The director presents the strategic report for the period ended 29 May 2025.
The Group's financial performance during the year was significantly influenced by the macroeconomic environment, particularly the ongoing conflict in Ukraine and the associated sanctions on Russian goods. As Russia is a key global producer of both primary and sacrificial FeTi, sanctions contributed to volatility in raw material pricing and availability.
Steel production across several key industrial regions remained subdued during the period, reflecting weaker construction activity, cautious manufacturing demand, and broader economic uncertainty. This environment directly reduced alloy consumption and contributed to lower trading volumes across the sector.
The Group also experienced a significant decline in Ferro-Titanium pricing during the period, with benchmark market prices reducing by approximately 25%. This had a direct and adverse impact on margins across the sector and was a primary driver of the Group’s increased operating loss.
In addition, inventory positions established during a higher pricing environment adversely affected margins as market prices declined, while reduced production volumes limited the Group’s ability to absorb fixed manufacturing costs efficiently.
In parallel, the Western Ferrotitanium supply base continued to consolidate following the closure or financial distress of several producers. Given the relatively concentrated nature of the market, such structural changes can have a direct impact on material availability, customer sourcing strategies, and pricing behaviour.
Despite these challenges, the Group leveraged its flexible procurement strategy and long-term sales arrangements to partially mitigate price shocks and capitalised on selective trading opportunities earlier in the financial year where possible.
Turnover increased to £16.374m (2024: £13.494m), primarily reflecting increased activity and stronger contribution in the revert titanium market, a segment that is less directly exposed to ferrotitanium price volatility and which provided important diversification during the period. The full-year operating result before exceptional items was a loss of £2.231m, compared to a loss of £0.370m in the previous year.
Exceptional items £0.851m (2024: £nil) during the year related to a non-cash accounting adjustment arising from a periodic review of accounting policies, undertaken to provide a clearer and more representative view of production costs and performance metrics, and had no impact on cash flows for the period.
Profit before tax fell to a loss of £3.207m (2024: £0.416m), and net assets stood at £2.893m (2024: £6.232m). The results for the year reflect a materially more challenging trading period for the Group, resulting in a significant operating loss and reduction in net asset position. Margin performance was adversely impacted by raw material price volatility, reduced production absorption, and lower alloy demand. Notwithstanding the year’s financial result, the Director believes the Group retains a resilient underlying business model supported by long-term customer relationships, an established market position, and structural supply dynamics within the Western Ferrotitanium market.
In response to the trading environment, the Group initiated a series of management actions focused on cost reduction, operational restructuring, procurement discipline, and working capital optimisation to support financial stability. These actions are intended to align the Group’s cost base with current market conditions while preserving operational capability ahead of an anticipated improvement in demand. The Group continues to benefit from a stable core customer base and favourable supply conditions within the Western Ferrotitanium market.
The Group maintained a disciplined approach to forecasting, resource planning, and client engagement throughout the year. Management continues to prioritise long-term customer relationships aligned with the Group’s strategic and operational objectives. The Director has assessed the Group’s cash flow forecasts, available banking facilities, and financing arrangements and remains satisfied that the Group has adequate resources to continue as a going concern and meet its obligations as they fall due for the foreseeable future. Trading since the period end has been consistent with management expectations. More recent trading results show a significant improvement in profitability, supported by the cost reduction, operational restructuring and strengthened procurement measures implemented by the Group.
While steel demand remained soft across parts of Europe and Asia, underlying titanium scrap generation continued to be supported by activity within the aerospace and medical sectors. Changes observed within the scrap market have been driven less by physical availability and more by evolving collection and trading structures, increasing the importance of stable supplier relationships and procurement discipline.
The continued consolidation of the Western producer base has further reinforced the importance of reliable, long-term supply arrangements for customers seeking consistency and traceability in alloy inputs.
The Group’s strategic focus remains centred on:
Maintaining market leadership in Ferro-Titanium by continuing to deliver high-quality material aligned to strict specifications.
Expanding its footprint in the revert titanium market by replicating the core values of precision, quality, and reliability.
Investing in operational efficiency, including enhanced IT systems, workforce training, and plant upgrades to support long-term growth.
Diversification and innovation through participation in sustainable material projects and emerging markets.
During the year, the Group commenced preparation for AS9100 aerospace quality certification, reflecting a continued focus on governance, traceability, and process control.
Looking ahead, the Director expects market conditions to remain sensitive to geopolitical developments and raw material dynamics in the near term. However, industry forecasts indicate a gradual recovery in steel production as inflationary pressures ease and manufacturing activity stabilises.
Given the continued consolidation of the Western Ferrotitanium producer base, even modest improvements in steel output are likely to tighten the supply-demand balance. This is expected to reinforce the importance of dependable supplier relationships, quality assurance, and traceability – areas in which the Group has continued to invest.
While short-term visibility remains limited, the Director believes the Group is appropriately positioned to navigate market volatility and respond in a controlled manner to strengthening demand as conditions normalise over the medium term.
The Group operates in a complex international trading environment and is exposed to the following principal risks:
Geopolitical and Market Risk:
Global events such as the war in Ukraine have directly impacted commodity pricing and titanium availability. The Group continues to monitor political developments and adjusts sourcing and pricing strategies where appropriate.
Supply Chain and Raw Material Risk:
While underlying titanium scrap generation remains stable, evolving collection channels and trading structures have increased the importance of direct supplier relationships. The Group mitigates this risk by maintaining diverse sourcing channels and investing in in-house processing capability.
Customer and Credit Risk:
A rigorous assessment framework is in place to evaluate the creditworthiness of counterparties, supporting strong receivables performance.
Regulatory and Trade Compliance:
Post-Brexit regulatory changes have resulted in minor impacts on customs processes and documentation, with no significant financial consequences. The Group continues to adapt its procedures in line with evolving trade requirements.
Environmental and Health & Safety Risk:
The Group has invested in environmentally responsible processing technologies that support operational efficiency and ESG objectives. Robust health and safety policies, combined with regular training, help minimise risk across operational sites.
The Group’s long-term sustainability strategy includes:
Transitioning toward environmentally responsible cleaning and separation technologies.
Reducing environmental impact and supporting circular economy principles through titanium scrap reprocessing.
Exploring collaborative projects that promote resource efficiency, including material reuse initiatives within the aerospace sector.
These initiatives are intended to future-proof the Group’s operations while aligning with the evolving expectations of customers, regulators, and stakeholders.
On behalf of the board
The director presents his annual report and financial statements for the period ended 29 May 2025.
The results for the period are set out on page 9.
Ordinary dividends were paid amounting to £352,000. The director does not recommend payment of a further dividend.
The director who held office during the period and up to the date of signature of the financial statements was as follows:
Sumer Auditco Limited were appointed as auditor to the company 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.
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 Transition Participations Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 29 May 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).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 director 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 director's report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's 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 extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
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 management, and from our commercial knowledge and experience of the sector;
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, including Companies Act 2006, taxation legislation, data protection, anti-bribery, employment and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the 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 risk of fraud through management bias and override of 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 accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims;
reviewing correspondence with HMRC
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 directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or 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 company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year (after tax) was £354,806 (2024 - £452,975 profit).
Transition Participations Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Hi-Temp Works, 480 Penistone Road, Sheffield, S6 2FU.
The group consists of Transition Participations Limited and all of its subsidiaries.
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 £.
The financial statements have been prepared under the historical cost convention. 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Transition Participations Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 29 May 2025. 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.
The directors have carried out a comprehensive assessment of the group’s ability to continue as a going concern for a period of at least twelve months from the date of approval of these financial statements. This assessment has considered the group’s current financial position, detailed cash flow forecasts, projected trading performance, and the headroom available within existing financing facilities.
In forming their judgment, the directors have taken into account:
The significant losses incurred during FY24 and FY25 and their impact on the group’s net assets and liquidity position;
Forecast cash flows and the assumptions underlying those forecasts, including expected revenue, margin, and cost trends;
The availability of committed banking facilities and the group’s compliance with associated covenants;
The availability of support from the group's principal shareholder in assessing the group's ability to meet its future funding and working capital requirements.
Prevailing and anticipated market conditions affecting demand, supply chain, and input costs; and
The mitigating actions implemented and planned to improve profitability and cash generation.
The directors have also considered a range of downside scenarios, including sensitivities to key assumptions, to assess the potential impact on liquidity and covenant headroom. Based on this review, the directors have a reasonable expectation that the group has adequate resources to meet its obligations as they fall due for the foreseeable future, and at least for the period of twelve months from the date of approval of these financial statements. Accordingly, the financial statements continue to be prepared on a going concern basis.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the
goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured
reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the
costs incurred or to be incurred in respect of the transaction can be measured reliably.
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 profit and loss account.
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.
In the parent company financial statements, 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 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 balance sheet 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 and cash and bank balances, 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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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 profit or loss.
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, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Share capital issued by the group is recorded at the proceeds received, net of transaction costs. Dividends payable on share capital 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 profit and loss account 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 profit and loss account, 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.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the director is 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 significant estimates and assumptions which are currently applicable are outlined below.
Stock provision
Stocks are stated at the lower of cost and net realisable value, with provisions for obsolete or slow-moving items assessed by the Directors. The key estimation uncertainty relates to future market conditions, which affect demand and selling prices. These judgments also consider historical usage patterns and product lifecycle trends, but actual outcomes may differ, potentially resulting in material adjustments to stock values in future periods.
Useful economic lives of property, plant and equipment
The determination of useful economic lives requires management judgement and is based on the expected period over which assets will generate economic benefits for the Company. During the year, management undertook a review of the useful economic lives applied to certain items of property, plant and equipment and revised depreciation estimates where appropriate to reflect current expectations of future use and economic benefit. This review resulted in additional depreciation of £756,532 being recognised in the current year.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
The actual credit for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 29 May 2025 are as follows:
* Subsidiaries that are exempt from audit by virtue of section 479A of the Companies Act 2006 with parental guarantee given by the company. The Company Registration numbers have been provided in relation to these exempt subsidiaries in note 26.
Details of associates at 29 May 2025 are as follows:
Other borrowings include debt financing of £897,281 (2024: £931,026) provided by an invoice financing facility. The company has granted a debenture in favour of its bankers, creating fixed and floating charges over all of the company’s assets.
Creditors include an amount of £347,297 (2024: £614,390) which is secured on the freehold property of Transition Sheffield Limited, of which £58,136 (2024: £303,460) is included in creditors due within one year.
There has been a prior year adjustment to reanalyse the invoice discounting facility within creditors due within one year. There is no impact to the net income for the year to 30 May 2024 nor the net assets as at 30 May 2024.
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.
D J Ingall is a director of Fondel Alloys Limited. At the year end £40,218 (2024: £40,575) was due to Fondel Alloys Limited and £29,787 (2024: £29,787) was due from Fondell Alloys Limited.
Directors remuneration is disclosed in note 6. The remuneration of the individuals considered to be key management personnel of the group, including the directors, totalled £194,968 (2024: £156,756).
Advances or credits have been granted by the group to its directors as follows:
The Company is providing certain wholly owned subsidiaries (as disclosed in note 13 and which are included within these Group consolidated financial statements) with guarantee of their respective debts in the form prescribed by Section 479A of the Companies Act 2006 ('the Act') such that they can claim exemption from requiring an audit in accordance with Section 479A of the Act. The guarantees cover all of the outstanding actual and contingent liabilities of these companies at 30 May 2025: