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COMPANY REGISTRATION NO: 05572555
FCC WREXHAM PFI LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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FCC WREXHAM PFI LIMITED
COMPANY INFORMATION
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FCC WREXHAM PFI LIMITED
CONTENTS
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Independent auditors' report
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Statement of comprehensive income
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Statement of changes in equity
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Notes to the financial statements
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FCC WREXHAM PFI LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The Directors present their strategic report on the affairs of FCC Wrexham PFI Limited ("the Company") for the year ended 31 December 2025.
Overview of Group
The Company is an indirect subsidiary of FCC Environment (UK) Limited (“FCC E UK”), and Fomento de Construcciones y Contratas, S.A. (“FCC”). FCC is a significant multi-national business listed on the Madrid stock exchange with operations in Europe, America, Africa, and the Middle East. FCC is among the top global players that deliver Environmental Services (including water and waste management), and has implemented a balanced business model, combining other activities such as Construction, Cement and Real Estate.
FCC’s financial capacity and depth of experience in the European waste infrastructure sector is backed by over 100 years of experience in operating municipal services contracts. This complements both the position of the Company and FCC E UK’s other subsidiaries (together the “Group” or “FCC E UK group”) as a leading waste management, recycling and energy business, and the Group’s ambition to maintain its position as a significant player in establishing the next generation of waste treatment infrastructure in the UK. The core services provided by the Group are fully aligned with FCC’s strategic growth plans. The Group is ideally placed to take advantage of local opportunities to provide the services and infrastructure required by the UK, to meet existing legislative framework and emerging proposals to promote circular economy infrastructure, by recognising the true value of the materials we handle. The Board continues to look forward to the opportunities that are presented to the Group and its employees by virtue of FCC’s plans to expand and embed its operations in the UK.
We help local authorities and businesses minimise the amount of waste that goes to landfill by transforming it into valuable resources. We focus on retrieving the full value of the resources we collect and process, so that they can be used again as materials. Waste that cannot be recycled is transformed into energy.
Principal activity
The principal activity of the Company is the procurement, construction and operation of a recycling infrastructure for Wrexham County Borough Council (“Wrexham Council”) under a 25 year £330million Private Finance Initiative (“PFI”) contract. The Company manages the disposal and recycling of Wrexham Council’s municipal waste and ensures compliance with Landfill Directive and National recycling targets.
The activities, strategies and risks affecting the Company are inextricably similar to, and dependent on, those of the Group, and consequently it is appropriate that the following narrative applies to the Group in its entirety.
The Group is one of the UK’s leading waste management, recycling and renewable energy service businesses. It is a key player within the municipal waste management sector, with over 60 Local Authority clients across England, Wales and Scotland.
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FCC WREXHAM PFI LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The Directors consider that the Company's business performed in line with expectations during the year.
Commentary on the Company's result is set out in the Results, dividends and key performance indicators section.
During the year, the Group successfully completed the integration of the UK operations of Urbaser, which were acquired during 2024, and in October 2025, FCC Environment (UK) Limited completed the acquisition of Cumbria Waste Group (“CWG”). CWG operates multiple sites covering materials recovery, composting, hazardous and liquid waste treatment, HWRCs and collections. The acquisition complements our existing offering, strengthening and expanding our core operations and enhancing the services we provide to customers.
The ongoing military conflicts in Ukraine and the Middle East continued to contribute to increased political instability and uncertainty across the world, but during the year, there were signs that fuel prices were becoming more stable and inflation was expected to return to lower, pre-conflict levels. Since the year end, conflict involving Iran, the United States and Israeli forces has increased tensions across the Gulf states and pushed fuel prices higher, exacerbating inflationary pressures and further continuing uncertainty.
Results, dividends and key performance indicators
The results for the Company for the year ended 31 December 2025 are presented on page 11. The profit for the year ended 31 December 2025 amounted to £1.1million (2024: £1.0million). The Company did not pay a dividend during the year (2024: £750,000). The Directors do not recommend the payment of a final dividend (2024: £nil).
FCC manages its operations on a divisional basis and information regarding financial and non-financial key performance indicators is included within the FCC annual report. For this reason, the Company’s Directors believe that the disclosure of further key performance indicators for the Company is not appropriate for an understanding of the development, performance or position of the business. Copies of the FCC annual report can be obtained from the address in note 22.
Financial and non-financial KPIs
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To help deliver the contract and to assist in managing operational performance of the business, the following KPIs have
been identified to monitor performance in certain key areas:
Health and safety – There were no RIDDOR reportable incidents during 2025 (2024: none).
Waste management performance – The Company is required to work in partnership with the Council to meet targets for the effective processing of compostable and recyclable materials. In 2025, the Council did not exceed the relevant target with overall levels of recycling and composting for 2025 being 67.0% (2024: 65.8%) against a target of 70.0% (2024: 68.5%).
Service level compliance KPIs – the Company is required to adhere to a variety of key service level KPIs, failure of which
results in financial and performance penalties. There were no instances of compliance failure in 2025 (2024: none).
Site availability – Site availability is a key element of the Wrexham Contract service provision and is of paramount
importance to the Council. As a result, the availability of key sites to both members of the public and customer authorised
vehicles is subject to financial and performance penalties. There was one such financial penalty during 2025 (2024: none),
incurring a cost of £292 (2024: £nil).
Debt cover ratios – The Credit Facility Agreement, between the Company and its Bank, NORD/LB, requires that the
Company manages various Debt Cover Ratios within certain given limits. The Company is obliged to forecast, monitor and
report against these ratios on a bi-annual basis following completion of construction of the project in 2009. The Company
has comfortably met all Debt Cover Ratios to date and is currently forecasting compliance with the Credit Facility
requirements in all future periods.
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FCC WREXHAM PFI LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Future trends and developments
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The Directors consider that the climate agenda has become the climate crisis: public concern for the environment has never been greater, and government focus at all levels – internationally, nationally and locally – has shifted significantly. In particular, the UK has committed to Net Zero carbon emissions by 2050 (2045 in Scotland), and new regulations are taking shape under the Labour government elected in 2024, including the Great British Energy Act, which received Royal Assent in 2025 and the introduction of Simpler Recycling for households in 2026.
The waste sector works collaboratively to ensure it is making a positive contribution to national and legally binding Net Zero obligations. Within this, the Directors believe that EfW, alongside the drive towards reduction, reuse and recycling is currently an important part of today’s waste hierarchy.
At FCC Environment, we wholeheartedly support the drive to more and better resource efficiency by reducing waste at source wherever possible, reusing what we can and recycling valuable commodities. For waste that cannot be recycled or reused, EfW is currently the best available and best proven technology to recover maximum value from end-of-life waste as an alternative to landfill. In doing so, EfW is contributing to reductions in landfill emissions, while also producing electricity – with the potential for heating local communities. We will continue our push towards the objectives set out in the FCC Net Zero Strategy and Carbon Reduction Plan, including decarbonising the vehicle fleet, investing in Carbon Capture and Storage for EfW plants, rolling out clean energy generation and developing district heating networks.
Principal risks and uncertainties
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Operating in the UK’s highly regulated waste management market provides a clear legal framework as well as presenting numerous risks and uncertainties to the Group. The Directors regard the following to be the principal risks and uncertainties affecting the Group and their approach to managing these risks and uncertainties is considered below:
∙Environmental risks: The Group’s environmental risks are tightly controlled under environmental legislation enforced principally by the Environment Agency (“EA”), Scottish Environment Protection Agency (“SEPA”) and Natural Resources Wales (“NRW”). Compliance with all environmental legislation pertinent to the Group’s activities is a minimum requirement. A dedicated in-house team prepare regular reports on environmental compliance at the Group’s sites for the Board’s review. Environmental objectives are reviewed annually and highlighted within the Group’s Safety Health Environment and Quality (SHEQ) Policy Statement. In addition to this, there are detailed environmental procedures to enable compliance with environmental legislation.
∙Health and safety: Health and safety is a key issue for the Group due to the nature of its operations, including the use of heavy plant equipment and difficult working conditions. The Group is continually improving in this area as a result of ongoing consultation with the relevant authorities and the monitoring of best practice initiatives. Whenever an area is highlighted for improvement, the Group seeks to implement such improvement expeditiously; through bulletins, on-line training courses and tool-box briefings. The Group’s Incident Review Panel meets as required, at which senior management review significant health and safety incidents that have occurred at Group sites to identify improvements and lessons for the business. All employees undertake a rigorous health and safety training programme, which is underpinned by the latest UK legislation, detailed policies and procedures. The Group’s executive management receive regular, detailed reports on health and safety performance affecting the Group’s operations and it employs a dedicated team, led by the Group Safety, Health, Environment and Quality Manager, to monitor and promote high standards. All employees are expected to recognise their role in achieving acceptable standards of health and safety and to exhibit such understanding through their approach and attitude to work.
∙Business continuity: The Group, as part of its risk management programme, has developed business continuity planning for its operations. As part of this planning, the Group has developed a bespoke emergency plan for each operational facility (including the diversion of waste from single or multiple sites in the event of major disruption or disaster affecting a site or region). The Group’s IT systems are covered by an IT disaster recovery plan, to ensure business continuity.
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FCC WREXHAM PFI LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
∙Legislation: The Group monitors forthcoming and current legislation to ensure full compliance and to anticipate and assess the impact upon its operations, including the significant opportunities it can present. The waste management industry is subject to extensive government regulation which has a substantial impact on the Group’s business.
∙Economic: The Group has exposure to reduced economic activity. We recognise shorter term uncertainty as a result of the Ukraine and Middle Eastern conflicts, which created inflationary pressures. This could result in higher borrowing costs generally. We have reviewed the potential impacts and consider that we have sufficient mitigations in place. The Group’s strategy is focused on growing through further investment in EfW infrastructure projects.
∙Litigation: The Group could be subject to litigation from time to time. The outcome of legal action is always uncertain and there is a risk that it may prove more costly and time consuming than expected. There is also a risk that litigation could be instigated in the future that could materially impact the Group. In some liability cases legal expenses are covered by the Group’s liability insurance. This risk is mitigated through continued monitoring and employing an experienced and dedicated in-house legal team.
∙Competitive risk: The Group operates in highly competitive markets in which competitors’ service offerings may react faster to legislative and market dynamics than those of the Group. To mitigate this risk, the Group ensures that its asset, cost and capital base is regularly reviewed and flexed to meet changes in customers’ demands and to maximise cash generation.
∙Employees: The loss of key employees or the inability to hire experienced management personnel could have a materially adverse effect on the business. To manage this risk, succession planning for senior positions within the Group is undertaken. In addition, the Group has the benefit of being able to draw on resources from within the wider FCC Group.
∙Technology: The Group relies on a variety of information technology platforms for the efficient delivery of its services and has therefore employed a structured IT support team, using internal and external resources. In addition, as there are a wide variety of technologies available to the waste management industry, there is a risk that the technologies employed by the Group might fail to deliver expected performance levels or end products for its customers and so the Group has made a significant investment into establishing a dedicated technical and development team. This team review and assess the available technologies before any are adopted to ensure they will meet the needs of the business and those of its customers.
Financial risk management objectives and policies
The Company is exposed to financial risk through its financial assets and liabilities. The most important components of financial risk are interest rate risk, credit risk and liquidity risk, all of which the Directors consider relevant due to the nature of the Company’s activities and the assets contained within the Company’s balance sheet.
Liquidity and credit risk
The Company and Group finances its operations by a combination of cash generated from operations, bank borrowings and inter-group loans. At 31 December 2025, the Group’s borrowings are denominated in sterling at fixed rates of interest.
Liquidity risk is managed by ensuring that sufficient committed loan facilities and inter-group loans exist in order to meet short-term business requirements, after taking into account cash flows from operations and the holding of cash and cash equivalents. Derivative instruments are used on a group wide basis to manage the risks identified when appropriate.
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks, as well as credit exposures to customers, including outstanding receivables. The credit risk on the former is limited because the counterparties are reputable banks. Management does not expect any significant losses on receivables that have not been provided for within note 13 “Trade and other receivables (current)”.
Interest rate risk
The Group’s interest bearing assets include cash and cash equivalents, which earn interest at floating rates. The Group’s income and operating cash flows are substantially independent of changes in market interest rates.
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FCC WREXHAM PFI LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis in preparing the annual financial statements. Further details regarding the adoption of the going concern basis can be found in note 2 to the financial statements.
This report was approved by the board and signed on its behalf.
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FCC WREXHAM PFI LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The Directors present their report and the financial statements for the year ended 31 December 2025.
Matters covered in the Strategic Report
Information on the Company's going concern status, financial risk management policies, future developments and dividends are disclosed in the Strategic report.
On 2 May 2007 Wrexham Council signed a 25 year contract under the Government’s Private Finance Initiative (“PFI”) with FCC UK for the provision and operation of new recycling infrastructure.
Construction of the facilities started in 2008 and reached full services commencement in October 2009. All operational services are sub-contracted by the Company to FCC Recycling (UK) Limited (“FCC R”), a subsidiary of FCC E UK. In 2013 a contract variation was signed with Wrexham Council extending the duration of the contract by 4 years to 2038.
The following individuals served as Directors of the Company during the year ended 31 December 2025 and up to the date of this report:
The Company has made qualifying third party indemnity provisions for the benefit of its Directors during the year which remain in force at the date of this report. Such provisions were made by FCC.
Disclosure of information to auditors
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The Directors who held office at the date of approval of this Directors' report confirm that:
∙so far as each Director is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙each Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
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FCC WREXHAM PFI LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
Directors' responsibilities statement
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The Directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year.
Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 "The Financial Reporting Standard Applicable in the UK and Republic of Ireland" ("FRS 102").
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company 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;
∙present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
∙state whether applicable UK Accounting Standards, including FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
This report was approved by the board and signed on its behalf.
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FCC WREXHAM PFI LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FCC WREXHAM PFI LIMITED
Opinion
We have audited the financial statements of FCC Wrexham PFI Limited for the year ended 31 December 2025 which comprise the Statement of comprehensive income, the Balance Sheet, the Statement of changes in equity and the related notes 1 to 22, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
∙give a true and fair view of the company’s affairs as at 31 December 2025 and of its profit for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for the period ending 30 June 2027 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. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
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FCC WREXHAM PFI LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FCC WREXHAM PFI LIMITED
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the 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 directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors’ remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 7, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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FCC WREXHAM PFI LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FCC WREXHAM PFI LIMITED
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. 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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
∙We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those that relate to the reporting framework including FRS 102 and the relevant direct and indirect tax compliance regulations in the UK. In addition, the Company has to comply with laws and regulations relating to its operations, including health and safety and General Data Protection Regulations (‘GDPR’).
∙We understood how FCC Wrexham PFI Limited is complying with those frameworks by making enquiries of management to understand how the company maintains and communicates its policies and procedures in these areas. We corroborated this by reviewing supporting documentation to validate that the company has a process for monitoring legal requirements and has a process for reporting matters of non-compliance and taking appropriate action.
∙We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur by considering the risk of management override and by assuming revenue to be a fraud risk. We tested manual journals on areas involving significant estimation and judgement, which were identified through our data analytics techniques based on risk criteria tailored to identify journals most susceptible to fraud. We also tested a sample of revenue transactions back to supporting documentation.
∙Based on this understanding we designed our audit procedures to identify noncompliance with such laws and regulations. Our procedures involved making enquiries of management, review of Board minutes and journal entry testing as set out above. We also considered the results of our substantive procedures on other areas of the audit that may indicate non-compliance with such laws and regulations.
A further description of our responsibilities for the audit of the financial statements is located 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.
Richard Lingwood (Senior statutory auditor)
For and on behalf of Ernst & Young LLP, Statutory Auditor
Leeds
30 April 2026
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FCC WREXHAM PFI LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
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Depreciation and amortisation
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Loss on disposal of assets
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit for the financial year
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Other comprehensive income:
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Items that may be reclassified subsequently to profit or loss:
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Change in fair value of hedging interest rate swap
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Tax relating to components of other comprehensive income
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Other comprehensive income net of tax
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Total comprehensive income for the year
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The notes on pages 15 to 26 form part of these financial statements.
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FCC WREXHAM PFI LIMITED
REGISTERED NUMBER: 05572555
BALANCE SHEET
AS AT 31 DECEMBER 2025
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Property, plant and equipment
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Trade and other receivables
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Cash and cash equivalents
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Cash flow hedging reserve
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Total non-current liabilities
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Total current liabilities
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Total equity and liabilities
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FCC WREXHAM PFI LIMITED
REGISTERED NUMBER: 05572555
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2025
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 26 form part of these financial statements.
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FCC WREXHAM PFI LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
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Cash flow hedging reserve
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Tax related to gains recognised in equity
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Change in fair value of hedging interest rate swap
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Total comprehensive income for the year
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Tax related to gains recognised in equity
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Change in fair value of hedging interest rate swap
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Total comprehensive income for the year
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
FCC Wrexham PFI Limited is a private company limited by shares incorporated in the United Kingdom under the Companies Act 2006, registered in England and Wales. The address of the registered office is given on the company information page before the contents. The nature of the Company’s operations and its principal activities are set out in the Strategic report.
2.Accounting policies
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Basis of preparation of financial statements
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The principal accounting policies are summarised below. They have all been applied consistently throughout the year and to the preceding year.
General information and basis of accounting
The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 (“FRS 102”) issued by the Financial Reporting Council.
The functional and presentational currency of FCC Wrexham PFI Limited is considered to be pounds sterling because that is the currency of the primary economic environment in which the Company operates.
Exemptions for qualifying entities under FRS 102
FCC Wrexham PFI Limited meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available to it in respect of its financial statements. Exemptions have been taken in relation to presentation of a cash flow statement, related party transactions, financial instruments, remuneration of key management personnel and the reconciliation of shares outstanding at the beginning and end of the year. The Company is a member of the FCC group and relevant full disclosures are made in the consolidated FCC annual report, copies of which can be obtained from the address in note 22
Service concession arrangements
The Company has claimed exemption from the requirement to apply paragraphs 34.12E to 34.16A to service concession arrangements that were entered into before the date of transition to FRS 102. Such service concession arrangements continue to be accounted for using the same accounting policies being applied at the date of transition to FRS 102.
The Directors have reviewed the Company's supply chain and do not believe that any specific risk has been identified. The Directors also considered the ability of Wrexham Council to continue to make payments due under the PFI contract to the Company and do not consider this to be a material risk.
The Directors have considered the period from the Balance sheet date to 30 June 2027 following the date of signing of the financial statements, have reviewed projected cash flows and have identified no reason to believe that a material uncertainty exists that may cast significant doubt about the ability of the Company to continue as a going concern.
At 31 December 2025 the Company had net assets of £3.4million and net current assets of £5.6million. As noted above the Company's forecasts and projections show that the Company expects to be able to continue to operate for the full term of the concession, which is not currently scheduled to cease until 2038. Accordingly, the Directors consider it appropriate to adopt the going concern basis in preparing the Annual report and financial statements.
15
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Revenue, including landfill tax, is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer. Revenue from the supply of services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable. Revenue is recognised in respect of waste disposal services when the waste has been received and disposed of. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of current liabilities.
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Current and deferred taxation
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Revenue, expenses, and assets are recognised net of the amount of sales tax except:
∙where the sales tax incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
∙debtors and creditors are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of debtors or creditors in the balance sheet. Tax on the profit or loss for the year comprises current and deferred tax.
Current tax is the expected tax payable on the taxable surplus for the year using average tax rates in place during the financial year, and any adjustments in respect of previous periods. Income tax relating to items recognised directly in equity is recognised in equity and not in the income statement.
Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax is recognised for all temporary differences:
∙except where the deferred income tax liability arises from the initial recognition of goodwill, non-tax deductible goodwill amortisation or the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit or loss nor taxable profit or loss; and
∙in respect of taxable temporary differences associated with investments in subsidiaries except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
16
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
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Property, plant and equipment
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Property, plant and equipment is stated at cost.
Depreciation is provided on property, plant and equipment in use at rates calculated to write off the cost less residual value of the assets as follows:
The cost of financing expenditure relating to the construction of assets prior to commissioning is capitalised in the cost of the fixed asset.
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in comprehensive income as described below.
Non-financial assets
An asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.
Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.
Financial assets
For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.
Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.
17
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
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Cash and cash equivalents
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Cash and cash equivalents include cash in hand, deposits held at call with banks and other short term investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are carried in the balance sheet at cost. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
Cash held in deposits
Under the terms of the agreement between the Company and the Operations and Management contractor, FCC Recycling (UK) Limited, the Company is required to deduct a proportion of payments due to FCC Recycling (UK) Limited and place them on deposit until the end of the contract period. Also included within Cash held in deposits are fixed term deposits where the term at the outset is more than three months.
Financial instruments are recognised in the Company's Balance sheet when the Company becomes party to the contractual provisions of the instrument.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction
18
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
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Financial instruments (continued)
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price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derivative financial instruments
The Company uses derivative financial instruments to reduce exposure to interest rate movements. The Company does not hold or issue derivative financial instruments for speculative purposes.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
The Company uses variable to fixed interest rate swaps to manage its exposure to cash flow risk on its debt instruments. These derivatives are measured at fair value at each balance sheet date.
To the extent the cash flow hedge is effective, movements in fair value are recognised in other comprehensive income and presented in a separate cash flow hedge reserve. Any ineffective portions of those movements are recognised in profit or loss for the year.
The Company operates a defined contribution scheme on behalf of its eligible employees. Contributions to the scheme are charged to the statement of comprehensive income for the year in which they are payable. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.
19
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Judgements in applying accounting policies and key sources of estimation uncertainty
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In the application of the Company’s accounting policies, which are described in note 2, the Directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Derivative financial instruments - The Company uses hedging instruments to reduce exposure to interest rate movements. These instruments are remeasured to their fair value at each reporting date. There is uncertainty in estimates of future interest rates, which can be affected by global events. The full policy can be found within the financial instruments accounting policy in note 2.
Revenue, including landfill tax, was generated in the United Kingdom from the handling, recycling and disposal of waste materials.
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Operating profit is stated after charging:
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Depreciation of property, plant and equipment - owned
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Loss on disposal of tangible assets
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Defined contribution pension cost
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Auditor’s remuneration in respect of audit fees totalling £6,000 (2024: £6,000) has been met by FCC Recycling (UK) Limited, a fellow subsidiary undertaking of FCC E UK.
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Directors' remuneration and transactions
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None of the Directors received any remuneration or other benefits through the Company during the year ended 31 December 2025 or the previous financial year.
All Directors are remunerated as Directors or employees of FCC E UK for services to the Group as a whole and as such it is not possible to directly attribute any element of their remuneration to the Company.
20
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Staff costs were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees during the year was as follows:
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Interest payable and similar expenses
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Other loan interest payable
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Loans from group undertakings
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21
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Adjustments relating to prior years
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Factors affecting tax charge for the year
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The tax assessed for the year differs from the standard rate of corporation tax in the UK of 25% (2024: 25%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024: 25%)
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Adjustments to tax charge in respect of prior periods
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Total tax charge for the year
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
22
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Property, plant and equipment
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Charge for the year on owned assets
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Trade and other receivables
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Prepayments and accrued income
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23
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Less prepaid bank arrangement fees
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Unsecured subordinated loan notes issued to parent
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Less prepaid bank arrangement fees
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Between one and two years
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Between two and five years
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Less prepaid bank arrangement fees
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Amounts due to fellow subsidiary undertakings
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Amounts due to fellow subsidiary undertakings
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Accruals and deferred income
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Accrued interest on unsecured subordinated loan notes
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24
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Credited to statement of comprehensive income
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Hedging interest rate swap
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Allotted, called up and fully paid
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20,100 (2024: 20,100) Ordinary shares of £1.00 each
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Cash flow hedging reserve
The cash flow hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred, net of any related deferred tax.
Profit and loss account
The profit and loss account comprises cumulative profits or losses, including unrealised profits or losses recognised in the statement of comprehensive income.
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A dividend of £nil (2024: £37.31) per share was paid in the year
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25
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FCC WREXHAM PFI LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
The Company participates in the defined contribution scheme operated by FCC E UK on behalf of its eligible employees. The assets of this scheme are held separately from those of the Company in independently administered funds. There were no outstanding or prepaid contributions at the end of the year in respect of defined contribution schemes. Contributions under defined contribution schemes amounted to £7,000 (2024: £7,000).
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Related party transactions
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The Directors regard all subsidiaries of FCC as related parties. In the ordinary course of business, the Company has traded with fellow subsidiaries of FCC.
Under FRS 102, the Company is exempt from disclosing related party transactions with other wholly owned subsidiaries of FCC.
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The immediate parent of the Company is FCC Wrexham PFI Holdings Limited, a company registered in England and Wales.
The Directors regard Control Empresarial de Capitales S.A. de C.V, a company registered in Mexico, as the ultimate parent and ultimate controlling party.
Fomento de Construcciones y Contratas, S.A. is the parent company of the largest group of which the Company is a member and for which group financial statements are drawn up. FCC Environment (UK) Limited is the parent company of the smallest group of which the Company is a member and for which group financial statements are drawn up. Copies of the financial statements of both FCC Environment (UK) Limited and Fomento de Construcciones y Contratas, S.A. are available from the Company Secretary, 3 Sidings Court, White Rose Way, Doncaster, DN4 5NU.
26
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