Introduction
The Directors present their Strategic Report and the consolidated audited financial statements of Slicker Recycling Limited (‘Slicker’) and its subsidiaries for the year ended 31 December 2022.
The directors are pleased to present an EBITDA result of £9.2m, for the year ended 31 December 2022 (2021: £4.7m). This result reflects a successful year where Slicker has been able to maximise opportunities presented despite the challenging macro environment.
| Year Ended 31 December 2022 | Year Ended 31 December 2021 |
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Turnover (£’000) | 50,137 | 33,519 |
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EBITDA (£’000) | 9,172 | 4,725 |
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Profit after tax (£’000) | 4,482 | 1,540 |
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Average number of employees | 198 | 188 |
Having ridden out the worst of the global COVID-19 pandemic, the year 2022 saw the Russia-Ukraine war bring large scale armed conflict to Europe. As a result, the price of crude oil in the global market increased to the highest level since 2014, challenging all commodity markets and supply chains.
Slicker has proven to be an agile business, understanding its market dynamics, and acting accordingly; therefore despite the macro issues presented, 2022 was a year of further growth and consolidation. This is demonstrated through the supply of 23 percent more volume of waste lubricating oil to the co-owned AVISTA Green re-refinery in Denmark, enabling the facility to operate at full capacity throughout the year. Slicker’s sustainable solution for used lubricating oil delivered organic growth in the year, with new marque customer wins leading to an increase in volume under contract.
Notwithstanding the strong position held in the waste oil markets, as the economy moves towards a lower carbon future Slicker is focused on building its non-lubricating oil-based business divisions such as solid hazardous waste, total waste management, industrial services, interceptors, and parts washers. In 2022, over half of the Slicker Group revenue was generated from business activities outside of the sale of waste lubricating oil, with growth across all divisions. The strategic partnership with Minerals Technology (see below) to provide a lithium ion battery solution for customers at our Wolverhampton site also made good progress. In addition to providing a more balanced services portfolio for the business, this integrated service offering means Slicker can offer a “one stop” waste management solution to all its customers.
The sustainability and circular economy agenda continue to gather momentum and with the Slicker services offering being at the core of this, new customer acquisition has continued into 2023. Despite progress being made on sustainability, it is worth noting that up to 50% of the waste lubricating oil collected in the UK is still being burnt. The Environment Agency is looking to address in it's ongoing review of the Processed Fuel Oil Quality Protocol, which when concluded will provide additional feedstock and market opportunities.
The fuel supply division of Regroup, acquired by Slicker in July 2020, has continued to perform well despite the Russian invasion, which, following the significant increase in oil prices, created pressure on feedstock supplies throughout the UK, presenting a potential supply risk. This risk was mitigated by leveraging internal contracts and customers held within the wider group as well as putting agreements in place with external suppliers to ensure all customers’ demands were met.
Changes in legislation for the use of fuel in certain applications has led to increased opportunities, resulting in an influx of new customers. Moving into 2023, despite the normalisation of oil prices and increased competition within the fuel marketplace, Regroup remain highly competitive. The focus now being research and development into new fuels to complement the existing range already offered, increasing feedstock supplies, and expansion into other Northern European markets.
Operations
During the year, due in the main to the Ukraine situation, Slicker have been faced with supply chain disruption and increasing cost pressures, which impacted the efficiencies of the vehicle fleet, making for difficult transport planning at times. In addition, the sourcing of new vehicles has becoming increasingly challenging and is an area that requires careful management. Whilst these challenges have had a significant impact on our operating costs and efficiency KPIs, flexibility within the business has enabled the business to adapt and meet these challenges head on. This will ensure that when our new vehicles are delivered the new worked efficiencies will lead to increased adaptability which will ultimately feed through to the bottom line.
A commitment to purchase 15 artic vehicles was made during the year, renewing most units in this division which in turn will increase productivity and efficiencies for the bulk movement of waste and product. This will improve the flexibility to feed our dock areas and ultimately enable us to increase the turnaround of our shipping timescales to be able to deliver more export parcels.
Health, Safety and Environmental
Slicker has a zero-waste-to-landfill policy and adheres to the European Waste Hierarchy Model prioritising prevention, recycling, and reuse over disposal. The business has transitioned from using waste lubricating oil resources as a fuel to one of repeat practical reuse by re-refining back to their original purpose as lubricants. Per the IFEU, compared to the next best solution, Slicker’s re-refining process is c.37% more carbon efficient.
Slicker’s roadmap to net zero remains a priority, progress made in 2021/22 has given confidence in the Company’s strategic optimism about meeting the scientific based targets by 2050.
Scope 1 emissions in metric tonnes CO2e (2021) 6,016
Scope 2 emissions in metric tonnes CO2e (2021) 347
Due to the nature of Slicker’s operations, there are inherent Health, Safety and Environmental risks to our customers, our contractors, our colleagues and the general public. In 2022, Slicker continued to maintain ISO9001:2015 and ISO14001:2015 accreditations and successfully migrated to the ISO45001:2018 standard.
Further to this, Slicker continued to maintain a number of other key accreditations such as SafeContractor, RISQS and Achilles, to name a few. The company maintains regular engagement on all EHS matters, with both senior management and colleagues, through a variety of communication channels, with monthly reporting of performance targets reviewed by the Executive Team.
Strategic Partnerships
The partnership between Slicker and Technology Minerals Plc has continued in good order through 2022. Battery related operations on Slicker’s Wolverhampton site slowed down as Recyclus, subsidiary of Technology Minerals Plc awaited sign off of their permit from the Environment Agency, which was granted in Q2 2023.
During this time, both Companies have worked at developing the commercial offerings and ensuring the infrastructure is in place for when the collection and processing operations commence, expected to be Q3 2023.
The executive board continues to follow its strategy of innovation and growth by strengthening its infrastructure and people to lead the way in achieving environmentally sustainable waste management practices. Doing so by re-refining waste lubricant oil and the recycling of other wastes collected to avoid landfill, being committed to developing innovative ways to improve services, whilst achieving positive impacts in the attitudes, satisfaction and happiness of both colleagues and customers. Sustainability through Environmental, Social and Governance (ESG) practices and the Circular Economy will be the key consideration for ongoing development projects.
Since the year end, Slicker have acquired the trade and assets of Oil Monster, the waste lubricating oil collection arm of Cleansing Service Group Limited. Oil Monster operated across the UK, with 13 employees, and a fleet of 10 collection vehicles, all of which have been welcomed into Slicker’s day to day operations. The acquisition provides additional customers and used lubricating oil to supply the re-refinery as part of the extended value chain. The plan is to upsell the wider services offered by Slicker to the Oil Monster customer base, as well as to capitalise on the operational and collection synergies available post-acquisition.
Internal investment remains a high priority, the Company has committed to the upgrade of our existing sites and infrastructure, which will present additional opportunities by introducing new waste processing options. Capital expenditure ranges from welfare funds for minor facelifts, to capital for new and additional services, to works to raise environmental standards. In addition, during the first half of 2023, Slicker have continued the fleet replacement cycle by committing to the purchase of 11 waste oil collection vehicles and 11 garage service box vans. In turn, these new vehicles will improve on current capacity, enhance productivity via the reduction of downtime and allow for efficiencies within the fleet as well as helping us to further improve our green footprint.
Due to COVID-19 and volatile market conditions, an Enterprise Resource Planning (ERP) software project was delayed pending market stabilisation. During 2022, this project has been brought back on to the Managements agenda, redefined and the journey has recommenced in 2023.
The Directors of the Company and the execution of the company strategy are subject to the following risks:
Credit and liquidity risk:
The company’s sources of funding currently comprise operating cash flow, bank borrowings and intercompany loans with the parent company, Greenbottle Limited. There is a guarantee and right of set off between the company and certain other group undertakings in respect of bank borrowings.
Pricing risk:
The selling price of used lubricating oil is exposed to movement in the Platts and base oil indices.This exposure has been mitigated by aligning feedstock acquisition pricing with the same indices.
Foreign exchange risk:
The Platts index is denominated in US Dollars, all export sales are denominated in GBP and the Company uses natural hedging to minimise exposure.
Competitor risk:
Slicker has 3 fundamental pillars: People, Planet and Profit, and remaining competitive is key to this. The Company strives to combat the risks associated with new entrants to the industry along with the risk that current competitors become more focused on the green agenda and a wider service offering catering for all waste needs. In 2023 there was a new entrant to the waste lubricating oil collection landscape, however the Slicker executive board feel that through a focus on sustainability, high standards, and customer service, they are well placed to stay ahead of any such competition.
The directors have considered the potential wider economic effect of the ongoing COVID-19 impacts and have a reasonable expectation that the company has resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders in their decision making. Our statement below sets out how the Directors have discharged their section 172 duty.
The Company is committed to a clear and understandable strategy centred around sustainable growth and supporting the green agenda by continuing to develop the circular economy approach.
Slicker recognises that good governance and leadership underpins its reputation and success. Stakeholders from customers to suppliers to colleagues to regulators have to be able to see and feel ethical behaviour delivered via an open culture. Slicker publicly communicates its core value of driving sustainability supported by the legally correct waste management procedures. These principles are actioned through colleague responsibility and accountability procedures and relevant professional external auditing.
The Executive Management team meets monthly to address strategy implementation and performance. This includes independent advice to ensure we remain abreast of wider industry issues and topics. The revised Executive Board structure, which achieves a 50:50 gender split, operates effectively, with team leaders from all sections individually reporting on performance and issues of relevance and concern.
The Directors recognise that the success of Slicker relies on attracting, retaining and developing our colleagues. Therefore, the Company takes steps to ensure that colleagues feel engaged and informed around the business decisions that affect them by regularly communicating via colleague briefings and quarterly newsletters.
Annual colleague surveys are carried out, giving the opportunity to anonymously share views on various aspects of life at Slicker and how likely they are to recommend Slicker as an employer. The last colleague survey recorded a Net Promoter Score of 63, which is considered to be excellent.
Financial support has been given to colleagues during 2022 to recognise the economic difficulties facing individuals, in the form of companywide salary increases, bonus payments and mental health/occupational support. We believe that motivated colleagues fuel business performance, therefore in addition to financial support, a number of internal promotions have been awarded.
Colleague welfare and morale is taken seriously at Slicker and during the year seasonal welfare packs were issued to all operatives and drivers. This was an initiative to show appreciation and recognise their working conditions, outside of offices, can be challenging.
Social events are encouraged across the Company, to foster relationships and demonstrate that the Company cares about colleague health and wellbeing.
The Directors recognise that the Company’s diverse customer base is at the centre of the business and therefore adding value and providing a top level service to these stakeholders is essential.
Operational customer focus is measured by the high levels of customer satisfaction and business retention. The average score in 2022 for customer service was 93.39% (2021: 90.64%).
Slicker recognise that as we focus on strengthening our commitment and transition to a net zero carbon company, we also need to bring our customers along on this journey and educate to deliver their own green credentials. Many companies are choosing Slicker as their provider based on both our green values and circular economy approach and our leading customer service.
The first phase of the customer portal has been launched providing customers access to paperwork and reporting facilities. Further development continues with the aim of enhancing their experience and giving them confidence and freedom to access the additional tools such as job requests, MI reports and invoicing.
Slicker work with a large range of suppliers and contractors and are committed to being transparent in our dealings with all. The Company has relevant due diligence procedures in place for new suppliers including ensuring that operations are in line with our modern slavery commitments.
The Directors approach to social responsibility, diversity and community is of high importance.
Slicker continues to Partner with a local scheme to provide action-centred leadership for young people in education, providing information about the skills that employers seek. Our colleagues take part in work experience initiatives, career shows, give interview training, and deliver talks to schools across the local area.
The company is committed to promoting diversity and ensuring equality of opportunities within the work place, regardless of disability, age, gender, race or sexual orientation. Slicker create jobs in many UK regions and to encourage young people into the working environment, Slicker has continued the Apprentice programme, taking on several apprentices across the business during the year, building their skills for the future.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2022.
The results for the year are set out on page 11.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Ormerod Rutter Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of Slicker Recycling Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
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 group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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 our 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 this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
As explained more fully in the directors' responsibilities statement, 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 parent 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 parent company or to cease operations, or have no realistic alternative but to do so.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and the group, we identified the principal risks of non-compliance with laws and regulations including those that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, and the extent to which non-compliance might have a material effect on the financial statements.
Audit procedures performed included discussions with management, review of board meeting minutes, testing of journals, designing and performing audit procedures and challenging assumptions and judgements made by management in relation to accounting estimates.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £2,915,166 (2021 - £803,072 profit).
Slicker Recycling Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Lombard House, Worcester Road, Stourport-On-Severn, DY13 9BZ.
The group consists of Slicker Recycling Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Slicker Recycling Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Property, plant and equipment are depreciated over their useful life taking into account, where appropriate, residual values. Assessment of useful lives and residual values are performed annually, taking into account factors such as technological innovation, maintenance programmes, market information and management considerations. In assessing the residual values, the remaining life of the asset, its projected disposal value and future market conditions are taken into account. Details on property, plant and equipment can be found in note 11.
Provision is made to cover anticipated costs in relation to the restoration of a number of sites following sale or completion of activities. Detail on environmental provision can be found in note 20.
The whole of turnover is attributable to the principal activities of the Group, which are the provision of collection of waste oil and sale of processed fuel oil. Turnover arises from the United Kingdom as well as from exports of oil.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2021 - 1).
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
The addition in the year represents an additional payment in relation to the acquisition of Regroup (UK) Limited which was triggered by rising prices.
Details of the company's subsidiaries at 31 December 2022 are as follows:
The long-term loans are secured by fixed and floating charges over the assets of the company and the group.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 2 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Deferred income is included in the financial statements as follows:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The share premium represents the premium arising on the issue of shares net of costs.
The profit and loss reserves comprise of the cumulative profits of the Company or Group.
Capital Contribution reserve
On 4 March 2016 Mr Andrew Black acquired the Company from Hydrodec Group Plc. As a part of the sale agreement Hydrodec Group Plc forgave all debt due to it and its subsidiaries by the Company effective from 31 December 2015. The debt forgiven has been treated as a capital contribution as at 31 December 2017.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Amounts contracted for but not provided in the financial statements:
As at 31 December 2022, Slicker Recycling Limited had committed to purchasing Motor Vehicles amounting to £1,250,620.
On 15 May 2023 the company acquired the trade and assets of Oil Monster, the waste lubricating oil collection arm of Cleansing Service Group Limited.
This acquisition is aligned with the company’s growth strategy, increasing the companies UK market share of used lubricating oil collections providing additional feedstock for the joint venture Danish re-refinery. There is also the opportunity to realise synergies from combining the collection fleets, plus the cross selling of additional services undertaken by Slicker Recycling into the Oil Monster customer base, all of which are earnings enhancing. Outside of the financial benefits the acquisition will give Oil Monster customers access to their own carbon cutting and sustainability agenda from the circular economy approach of re-refining the collected waste lubricating oil back into base oil.