held in debtors falling due within one year and 'amounts owed to group undertakings' held in creditors falling due in within one year increasing by £820k on the Company's balance sheet. There is no change to the Company's net liabilities.
Note that there is no restatement to the Group balance sheet amounts as the balances are eliminated on consolidation.