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COMPANY REGISTRATION NO: 08301902
FCC (GLOUCESTERSHIRE) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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FCC (GLOUCESTERSHIRE) LIMITED
COMPANY INFORMATION
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FCC (GLOUCESTERSHIRE) 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 (GLOUCESTERSHIRE) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
The Directors present their strategic report on the affairs of FCC (Gloucestershire) 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 to design, construct, operate and maintain a waste facility and all assets pertaining to it on the Javelin Park site near Haresfield, Gloucester under a Private Finance Initiative concession contract with Gloucestershire County Council.
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FCC (GLOUCESTERSHIRE) LIMITED
STRATEGIC 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.
Results and dividends
The results for the Company for the year ended 31 December 2025 are presented on page 10. The profit for the year ended 31 December 2025 amounted to £1.7m (2024: £7.9m). The Company paid an interim dividend of £11.0m during the year (2024: £nil). 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 E UK 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 E UK annual report can be obtained from the address in note 20.
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.
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FCC (GLOUCESTERSHIRE) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
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.
∙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.
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FCC (GLOUCESTERSHIRE) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
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Principal risks and uncertainties (continued)
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∙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
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Due to the nature of the Company’s activities and the assets and liabilities contained within the Company’s balance sheet, the financial risks the Directors consider relevant to the Company are liquidity risk, credit risk and interest rate risk.
Liquidity and credit risk
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The Company’s exposure to credit and liquidity risk is reduced as it is a subsidiary of FCC. Credit risk arises from the risk of having credit exposures to customers, including outstanding receivables. The Company reviews the credit ratings of significant customers and monitors debtor balances on an ongoing basis. Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its commitments. The Company prepares and reviews cash flow forecasts frequently to ensure that it has sufficient resources to meet its cash flow commitments.
The Group’s exposure to interest rate risk is managed by using a mix of fixed and variable rate debt. To manage this mix in a cost effective manner, the Group uses interest rate swaps. Full details of the accounting policy in respect of financial instruments are given in note 2 to the financial statements.
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 (GLOUCESTERSHIRE) 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
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Information on the Company's going concern status, financial risk management policies, future developments and dividends are disclosed in the Strategic report.
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 (GLOUCESTERSHIRE) 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 101 "Reduced Disclosure Framework" ("FRS 101").
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 101, have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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 (GLOUCESTERSHIRE) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FCC (GLOUCESTERSHIRE) LIMITED
Opinion
We have audited the financial statements of FCC (Gloucestershire) 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 20, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 101 “Reduced Disclosure Framework’’ (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 to 30 June 2027.
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 (GLOUCESTERSHIRE) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FCC (GLOUCESTERSHIRE) 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 6, 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 (GLOUCESTERSHIRE) LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FCC (GLOUCESTERSHIRE) 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 (FRS 101 and the Companies Act 2006) and compliance with the relevant direct and indirect tax regulation in the United Kingdom. In addition, the Company has to comply with laws and regulations relating to its operations, including health and safety.
∙We understood how FCC (Gloucestershire) Limited is complying with those frameworks by making enquiries of management and those charged with governance to understand how the company maintains and communicates its policies and procedures in these areas. We understood any controls put in place by management to reduce the opportunities for fraudulent transactions. We performed procedures, including reading minutes of the board meetings and making enquiries with the management for any correspondence of non-compliance with the tax and other regulatory authorities, and noted no significant issues. We performed journal entry testing to ensure that there are no unusual legal or penalty expenses incurred during the period and to ensure that the management is in compliance with the applicable framework.
∙We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur by internal team conversations and enquiry of management and those charged with governance. Through these procedures we determined there to be a risk of management override in relation to revenue recognition. In performing our work relating to management override, we used data analytics to sample from the entire population of journals, identifying specific transactions which did not meet our expectations based on specific criteria, to investigate to gain an understanding of the underlying business transaction and agreed these to the relevant source documentation. In performing our work over revenue, we considered there to be a fraud risk as a result of the complexities arising from service concession arrangement accounting and presence of related party transactions. For the complexities arising from service concession arrangement accounting, we have performed an understanding of how revenue recognition is applied and whether it complies with the relevant standard. We verified significant inputs that affect revenue recognition to third-party evidence such as invoices and bank statements. For the risk arising from related party transactions, we have performed a reconciliation between the cost recorded by the Company to the revenue recorded by its operator, a related party.
∙Based on this understanding we designed our audit procedures to identify noncompliance with such laws and regulations. Our procedures involved inquiry of management and those charged with governance and reviewing board minutes. 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.
Chris Robson (Senior statutory auditor)
For and on behalf of Ernst & Young LLP, Statutory Auditor
Leeds
30 June 2026
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FCC (GLOUCESTERSHIRE) 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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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 14 to 25 form part of these financial statements.
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FCC (GLOUCESTERSHIRE) LIMITED
REGISTERED NUMBER: 08301902
BALANCE SHEET
AS AT 31 DECEMBER 2025
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Derivative financial instruments
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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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Interest bearing loans and borrowings
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Interest bearing loans and borrowings
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Total equity and liabilities
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11
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FCC (GLOUCESTERSHIRE) LIMITED
REGISTERED NUMBER: 08301902
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 14 to 25 form part of these financial statements.
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FCC (GLOUCESTERSHIRE) 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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Taxation in respect of items of other comprehensive income
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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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Taxation in respect of items of other comprehensive income
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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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The notes on pages 14 to 25 form part of these financial statements.
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FCC (GLOUCESTERSHIRE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
FCC (Gloucestershire) 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.
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General information and basis of accounting
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The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' ("FRS 101") issued by the Financial Reporting Council.
The functional and presentational currency of FCC (Gloucestershire) Limited is considered to be pounds sterling because that is the currency of the primary economic environment in which the Company operates.
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Financial Reporting Standard 101 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions under FRS 101:
a)The requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment;
b)The requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of IFRS 3 Business Combinations;
c)The requirements of IFRS 7 Financial Instruments: Disclosures;
d)The requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;
e)The requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:
i.paragraph 79(a)(iv) of IAS 1;
ii.paragraph 73(e) of IAS 16 Property, Plant and Equipment;
iii.paragraph 118(e) of IAS 38 Intangible Assets;
f)The requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134 to 136 of IAS 1 Presentation of Financial Statements;
g)The requirements of IAS 7 Statement of Cash Flows;
h)The requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
i)The requirements of paragraph 17 of IAS 24 Related Party Disclosures;
j)The requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member; and
k)The requirements of paragraphs 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairment of Assets.
Where relevant, equivalent disclosures have been given in the consolidated FCC group financial statements, copies of which are available from its registered office at 3 Sidings Court, White Rose Way, Doncaster, DN4 5NU.
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FCC (GLOUCESTERSHIRE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
At 31 December 2025 the Company had net assets of £25.9m and net current assets of £2.1m.
The assessment of going concern is linked to that of the FCC (Gloucestershire) Group, whose ability to continue as a going concern is dependent upon the financial performance of FCC (Gloucestershire) Limited.
The Directors have made this assessment after consideration of the Company’s cash flows and related assumptions, with due consideration of the ongoing impact of trading forecasts on the operating performance of FCC (Gloucestershire) Limited over the period to 30 June 2027. The Directors have adopted the going concern basis in preparing the Company’s financial statements based on their assessment of the Company’s plan. The FCC (Gloucestershire) Group has substantial financial resources to cover its obligations to Gloucestershire County Council under the PFI contract, having arranged senior debt facilities, which commenced at the start of the PFI contract in 2019, and with the subordinated debt funding received from its shareholders. Accordingly, the FCC (Gloucestershire) Group has prepared an assessment to demonstrate its future cash flows and from this the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the period from the date of signing the financial statements, up to and including 30 June 2027.
The Directors therefore continue to adopt the going concern basis in preparing the financial statements.
Under IFRIC 12, the Company applies the financial asset model. Revenue is recognised as the services are delivered, reflecting the right to receive cash from the grantor. Revenue represents the value of waste disposal services provided under the service concession agreement, including landfill tax but excluding VAT. Revenue is recognised in accordance with IFRS 15, at the point the waste is received and processed, which is when the performance obligation is satisfied.
15
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FCC (GLOUCESTERSHIRE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
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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.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
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Service concession financial asset
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The Company recognises a financial asset under IFRIC 12 in relation to its service concession arrangement. This financial asset represents the contractual right to receive cash from the grantor and is measured at amortised cost using the effective interest rate method.
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FCC (GLOUCESTERSHIRE) 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.
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Financial assets and liabilities
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a finance transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Non-current debt instruments which meet the following conditions, are subsequently measured at amortised cost using the effective interest method:
(a) Returns to the holder are (i) a fixed amount; or (ii) a fixed rate of return over the life of the instrument; or (iii) a variable return that, throughout the life of the instrument, is equal to a single referenced quoted or observable interest rate; or (iv) some combination of such fixed rate and variable rates, providing that both rates are positive.
(b) There is no contractual provision that could, by its terms, result in the holder losing the principal amount or any interest attributable to the current period or prior periods.
(c) Contractual provisions that permit the issuer to prepay a debt instrument or permit the holder to put it back to the issuer before maturity are not contingent on future events, other than to protect the holder against the credit deterioration of the issuer or a change in control of the issuer, or to protect the holder or issuer against changes in relevant taxation or law.
(d) There are no conditional returns or repayment provisions except for the variable rate return described in (a) and prepayment provisions described in (c).
Debt instruments that are classified as payable or receivable within one year and which meet the above conditions are measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.
Other debt instruments not meeting these conditions are measured at fair value through profit or loss.
Commitments to make and receive loans which meet the conditions mentioned above are measured at cost (which may be nil) less impairment.
Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the Group transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or c) the Group, despite having retained some significant risks and rewards of ownership, has transferred control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer.
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.
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FCC (GLOUCESTERSHIRE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
2.9 Financial instruments (continued)
For the Company’s financial instruments, the Company recognises lifetime Expected Credit Losses (‘ECL’) when there has been a significant increase in risk since initial recognition. When estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis. The assessment is based on the Company’s historical experience and includes forward-looking information.
If the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to the 12–month ECL as defined below.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12–month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering the asset in its entirety or a portion thereof. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.
The Company uses variable to fixed interest rate swaps to manage its exposure to cash flow risk on its debt instruments. These derivatives are designated as hedging instruments and are measured at fair value at each balance sheet date.
To the extent the cash flow hedge is effective, movements in the fair value of hedging instruments are recognised in other comprehensive income and presented in a separate cash flow hedge reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge. Any ineffective portions of those movements are recognised immediately in profit or loss for the year.
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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.
The Directors have not made any critical accounting judgements in the process of applying the Company’s accounting policies.
Intangible assets are tested for impairment on a value in use basis using business valuations, where available, or the Directors’ current estimate of the medium-term forecast. To assess if any impairment exists, estimates are made of the future cash flows expected to result from the use of the asset and its eventual disposal. Actual future cash flows could vary from those estimated. Factors such as closure of facilities and declining volumes could result in shortened asset lives or impairment. Management review and update the discount rates used annually.
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FCC (GLOUCESTERSHIRE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
All revenue was generated in the United Kingdom from the handling, recycling, and disposal of waste materials.
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In 2025, the Company paid audit fees relating to the statutory audit of financial statements of £85,000 (2024: £85,000) on behalf of FCC (Gloucestershire) Holdings Limited £14,000 (2024: £14,000) and FCC (Gloucestershire) Intermediate Limited – £16,500 (2024: £16,500). Of this amount, the fees that related to the Company were £54,000 (2024: £54,000).
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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.
The Company had no employees during the current and previous financial year.
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Finance income on financial asset
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Loans from group undertakings
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FCC (GLOUCESTERSHIRE) 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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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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Total tax charge for the year
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There were no factors that may affect future tax charges.
20
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FCC (GLOUCESTERSHIRE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Service concession intangible asset
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Charge for the year on owned assets
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The intangible asset is the part of the assets which will be paid with unguaranteed revenues. The amortisation period for the intangible asset of the Company is 25 years and commenced when the project entered into the operational phase in 2019.
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Finance income on financial asset
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Repayment of financial asset
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Analysis of closing financial asset
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Non-current financial assets
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FCC (GLOUCESTERSHIRE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
11.Financial assets (continued)
The financial asset includes construction and operational revenues related to the construction phase in previous years and the finance income on the financial asset. The construction and operational revenues capitalised to date are £150,545,000 (2024: £150,545,000). The finance income capitalised to date is £145,971,000 (2024: £127,387,000). The repayment of financial asset has started from the beginning of the operational phase in 2019. The repayment of the assets to date is £120,905,000 (2024: £99,469,000).
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Amounts owed by other FCC group undertakings
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Prepayments and accrued income
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Amounts owed by other FCC group undertakings are unsecured, interest free and repayable on demand.
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FCC (GLOUCESTERSHIRE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Loans to group undertakings
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Other financial liabilities
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Loans to group undertakings
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Other financial liabilities
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Between one and five years
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The Company has arranged secured bank loans under a facility agreement with a consortium of banks. The bank loans bear interest at a margin over SONIA and are repayable in instalments with final repayment in 2042. The loans are secured by fixed and floating charges over the undertaking, property, assets and rights of the Company, and have certain covenants attached.
The company also holds a loan with its group partner which represents amounts borrowed by the Company under a Subordinated Debt agreement with the shareholders. The Subordinated Debt loan bears interest at an interest rate of 13.13% per annum and is repayable in instalments with final repayment in 2044. The balance at year end was £48,642,000 (2024: £48,642,000). The interest payable on this balance at December 2025 was £8,617,000 (2024: £2,176,000).
The other financial liabilities relate to interest breakage cost incurred by the project for a fixed rate loan which is amortised over the period of operations. This liability is due to be amortised over the period of the repayment of the loan until 2042.
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FCC (GLOUCESTERSHIRE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Amounts payable to other FCC group undertakings
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Other taxation and social security
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Accruals and deferred income
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Origination and reversal of timing differences
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The deferred taxation balance is made up as follows:
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Accelerated capital allowances
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Tax losses carried forward
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Capitalised interest and corporate interest restriction
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Hedging interest rate swap
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Allotted, called up and fully paid
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1,000 (2024: 1,000) Ordinary shares of £1.00 each
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The Company has one class of ordinary shares which carries no right to fixed income.
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24
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FCC (GLOUCESTERSHIRE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Retained earnings comprises cumulative profits or losses, including unrealised profits or losses recognised in the statement of comprehensive income.
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A dividend of £11,000 (2024: £nil) per share was paid in the year
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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 101, 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 (Gloucestershire) 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.
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