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COMPANY REGISTRATION NO: 08164693
FCC WREXHAM PFI (PHASE II) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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FCC WREXHAM PFI (PHASE II) LIMITED
COMPANY INFORMATION
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FCC WREXHAM PFI (PHASE II) 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 (PHASE II) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The Directors present their report and the audited financial statements of FCC Wrexham PFI (Phase II) Limited ("the Company") for the year ended 31 December 2025.
Overview
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.
On the 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 Phase II facilities started in 2013 and reached full services commencement in July 2015. 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 principal activity of the Company is the procurement, construction and operation of a new recycling infrastructure for Wrexham County Borough Council (“Wrexham Council”) under a 25 year £330million 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 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.
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FCC WREXHAM PFI (PHASE II) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
The Directors consider that the Company's business performance remained satisfactory during the year.
The Company's result is set out in the Results and dividends 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.
The results of the Company for the year ended 31 December 2025 are presented on page 7. The profit for the year amounted to £842,000 (2024: £884,000). The Company paid an interim dividend of £250,000 (2024: £250,000). 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 21.
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 meet targets for the effective processing of MBT contract waste. In 2025 the Company exceeded the relevant target with the overall levels of recycling and composting being 23.8% (2024: 26.0%) against a target of 17% (2024: 17%).
∙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 customer authorised vehicles is subject to financial and performance penalties. There has been no financial penalty during 2025 (2024: none).
∙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 2013. 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.
The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Therefore, 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.
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FCC WREXHAM PFI (PHASE II) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
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.
Directors' responsibilities statement
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The Directors are responsible for preparing 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.
In preparing this report, the Directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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FCC WREXHAM PFI (PHASE II) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FCC WREXHAM PFI (PHASE II) LIMITED
Opinion
We have audited the financial statements of FCC Wrexham PFI (Phase II) 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 21, 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 result 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 the provisions available for small entities 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 (PHASE II) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FCC WREXHAM PFI (PHASE II) 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 directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the directors’ report has 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 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; or
∙the directors were not entitled to prepare the financial statements in accordance with the small companies’ regime and take advantage of the small companies’ exemptions in preparing the directors’ report and from the requirement to prepare a strategic report
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 3, 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 (PHASE II) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FCC WREXHAM PFI (PHASE II) 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 (Phase II) 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 (PHASE II) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
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Depreciation and amortisation
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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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The fair value movement on the hedging interest rate swap
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Tax relating to components of other comprehensive income
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Total comprehensive income for the year
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The notes on pages 11 to 22 form part of these financial statements.
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FCC WREXHAM PFI (PHASE II) LIMITED
REGISTERED NUMBER: 08164693
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 (PHASE II) LIMITED
REGISTERED NUMBER: 08164693
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 11 to 22 form part of these financial statements.
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FCC WREXHAM PFI (PHASE II) 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 (PHASE II) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
FCC Wrexham PFI (Phase II) 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 Directors’ report.
The Company entered the operating phase of the PFI contract on 8 July 2015.
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 (Phase II) 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 (Phase II) 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 21
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 £4.7million and net current assets of £3.9million. 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.
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FCC WREXHAM PFI (PHASE II) 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 statement of comprehensive income.
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.
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FCC WREXHAM PFI (PHASE II) 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.
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FCC WREXHAM PFI (PHASE II) 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 price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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FCC WREXHAM PFI (PHASE II) 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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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.
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 remeasured 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.
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.
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FCC WREXHAM PFI (PHASE II) 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.
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The operating profit is stated after charging:
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Depreciation of property, plant and equipment - owned
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Defined contribution pension cost
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Revenue, including landfill tax, was generated in the United Kingdom from the handling, recycling and disposal of waste materials.
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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.
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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.
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FCC WREXHAM PFI (PHASE II) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Bank charges and similar expenses
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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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FCC WREXHAM PFI (PHASE II) 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 total corporation tax charge differs from the average standard rate 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.
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FCC WREXHAM PFI (PHASE II) 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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The carrying value of land and buildings includes bid development costs amounting to £879,000 (2024: £950,000), capitalised interest of £622,000 (2024: £697,000) and capitalised bank arrangement fees of £91,000 (2024: £102,000). These represent costs incurred during the preferred bidder stage of bringing the Wrexham PFI (Phase II) project to financial close and will be written off on a straight-line basis over the life of the PFI contract, being 25 years.
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Trade and other receivables / derivative financial assets
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Derivative financial assets - interest rate swap
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Prepayments and accrued income
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19
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FCC WREXHAM PFI (PHASE II) 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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Accrued interest on bank loan
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Accrued interest on unsecured subordinated loan notes
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Total trade and other payables
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20
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FCC WREXHAM PFI (PHASE II) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Balance at 1 January 2025
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Charged to profit or loss
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Credited to other comprehensive income
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Balance at 31 December 2025
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Depreciation less than capital allowances
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Hedging interest rate swap
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Balance at 31 December 2025
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Allotted, called up and fully paid
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100 (2024: 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 £2,500 (2024: £2,500) per share was paid in the year
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21
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FCC WREXHAM PFI (PHASE II) 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 £2,000 (2024: £2,000).
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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 (Phase II Holding) 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.
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