Results

The year ended 31 December 2025 was the most challenging period the Company has experienced in recent years. Turnover decreased by 31.8% to £4,836,603 (2024: £7,095,823), resulting in a loss before tax of £616,522 compared with a profit before tax of £1,071,607 in the previous year. Gross margin reduced from 47.2% to 36.2%.

The Board recognises the significance of this result. However, the decline was concentrated within two construction-related revenue streams, Local Authority Works and Fire Works, and did not reflect performance across the business as a whole. The Company's compliance activities, particularly in legionella and water hygiene services, continued to grow during the year.

The two project-based revenue streams declined by £2.4 million during the year. By contrast, legionella and water hygiene compliance services increased by £141,053, demonstrating continued demand for these services despite wider market challenges.

Regulatory approval delays

During 2025, significant delays in the approval process affected the commencement of projects across the sector. Gateway 2 approvals were taking substantially longer than the statutory 12-week target, preventing clients from progressing developments and delaying projects for which the Company had already secured work. As a result, a number of contracts that had been tendered, awarded and scheduled could not begin as originally planned.

Impact Project Works

A substantial proportion of the Company’s Fire Works revenue is generated from fire stopping and passive fire protection services delivered as part of construction and remediation projects. Many of these projects are now subject to Building Safety Regulator approval under the gateway regime introduced by the Building Safety Act 2022. Within the Local Authority Project Works, we saw client capital programmes being deferred, re-phased or withdrawn due to the delays. This reduced the flow of replacement work as existing secured projects completed.

Effect on work in progress

The effect is visible in the Company’s balance sheet, where work in progress fell from £869,722 to £437,543 over the year as secured work was completed and not replaced at the same rate.

Cost Base and Restructuring

The loss reported for the year reflects the speed and scale of the reduction in revenue. While turnover fell by 31.8%, direct costs reduced by only 3.6% and overheads increased by 1.7%.

The Company operates within specialist technical markets and relies on a skilled, accredited workforce that cannot be expanded or reduced without consequence. During much of the year, the Board maintained capacity to meet existing contractual commitments and to service the significant volume of work awaiting release from the regulatory approval process.

As it became clear that delays would extend beyond the year end, measures were taken to reduce costs and align the business with anticipated demand. The Company incurred £53,323 of redundancy and other non-recurring restructuring costs, and the vehicle fleet was significantly reduced, with motor vehicle net book value decreasing from £458,897 to £274,408. Despite the loss recorded during the year, net assets remained positive at £510,321 as at 31 December 2025.

Strategy for 2026

The Board's focus for 2026 is to continue increasing the proportion of revenue generated from recurring compliance services while reducing reliance on project-based construction activity.

This includes the expansion of testing, inspection, certification and compliance services, including legionella risk assessments, water hygiene monitoring and sampling, tank inspection and cleaning, fire risk assessments and related statutory compliance services. These activities are generally delivered under multi-year arrangements and provide a more predictable and recurring revenue base.

The Company will continue to undertake project work where opportunities meet the required commercial and operational criteria. However, a key objective is to reduce the proportion of turnover dependent on construction programmes and external approval processes over which the Company has limited influence.

This approach builds on areas where the Company has demonstrated resilience and growth. The compliance division is supported by established technical expertise, recognised accreditations and long-standing client relationships. The performance achieved during 2025 reinforces the strength of this part of the business and its importance to the Company's future development.

Outlook

The Board does not expect an immediate improvement in market conditions. Delays within the gateway approval process continue to affect construction activity, and projects released from the system require additional time before reaching stages at which the Company's services are required.

Accordingly, trading conditions within the construction-related segments of the business are expected to remain challenging for much of 2026, and the Company is likely to remain loss-making during the first half of the year. Current trading is consistent with those expectations, and forecasts have been prepared on a prudent basis.

There are, however, encouraging signs. The cost reduction measures implemented during 2025 have improved performance, and monthly losses have reduced significantly compared with the final quarter of the year. Demand for compliance services has remained strong, with legionella-related revenues continuing to grow during the early part of 2026 despite ongoing weakness in construction-led activities.

While the challenges experienced in 2025 were largely driven by external factors, the actions taken by the Board have repositioned the business towards more predictable and recurring sources of income. The Board believes this strategy will strengthen the Company's resilience, improve earnings visibility and provide a more sustainable platform for future growth.

For the financial year ended 31 December 2025 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The member has not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with section 444 of the Companies Act 2006, all of the members of the company have consented to the preparation of abridged financial statements pursuant to paragraph 1A of Schedule 1 to the Small Companies and Groups (Accounts and Directors’ Report) Regulations (SI 2008/409)(b).

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

LegionellaSafe Services (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Britannia House, Britannia Way, Lichfield, Staffordshire, WS14 9UY.

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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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.

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.

When cash inflows are deferred and represent a financing arrangement, the promised consideration is adjusted for the effects of the time value of money, which is recognised as interest income.

The company recognises revenue from the following major sources:

• Environmental health service

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

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

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

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

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

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

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 credited or charged to profit or loss.

At each reporting period end date, the company 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.

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 profit or loss, 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 profit or loss, 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.

Stocks represent consumables and work in progress at the year end. Consumable stocks are stated at the lower of cost and new realisable value.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

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

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

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.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after 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.

Equity instruments issued by the company 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 company.

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 company’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 when the company has 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.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

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 balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss 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 profit or loss 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 leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

In the application of the company’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.

During this year it was not necessary for the directors to make any material critical judgements or estimations.

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

The company is a wholly owned subsidiary of Compliance Holdings Limited, registered office address Britannia House, Britannia Way, Britannia Enterprise Park, Lichfield, England WS14 9UY.