REG - Earnz PLC - Final Results for the year ended 31 December 2025
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RNS Number : 5639F Earnz PLC 26 May 2026
26 May 2026
EARNZ plc
("EARNZ", the "Company", or the "Group")
Final Results for the year ended 31 December 2025 and Notice of AGM
Pivotal stage in the Group's evolution reached, with positive adjusted EBITDA
in FY25
EARNZ plc ("EARNZ" or the "Company") (AIM: EARN), an energy services company
whose objective is to capitalise on the drive for global decarbonisation, is
pleased to announce its audited results for the year ended 31 December 2025
(the "Full Year").
Financial Highlights
· Revenue increased to £11.8m (FY25: £2.6m)
o Full year impact from the acquisitions of Cosgrove & Drew Ltd
("C&D") and South West Heating Services ("SWH") in September 2024
· EBITDA 1 of £0.1m (FY25: (£1.0m loss))
o Achieved despite significant increase in central support costs to support
business growth.
· Loss before tax of £1.7m (FY24: £3.6m)
· Net debt of £1.2m (net cash FY24: £0.3m), excluding IFRS16 lease
liabilities net debt was £0.7m (net cash FY24: £0.6m)
Operational Highlights
· The Group is benefitting from significant opportunities for growth,
following the first phase of the buy and build strategy.
· In July 2025 the Group acquired A&D Carbon Solutions Limited
("A&D"), which has been integrated into the Group and has provided the
platform for two new startup businesses, Warm Low Living ("WLL") and National
Retrofit Solutions Limited ("NRS").
· Significant contract wins with Equans announced in FY25, and post
year end further contract wins with Fortem, working on behalf of Sanctuary
Housing announced in February and May 2026.
· During the year the Board was strengthened with the appointment of
Peter Smith as CEO.
· Post year end, the business acquired Zero Carbon Group Limited
("ZCG"), which enhances the Group's scale and activities in the North of
England.
The Group has had a successful first full year at the start of its journey to
build a significant group in the energy services sector focussing on
delivering for the key objectives of energy efficiency, reducing fuel poverty
and building energy security across the UK through decarbonisation. The
strengthened central support teams are in place for significant future growth.
We continue to develop our active list of potential acquisition targets across
the decarbonisation agenda. Due to the difficulties of the capital
restrictions to date, our acquisition strategy has been highly selective as we
work within our financial constraints. As we have established a profitable
platform for growth, the Board is looking at more significant opportunities
for acquired growth which will enhance service offerings and provide a more
stable base.
Outlook
· Momentum has continued with further contract wins announced in Q1
2026
· Strong pipeline of opportunities in all the businesses within the
Group
· Further opportunities for growth through acquisition in line with our
buy and build strategy.
· The Board remains confident in the outlook for FY26.
Peter Smith, CEO of EARNZ, said: "I am delighted with the progress to date.
I would like to thank the whole EARNZ team across the Group for their hard
work during the year. The business is well placed to benefit from the
opportunities that lie ahead."
The Report & Accounts for the Full Year, the contents of which are set out
below, together with the Notice of Annual General Meeting ("AGM"), will be
posted to shareholders and will be made available later today on the Company's
website at www.earnzplc.com (http://www.earnzplc.com) . The AGM will be held
at 10.30am on 23 June 2026 at EARNZ's office, Blackwell House, Guildhall Yard,
London EC2V 5AE.
Engage with the Earnz PLC management team directly by asking questions,
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Corporate Broking
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CHAIR'S REVIEW
I am pleased to announce another satisfactory year for the Group during a
period of uncertainty in the energy services sector. We have continued to
invest in both organic and inorganic growth with the acquisition of A&D
Carbon Solutions Limited and toward the end of the year the formation of two
start-up businesses, Warm Low Living Limited and National Retrofit Solutions
Limited. These two start up opportunities became possible as a result of
vendors from competitors wanting to join the Group at the start of our
journey. We aspire to be a partner of choice to major property landlords in
both the public and private sector.
Post year end we announced the acquisition of Zero Carbon Group Limited, for a
total consideration of £9.5 million. The management team headed by Peter
Jones bring an exciting range of skills which we believe add significant value
to the business - welcome!
I have managed businesses in this sector for over 30 years and believe the
opportunity to be just as big as it was when I floated Mears Group PLC which
built a market leading position of revenues in excess of £1 billion; and
Sureserve plc which became very successful under my Chairmanship and
subsequently was acquired by private equity. I'm particularly proud to confirm
that both businesses have continued their earlier successes under subsequent
ownership.
The primary market we operate in is believed to be worth more than £10
billion.
We continue to seek out potential acquisition targets across the energy
services. In the immediate short term we look to build partnerships with
landlords across the full range of decarbonisation and general maintenance
services. These budgets are vast and our determination to provide value for
money services in periods of tight fiscal times will provide excellent
long-term rewards.
As the business grows, we are seen as an attractive home for vendors and
competitors' management teams, and our organic growth will be substantial in
the short medium and long term.
I must congratulate all employees who have to work harder in a small company
to demonstrate the skills they possess and why we should be the beneficiary of
significant contract awards.
The primary responsibility of the Board is to ensure that our capital
application is sound capital, as we continue to work within our financial
constraints.
We have established the profitable platform for growth that was our priority.
We are looking at more significant opportunities for acquired growth. Our
shareholders and other stakeholders have been great support to date for which
I am very grateful.
I look forward to bringing news of further growth in earnings in the coming
months.
Bob Holt OBE,
Chair
22 May 2026
CEO REPORT
2025 marked an important milestone in the progress of the Group. Our two
original businesses, Cosgrove & Drew (C&D) and South West Heating
Services (SWHS) were joined by the newly acquired A&D Carbon Solutions
(A&D) in July and then the formation of two new businesses, Warm Low
Living (WLL) and National Retrofit Solutions (NRS) in October.
These five businesses have allowed us to broaden our service offering
considerably across the energy services sector. A&D gives us both a
presence in Wales and opportunities around decarbonisation schemes and
commercial solar, whilst WLL and NRS have a focus on the Social Housing
sector, whether operating via Tier One contractors, or directly with Local
Authorities and Housing Associations. With C&D continuing dual focus on
mechanical engineering projects and facilities management, and SWHS focused on
boiler servicing, repairs and maintenance, we are well positioned for growth
on multiple levels.
It is worth adding that with businesses based in Plymouth, Bristol, Swansea,
Stafford and Leeds, our geographical reach has increased substantially.
We were particularly pleased to be awarded a multi-year contract with Equans
for Bradford City Council, not least because the opportunity came about
through the accreditations held by A&D and delivered by WLL. Strength of
the Group approach already evident and I am delighted to report that in 2026
we have already been awarded further multi-year contracts via Equans for Leeds
Federated Housing Association (WLL) and via Fortem for Sanctuary Housing in
Stoke-on-Trent and Chester (NRS). Alongside the existing pipeline of work for
C&D, in particular, our Order Book is strong.
The post Year End acquisition of Zero Carbon Group (ZCG) continues the growth
theme, increasing our reach in Social Housing and the Midlands and North West,
in particular.
With these strong foundations in place, we welcomed the publication of the
Government's Warmer Homes Plan in early 2026, which sets out plans for the
next five years, with £15bn of funding set aside, £5bn of it for those on
low incomes. Whilst we await further details, we are confident that this will
only provide increased opportunities for the Group.
With growth comes the need to ensure functional support is appropriate. We
have a strong Board in place and have strengthened our PLC team with the
recruitment of an experienced People Director and Head of Health & Safety.
We have taken space in a small managed office in London for the team. We will
continue to review the support we give to the operators in the field, on whom
we are so dependent.
I would like to thank all employees for their contributions over the past year
and look forward to continuing our growth story.
Peter Smith,
CEO
22 May 2026
STRATEGIC REPORT
The Directors present their strategic report on the Group for the year ended
31 December 2025.
EARNZ plc disposed of its interests in its Solar Business on 29 February 2024.
The Company's principal business is targeting acquisitions in the energy
services sector. Going forward the Company will build a leading business in
the energy services sector focusing on decarbonisation of public and private
sector building fabric, leveraging UK Government investment in Net Zero
transition and UK clean energy industries.
The sector is hugely fragmented, providing significant growth opportunities,
by acquisition and organically.
The Group's buy and build strategy is designed to create shareholder value
through bringing together businesses in the energy services sector, providing
consolidation in a fragmented sector, and extensive industry experience gained
over many years. This creates improved service experience for customers and a
virtuous circle of value creation. The foundations have been set through the
addition of three businesses to the Group and the opportunity for organic
growth and further acquisitions set.
For a review of the business during the year, please refer to the Chair's
Review on page 1 of this report. For an analysis of financial performance
indicators, please refer to the Financial Review set out on page 5.
Principal risks and uncertainties facing the business
A full review of principal risks and uncertainties facing the business during
the year and going forward is given on pages 8 to 9 of this report .
S172 Statement
As required by Section 172 of the Companies Act, a director of a company must
act in the way he or she considers, in good faith, would likely promote the
success of the company for the benefit of the shareholders. In doing so, the
director must have regard, amongst other matters, to the following issues:
• the likely consequences of any decisions in the long term (see Corporate
Governance Report, pages 12 to 15);
• the interests of the company's employees (see Corporate Social
Responsibility report on page 19)
• the need to foster the company's business relationships with
suppliers/customers and others (see Corporate Governance Report, pages 12 to
15);
• the impact of the company's operations on the community and environment
(see Corporate Social Responsibility report on page 19);
• the company's reputation for high standards of business conduct (see
Corporate Governance Report, pages 12 to 15); and
• the need to act fairly between members of the company (see Corporate
Governance Report, pages 12to 15).
On behalf of the Board
Peter Smith
CEO
22 May 2026
FINANCIAL REVIEW
The Financial Review covers aspects of the consolidated statements of
comprehensive income, financial position and cash flows.
Group revenue increased from £2.6m in 2024 to £11.8m in 2025. This
performance was driven by the full year impact of the acquisitions made in
August 2024 plus contribution from the acquisition of A&D Carbon Solutions
Limited on 1 July 2025.
The Group posted break even adj. EBITDA for the first time since it started
trading 15 months ago in August 2024. Group adj. EBITDA was £0.0m in 2025
against a loss of £1.0m in 2024. This represents a milestone for the Group,
with the first full year of the initial acquisitions (Cosgrove & Drew, and
South West Heating Services) covering the Group PLC operating costs.
Adjusted Profits
The Group uses a number of Alternative Performance Measures ("APMs") in
addition to those measures reported in accordance with IFRS. Such APMs are not
defined terms under IFRS and are not intended to be a substitute for any IFRS
measure. The Directors believe that APMs are important when assessing the
underlying financial and operating performance of the Group.
The exceptional items identified as non-recurring in nature are set out below
and were considered in calculating the adjusted profits.
Adjusted EBITDA from continuing operations £'000 Year ended 31 December 2025 Restated Year ended 31 December 2024
Operating Loss (1,349) (3,486)
Depreciation & amortization 310 73
Share based payment 71 23
Exceptional items:
Transaction costs 304 1,622
Impairment 71 704
Restructuring costs 29 -
Pre-trading start up costs 642 -
Non-recurring audit fee 16 68
Total items added back 1,443 2,490
Adjusted EBITDA 94 (996)
The performance of the two businesses that were in the Group for the full 12
months of FY25, C&D and SWH generated sufficient EBITDA to cover the costs
of running the PLC.
Gross Profit
Gross profit for the year was £3.1m, 26%, a significant improvement on 2024
as can be seen in the table below.
Continuing Operations Year ended 31 December 2025 Year ended 31 December 2024
£'000
Revenue 11,785 2,637
Cost of sales (8,734) (2,289)
Gross profit 3,051 348
Gross Profit % 25.9% 13.1%
The key driver for this performance has come from C&D, which delivered
£2.8m of margin at 29.3% v's £214k of margin at 9% in 2024. This improvement
has been achieved through control of the cost base and the introduction of
financial rigor in forecasting and controlling costs on projects and
facilities management.
The margin in SWHS was lower year on year at 27% v's 33% in 2024, as expected,
due to seasonality, with FY 2024 only containing 4 peak activity winter
months, September to December.
For the six months that A&D has been in the Group, the margin they have
achieved has been lower than the Group's overall margin and has had a diluting
effect. We have been improving financial rigor and reporting and balancing the
business portfolio with solar in A&D and going forward into 2026 we will
see the benefits of this work.
Finance Costs
Net finance costs were £0.4m (2024: £0.1m). The increase year on year is
attributable to the annualised costs for C&D and SWHS, together with costs
within A&D brought into the Group from 1 July 2025. Just over half the
total balance relates to loan interest with the remainder arising from the
unwinding of contingent consideration discount and lease interest.
Taxation
Loss after tax from continuing operations was £1,747k (2024: £3,363k)
Loss per share
The basic and diluted loss per share was 0.015p (2024: 0.057p).
Financial Position
As at 31 December 2025, the Group's net assets were £3,752k (2024: 3,297k).
Non-current assets
Goodwill of £3,839k is the principal item in our balance sheet. This has
arisen on the acquisitions of C&D, SWH and A&D and has been recognised
at cost, representing the excess of the consideration paid over the fair value
of the net assets acquired. The details relating to the acquisitions are set
out in Note 12. As required by IAS 36, an impairment review has been carried
out and concluded an impairment was necessary in SWH for the prior year, see
Note 14.
The intangible assets are the value of the customer relationships acquired,
and these are amortised each year.
Current assets excluding cash
Current assets excluding cash have increased from £1,733k in 2024 to £2,599k
at the end of 2025. The main drivers of the movement comprise accrued revenue
in C&D, A&D and NRS, reflecting revenue growth. See Note 16 for
further details.
Liabilities excluding borrowings
The largest balance is trade and other payables at £1,836k (2024: £1,947k)
which is consistent with the prior year.
Also included is the contingent deferred consideration arising from the
acquisitions of C&D, SWH & A&D. The total balance of contingent
consideration is £1,141k of which £348k is due within 12 months of the FY25
year end.
Lease liabilities amount to £394k (2024: £245k).
See Note 16 for further details.
Liquidity
The Group cash balance as at 31 December 2025 was £1,076k (2024: £1,965k).
Details of borrowings are shown in Note 16(vii)
Cashflow
£'000 Year ended 31 December 2025 Year ended 31 December 2024
Net cash (used in) operating activities (2,307) (3,083)
Payment for acquisitions net of cash acquired (306) (747)
Other (76) (28)
Cash flows from investing activities (382) (775)
Net proceeds from issues of shares 1,942 5,663
Net proceeds/(repayment) of borrowings 98 (89)
Repayment of lease liabilities (179) (73)
Other (61) 431
Cash generated from financing activities 1,800 5,932
Net cash outflow from discontinued operations - (162)
Net increase/(decrease) in cash and cash equivalents (889) 1,912
Net cash used in operations includes £642k of exceptional costs supporting
the start-ups NRS and WLL and £304k for transaction costs for the acquisition
of A&D
Issue of New Shares
New shares have been issued during the period to raise funds for the
acquisition of A&D and for additional working capital to support the Group
continuing with its buy and build strategy.
Dividends
No dividend is recommended (2024: £nil).
Events after the reporting period
On 11 March 2026, the Group signed a sale and purchase agreement to acquire
all the share capital of Zero Carbon Group Limited at a cost of £9.5m with
initial consideration of up to £5m, £1.5m in cash and £1.5m in new ordinary
shares of EARNZ plc, to be adjusted for net debt and normalised working
capital and a further £2m of which is contingent on meeting certain targets.
When EBITDA of £0.5m has been achieved following completion, £1m becomes
payable, 50% in cash and 50% in Consideration Shares at the Placing Price. The
final £1.0m of the initial consideration is payable when EBITDA of £1.0m is
achieved post completion, payable 50% cash and 50% in new ordinary shares in
EARNZ plc.
The remaining consideration in the sale and purchase agreement is deferred and
contingent upon reaching EBITDA targets for up to 3 years post completion and
is payable 60% in cash and 40% in new ordinary shares in EARNZ plc.
On 12 March 2026 the Company raised £3.5m through a share placing, to fund
the acquisition and provide additional working capital for the Group. The
purchase completed on 31 March 2026 following shareholders' approval at a
general meeting to authorise the directors to issue the consideration shares.
Events after the reporting period are described in Note 25 to the financial
statements.
Elizabeth Lake
Chief Financial Officer
22 May 2026
RISK REPORT
Risk Management Framework
The Group has a risk register which includes all principal risks critical to
the business.
The Board retains responsibility and accountability for the effectiveness of
the risk management framework and internal control systems. As the business
grows the risks will continue to evolve and grow in complexity and so will the
risk management processes. This will ensure continuous improvement in the
organisation's risk maturity.
Approach to Risk Management
The Audit Committee, under delegated authority from the Board, is accountable
for overseeing the effectiveness of the risk management process, including
identification of the principal and emerging risks facing the Group. The
Audit Committee has particular focus on those risks that affect accounting in
general and safeguarding the Group's assets.
Principal Risks and Uncertainties
The current Board has identified the Group risks.
DETAIL OF RISK MITIGATION and MANAGEMENT ASSESSMENT
Continued Global political and economic uncertainty diverts resources away The Group has diversified its operations to move away from government funded High risk
from the decarbonization agenda and increases costs schemes and to increase work directly with landlords. In addition, the solar
offering for both commercial and residential has been expanded. The Group is
moving towards centralising procurement to achieve economies of scale to
mitigate any cost increases of key materials.
Insufficient working capital to fund growth opportunities in delivery of the The Board has reviewed medium-to-long-term cashflow forecasts (including sales Medium risk
Group's buy and build strategy. forecast) and aims to ensure sufficient funding is in place to meet
requirements. The Board is continually engaged with its investors and
potential investors. With the Group now moving into positive EBITDA there will
be an opportunity for facilities with our banking partner
Underperformance of target businesses Focusing on building relationships with key partners in the social housing Medium risk
sector. Build in contingencies in budgets and forecasts.
Strong management teams are in place within the target businesses.
HSE violations in Group operating companies. The Group is directly responsible for installing and auditing an HSE culture. Medium risk
Documented operating procedures are in place in the operating businesses.
Health & Safety is reviewed at each Board meeting and a Group Head of
Health & Safety has been appointed.
Failure of business systems or loss of data, potentially causing issues such The Group uses external IT support to carry out regular penetration testing Medium risk
as delay in sales, reduced financial performance, reputational damage. and auditing security and processes. Robust insurance policy in place in case
the event of ransom, including obtaining cyber essentials and training.
Attracting and retaining key employees. There is a general shortage of labour Founders are incentivised with earn outs and bonuses. Executives have an LTIP Medium risk
across the construction industry. in place, and senior management have bonus schemes. The Group is committed to
improving working conditions, work life balance, progression, and training.
Each operating company has a key management team, including the founders. The
loss of any of these staff would have a detrimental impact on the growth of
the business.
Failure to meet AIM corporate governance requirements. The executive benchmarked its corporate governance, policies and procedures Low risk
against published QCA guidelines to ensure compliance. The Company has regular
discussions with its nominated adviser and external counsel.
GOVERNANCE
BOARD OF DIRECTORS
The Directors of EARNZ plc as at the date of signing the report and accounts
comprised:
Bob Holt OBE (Chair) - appointed 29 February 2024 as Executive Chair, became
Non-Executive Chair on 1 July 2025
Bob Holt is a highly accomplished executive with over 35 years' experience in
senior leadership roles across various sectors, most recently serving as CEO
of Revolution Beauty Plc after joining its board as interim COO. Prior to
that, he successfully led Sureserve Group Plc as Chair, overseeing its
successful turnaround that resulted in over a fivefold increase in the
company's share price. He is perhaps most widely known for his role in the
rise of Mears Group PLC. Since being appointed as Chair in 1996, he guided the
company through its successful IPO on AIM and played a pivotal role in
building its order book value to £3 billion, establishing Mears as a market
leader in its sector. Bob has been awarded the OBE for his services to
philanthropic causes.
Peter Smith (Chief Executive Officer) - appointed 1 July 2025
Peter was the former CEO of Sureserve Group PLC, (an AIM listed company) where
he was responsible for growth strategy which delivered significant results and
then oversaw its sale to PE in July 2023. Peter also has previous considerable
experience as CFO/FD with widespread success in delivering results. Peter has
worked in and specialises in highly regulated industries and has experience of
extensive stakeholder engagement.
Peter is a qualified finance professional with a Henley Business School MBA
Elizabeth Lake FCA (Chief Financial Officer) - appointed 3 June 2024
(appointed non-executive director from 13 March 2024 - 3 June 2024)
Elizabeth is an accomplished executive with more than 25 years' finance and
commercial experience. Previously, Elizabeth joined the board of Revolution
Beauty Group as CFO in May 2022 and was instrumental in turning around the
business following the suspension of its shares from trading on AIM. Prior to
Revolution Beauty, she was CFO of AIM quoted, Everyman Media Group. During her
time at Everyman, Elizabeth successfully led the company through the
challenges presented by the Covid 19 pandemic, demonstrating her ability to
navigate uncertainty with strong financial and operational acumen. Prior to
Everyman, Elizabeth was Chief Financial Officer at AIM quoted, Science in
Sport, and before that finance director at Hugo Boss UK and Ireland. She
brings extensive UK plc experience to EARNZ having also worked in finance
roles at Marks & Spencer, Pearson and Thomson Reuters. Elizabeth is ACA
qualified, having trained at Coopers and Lybrand (now PwC).
Linda Main (Senior Independent Director) - appointed 1 May 2024
Linda is a chartered accountant who retired from KPMG LLP in September 2023
after a long career leading its Capital Markets Advisory Group. Linda has
advised on well over 100 IPOs and significant transactions by listed companies
of all sizes ranging from start-ups to members of the FTSE 100. She was also a
member of the UK board of KPMG where she chaired the Risk Committee and sat on
the Audit Committee. Until December 2023, Linda was a member of the London
Stock Exchange's AIM Advisory Group and earlier in her career sat on a number
of the Quoted Companies Alliance ("QCA")'s technical committees. She also sits
on the QCA board. Linda is a non-executive director at MHA PLC and Princes
Group Plc and is a Trustee at United Response. Linda chairs the Company's
Audit and Remuneration committees.
Sandra Skeete (Independent Non-Executive Director) - appointed 3 June 2024
Sandra has over 25 years' experience working in social housing, holding senior
roles in organisations such as the Peabody Trust and Refugee Housing
Association Limited, and was previously a director of One Housing Group and
the Duke of Lancaster Housing Trust. She was the Chief Executive of Octavia
Housing Association Group, a not-for-profit organisation offering social
housing and care services for vulnerable members of the community in central
and west London. She was previously a non-executive board associate of
Principality Building Society. Sandra sits on the Company's Audit and
Remuneration committees.
Directors in post during the year included:
John Charlton (Director) - resigned 1 July 2025
The Board and responsibilities
The Board holds bi-monthly meetings to review, formulate and approve the
Group's strategy, budgets, corporate actions and oversee the Group's progress
towards its goals. There is an Audit Committee and a Remuneration Committee in
place with formally delegated duties and responsibilities and with specific
terms of reference. From time-to-time separate committees may be set up by the
Board to consider specific issues when the need arises. Due to the size of the
Group, the Directors have decided that issues concerning the nomination of
directors will be dealt with by the Board rather than by a committee but will
regularly reconsider whether a nominations committee is required.
Details of board meetings held in the reporting period, and attendance of
Board directors is shown below:
Board Members Eligible to attend Attended
Executive Directors
Bob Holt OBE (appointed 29 February 2024) 15 15
Elizabeth Lake FCA (appointed Non-Executive Director 13 March 2024 and as 15 15
Chief Financial Director 3 June 2024)
John Charlton (appointed 29 February 2024, resigned 1 July 2025) 9 9
Peter Smith (appointed CEO 1 July 2025)
6 6
Non-Executive Directors
Linda Main (appointed 3 June 2024) 15 15
Sandra Skeete (appointed 1 May 2024) 15 15
The Audit Committee
The Audit Committee comprises Linda Main (appointed 1 May 2024) as Chair and
Sandra Skeete (appointed 3 June 2024).
The Audit Committee determines the terms of engagement of the Group's auditors
and will determine, in consultation with the auditors, the scope of the audit.
The Audit Committee receives, and reviews reports from management and the
Group's auditors relating to the interim and annual accounts and the
accounting and internal control systems in use throughout the Group. The Audit
Committee has unrestricted access to the Group's auditors. The Audit Committee
Report is presented on page 16.
The Remuneration Committee
The Remuneration Committee comprises Linda Main (appointed 1 May 2024) as
Chair and Sandra Skeete (appointed 3 June 2024).
The Remuneration Committee reviews the scale and structure of the executive
Directors' and senior employees' remuneration and the terms of their service
or employment contracts, including share option schemes and other bonus
arrangements. The remuneration and terms and conditions of the non-executive
Directors are set by the entire Board. The Directors' Remuneration Report is
presented on pages 17-18.
Investor relations
The Annual General Meeting is the principal forum for dialogue with
shareholders. Updates on the progress of the business are
regularly published on the Group's website.
On behalf of the Board
Bob Holt OBE
Chair
22 May 2026
CORPORATE GOVERNANCE REPORT
The Chair has overall responsibility for corporate governance and good
corporate governance is central to the Group's approach to creating
sustainable growth and enhancing long-term shareholder value. The Directors
are expected to always act ethically and responsibly, reflecting the Group's
core values.
The Directors recognise that good corporate governance is a key foundation for
the long-term success of the Group. As the Company is listed on the AIM market
of the London Stock Exchange it is subject to the continuing obligation of the
AIM Rules. The Board has therefore adopted the principles set out in the
Corporate Governance Code for small and midsized companies published by the
Quoted Companies Alliance (the "QCA Code").
QCA Code Principle What we do and why
1. Establish a strategy and business model which promotes long-term value The Company's strategy is explained fully within the Chair's Review section of
for shareholders the Report and Accounts for the year ended 31 December 2025.
Our strategy is identifying potential acquisitions in the energy services
sector, to create a consolidated Group with scale and breadth of offering in
the energy services sector, growing revenues and profitability.
The key challenges to the business and how these are mitigated are detailed on
pages 8 to 9 of the Report and Accounts for the year ended 31 December 2024.
2. Promote a corporate culture that is based on ethical values and The Corporate and Social Responsibility section on page 19 of the Report &
behaviours Accounts for the year ended 31 December 2025 details the ethical values of the
Company.
The Board continues to review policies and will amend as required. These
policies and procedures are made available to staff and consultants and
anti-bribery and anti-corruption training, and data protection training is
mandatory.
Staff and consultants are encouraged to ask questions and seek clarifications
from senior members of the team on these policies and procedures.
3. Seek to understand and meet shareholder expectations Whilst the Company is early stage, the Board is committed to returning value
to shareholders through execution of our strategy.
The Board recognises the AGM as an important opportunity to meet shareholders.
All the Directors are available to listen to the views of shareholders
informally immediately after the AGM
The people responsible for shareholder liaison are:
The Chair
The Executive Directors
NOMAD (Zeus)
The Company's website maintains a channel to provide information and receive
feedback from all stakeholders.
The Company has also invested in a subscription to Investor Hub to enhance the
opportunities for communication with shareholders
In addition the Company will present results directly to Investors and provide
opportunities for questions at the AGM.
4. Take into account wider stakeholder interests, including social and The executive maintained communications with trade and interest groups working
environmental responsibilities, and their implications for long term success. in the markets where its products are sold and applied.
A number of mechanisms are in place to solicit feedback from shareholders
including the Company's website and face to face meetings as well as the AGM
and Investor Hub.
Going forward, much of the Group's business will be involved in
decarbonisation of public, commercial and private buildings, leading to
greater fuel efficiency and energy security.
The Company has a whistleblowing policy in place which is given to all new
employees. This provides a confidential mechanism for employees to raise
concerns.
The business model is focussed on decarbonisation of buildings in the public,
commercial and private sector, together with energy efficiency.
The culture of the business reinforces social and environmental
responsibility.
5. Embed effective risk management, internal controls and assurance Risk management on pages 8 to 9of our Annual Report and Accounts details the
activities, considering both opportunities and threats, throughout the risks to the business and how these are mitigated.
organisation.
The Board considers risks to the business at its monthly meetings and reviews
the principal risks to the business and the risk register quarterly.
Risks are reviewed in the business monthly and quarterly by the Board.
The enterprise-wide controls are continually reviewed and the FPPP
(Financial Position and Prospects Procedures) manual updated if required.
All Board members are entitled to engage external experts as part of their
roles where they see fit.
The Company's auditor HaysMac is independent of management.
6. Establish and maintain the Board as a well-functioning, balanced team, All members of the Board are experts in their fields with no one individual
led by the Chair. dominating. All Directors are seasoned Board members and understand the
responsibilities of being a company Director.
The shareholders have the opportunity annually at the AGM to vote for the
(re-)election of all the Directors
The new Board comprises 2 executive Directors, the Chair and 2 non-executive
Directors. The 2 non-executive Directors are independent.
Both the audit and remuneration committees comprise non-executive Directors
only, with Linda Main being the Senior Independent Director.
The Board is relatively newly constituted.
Any related parties are excluded from Board discussions concerning their
interests to maintain independence.
Directors' remuneration is set by the Remuneration Committee which comprises
the independent non-executive Directors.
7. Maintain appropriate governance structures and ensure that individually The Corporate Governance report on pages 10 to 11 details the Company's
and collectively the Directors have the necessary up-to-date experience, governance structures and why they are appropriate and suitable for the
skills and capabilities. Company.
The Board has a formal schedule of matters reserved for the Board and is
supported by the Audit and Remuneration committees. Due to the size of the
Company, the Board has decided that issues concerning the nomination of
Directors will be dealt with directly by the Board but will reconsider on a
regular basis whether a Nominations committee is needed.
The Audit and Remuneration committees have specific terms of reference under
which they operate.
The Directors have a proven track record of previously serving on Boards.
Where an expert view is needed the Board will seek input from external
advisers
Further information about the Board's skillset, including each Director's
biography is set out on the Company website and additional information is set
out on page 8 in this report.
Each director attends industry events and seminars to continually update their
skills and knowledge.
Through the FPPP process a new Board pack has been developed and this will
continue to evolve as the business grows.
8. Evaluate board performance based on clear and relevant objectives, The Board is relatively new, a performance evaluation process will be
seeking continuous improvement. developed.
The annual review process will be implemented following the appointment of the
CEO, together with succession planning.
9. Establish a remuneration policy which is supportive of long-term value The Remuneration Committee has been established comprising 2 independent
creation and the Company's purpose and culture non-executive Directors. The Committee are reviewing the remuneration strategy
on a regular basis.
The remuneration policy includes long term incentive schemes to promote long
term growth of shareholder value.
The remuneration policy includes share options and plans to include a
Save-As-You-Earn scheme for wider participation in shareholding across the
Group.
The Remuneration Committee will consult with the Audit Committee and the
Board, as appropriate, when developing the remuneration policy.
The Chair of the Remuneration Committee will consult with major shareholders
on the design of incentives.
Whilst this will not be binding, it will give shareholders the opportunity for
input.
10. Communicate how the company is governed and is performing by maintaining a The Company encourages two-way communication with its investors and responds
dialogue with shareholders and other relevant stakeholders. quickly to all queries received.
The Board recognises the AGM as an important opportunity to meet private
shareholders. The Directors are available to listen to the views of
shareholders informally immediately following the AGM.
The Chair is responsible for ensuring appropriate communication and reporting
to shareholders.
A range of corporate information (including Company announcements, historical
annual reports and other governance related material) is also available on the
Company's website.
The Company will disclose outcomes of all votes at shareholder meetings in a
clear and transparent manner by releasing a market announcement and by
including it on the Company website.
AUDIT COMMITTEE REPORT
The Audit Committee helps the Board discharge its responsibilities regarding
financial reporting, external and internal audits and controls as well as
reviewing the Group's annual and half-year financial statements, other
financial information and internal Group reporting.
This includes:
• considering whether the Company has followed appropriate accounting
standards and, where necessary, made appropriate estimates and judgments
taking into account the views of the external auditors;
• reviewing the clarity of disclosures in the financial statements and
considering whether the disclosures made are set properly in context;
• where the audit committee is not satisfied with any aspect of the
proposed financial reporting of the Company, reporting its view to the Board
of Directors;
• reviewing material information presented with the financial statements
and corporate governance statements relating to the audit and to risk
management; and
• reviewing the adequacy and effectiveness of the Company's internal
financial controls and, review the Company's internal control and risk
management systems and, except where dealt with by the Board, review and
approve the statements included in the annual report in relation to internal
control and the management of risk.
The Audit Committee assists by reviewing and monitoring the extent of
non-audit work undertaken by external auditors, advising on the appointment of
external auditors and reviewing the effectiveness of the Group's internal
audit activities, internal controls and risk management systems. The ultimate
responsibility for reviewing and approving the Annual Report and financial
statements and the half-yearly reports remains with the Board.
For the year under review, there were no non-audit services rendered to the
Group and the Company. Fees paid for audit services are provided in Note 5a.
Significant reporting issues considered during the year included the
following:
· Revenue recognition under IFRS 15 and the application within the
Group.
· Application of IFRS 3 and calculations to allocate the purchase
price of acquisitions made in the period.
· Impairment reviews of acquired subsidiaries.
Going concern
The Committee considered the Going Concern basis on which the accounts have
been prepared and can refer shareholders to the Group's accounting policy set
out in Note 2.2. The directors are satisfied that the going concern basis is
appropriate for the preparation of the financial statements
Linda Main
Audit Committee Chair
22 May 2026
DIRECTORS' REMUNERATION REPORT
This report sets out the remuneration policy operated by the Company in
respect of the Chair, Executive and Non-Executive Directors. The remuneration
policy is the responsibility of the Remuneration Committee, a sub-committee of
the Board. No Director is involved in discussions relating to their own
remuneration.
Remuneration policy
The objective of the remuneration policy is to attract, retain and motivate
high calibre executives to deliver outstanding shareholder returns and at the
same time maintain an appropriate compensation balance with the other
employees of the Group. There is no formal requirement for Directors to own
shares in the Group.
The Remuneration Committee comprises independent Non-Executive Directors, and
is appointed by the Board. The Remuneration Committee has terms of reference
approved by the Board, which sets out a framework for determining the
remuneration of the Company's Chair and Executive Directors including pension
rights and compensation payments. The remuneration of Non-Executive Directors
is a matter reserved for the Board. No Director or senior manager shall be
involved in any decisions as to their own remuneration. The Remuneration
Committee recommends and monitors the level and structure of remuneration for
senior management.
The Remuneration Committee has regard to the following factors when
determining remuneration:
· The pay and employment conditions across the Company and/or the
Group when setting remuneration policy for Directors, especially when
determining salary increases.
· The Company's appetite for risk and long-term strategic goals.
· Remuneration in other companies of comparable scale
The Remuneration Committee sets appropriate Directors' compensation to reward
long-term success:
· A significant proportion of Executive Directors' remuneration should be
structured to link rewards to corporate and individual performance and be
designed to promote the long-term success of the Company. The Remuneration
Committee approves the design of, and determines targets for, any
performance-related pay schemes operated by the Company and approves any
payments made under such schemes.
The Remuneration Committee has regard to the following factors when reviewing
remuneration:
· The Remuneration Committee reviews the performance of share incentive
plans and discretionary bonus schemes. Each year the Remuneration Committee
determines whether awards will be made, and if so, the overall amount of such
awards, the individual awards to Executive Directors and other senior
management and the performance targets to be used.
· The Remuneration Committee periodically reviews the ongoing
appropriateness and relevance of the remuneration policy.
Directors' remuneration
The normal remuneration arrangements for Executive Directors consist of base
salary, performance bonuses and other benefits as determined by the Board. The
Company currently has two Executive Directors, who have service agreements
that can be terminated at any time by either party giving to the other six
months' written notice.
The remuneration package for an Executive Director is detailed below:
Base Salary:
Annual review of the base salary of the Executive Director considering the
Executive Director's role, responsibilities and contribution to the Group
performance.
Performance Bonus:
No bonuses were paid in relation to the reporting period. Going forward the
remuneration committee will be establishing a performance bonus scheme with
relevant targets.
Benefits:
Benefits include Company pension contributions of 5%. On 1 November 2025 the
Group established a Private Healthcare Scheme which all employees of the Group
are eligible to join. Post the year end the Group has also established
death-in-service benefits scheme which all employees are enrolled in.
Longer term incentives:
To incentivise the Directors, and align their interests with shareholders, the
Company granted share options in the period. The share options will vest at a
future date as described in Note 19 in the financial statements. The vesting
conditions are exclusively share price related.
Non-Executive Directors are currently remunerated solely in the form of
Directors' fees and pension contributions.
Re-election of Directors
All Directors stand for re-election on an annual basis and all Directors are
aware of the need to maintain their independence and to demonstrate their
continued commitment to the role. Succession planning is limited due to the
current size of the Board.
The emoluments of the Directors were as follows (Audited):
Year ended 31 December 2025 Year ended 31 December 2024
Salary & Directors' fees Pension contributions Share-based payments Other Benefits Total Total
£ £ £ £ £ £
Executive Directors
Bob Holt OBE (appointed 1 March 2024) 50,000 2,500 34,663 834 87,997 57,122
Peter Smith (appointed 1 July 2025) 56,667 4,583 1,642 353 63,245 -
Elizabeth Lake (appointed 13 March 2024) 125,000 6,249 13,196 424 144,869 86,690
John Charlton (resigned 1 July 2025) 25,000 1,250 11,554 - 37,804 37,340
Robert Richards (resigned 1 March 2024) - - - - - 28,272
Non-Executive Directors
Linda Main (appointed 1 May 2024) 31,917 2,208 - - 34,125 17,500
Sandra Skeete (appointed 3 June 2024) 29,288 4,837 - - 34,125 15,750
George Katzaros (resigned 29 February 2024) - - - - - -
Gavin Mayhew (resigned 2 January 2024) - - - - - -
Total 317,872 21,627 61,055 1,611 402,165 242,674
The remuneration of the Directors in EARNZ plc who held office during the
years to 31 December 2025 and 2024 were as follows:
Linda Main
Chair - Remuneration Committee
22 May 2026
CORPORATE AND SOCIAL RESPONSIBILITY
The Company understands that its impact reaches beyond that of its core
business and into the environment and society in which it operates. With
integrity at the heart of our corporate social goals our aim is to make a
lasting positive contribution to all our stakeholders.
In view of the limited number of stakeholders, the Company has not adopted a
specific policy on Corporate Social Responsibility. However, it does seek to
protect the interests of stakeholders in the Company through its policies,
combined with ethical and transparent business operations.
Environment
EARNZ Plc is sensitive to the environment in which it operates. Previously the
Group established well defined operating guidelines with some of the
manufacturing partners where it sought their compliance with ISO14001 (a
recognized standard for Environmental Management Systems) when relevant, to
ensure certain environmental standards are complied with. Going forward the
Company will be operating in the energy services sector, and as such will be
instrumental in assisting with the delivery of de-carbonisation across the
public and private sector.
Human Rights
EARNZ plc is committed to socially and morally responsible business practices
for the benefit of all stakeholders. The activities of the Company are in
line with applicable laws on human rights.
Employees
Employees are key to achieving the business objectives of the Company. The
Board's priority is to provide a working environment in which our employees
can develop to achieve their full potential and have opportunities for both
professional and personal development. We aim to invest time and resource in
supporting, engaging and motivating our employees to feel valued, to be able
to develop rewarding careers and want to stay with us. The Company embraces
employee participation in issue raising and resolution through regular
meetings with managers and values contributions from all levels regardless of
their position in the business.
Shareholders
The Board of Directors actively encourages communication, and they seek to
protect the interest of shareholders at all times. The Company updates
shareholders regularly through regulatory news, financial reports and research
notes. The Company also engages directly with investors at our General
Meetings or investor events.
Health and Safety
Company and Group activities are carried out in accordance with its health and
safety policies which adhere to all applicable laws.
DIRECTORS' REPORT
The Directors present their report and the audited financial statements for
EARNZ plc ("EARNZ" or the "Company") for the year ended 31 December 2025.
The preparation of financial statements is in compliance with UK adopted
International Accounting Standards and the Companies Act 2006. The Group
financial statements comprise of the financial information of the parent
Company and its subsidiaries (together the "Group"). The parent Company's
financial statements present information about the Company as a separate
entity and not about its Group.
Principal activities
EARNZ plc is a holding company based in UK. The principal activity of the
Group is to build a leading business in the energy services sector focusing on
decarbonisation of public and private sector building fabric, leveraging UK
Government investment in Net Zero transition and UK clean energy industries.
A detailed review of the business activities of the Group is contained in the
Strategic Report.
Business review and future developments
The review of the business' operations, future developments and key risks is
contained in the Strategic Report. The Directors do not recommend the payment
of a final dividend for the year (2024: £nil).
Directors and directors' interests
The directors who held office during the year or subsequently were as follows:
Bob Holt Appointed 29 February 2024
Peter Smith Appointed 1 July 2025
Elizabeth Lake Appointed 13 March 2024
Linda Main Appointed 1 May 2024
Sandra Skeete Appointed 3 June 2024
John Charlton Appointed 29 February 2024, resigned 1 July 2025
Regarding the appointment and replacement of Directors, the Company is
governed by its articles of association, the Companies Act and related
legislation. The articles themselves may be amended by special resolutions of
the shareholders.
Directors' interests
The Directors held the following beneficial interests in the shares of EARNZ
plc at 31(st) December 2025:
Ordinary shares Issued share capital %
of £0.04 each
Bob Holt OBE 12,400,000 9.3%
Peter Smith 1,013,888 0.8%
Elizabeth Lake 3,819,443 2.9%
John Charlton 1,339,083 1.0%
Linda Main 255,555 0.2%
Sandra Skeete 27,221 0.0%
The Directors held the following beneficial interests in the shares of EARNZ
plc at 31(st) December 2024:
Ordinary shares Issued share capital %
of £0.04 each
Bob Holt OBE 11,300,000 11.06%
Peter Smith - -
Elizabeth Lake 1,666,666 1.63%
John Charlton 1,100,000 1.08%
Linda Main 200,000 0.20%
Sandra Skeete 13,333 0.01%
Directors' indemnities
The Company has taken out Directors' and Officers' indemnity insurance for the
benefit of its Directors.
Events after the reporting date
See Note 25 of the accounts.
Financial Risk management
Details of financial risk management are provided in [Note 21] to the
accounts.
Political and charitable contributions
The Group made no charitable or political contributions during the year.
Going Concern
The Director' considered the Going Concern basis on which the accounts have
been prepared and can refer shareholders to the Group's accounting policy set
out in Note 2.2. The directors are satisfied that the going concern basis is
appropriate for the preparation of the financial statements
Substantial shareholdings:
The Company has been advised of the following interests in more than 3% of its
ordinary share capital as at 31 December 2025:
No. of Shares (nominal value £0.04) %
Shareholder
Gresham House Asset Management 35,436,474 26.5%
Bob Holt 12,400,000 9.3%
Pentwater Capital Management 6,944,444 5.2%
UBS Group AG 5,802,146 4.3%
Bank of America Securities 5,555,555 4.2%
Hargreaves Lansdown PLC 5,024,244 3.8%
Andrew Custer 4,666,666 3.5%
Philip J Milton & Co 4,396,597 3.3%
Aberdeen PLC 4,026,579 3.0%
At the signing date the Company had been advised of the following interests in
more than 3% of its ordinary share capital:
No. of Shares (nominal value £0.004) %
Shareholder
Gresham House Asset Management 63,936,474 27.20%
Pentwater Capital Management 46,749,998 19.89%
Bob Holt 13,480,000 5.76%
Peter Jones 9,000,000 3.83%
Debra Jones 9,000,000 3.83%
Elizabeth Lake 8,219,443 3.35%
Statement of Disclosure to the Auditors
The Directors at the date of approval of this report confirm that:
· As far as each director is aware, there is no relevant audit
information of which the Company's and the Group's auditor is unaware; and
· Each Director has taken all reasonable steps that they ought to
have taken as a Director to make themselves aware of any relevant information
and to establish that the Company's and the Group's auditor is aware of that
information.
Auditors appointment
HaysMac LLP were re-appointed as auditors to the Company during the year. In
accordance with section 485 of the Companies Act 2006, a resolution proposing
that they be re-appointed will be put to the vote at the AGM.
By order of the Board
John Charlton
Company Secretary
22 May 2026
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Company financial
statements for each financial year. Under that law the Directors have elected
to prepare the Group consolidated financial statements in accordance with UK
adopted International Accounting Standards (UK IAS) and elected to prepare the
parent company financial statements under United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable laws
including FRS 101 Reduced Disclosure Framework).
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 Group and the Company and of the profit or loss of the Group
for that period.
In preparing each of the Group and Company financial statements, the Directors
are required to:
• Select suitable accounting policies and then
apply them consistently;
• Make judgments and estimates that are reasonable
and prudent;
• State whether they have been prepared in accordance with
UK-adopted International Accounting Standards (IASs) and International
Financial Reporting Standards (IFRSs) have been followed, subject to any
material departures disclosed and explained;
• Prepare the Strategic Report and Directors' report which
comply with the requirements of the Companies Act 2006; and
• Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group and the Company
will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group and the Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and the Company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also generally responsible for
taking such steps as are reasonably open to them to safeguard the assets of
the group and to prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Information published on the website is accessible in many countries and
legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
The Directors consider that the annual report and accounts, taken as a whole,
is fair, balanced and understandable and provides the information necessary
for shareholders to assess the Group's position and performance, business
model and strategy. Each of the directors confirms that, to the best of their
knowledge:
The Group financial statements, which have been prepared in accordance with UK
IAS and Companies Act 2006, give a true and fair view of the assets,
liabilities, financial position and profit of the Group; and the Annual Report
includes a fair review of the development and performance of the business and
the position of the Group, together with a description of the principal risks
and uncertainties that it faces.
Independent auditors' report
to the members of Earnz Plc
Opinion
We have audited the financial statements of Earnz Plc (the 'company') and its
subsidiaries (the 'group') for the year ended 31 December 2025 which comprise:
Group Company
the Consolidated Statement of Comprehensive Income; the Company Balance Sheet;
the Consolidated Balance Sheet; the Company Statement of Changes in Equity;
the Consolidated Statement of Changes in Equity;
the Consolidated Statement of Cash flows; and related notes to the financial statements
and related notes to the financial statements
The financial reporting framework that has been applied in their preparation
is applicable law and United Kingdom adopted International Financial Reporting
Standards (IFRSs).
In our opinion:
the financial statements give a true and fair view of the state of the group's
and of the company's affairs as at 31 December 2025 and of the group's loss
for the year then ended;
the group financial statements have been properly prepared in accordance with
UK adopted International Financial Reporting Standards (IFRS).
the company financial statements have been properly prepared in accordance
with United Kingdom Generally Accepted Accounting Practice; and
the financial statements 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 group and the company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the
UK, including the Financial Reporting Council's (the FRC's) Ethical Standard
as applied to listed public interest/listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
An overview of the scope of our audit
The group comprises a parent holding company, an additional holding company,
two existing subsidiaries (acquired in the prior year), a newly acquired
subsidiary, and two newly formed entities. The material components of the
group for which we performed full scope audit procedures following an
assessment at the audit planning phase were Earnz Plc, Southwest Heating
Services Limited ("SWH") and Cosgrove & Drew Limited ("C&D") with
analytical review or specific scope procedures as well as verification of bank
balances to third party confirmation completed on other group entities that
were determined to be less significant to the group based on our assessment of
materiality.
The scope of the audit and our audit strategy was developed by using our audit
planning process to obtain and update our understanding of the group and its
environment, including the group's system of internal control, and assessing
the risks of material misstatement at the group level.
We communicated with both the Directors and the Audit Committee our planned
audit work via our audit planning report and relevant discussion. We
communicated audit progress with the Audit Committee through interim audit
progress.
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.
Our evaluation of the Directors' assessment of the group's ability to continue
to adopt the going concern basis of accounting included consideration of the
inherent risks to the group's business model and analysed how those risks
might affect the group's financial resources or ability to continue operations
over the period 12 months from the date of the signing of the financial
statements.
The risks that we considered most likely to affect the group's financial
resources or ability to continue operations over this period were adverse
circumstances impacting the underlying profitability of the trading
subsidiaries and being able to fund potential contingent consideration
relating to historic acquisitions, as well as the acquisition that was
undertaken of Zero Carbon Group post year end.
We considered these risks through a review of the application of reasonably
foreseeable downside scenarios that could arise with reference to the level of
available financial resources indicated by the group's financial forecasts and
management's assessment of these risks, including potential mitigations
available.
Our audit procedures to evaluate the Director's assessment of the group and
the company's ability to continue to adopt the going concern basis of
accounting included:
- Undertaking an initial assessment at the planning stage of the
audit to identify events or conditions that may cast significant doubt on the
group and the company's ability to continue as a going concern;
- Evaluating the methodology used by the Directors to assess the
group and the company's ability to continue as a going concern;
- Reviewing the Directors' going concern assessment and evaluating
the key assumptions used and judgements applied;
- Reviewing the sensitivities performed by management to
understand the going concern implications;
- Performing our own review of the liquidity headroom and applying
sensitivities to the base trading and cashflow forecast assessments of the
Directors to ensure there was sufficient headroom to adopt the going concern
basis of accounting;
- Reviewing the availability of the group's existing cash
balances for use in the day to day running of the business;
- Considered the reasonableness of management's reasonable worst
case scenarios which included significant reductions in gross margin generated
by newly acquired entities as well as entities which have been set up in the
year, these included reductions in gross profit of 50%, consideration of the
mitigating levers at managements disposal such as cutting of overhead costs
and the timeliness in which these could be enacted should adverse scenarios
occur;
- We evaluated management's ability to meet future contingent
consideration obligations under a range of adverse scenarios to ensure there
were no 'cliff edge' outcomes within the assessment prepared by management;
- We considered how reasonable the potential mitigants presented
by management were, that would be required in adverse scenarios modelled as
part of their going concern assessment, as well as in a range of further
sensitivities prepared by ourselves;
- For newly acquired entities (both in year and post year
end acquisitions, as well as entities set up in the year (being A&D Carbon
Solutions Ltd, NRS Ltd, WLL Ltd, and Zero Carbon Energy Ltd), we reviewed
management's pipeline forecasts to assess whether it was reasonable to expect
revenues and profits to be generated by these entities - our further
sensitivities assessed, considered delays in revenue generation and slower
revenue generation than was included in management's base case forecast;
- We reviewed post year end cash balances to ensure the
appropriate starting position was used in both the base case scenario, and all
sensitised scenarios prepared by management;
- A review of post year end actuals compared to forecasts prepared
by the Directors to note whether there was any adverse trading or change in
underlying performance of the trading subsidiaries within the group that would
impact the going concern assessment. Where adverse variances were noted, we
obtained appropriate justification for these variances to determine whether
there were fundamental issues with the forecasted revenues and profits of the
entities included within the cashflow forecast;
- We ensured that management's forecasts included covenant
testing review in both the base case and sensitised cases to determine whether
any covenants relating to the bank loans held by the group would be in breach
and, if so, whether there were suitable mitigants to enable the group to
remain a going concern;
- For the acquisition of Zero Carbon Group made post year end, we
completed a review of the revenue pipeline alongside supporting documentation
to determine whether forecast overhead costs were included on a reasonable
basis. We also reviewed the SPA to ensure that we understood the structure of
future consideration payable, and ensured that this was factored into the
cashflow forecast;
- Reviewing and assessing the appropriateness of the
Directors' disclosures regarding going concern in the financial statements.
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 and the 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.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those
which had the greatest effect on:
· the overall audit strategy,
· the allocation of resources in the audit; and
· directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
In determining the key audit matters we considered the:
· Areas of higher risks of material misstatement or significant
risks identified in accordance with ISA (UK) 315
· Significant audit judgements on financial statement line items
that involved significant management judgement such as accounting estimates,
and
· The impact of significant events and transactions during the
period covered by the audit.
The following table summarises the key audit matters we have identified and
rationale for their identification together we how we responded to each in our
audit. The table also shows how our judgement of the magnitude of each risk
has changed since the previous audit.
Risk magnitude key
New risk Same level Increased risk Decreased risk
Key audit matter How we addressed the key audit matter in the audit
Fraud in revenue recognition We performed specific tests to consider whether revenue has been recorded in
the correct period and is free from misstatement. These included:
The risk of incorrect or inappropriate treatment and recognition of revenue
under IFRS 15. · We assessed the group's accounting policy for each material
revenue stream and performed walkthrough procedures to assess the design and
We consider there to be a significant risk of misstatement in the financial implementation of controls.
statements arising as a result of incorrect application of IFRS 15 and
recording revenue when the performance obligations have not been met, thus · We performed substantive tests of detail for a sample of revenue
resulting in a material misstatement of revenue. items recorded during the year to assess whether revenue recognition was in
accordance with the standard, including consideration of identification of
performance obligations such that revenue had not been materially misstated.
The Group recognised revenue at a point in time and had revenue recognised · We performed specific targeted cut-off testing around the
over time. There is a risk that revenue is materially overstated if revenue year-end, with sales in December 2025 and January 2026 selected for testing to
has been recorded prior to the relevant performance obligations being supporting documentation to ensure that revenue had been included within the
satisfied. correct period.
· We utilised data analytics to identify unusual or unexpected
revenue journal entries, including those posted outside normal business
Specifically, there is a risk in relation to the cut-off of revenue around the processes, and investigated any items identified.
year-end and occurrence of revenue. Specific testing was planned to ensure
this risk had been appropriately tested for. · We obtained and critically evaluated management's revenue
recognition policy and whether the application of IFRS 15 was reasonable and
appropriate.
· For revenue recorded over time, we performed relevant testing on
accrued and deferred income to ensure that revenue was being appropriately
recognised during the year ended 31 December 2025.
Acquisition accounting and valuation of intangible assets To address the risks associated with acquisition accounting and the valuation
of intangible assets, our audit procedures consisted of but were not limited
to:
There is a risk that the acquisition accounting in relation to the acquisition
of two trading subsidiaries during the year have been accounted for
incorrectly with reference to IFRS 3 'Business Combinations'. • We reviewed the assessment prepared by management
regarding whether the transaction constituted a business combination in
accordance with IFRS 3
The risks we identified were as follows: • We reviewed the work of managements expert used to
complete the purchase price allocation assessment to assess whether the
· The accounting entries of the newly acquired entities in the intangible assets considered to meet the relevant criteria as per IFRS 3 were
group accounts appropriate
· Over/misstatement of the fair value of the net assets acquired • We utilised our internal valuations expert to review the
and the resulting goodwill being recorded appropriateness of the methodology and assumptions used in the WACC
calculation and the intangible asset valuation at acquisition date.
· Identification and accounting of separately identifiable
intangible assets arising on acquisition in accordance with IFRS 3 • We reviewed and challenged the valuation exercise
undertaken by management and their expert for the purposes of valuing
· Cut-off of the income and expenses from the point of acquisition separately identifiable assets arising from the acquisition to ensure these
to be recognised in the consolidated accounts were reasonable
· Completeness and cut-off of balance sheet of the entities being • We reviewed the consideration payable in accordance with
acquired at the date of acquisition. the share purchase agreements in place to ensure that the calculation of
goodwill was appropriate
· Appropriateness of the disclosures in the financial statements
relating to the acquisition of the new businesses. • We performed substantive audit testing on the opening
balance sheet at the acquisition date for A&D Carbon Solutions Limited to
· Any impairment of the intangible assets including goodwill ensure that the net asset value acquired that was incorporated in the
recognised as part of the acquisition may be materially overstated. acquisition accounting journals was appropriate
• We reviewed and assessed management's judgements for
reasonableness concerning the conditions that existed at the acquisition date;
Impairment of intangible assets arising from acquisitions To address the risks associated with acquisition accounting and the valuation
of intangible assets, our audit procedures consisted of but were not limited
to:
There is a risk that intangible assets, namely goodwill and separately
identified assets from acquisitions, is materially misstated where impairment
indicators exist.
• We reviewed the impairment assessment prepared by
management to assess whether indicators of impairments had been addressed and
· Where goodwill or other intangible assets are allocated to cash to ensure that it was in line with IAS 36
generating units (subsidiaries) where there are indicators of impairment,
namely losses in the financial year, there is a risk that these intangible • We reviewed the mathematical accuracy of the calculations
assets should be impaired. prepared by management for their IAS 36 assessment
• We reviewed key inputs to the value in use calculation
such as the discount rate (WACC) and inputs in relating to expected trading
results to ensure these were consistent with other areas of forecasting
• We challenged management on key assumptions such as
revenue growth and the forecasted levels of cost obtaining supporting
information to enable us to assess the reasonableness of the key assumptions
made by management in their forecasts
• We reviewed the work of managements expert used to
complete the purchase price allocation assessment to assess whether the
intangible assets considered to meet the relevant criteria as per IFRS 3 were
appropriate
• Following discussions with management regarding known
costs that had been omitted from the forecasts of one of the entities acquired
in the prior year (SWH Ltd), we asked management to prepare revised forecasts.
We reviewed and challenged the updated forecast to confirm that the omitted
costs were known or could have been reliably estimated both at the acquisition
date and at 31 December 2024 confirming a prior year adjustment was
appropriate;
Our application of materiality
The scope and focus of our audit were influenced by our assessment and
application of materiality. We define materiality as the magnitude of
misstatement that could reasonably be expected to influence the readers and
the economic decisions of the users of the financial statements. We use
materiality to determine the scope of our audit and the nature, timing and
extent of our audit procedures and to evaluate the effect of misstatements,
both individually and on the financial statements as a whole.
Group Financial Statements Company Financial Statements
Materiality £177,000 (2024: £199,000) £88,000 (2024: £83,600)
Benchmark 1.5% of total revenue (2024: 2.5% of gross assets) This was determined as being 25% of the full scope MACM benchmark.
Basis for, and judgements used in the determination of materiality Revenue has been selected as the benchmark for determining materiality, as it Materiality has been based on an allocation of 25% of the component
is a primary KPI for the group and provides a stable, representative measure materiality multiplier for full scope entities, as it does not generate
of the scale of operations. The majority of the group activity occurs in the external revenue and primarily acts as a holding company for its subsidiaries.
two main trading entities, which due to acquisition in the prior year, we have While the company has significant balance sheet balances, profit-based
a full 12m of revenue results for. The group is currently in a loss-making and measures are not considered meaningful due to the nature of its activities.
growth phase, with a volatile cost base driven by acquisitions and
restructuring activities. Therefore, an allocation of the full scope component materiality provides the
most appropriate basis for determining materiality, which is largely in line
Alternative benchmarks were considered, including: adjusted EBITDA, loss with the prior year allocation.
before tax, gross assets, net assets and gross margin. However, adjusted
EBITDA is subject to management discretion due to the exclusion of
non-recurring and judgemental items, and both EBITDA and loss before tax are
volatile and less consistent measures of performance. Gross profit and margin
are also subject to fluctuations, while net assets are not a key performance
metric for the group given its service-based nature.
Revenue is consistently reported, forms a key focus of management reporting,
and aligns with industry practice. It also underpins external market
expectations and consensus forecasts used by shareholders. As such, revenue
provides the most appropriate, stable and relevant basis
for determining materiality.
Performance materiality - Based on our risk assessment, our experience of the
prior year audits and review of the group's control environment, performance
materiality was set at 70% of materiality, being £124,000 (2024: £129,000)
for group and £61,600 (2024: £54,340) for the company. This threshold was
revised upwards from 65% in the prior year to reflect our assessment and
understanding of the control environment from the prior year and also taking
account of the control findings raised in the 2024 audit.
Reporting threshold - The reporting threshold to the audit committee was set
as 5% of materiality, being £8,850 (2024: £9,950) for the group. If, in our
opinion in differences below this level warranted reporting on qualitative
grounds, these would also be reported.
Differences in materiality levels from the previous audit
Gross assets were used in the prior year due to the group not having a full
year of trade. With the group now being a trading group for a full reporting
period, gross assets is not considered to be an appropriate metric.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report, other than the
financial statements and our auditor's report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. 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 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 the 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 group and the company
and its 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 company, or returns
adequate for our audit have not been received from branches not visited by us;
or
the 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.
Responsibilities of directors
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 group's and 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 group or 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.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. 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 and management of the group and company. Explanation
as to what extent the audit was considered capable of detecting
irregularities, including fraud
Based on our understanding of the group/company and industry, we identified
that the principal risks of non-compliance with laws and regulations related
to UK adopted international accounting standards, the Companies Act 2006,
relevant tax legislation in the jurisdictions the group operates and
regulatory requirements for AIM listed companies, and we considered the extent
to which non-compliance might have a material effect on the financial
statements. We also considered those laws and regulations that have a direct
impact on the preparation of the financial statements including from those
relevant laws and regulations listed above.
We evaluated management's incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of
controls) and determined that the principal risks were related to posting
inappropriate journal entries to revenue and management bias in accounting
estimates. Audit procedures performed by the engagement team included:
Discussions with management including consideration of known or suspected
instances of non-compliance with laws and regulation and fraud;
Challenging management on the overhead costs included in the prior year SWH
Ltd forecast underpinning the impairment review, with a particular focus on
costs that were known and existed or were reasonably foreseeable both at the
acquisition date and FY24 year-end and therefore should have been reflected in
the original PPA and impairment models;
We involved our internal valuations expert to review the appropriateness of
the methodologies and assumptions used within the revised impairment and
intangible asset valuations;
Challenge and critical assessment of areas containing significant amounts of
management judgement or estimation, for example in areas such as revenue;
The evaluation of management's controls designed to prevent and detect
irregularities;
Utilisation of our audit software to select journals for further inspection
that met certain risk criteria as determined by the engagement team;
Review of tax working papers prepared by management experts and utilising our
own experts to review these areas;
The identification and review of manual journals, in particular journal
entries which shared key risk characteristics;
The review and challenge of assumptions, estimates and judgements made by
management in their recognition of accounting estimates.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the FRC's website at:
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.
Jonathan Maddison (Senior Statutory Auditor)
For and on behalf of HaysMac LLP, Statutory Auditors
10 Queen Street Place
London EC4R 1AG
22 May 2026
Consolidated statement of profit or loss and other comprehensive income
for the year ended 31 December 2025
Restated
Note 2025 2024
£'000 £'000
Continuing operations
Revenue 3,4 11,785 2,637
Cost of sales 5 (8,734) (2,289)
Gross profit 3,051 348
Administrative expenses 5 (4,400) (3,834)
Operating loss (1,349) (3,486)
Net finance costs 6 (353) (70)
Other (expenses)/income (19) 1
Loss before taxation (1,721) (3,555)
Taxation 7 (26) 192
Loss for the year from continuing operations (1,747) (3,363)
Loss from discontinued operations 13 - (77)
Loss on disposal of discontinued operations 13 - (58)
Loss for the year (1,747) (3,498)
Loss attributable to owners of Earnz Plc arises from:
Continuing operations (1,747) (3,363)
Discontinued operations 13 - (135)
(1,747) (3,498)
Other comprehensive income/(loss), net of tax:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of discontinued operations 13 - 9
Other comprehensive income - 9
Total comprehensive loss for the year (1,747) (3,489)
Total comprehensive loss for the year attributable to owners of Earnz Plc
arises from:
Continuing operations (1,747) (3,363)
Discontinued operations 13 - (126)
(1,747) (3,489)
Earnings per Share
Basic and diluted (£) 8 (0.015) (0.057)
The accompanying notes on pages 29 to 77 are an integral part of these
financial statements.
Consolidated statement of financial position
for the year ended 31 December 2025
Restated
Note 2025 2024
£'000 £'000
Non-current assets
Property, plant and equipment 9 316 310
Right-of-use assets 10 380 220
Goodwill 11 3,840 2,954
Intangible assets 11 572 557
Deferred tax asset 7 233 242
Total non-current assets 5,341 4,283
Current assets
Cash and cash equivalents 16(i) 1,076 1,965
Trade and other receivables 16(ii) 1,766 1,221
Contract assets 16(iii) 210 170
Inventories 15 154 145
Other current assets 16(iv) 469 197
Total current assets 3,675 3,698
Current liabilities
Trade and other payables 16(v) (1,836) (1,947)
Contingent consideration 16(vi) (348) (42)
Loans and borrowings 16(vii),16(viii) (1,235) (1,110)
Lease liabilities 16(ix) (188) (92)
Tax liabilities 16(x) - (64)
Provisions 17 (19) -
Total current liabilities (3,626) (3,255)
Net current assets 49 443
Non-current liabilities
Contingent consideration 16(vi) (793) (1,015)
Loans and borrowings 16(vii) (639) (261)
Lease liabilities 16(ix) (206) (153)
Total non-current liabilities (1,638) (1,429)
Net assets 3,752 3,297
Capital and reserves
Share capital 18 5,356 4,088
Share premium 18 16,555 15,621
Share-based payment reserve 19 94 39
Retained earnings (18,253) (16,451)
Total equity 3,752 3,297
The accompanying notes on pages 29 to 77 are an integral part of these
financial statements.
These financial statements were approved and authorised for issue by the board
on 22 May 2026 and signed on its behalf by:
Peter Smith
Chief Executive Officer
Consolidated statement of changes in equity
for the year ended 31 December 2025
Share capital Share Premium Share-based payment reserve Currency translation reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000
222 12,626 179 (9) (13,116) (98)
Balance at 1 January 2024
Loss for the year (as previously reported) - - - - (2,819) (2,819)
Prior period adjustment - - - - (679) (679)
Other comprehensive income - - - 9 - 9
Total comprehensive loss (restated) - - - 9 (3,498) (3,489)
Transactions with owners:
Shares issued, net of costs 3,227 2,436 - - - 5,663
Consideration shares issued on acquisitions 639 559 - - - 1,198
Transfer of lapsed share-based payments - - (163) - 163 -
Equity settled share-based payments - - 23 - - 23
Total transactions with owners 3,866 2,995 (140) - 163 6,884
Balance at 31 December 2024 (restated) 4,088 15,621 39 - (16,451) 3,297
Total comprehensive loss - - - - (1,747) (1,747)
Transactions with owners:
Shares issued, net of costs 1,124 818 - - - 1,942
Consideration shares issued on acquisitions 144 116 - - - 260
Transfer of lapsed share-based payments - (16) - 16 -
Fair value to statutory value adjustment on investment elimination
- - - - (71) (71)
Equity-settled share-based payments - 71 - - 71
Total transactions with owners 1,268 934 55 - (55) 2,202
Balance at 31 December 2025 5,356 16,555 94 - (18,253) 3,752
The accompanying notes on pages 29 to 77 are an integral part of these
financial statements.
Nature and purpose of reserves:
Share capital
This reserve represents the nominal value of shares issued by the company. It
arises from the issue of ordinary shares and reflects the legal capital that
is not distributable to shareholders.
Share premium
This reserve represents the excess of proceeds received over the nominal value
of shares issued by the company, in addition to any costs incurred on the
issuance of shares. It is a non-distributable reserve.
Share-based payment reserve
This reserve represents the cumulative fair value of equity-settled
share-based payments recognised as an expense in the profit or loss account in
accordance with IFRS2. This reserve is not distributable and is transferred to
retained earnings upon exercise or lapse of the related share-based payment
arrangement.
Currency translation reserve
This reserve represents the currency translation differences arising from the
consolidation of foreign operations. This reserve is not distributable and is
reclassified to profit or loss on disposal of the relevant foreign operation.
Retained Earnings
This reserve represents the cumulative net profits or losses of the group
after dividends and other appropriations. It includes all undistributed
earnings since incorporation and reflects the portion of profits that is
available for distribution to shareholders, subject to any legal or
contractual obligations.
It also includes adjustments relating to changes in accounting policies or the
corrections of prior period errors, where applicable, in accordance with IAS
8.
Consolidated cash flow statement for the year ended 31 December 2025
Restated
Note 2025 2024
£'000 £'000
Cash flows from operating activities
Loss before taxation (1,721) (3,555)
Adjustments to cash flows from non-cash items:
Depreciation 9,10 204 81
Amortisation 11 61 19
Impairment charge 7 694
Share based payment expense 19 71 23
Loss on disposal of subsidiary 13 - (77)
Gain on disposal of asset 6 -
Loss utilisation of onerous contract provision 17 - (240)
Gain on remeasurement of contingent consideration 15
Bad debt expense 16(ii) 5 40
Less finance income 6 (16) (39)
Add back finance costs 6 200 109
(1,168) (2,945)
Working capital adjustments:
Decrease in inventories 15 2 8
(Increase) / decrease in trade and other receivables (654) 162
(Decrease) in trade and other payables (344) (308)
Cash outflows from operating activities (2,164) (3,083)
Income tax paid (143) -
Net cash outflows from operating activities (2,307) (3,083)
Cash flows from investing activities
Interest received 6 16 39
Payment for acquisition of subsidiaries net of cash acquired 12 (306) (747)
Purchase of property, plant and equipment 9 (78) (64)
Proceeds from sale of property, plant and equipment 9 8 1
Capitalised development costs (22) -
Staff loans issued - (4)
Net cash outflows from investing activities (382) (775)
Cash flows from financing activities
Proceeds from issue of shares, net of share issue costs 18 1,942 5,663
(Repayment) / Proceeds from unauthorised overdraft (2) 2
Net (repayment) / proceeds from factoring of trade receivables 16(viii) (47) 139
Factoring fees and interest paid - (39)
Proceeds from related parties - 339
Proceeds from borrowings 489 -
Repayment of borrowings (389) (89)
Repayment of lease liabilities (179) (73)
Interest paid 6 (14) (10)
Net cash inflows from financing activities 1,800 5,932
Net cash outflows from discontinued operations 13 - (162)
Net (decrease) /increase in cash and cash equivalents (889) 1,912
Cash and Cash Equivalents at the start of the period 1,965 54
Net foreign exchange differences on cash and cash equivalents - (1)
Cash and Cash Equivalents at the end of the year 1,076 1,965*
The accompanying notes on pages 29 to 77 are an integral part of these
financial statements.
*Includes restricted cash of £100k, see note 16(i) for further details.
Notes to the financial statements
for the year ended 31 December 2025
1.0 Corporate Information
Energy Advisory Regeneration Net Zero, EARNZ Plc ("EARNZ", "the Company"), is
a public company limited by share capital, incorporated in the UK, registered
in England and Wales (Company number: 10114644) and domiciled in the UK.
The address of its registered office is:
St James House First Floor,
St James House,
St James' Square
Cheltenham,
Gloucestershire,
United Kingdom,
GL50 3PR
The Company's ordinary shares are traded on the Alternative Investment Market
(AIM) of the London Stock Exchange under the ticker symbol EARN.
The Company's strategy is to pursue a buy-and-build approach, focusing on the
acquisition and development of businesses aligned with decarbonisation and net
zero objectives.
1.1 Statement of compliance
These consolidated financial statements have been prepared in accordance with
UK-adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006 as applicable to companies reporting
under IFRS.
These financial statements also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board
(IASB) and interpretations issued by the International Financial Reporting
Interpretations Committee (IFRIC) as adopted by the UK.
2.1 Basis of preparation
These consolidated financial statements present the results of the Earnz Plc
and its subsidiaries ('the Group'), for the year ended 31 December 2025. The
Parent Company's financial statements present information about the Company as
a separate stand-alone entity.
During the previous year, the Group disposed of Verditek Solar Italy srl,
which has been classified as a discontinued operation in accordance with IFRS
5 - Non-current Assets Held for Sale and Discontinued Operations. The results
of the discontinued operation have been presented separately from continuing
operations in the consolidated statement of profit or loss in the prior year.
This reclassification has no impact on the total loss for the year, net
assets, or the total comprehensive income in the prior year.
The material accounting policy information adopted in the preparation of the
consolidated financial statements is set out below. The policies have been
consistently applied to all years presented, unless otherwise stated.
The preparation of financial statements, in compliance with the UK adopted
IFRS Accounting Standards, requires the use of certain judgements, estimates
and assumptions that affect the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is
made and in any future periods affected. Significant areas where the Group has
applied critical accounting judgements and key sources of estimation
uncertainty are disclosed in Note 2.6.
The Group and Parent Company financial statements of Earnz Plc for the year
ended 31 December 2025 were authorised for issue in accordance with a
resolution of the Directors on 22 May 2026.
2.2 Going concern
The consolidated financial statements have been prepared on a going concern
basis, under the historical cost convention as modified by financial assets
and financial liabilities.
The Directors have made an assessment of the Group's ability to continue as a
going concern for a period of at least 12 months from the date of approval of
these financial statements. In making this assessment the Directors have
considered:
· The Group's current financial position and cash flow forecasts;
· The availability of existing banking and financing facilities, and
consideration of the net leverage covenant attached to the existing facility;
· The expected performance of the businesses in light of the current
and forecasted market conditions and;
· Any significant risks and uncertainties, including revenue reductions
and cost inflations.
As at the date of approval of these financial statements, the base case cash
flow forecast based on the Board-approved forecasts to 30 June 2027, indicated
that no additional cash resources will be required over the course of the next
12 months. This base case included the acquisition of Zero Carbon Group
Limited on 31 Mar 2026 but assumed that no further acquisitions took place in
the period to 31 May 2027.
The Group stress tested two scenarios, using the Board-approved forecasts to
30 June 2027.
Scenario 1 The impact of a 10% reduction of revenue across the Group with a
corresponding reduction in cost of sales whilst taking no mitigating actions.
Scenario 2 The impact of material costs increasing by 10% whilst taking no
mitigating actions.
Under both forecasts and scenarios, the Group is able to generate profits and
cash, and has positive net cash available at the end of the period considered.
In the year, the business set up 2 new entities, WLL and NRS, the revenues in
these businesses come from government funded schemes to deliver energy
efficiency in homes within the social housing sector. As these are start-up
businesses they have no track record of delivery. Whilst the Board are
confident in the forecasts for these businesses, more significant
sensitivities have been modelled as reasonable worst-case scenarios. This
included modelling delays in revenue delivery and reduced margins. In these
worst case scenarios the Group remained able to generate profits and cash.
Management have seen the forecast revenues from these starts-up start to be
delivered post year end.
Should the actual scenarios be worse than those modelled, the Board have other
mitigants such as reviewing and reducing variable cost, that could be employed
to ensure that there was sufficient cash in the Group. Examples of the actions
that could be taken if needed are;
· Reduction in staffing costs through consolidation
· Reduction in vehicle costs
· Reduction in travel and entertainment costs
· Reduction in contingent deferred consideration payments if
performance targets are not met to trigger the payment of contingent deferred
consideration.
Based on this assessment, the Directors consider that the Group has adequate
resources and mitigation levers at its disposal to meet its liabilities as and
when they fall due in the forecast period, including when considering
reasonable worst-case scenarios. Accordingly, they continue to adopt the going
concern basis of accounting in preparing the financial statements.
2.3 Basis of measurement
The financial statements are prepared on the basis of the following
measurement categories:
Non-current assets including property, plant and equipment are measured at
historical cost, less accumulated depreciation and accumulated impairment
losses.
Inventory is measured at the lower of cost or net realizable value.
Financial instruments are classified into categories based on their nature and
are measured as follows:
· Financial assets at amortised cost using the effective interest rate
method
· Financial assets at fair value through profit or loss (FVTPL) with
any gains or losses on the remeasurement of the fair value being recognised in
profit or loss
Impairment of non-financial assets is measured using the value-in-use method,
whereby the recoverable amount of an asset or cash-generating unit is
determined based on the present value of future cash flows expected to be
derived from the asset.
Liabilities are generally measured at amortised cost, except liabilities
related to leases.
Leases are measured at the present value of future lease payments, discounted
using the appropriate discount rate (see Note 16(ix) for further details on
leases).
2.4 Changes in accounting policies, disclosures, standards and
interpretations
New and amended standards adopted by the Group
The Group has considered all new and amended accounting standards and
interpretations that are effective for annual periods beginning on or after 1
January 2025.
The adoption of these standards and interpretations has not had, and is not
expected to have, a material impact on the Group's financial statements.
New standards, interpretations, and amendments not yet effective
There are a number of standards, amendments to the standards and
interpretations which have been issued by the IASB that are effective in
future accounting periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January
2026:
· Amendments to the Classification and Measurement of
Financial Instruments (Amendments to IFRS 9 Financial Instruments)
The following amendments are effective for the period beginning 1 January
2027:
· IFRS 18 Presentation and Disclosure in Financial
Statements
· IFRS 19 Subsidiaries without Public Accountability:
Disclosures
The Group is currently assessing the impact of these new accounting standards
and amendments but does not expect these or any other standards issued by the
IASB that are yet to be effective, to have a material impact on the group.
2.5 Accounting policies
Basis of consolidation
Subsidiaries are all entities (including structured entities) over which the
Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that control
ceases.
The acquisition method of accounting is used to account for business
combinations by the Group.
All intra-group transactions, balances, income and expenses, and gains and
losses are eliminated on consolidation.
Accounting policies of subsidiaries are changed where necessary to ensure
consistency with the policies adopted by the Group.
See Note 20 for full details on subsidiaries.
The Group acquired A&D Carbon Solutions Limited on 1 July 2025. (29 August
2024: The Group acquired Cosgrove & Drew Ltd and South West Heating
Services Limited)
The acquisitions were assessed and determined to meet the definition of a
business combination in accordance with IFRS 3 - Business Combinations.
Accordingly, the Group has applied the acquisition method to account for these
transactions, recognising identifiable assets acquired and liabilities assumed
at their fair values, at the acquisition date. The results of the acquired
entities have been consolidated from the date control was obtained. Further
disclosure is provided in Note 12.
On 29 February 2024, the Group disposed of Verditek Solar Italy srl. The
subsidiary's results have been included in the consolidated financial
statements up to the date of disposal and have been
accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations. Further disclosure is provided in Note 13.
Foreign currency transactions and balances
Functional and presentation currency
The financial statements are presented in pounds sterling which is the
presentational currency of the Group, and all values are rounded to the
nearest thousand pounds (£'000) unless otherwise stated.
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency').
Transactions and balances
Foreign currency transactions are translated into the entity's functional
currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such
transactions, and from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange rates, are generally
recognised in profit and loss. Non-monetary items that are measured at
historical cost are not retranslated at year end.
Foreign exchange gains and losses that relate to borrowings are presented in
the statement of profit and loss, within finance costs. Other exchange gains
and losses are included in the line items to which they relate.
Group companies
The results and financial position of foreign operations that have a
functional currency different from the presentation currency are translated
into the presentation currency as follows:
· Assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance sheet.
· Income and expenses for each statement of profit or loss and
statement of comprehensive income are translated at average exchange rates
(unless this is not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case income and expenses
are translated at the dates of the transactions); and
· All resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the translation of any net
investment in foreign entities, and of borrowings and other financial
instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings
forming part of the net investment are repaid, the associated exchange
differences are reclassified to profit & loss, as part of the gain or loss
on sale.
Revenue Recognition
Revenue is recognised when the Group satisfies a performance obligation by
transferring control of a good or service to the customer, in an amount that
reflects the consideration to which the Group expects to be entitled in
exchange for those goods or services. Revenue is measured net of VAT, trade
discounts and other similar deductions.
The Group earns revenue from multiple income streams and revenue recognition
can vary depending on the type of contract and the specific terms and
conditions outlined within it. Different types of contracts may involve
varying performance obligations, timing of revenue recognition and methods for
measuring the transaction price but currently the Group has three broad
categories for revenue recognition:
· Major projects and small works
Revenue is recognised over time for services in project contracts and small
works. Progress towards complete satisfaction of the overall performance
obligation is measured using the output method of certification of work
completed, agreed with the customer in advance of a month end.
Revenue is recognised at a point in time for materials in project contracts,
on delivery to site, which represents the transfer of control of the goods.
· Repairs, maintenance and reactive works
Revenue is recognised at a point in time when the entity satisfies the
performance obligation by transferring a promised service to a customer.
· Turnkey Retrofit Services
Revenue is recognised at a point in time for distinct deliverables, or over
time where the contract requires continuous transfer of control (e.g
multi-phase or programme-based projects with contractors).
The following criteria must be met in order to recognise revenue:
- A contract, with a customer exists, either written,
verbal or implied;
- The company has identified performance obligations in
the contract or contract milestones;
- The transaction price can be reliably estimated; and
- It is probable that the company will collect the
consideration to which it is entitled in exchange for the goods or services.
Performance obligations and milestones
Performance obligations define the goods or services that the entity promises
to transfer to the customer, where milestones represent significant points in
the fulfilment of those obligations. At the start of the contract the Group
establishes the most appropriate basis to determine the timing and pattern of
revenue recognition relating to that contract.
Performance obligations: Performance obligations are promises in a contract
with a customer to transfer distinct goods or services. They represent the
obligations of the entity to the customer and are the basis for revenue
recognition. Performance obligations can be explicit or implicit and each
distinct performance obligation must be separately identified and evaluated
for revenue recognition.
Milestones: Milestones are significant events or stages of completion that
trigger revenue recognition. They represent key points in the fulfilment of
performance obligations or the achievement of contractual objectives. Revenue
can be recognised upon the achievement of contract milestones if they
represent progress towards satisfying a performance obligation.
Transaction price
At the start of the contract, the total transaction price is estimated as the
amount of consideration to which the Group expects to be entitled in exchange
for transferring the promised goods and services to the customer, excluding
sales taxes. Variable consideration, such as price escalation, is included
based on the expected value, or most likely amount, only to the extent that it
is highly probable that there will not be a material reversal of the
cumulative revenue recognised. The transaction price does not include
estimates of consideration resulting from contract modification, such as
change orders, until they have been approved by parties to the contract.
The total transaction price is allocated to the performance obligations or
milestones identified in the contract in proportion to their relative,
stand-alone selling prices. Given the nature of the Group's services, which
are carried out under contract to customers individual specifications, there
are typically no observable stand-alone selling prices. Instead, stand-alone
selling prices are typically estimated based on expected costs plus contract
margin consistent with the Group's pricing principles.
Payment terms vary from contract to contract, and an element of the
transaction price may be received in advance of the delivery. The Group may
therefore have contract liabilities depending on the contract's status at a
period end.
The Group's contracts are not considered to include significant financing
components on the basis that there is no difference between the consideration
and the cash selling price.
Timing
At the start of the contract the Group defines the timing of revenue
recognition having considered the nature of the of the goods or services
provided, the terms of the contract, and the transfer of control.
Sale of goods: Revenue from the sale of goods is typically recognised at a
point in time when control of the goods is transferred to the customer. This
may occur upon delivery, shipment or when the customer takes possession of the
goods depending on the terms of the contract.
Rendering of services: Revenue from services may be recognised over time as
the services are performed, if the customer simultaneously receives and
consumes the benefits provided by the services. Alternatively, revenue may be
recognised at a point in time when the service is completed or when control of
the service is transferred to the customer.
Long-Term contracts: Revenue from long-term contracts may be recognised over
time using a percentage-of-completion method or based on milestones achieved,
if certain criteria are met. Alternatively, revenue may be recognised at a
point in time, if the performance obligation is satisfied at a single point in
time.
Variable consideration: Revenue recognition may be impacted by variable
consideration, such as performance bonuses, discounts or rebates, which may
require estimation and adjustment of the transaction price over time as
uncertainties are resolved.
If it is expected that the total contract costs will exceed total contract
revenue, the expected loss is recognised immediately as an expense.
Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker ("CODM") as required
by IFRS 8 Operating Segments. The chief operating decision-maker, who is
responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors.
Detailed information is provided in Note 4 of the financial statements.
Government grants
Government grants are recognised only when there is a reasonable assurance
that the Group will comply with the conditions attaching to the grant and that
the grants will be received. The amounts received are reported under other
income in the financial statements. The income is reported in the period
necessary to match the related costs that they are intended to compensate.
Employee benefits
Short-term employee benefits
Short-term employee benefits include wages and salaries, paid annual sick
leave, bonuses and non-monetary benefits (such as healthcare). These are
recognised as an expense in the period in which the employee provides the
service. Any unpaid amounts at the reporting date are recorded as current
liabilities in the statement of financial position.
Post-employment benefits - Defined contribution schemes
The Group operates defined contribution pension schemes for its employees.
During the year the Group transitioned the majority of employees to a scheme
administered by Scottish Widows, from the National Employment Savings Trust
("NEST") scheme. Contributions are recognised as an expense in the profit or
loss statement in the periods in which the related employee services are
rendered. The Group has no further payment obligation once the contributions
have been paid. Unpaid contributions at the reporting date are recognised
within current liabilities.
Share-based payment transactions
Employees (including senior executives) of the Group may receive remuneration
in the form of share-based payment transactions, whereby consideration is
received in the form of equity instruments for services rendered
(equity-settled transactions). The Group has four equity-settled share-based
payments schemes in place at the year end.
Detailed information is provided in Note 19 of the financial statements.
The cost of equity-settled transactions with employees is measured by
reference to the fair value at the date on which they were granted, determined
using an appropriate valuation model. The choice of model is determined by
features of the awards. The Black-Scholes model is used for awards with fixed
exercise prices, service-based vesting conditions, and no market-based
performance conditions. Conversely the Monte Carlo simulation model is applied
when awards include market-based conditions as it enables the modelling of
multiple potential future outcomes and incorporates the probability of meeting
those conditions over the performance period.
The cost of equity-settled transactions is recognised, together with a
corresponding increase in equity, over the period in which the performance or
service conditions are fulfilled and ending on the date on which the relevant
employee becomes fully entitled to the award (the vesting date).
The cumulative expense recognised for equity settled transactions at each
reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Group's best estimate of the number of equity
instruments that will ultimately vest. The profit or loss charge for a period
represents the movement in cumulative expense recognised at the beginning and
end of that period. No expense is recognised for awards that do not ultimately
vest, except for awards where vesting is conditional upon a market condition,
which are treated as vesting irrespective of whether or not the market
condition is satisfied provided that all other performance conditions are
satisfied.
Where an equity-settled award is cancelled, it is treated as if it had vested
on the date of cancellation, and any expense not yet recognised for the award
is recognised immediately. However, if a new award is substituted for the
cancelled award, and designated as a replacement award on the date that it is
granted, the cancelled and new awards are treated as if they were a
modification for the original award, as described in the previous paragraph.
Leases
The Group assesses whether a contract is, or contains, a lease at the
inception of the contract in accordance with IFRS 16 - Leases.
For all contracts in which the Group is a lessee, and which convey the right
to control the use of an identified asset for a period of time in exchange for
consideration as defined by IFRS 16 - Leases, the Group recognizes a
right-of-use-asset and a corresponding lease liability at the lease
commencement, except for:
· Short-term leases (12 months or less), and
· Leases of low-value assets (such as laptops or small office
equipment).
These are recognised on a straight-line basis over the lease term in operating
expenses.
Right-of -Use Asset
Initially the right-of-use asset is measured at cost, comprising:
· The initial lease liability amount
· Any lease payments made at or before the commencement date
· Any initial direct costs
· Estimated costs of dismantling or restoring the asset (if applicable)
Subsequently, the right-of-use asset is depreciated over the shorter of the
asset's useful life or the lease term, adjusted for any remeasurement of the
lease liability.
Lease Liability
Initially the lease liability is measured at the present value of future lease
payments, discounted using the interest rate implicit in the lease, or the
lessee's incremental borrowing rate if the implicit rate cannot be readily
determined.
Lease payments include:
· Fixed payments (including in-substance fixed payments)
· Variable payments that depend on an index or rate
· Amounts expected to be payable under residual value guarantees
· Purchase or termination option payments if reasonably certain to be
exercised
The liability is subsequently measured at amortised cost using the effective
interest method and remeasured upon certain events (e.g. lease modification,
change in lease term, or change in future payments).
Financial instruments
Financial assets and liabilities are recognised in the Group's statement of
financial position when the Group becomes a party to the contractual
provisions of the instrument. The Group currently does not use derivative
financial instruments to manage or hedge financial exposures or liabilities.
Financial assets
The financial assets held by the Group are classified as financial assets held
at amortised cost. These assets are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market. They are
initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue, and are subsequently carried at
amortised cost using the effective interest rate method.
Trade receivables
Trade receivables are recognised when the Group has an unconditional
contractual right to receive consideration from customers in the ordinary
course of business. These are initially measured at the transaction price
determined in accordance with IFRS 15 Revenue from Contracts with Customers as
they typically do not contain a significant financing component.
Subsequently, trade receivables are measured at amortised cost which, due to
their short-term nature, generally approximates their nominal (invoiced)
value.
The Group applies the simplified approach to measuring expected credit losses
as permitted by IFRS 9 for trade receivables. Under this approach, a lifetime
expected credit loss is recognised for all trade receivables, regardless of
whether they are past due or not.
Trade receivables are written off when there is no reasonable expectation of
recovery, such as in the case of customer insolvency, liquidation, or
prolonged non-payment. Any subsequent recoveries are recognised in profit or
loss.
The Group and Company derecognise a financial asset when the contractual
rights to the cash flows from the asset expire, or they transfer the asset,
and substantially all the risk and rewards of ownership of the asset, to
another party.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits held at call with
financial institutions and other short-term, highly liquid investments with
original maturities of three months of less, that are readily convertible to
known amounts of cash, and which are subject to an insignificant risk of
change in value.
Bank overdrafts are included within borrowings in current liabilities in the
balance sheet.
Financial liabilities
Financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the instrument.
Financial liabilities are initially recognised at fair value, net of directly
attributable transaction costs, where applicable. Subsequent measurement
depends on the classification of the financial liability:
Financial liabilities measured at amortised cost are subsequently carried at
the amortised cost using the effective interest method. This category includes
borrowings, lease liabilities and trade and other payables.
Contingent consideration is initially recognised at fair value at the
acquisition date and is subsequently remeasured at fair value at each
reporting date, with changes recognised in profit and loss. The unwinding of
the discount on contingent consideration liabilities is included within
finance costs, with other changes arising from changes in expected performance
conditions or probability weighted outcomes recognised in other income or
losses.
Trade payables
Trade payables are recognised initially at the transaction price and
subsequently measured at amortised cost using the effective interest method.
Accounts payable are classified as current liabilities if payment is due
within one year or less (or in the normal operating cycle of the business if
longer). If not, they are presented as non-current liabilities.
Borrowings
Borrowings are initially recorded at fair value, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost, with the
difference between the proceeds, net of transaction costs, and the amount due
on redemption being recognised as a charge to the income statement over the
period of the relevant borrowing.
Interest expenditure is recognised on the basis of the effective interest
method and is included in finance costs.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement for at least 12 months after the
reporting date.
The Group assesses any change in the terms and conditions of borrowing by
reference to the original debt agreement and accounts for the non-substantial
or substantial modification in accordance with IFRS 9 'Financial
Instruments'.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
determined using the weighted average cost method.
Inventories acquired on acquisition are initially recognised at fair value.
The cost of finished goods and work in progress comprises direct materials
and, where applicable, direct labour costs and those overheads that have been
incurred in bringing the inventories to their present location and condition.
At each reporting date, inventories and work in progress are assessed for
impairment. If inventory or work in progress is impaired, the carrying amount
is reduced to its selling price less costs to complete and sell. The
impairment loss is recognised immediately in profit or loss.
Income tax
Income tax expenditure comprises current tax and deferred tax. It is
recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity, in which case
the tax is also recognised in other comprehensive income or equity
respectively.
Current tax
Current tax is the expected tax payable or receivable on the taxable profit or
loss for the year, using tax rates enacted, or substantively enacted, at the
reporting date. It also includes any adjustment to tax payable in respect of
previous years.
Current tax assets and liabilities are offset only if the Group:
· Has a legally enforceable right to set off the recognised amounts;
and
· Intends to settle on a net basis or to realize the asset and settle
the liability simultaneously.
Deferred tax
Deferred tax is recognised using the balance sheet liability method on all
temporary differences between the carrying amounts of assets and liabilities
in the financial statements and their corresponding tax bases.
Deferred tax is not recognised for:
· Temporary differences arising from the initial recognition of goodwill;
· The initial recognition of assets or liabilities in a transaction that
is not a business combination and that affects neither accounting nor taxable
profit.
Deferred tax is measured at tax rates that are expected to apply when the
temporary differences reverse, based on laws that have been enacted, or
substantively enacted, at the reporting date.
Deferred tax assets
Deferred tax assets are recognised to the extent that it is probable that
future taxable profits will be available against which the temporary
differences or unused tax losses can be utilised. The carrying amount of
deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be
available.
Uncertain tax position
Where there is uncertainty over the tax treatment of a transaction, the Group
evaluates whether it is probable that the tax authority will accept the
position. If it is not probable, the Group reflects the effect of the
uncertainty in its accounting for current and deferred tax using either the
most likely amount or expected value method.
Tax consolidation and Group relief
The Group applies group relief where available under UK tax law. Tax losses
are surrendered or claimed between group companies to minimize the overall tax
liability. Current tax is calculated on a standalone basis for each legal
entity, and adjustments for group relief received or surrendered are reflected
in the current tax expenditure of the respective entities.
When compensation is paid between entities for tax losses surrendered or
received, this is treated as an intercompany transaction and eliminated on
consolidation.
R&D tax credits
R&D tax credits are accounted for under IAS 12 - Income Taxes, as they are
considered a form of income tax relief. These credits are recognised as a
reduction in current tax payable in the period in which the qualifying
expenditure is incurred, provided there is reasonable assurance that the
credits will be received and the Group is compliant with the relevant
conditions.
Where R&D credits exceed the current tax liability and are repayable by
the tax authority, the excess is recognised as a current tax asset.
The benefit of R&D tax credits is presented within the income tax line in
the consolidated statement of profit or loss.
Goodwill
Goodwill arises on the acquisition of subsidiaries and is recognised at cost,
representing the excess of the consideration transferred over the net
identifiable assets acquired and liabilities assumed at the acquisition date.
Goodwill is not amortised as it is deemed to have an indefinite useful life,
but is tested for impairment at least annually, or immediately if there are
indicators of impairment in accordance with IAS 36 - Impairment of Assets.
The impairment review compares the carrying amount of the cash-generating unit
('CGU') including goodwill, to its recoverable amount, being the higher of
fair value less costs of disposal, and value-in-use. If the recoverable amount
is less than the carrying amount, an impairment loss is recognised immediately
in profit or loss. As goodwill impairment is irreversible under IFRS, any
impairment loss recognised is permanent and will not be reversed in future
periods.
Intangibles
The Group has intangible assets, acquired in business combinations, which are
recognised at fair value at the date of acquisition and subsequently carried
less amortisation and any impairment losses.
Customer relationship intangible assets are amortised on a straight-line basis
over their estimated useful economic lives. The estimated useful lives are
determined based on expected customer retention patterns, historical churn
rates and contract terms.
Useful economic lives typically range from 5 to 10 years depending on the
acquired business and customer profile.
Amortisation
Amortisation is charged on a systematic basis over the finite useful life of
the intangible asset. The method of amortisation and the estimated useful life
are reviewed at least annually. If there is any change in the expected pattern
of consumption of future economic benefits, the amortisation method or useful
life is adjusted prospectively.
Tangible assets
Property, plant and equipment
Property, plant and equipment is stated in the statement of financial position
at cost, less any subsequent accumulated depreciation and subsequent
accumulated impairment losses.
The cost of property, plant and equipment includes directly attributable
incremental costs incurred in their acquisition and installation.
Tangible assets acquired on a business combination are recognised at fair
value at the acquisition date.
Depreciation
Depreciation is charged to allocate the depreciable amount of an asset, being
its cost less residual value, over its estimated useful economic life.
The depreciation method, useful life and residual value are reviewed at least
annually and adjusted if necessary.
The following are the typical estimated useful lives for the various
categories of tangible assets:
Asset Class Depreciation method and rate
Freehold land Not depreciated
ROU Assets Shorter of lease term or useful life
Motor vehicles Over 6 years straight line basis
Machinery & equipment Over 8 years straight line basis
Tools & small equipment Over 8 years straight line basis
Furniture & fittings Over 8 years straight line basis
Office equipment Over 5 years straight line basis
Computers and electronics Over 5 years straight line basis
Provisions and contingent liabilities
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of a past event, it is probable that an outflow of
economic resources will be required to settle the obligation, and the amount
can be reliably estimated. Provisions are measured at the best estimate of the
expenditure required to settle the obligation and are reviewed at each
reporting date.
A provision for an onerous contract is recognised when the unavoidable costs
of fulfilling the contract exceed the expected economic benefits to be
received under it. The provision is measured at the lower of the cost to
fulfil the contract and any compensation of penalties arising from failure to
fulfil it. Prior to recognising a provision, any impairment losses on assets
related to the contract are recognised.
Contingent liabilities are possible obligations or present obligations, where
payment is not probable or the amount cannot be measured reliably.
Contingent liabilities are not recognised but are disclosed unless the
possibility of outflow of resources is remote.
2.6 Critical accounting judgements and estimation uncertainty
Preparation of the Group's financial statements requires judgements, estimates
and assumptions that affect the reported amounts of assets, liabilities,
income and expenditure.
These judgements and estimates are based on historical experience, external
information and any other factors believed to be relevant and reasonable under
the circumstances. Despite being under continuous review and being updated as
necessary, actual results may differ from these estimates.
The estimates and assumptions that have the most significant risk of
adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below.
Revenue recognition
Judgement
The Group is required to make judgements that will determine how and when
revenue is recognised in accordance with IFRS 15 - Revenue from Contract with
Customers.
Significant judgements in applying the revenue recognition policy include, but
are not limited to, the following:
· Identifying distinct performance obligations that should be accounted
for separately in contracts
· Determining if the Group is acting as a principal or agent in the
provision of any goods or services
· Determining if revenue should be recognised over time or at a point
in time, based on when control of the goods or services is transferred to the
customer
· Identifying appropriate revenue recognition methods for revenue to be
recognised over time.
These judgements are evaluated based on the nature of the Group's business and
the specific terms and conditions of each customer contract.
Estimation uncertainty
Significant estimates are required in:
· Determining transaction prices, especially in contracts with variable
consideration
· Estimating contract progress, particularly for revenue recognised
over time based
· Allocating the transaction price to performance obligations and
estimating standalone selling prices or bundled goods or services.
Business combinations
Judgement
The Group is required to make judgements in the following areas for potential
business combination transactions:
· Identifying the accounting acquiror under IFRS 3 - Business
Combinations based on the relative size of combining entities, composition
of board and senior management post-transaction and control over
decision-making and voting rights
· Identifying and distinguishing intangible assets acquired from
goodwill.
· Judging whether contingent consideration arrangements meet the
definition of a liability or equity.
Estimation uncertainty
Significant estimation uncertainty arises in the following areas during a
business combination:
· Measuring the fair value of identifiable assets acquired and
liabilities assumed, particularly intangible assets such as customer
relationships.
· Measurement of consideration on an acquisition
· The calculation of Goodwill which is based on the accuracy of other
fair value estimates of assets acquired and liabilities assumed.
· Valuation techniques used for fair value estimation, which often
require assumptions about future cash flows, discount rates, and useful lives.
· The probability of achievement of performance targets triggering
contingent consideration in addition to timing and discounting of amounts to
be recognised.
Prior period restatement of comparative information
An impairment review was performed for the cash-generating unit ("CGU")
associated with the prior year acquisition of South West Heating Services
Limited. During the year ended 31 December 2025, the Group identified an error
in the forecast model used in the acquisition accounting and subsequent
impairment assessment relating to the acquisition. The error arose due to the
inadvertent omission of certain overhead costs from the forecast models,
despite those costs being known and available at the time the calculations
were performed.
The omitted costs impacted multiple elements of the acquisition accounting and
subsequent impairment review:
· the fair value assessment of contingent consideration recognised
on acquisition;
· the multi-period excess earnings method ("MEEM") valuation used
to determine the fair value of acquired customer-related intangible assets;
and
· the value in use calculation prepared as part of the impairment
assessment at 31 December 2024.
As a result of the error:
· contingent consideration recognised on acquisition was
overstated;
· acquired customer-related intangible assets recognised as part of
the purchase price allocation were overstated;
· goodwill recognised on acquisition was understated as a
consequence of the overstatement of acquired intangible assets, but also
overstated as a consequence of the overstatement of contingent consideration;
and
· the value in use calculation used in the impairment assessment
was overstated, resulting in an impairment charge not being recognised against
the corrected goodwill balance at 31 December 2024.
The correction has been accounted for retrospectively as a prior period error
in accordance with IAS 8. Comparative information has therefore been restated
to reflect the revised acquisition accounting and impairment assessment.
Following reassessment using the corrected assumptions, management concluded
that the performance conditions associated with the contingent consideration
would not have been achieved and, accordingly, the contingent consideration
recognised on acquisition was derecognised, with a corresponding reduction to
goodwill. The corrected MEEM valuation further indicated that no separately
identifiable customer-related intangible assets should have been recognised as
part of the purchase price allocation, with the value attributable instead to
goodwill.
Following reperformance of the impairment assessment at 31 December 2024 using
the corrected assumptions, the recoverable amount of the CGU was determined to
be lower than its carrying amount. As a result, the goodwill relating to the
acquisition was fully impaired at 31 December 2024. No further impairment was
recognised against other assets within the CGU, as the remaining material
asset related to right-of-use assets, for which fair value less costs of
disposal was assessed to support the existing carrying value.
Comparative information has been restated accordingly.
The following tables summarise the impact of the retrospective correction on
each affected financial statement line item.
Statement of financial position:
31 December 2024 Previously reported Adjustment Restated
£'000 £'000 £'000
Goodwill 3,577 (623) 2,954
Intangibles 1,003 (446) 557
Deferred tax asset 130 112 242
Contingent consideration < 1 year (180) 138 (42)
Contingent consideration > 1 year (1,155) 140 (1,015)
Retained earnings (15,772) (679) (16,451)
Statement of profit or loss:
31 December 2024 Previously reported Adjustment Restated
£'000 £'000 £'000
Administrative expenses (3,154) (680) (3,834)
Net finance costs (74) 4 (70)
Taxation 195 (3) 192
The impact on retained earnings is reflected in the Statement of Changes of
Equity.
Net cash flows are unaffected.
Goodwill and other intangible assets impairment
Judgement
There are two main areas of judgement relating to impairment assessments under
IAS 36 - Impairment of Assets:
· Determining if indicators of impairment exist which would require an
immediate impairment test for goodwill or other intangible assets
· The allocation of goodwill to cash-generating units (CGU) that will
affect whether impairment is identified and to what extent.
Estimation uncertainty
Impairment assessments involve significant estimation uncertainty. Assets
are tested by comparing their carrying amount with their recoverable amount,
which is the higher of fair value less costs of disposal and value in use.
The value in use is based on discounted cash flow models that require key
assumptions and estimates, including:
· Revenue growth, operating margin and capital expenditure assumptions.
· Terminal growth rates used to extrapolate cash flows based on
expected inflation and economic outlook.
· Discount rates and the Group's weighted average cost of capital,
adjusted for the specific risks associated with each cash-generating unit.
These estimates are inherently uncertain and sensitive to changes in
assumptions. A reasonably possible change in one or more key inputs could lead
to a materially different outcome in the impairment test. Where applicable,
management performs and discloses sensitivity analysis to assess the impact of
changes in key assumptions on the recoverable amount.
Leases (IFRS 16)
Judgement
The Group exercises significant judgment in applying the principles of IFRS 16
- Leases to determine the appropriate accounting treatment for leases. The key
judgments made include the following:
· Determining whether a contract is, or contains, a lease in accordance
with IFRS 16.
· Determining the lease term, particularly regarding the likelihood of
exercising renewal or termination option, based on operational plans and
market conditions.
· Determining the incremental borrowing rate when the rate implicit in
the lease is not readily available. (This is specific to the entity with the
lease agreement).
Estimation uncertainty
· Business environment or economic conditions that influence decisions
such as whether to extend of terminate a lease.
· The incremental borrowing rate (IBR) to discount future lease
payments where the interest rate is not implicit in the lease based on market
interest rates and the entity credit risk.
Share based payments (IFRS 2)
Judgement
The Group has made significant judgements in applying IFRS 2 to its
share-based payment arrangements. The key judgements include:
· Determining whether arrangements are equity-settled or cash-settled,
based on the terms and substance of the transaction.
· Selection of the most appropriate model to determine the grant date
fair value of the share-based payment awards.
· Establishing the grant date, particularly where there is a time lag
between board approval and communication to participants.
· Assessing whether the performance conditions are market-based or
non-market based, as this affects both the valuation methodology and the
recognition pattern.
· Evaluating modifications or cancellations of awards and their
accounting treatment.
These judgements directly affect the timing, classification, and measurement
of the expenditure recognised in the financial statements.
Estimation uncertainty
The measurement of share-based payments expenditure involves the use of
valuation models that require a number of subjective assumptions and estimates
which may have a material impact on the financial statements.
Key areas of estimation uncertainty include:
· Expected volatility which is estimated using historical share price
data, but may not be indicative of future volatility.
· The expected life of the options which is based on historical
exercise behaviour and management expectations.
· Risk-free interest rates which are based on current government bond
yields applicable to the expected life of the options.
· Fair value at grant date which is determined using valuation
techniques that are sensitive to input assumptions.
Any changes in these assumptions could significantly affect the amount of
share-based payment expenditure recognised.
Income taxes (IAS 12)
Judgement
The determination of the Group's tax position involves complex judgements and
estimates. Tax laws are subject to interpretation and outcomes may differ from
the amounts recorded. The main areas of judgement in accounting for income
taxes include:
· Recognition of Deferred Tax Assets in relation to losses based on the
expectation of sufficient taxable profits being generated.
· The classification of transactions for tax purposes (such as R&D
credits)
· Assessment of probability of availability of future taxable profits
against which to utilise tax losses.
· Assessment of uncertain tax positions
· Application of OECD guidelines and local tax law for intra-group
transactions and transfer pricing.
Estimation uncertainty
The most significant sources of estimation uncertainty in relation to income
taxes are forecasts of future taxable profits and the assumption that current
enacted tax rates will remain unchanged when temporary differences reverse,
and deferred tax assets and liabilities are settled.
3. Revenue
The Group derives revenue from the transfer of goods and services over time,
and at a point in time.
2025 2024
£'000 £'000
Rendering of services from contracts with customers over time - continuing 4,407 1,250
operations
Rendering of services from contracts with customers at a point in time - 7,378 1,387
continuing operations
Rendering of services from contracts with customers at a point in time- - 40
discontinued operations
Revenue - continuing 11,785 2,637
Revenue - discontinued - 40
Revenue is disaggregated further in Note 4, which is the level at which it is
analysed within the business. Further information on the timing of revenue
recognition is included in Note 2.5.
4. Segment information
Operating segments are reported in a manner consistent with the internal
reporting provided to chief operating decision-maker ("CODM") as required by
IFRS 8 'Operating Segments'. The chief operating decision-maker, who is
responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors.
As at 31 December 2025, the Group was organised into a number of legal
entities, five of which are operating entities, each of which operates in a
distinct market segment and performs a specific function. The CODM reviews
financial performance and allocates resources at the entity level.
Accordingly, each operating entity is considered to represent an operating
segment for the purposes of IFRS 8.
While certain entities operate within the same broader retrofit market,
management has determined that these entities do not meet the aggregation
criteria set out in IFRS 8 due to differences in their economic
characteristics, stages of maturity and operational profiles. As such they are
not aggregated for segmental reporting purposes.
For the year ended 31 December 2024 the Group comprised two operating
entities: Cosgrove & Drew Ltd, with a focus on provision of mechanical and
electrical engineering services across the commercial and industrial sectors,
and South West Heating Services Limited with a focus on provision of domestic
maintenance services and heating installations.
Inter-segment transactions are not reviewed by the CODM and are not presented
separately in segment disclosures.
Segmental revenue and gross profit: Revenue Results
Restated Restated
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Continuing operations
Commercial and Industrial mechanical and electrical engineering services 9,583 2,169 1,570 199
Domestic maintenance and heating installations 1,391 468 (52) 149
Retrofit and solar services 736 - (744) -
Social housing retrofit services 75 - (371) -
Energy efficiency retrofit services - - (284) -
Discontinued operations
Development and commercialisation of clean technologies - 40 - (28)
Segmental revenue/profit - continuing operations 11,785 2,637 119 348
Segmental revenue/profit/(loss) - discontinued operations - 40 - (28)
Head office costs - continuing operations (1,205) (2,213)
Head office costs - discontinued operations - (49)
Operating loss before acquisition and disposal costs - continuing operations (1,086) (1,865)
Operating loss before acquisition and disposal costs - discontinued operations - (77)
Acquisition related costs - continuing operations (265) (1,622)
Loss on disposal of discontinued operations - (58)
Other income - continuing operations 2 1
Other income - discontinued operations - -
Operating loss - continuing operations (1,349) (3,486)
Operating loss - discontinued operations - (135)
Finance income - continuing operations 16 39
Finance income - discontinued operations - -
Finance costs - continuing operations (369) (109)
Finance costs - discontinued operations - -
Other income - continuing operations - 1
Other losses - continuing operations (19) -
Loss before taxation - continuing operations (1,721) (3,555)
Loss before taxation - discontinued operations - (135)
Taxation - continuing operations (26) 192
Loss for the year from continuing operations (1,747) (3,363)
Loss for the year from discontinued operations - (135)
Loss for the year (1,747) (3,498)
Segmental assets and liabilities Assets Liabilities
2025 2024 2025 2024
£ £ £ £
Commercial and Industrial mechanical and electrical engineering services 5,967 5,654 (2,847) (3,178)
Domestic maintenance and heating installations 640 817 (275) (370)
Retrofit and solar services 1,391 - (1,683) -
Social housing retrofit services 179 - (560) -
Energy efficiency retrofit services 81 - (366) -
Segment assets / (liabilities) 8,258 6,471 (5,731) (3,548)
Unallocated assets / (liabilities) 758 1,510 467 (1,136)
9,016 7,981 (5,264) (4,684)
Unallocated assets predominantly relate to cash balances and prepayments.
(2024: cash balances and prepayments).
Unallocated liabilities include intercompany loan amounts owed to the parent
company by operating segments, these balances reflect the adjustment from the
CODM reporting basis to the IFRS consolidation basis and are eliminated on
consolidation.
Segmental depreciation and amortisation
Non-current asset additions Depreciation Amortisation
(Fixed assets and ROU)
2025 2024 2025 2024 2025 2024
£'000 £'000 £'000 £'000 £'000 £'000
Commercial and Industrial mechanical and electrical engineering services 7 - (109) (32) (56) (19)
Domestic maintenance and heating installations 11 60 (45) (8) - -
Retrofit and solar services 9 - (42) - (2) -
Social housing retrofit services 20 - (6) - (1) -
Energy efficiency retrofit services 11 - (1) - - -
Development and commercialisation of clean technologies - - - (40) - -
Segment assets / (liabilities) 58 60 (203) (80) (59) (19)
Unallocated assets / (liabilities) 20 4 (1) (1) (2) -
Total 78 64 (204) (81) (61) (19)
Continuing 78 64 (204) (41) (61) (19)
Discontinued - - - (40) - -
Geographical segments
Revenue location of generation: 2025 2024
£'000 £'000
United Kingdom - continuing operations 11,785 2,637
Italy - discontinued operations - 40
Following the disposal of Verditek Solar srl on 29 February 2024, all of the
Group's operations and revenue-generating activities are conducted in the
United Kingdom. As such, no geographical segment disclosures are provided as
the Group operates entirely within one geographic area.
All non-current assets are also located within the United Kingdom.
Country of Customer
The Group had revenues from customers in the following countries that were
determined to be material:
Revenue
Country 2025 2024
£'000 £'000
Continuing operations
United Kingdom - continuing operations 11,785 2,637
Discontinued operations
Denmark - 1
Germany - 11
Rest of the world - 28
Total 11,785 2,677
Revenue - continuing 11,785 2,637
Revenue - discontinued - 40
Customer concentration
In 2025 there were 2 customers that individually accounted for over 10% of the
Group's revenue. The revenue, derived from the two single external customers,
was £2.56m and £1.52m respectively, both amounts are included in the revenue
of Cosgrove & Drew Ltd.
In 2024 there were 2 customers that individually accounted for over 10% of the
Group's revenue. The revenue, derived from the two single external
customers, was £0.40m and £0.38m respectively, both amounts are included in
the revenue of Cosgrove & Drew Ltd.
5. Other operating income and expenses
Operating profit from continuing operations is stated after charging:
2025 2024
Breakdown of expenses by nature £'000 £'000
Cost of Sales:
Materials (2,448) (720)
Employee costs 5(a) (3,181) (867)
Agency labour (2,314) (768)
Other (791) (174)
Onerous contracts utilisation** - 240
Total cost of goods sold - continuing operations (8,734) (2,289)
Total cost of goods sold - discontinued operations - (67)
Administrative expenses:
Employee costs 5(a) (2,318) (548)
Training & development (15) (18)
Accommodation (107) (35)
Legal & professional (360) (252)
Audit & accountancy (366) (294)
IT & communication (265) (82)
Insurance (202) (72)
Repairs & maintenance (84) (24)
Travel & entertainment (67) (43)
Acquisition costs (265) (1,622)
Depreciation - continuing operations (204) (40)
Depreciation - discontinued operations - (219)*
Impairment (7) (694)
Amortisation (61) (19)
Bad debts (35) (28)
Other (44) (63)
Other - discontinued operations - -
Total cost of administrative expenses - continuing operations (4,400) (3,834)
Total cost of administrative expenses - discontinued operations - (49)
* Discontinued values
** The Group utilised a provision of £240k relating to an onerous contract
provided for at the point of acquisition in C&D.
Other operating income and expenses
2025 2024
Other income £'000 £'000
Apprenticeship income and minor loss on disposal of fixed asset 2 1
Loss on disposal of fixed assets (6) -
Loss on remeasurement of contingent consideration amount (C&D) (15) -
(19) 1
5(a) Staff costs
Average monthly number of persons employed by the Group during the year:
2025 2024
No. No.
Directors and key management personnel 10 5
Administration 17 4
Operations 69 19
96 28
Staff costs and key management personnel compensation
2025 2025 2024 2024
£'000 £'000 £'000 £'000
KMP Total KMP Total
Wages & salaries and fees 899 4,627 328 1,236
Social security contributions 124 565 36 126
Pension costs (defined contribution schemes) 42 124 10 27
Share-based payment expenses 70 71 23 23
Other short-term employee benefits 12 18 3 3
Total employee benefits 1,147 5,405 400 1,415
Consisting of:
Employee costs included in direct costs 3,181 867
Employee costs included in administrative expenses 2,224 548
5,405 1,415
Other employee costs 94 -
Total employee costs 5,499 1,415
Directors of Earnz Plc
2025 2024
£'000 £'000
Aggregate emoluments 361 212
Pension contributions 22 8
Share-based payment charge 61 23
Total directors' remuneration 444 243
Detailed remuneration disclosures are provided in the remuneration
report.
Auditor remuneration
2025 2024
£'000 £'000
Fees payable to the Company's auditors for the audit of the Company's and 170 161
Group financial statements
Fees relating to prior year audit services 35 -
Fees payable to the company's auditors and its associates for other services* - 433
205 594
*Non-audit fees, included in acquisition costs, relate to financial due
diligence on the two acquisitions completed in the year to 31 December 2024 in
addition to a further acquisition that was aborted.
6. Finance costs
Restated
2025 2024
£'000 £'000
Finance income
Interest income on bank deposits 16 39
Total finance income 16 39
Finance costs
Interest expense on loans, borrowings and hire purchase (96) (31)
Interest expense on lease liabilities (38) (12)
Invoice factoring costs (115) (39)
Unwinding of interest on contingent consideration (69) (14)
Bank charges (12) (5)
Other finance costs including foreign exchange gains and losses (39) (8)
Total finance costs (369) (109)
Net finance costs (353) (70)
7. Taxation
Tax charged in the consolidated statement of profit or loss is as follows:
2025 2024
£'000 £'000
Current tax - -
Deferred tax (26) 192
Total current tax in profit or loss (26) 192
Reconciliation of tax charge
The tax charge in the consolidated profit or loss statement for the year is
lower (2024: lower) than the average standard rate of corporation tax in the
UK of 25% (2024:25%). The differences are reconciled below:
Restated
2025 2024
Current tax £'000 £'000
Loss before taxation: (1,721) (3,555)
Loss at UK corporation tax rate of 25% (2023:19%) (430) (889)
Non-deductible expenses 116 623
Difference between depreciation and capital allowances (3) (15)
Other timing differences 2 -
Deferred tax assets not recognised 663 281
Tax effect of accounting differences between entity and group accounting basis 4 -
Tax losses utilised (352) -
Tax charge in the profit or loss statement - -
*Includes discontinued operations
Deferred tax
Deferred tax credited in the consolidated statement of profit or loss is as
follows:
Restated
2025 2024
Deferred tax £'000 £'000
Recognition of previously unrecognised deferred tax assets (41) 187
Reversal of temporary differences 15 5
Tax charge in the profit or loss statement (26) 192
Deferred tax included in the balance sheet is as follows:
Restated
2025 2024
Deferred tax assets £'000 £'000
Opening balance 242 -
Deferred tax liabilities recognised on business combinations (13) (144)
Deferred tax asset acquired on business combination - 194
(Derecognition)/recognition of deferred tax assets in the year (11) 187
Reversal of temporary differences 15 5
Total Deferred tax assets 233 242
Deferred tax assets and liabilities are offset and reported net where
appropriate and permitted.
Deferred tax assets are recognised to the extent that the realisation of the
related tax benefit through future taxable profits is probable.
All deferred tax movements arise from losses brought forward, and the
origination and reversal of temporary differences.
Deferred taxes at the balance sheet date have been measured using the
appropriate and substantively enacted tax rates at the date.
As at 31 December 2025, the Group has unrecognised deferred tax assets of
£2.3m. (2024:£1.7m)
8. Earnings per share
Restated
2025 2024*
£'000 £'000
Loss for the year attributable to equity holders of Parent Company - (1,747) (3,363)
continuing
Loss for the year attributable to equity holders of Parent Company - - (135)
discontinued
Weighted average number of ordinary shares - basic and diluted 115,764,357 61,387,896
Basic and diluted loss per share - continuing operations (1.51p) (5.48p)
Basic and diluted loss per share - discontinued operations - (0.22p)
Basic and diluted loss per share (1.51p) (5.70p)
The effects of anti-dilutive potential ordinary shares are ignored in
calculating diluted EPS.
As the Group incurred a loss in the current year and the prior year, the
impact of potential ordinary shares is also anti-dilutive and therefore
excluded from the diluted earnings per share calculation.
Therefore, basic and diluted loss per share is the same for the year ended 31
December 2025, this was also the case for the year ended 31 December 2024.
*On 4 April 2024 there was a share consolidation of every 100 ordinary shares
of 0.04 pence each into one new ordinary share of 4 pence each. The weighted
average number of shares in the year
to 31 December 2024 and the comparative weighted average number of shares at
31 December 2023 have been retrospectively adjusted.
9. Property, plant and equipment
Land and buildings Office equipment Motor Vehicles Plant & Machinery Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2025 42 32 231 14 319
Additions - 74 - 4 78
Arising on acquisition - 10 6 7 23
Disposals - (2) (48) - (50)
At 31 December 2025 42 114 189 25 370
Depreciation
At 1 January 2025 (3) (3) (2) (1) (9)
Charged during the year (10) (15) (47) (5) (77)
Disposals - - 32 - 32
At 31 December 2025 (13) (18) (17) (6) (54)
Net book value at 31 December 2025 29 96 172 19 316
Land and buildings Office equipment Motor Vehicles Plant & Machinery Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2024 - 5 - 302 307
Additions - 4 59 1 64
Arising on acquisition 42 28 176 13 259
Disposals - (5) (4) (298) (307)
Foreign exchange - - - (4) (4)
At 31 December 2024 42 32 231 14 319
Depreciation
At 1 January 2024 - (2) - (207) (209)
Charged during the year (3) (3) (5) (6) (17)
Disposals - 2 3 209 214
Foreign exchange - - - 3 3
At 31 December 2024 (3) (3) (2) (1) (9)
Net book value at 31 December 2024 39 29 229 13 310
10. Right-of-use assets
Land and buildings Motor vehicles Equipment Total
£'000 £'000 £'000 £'000
Cost
At 1 January 2025 108 140 - 248
Additions 119 56 - 175
Arising on acquisition - 104 4 108
Modifications - 32 - 32
Disposals (28) (13) - (41)
At 31 December 2025 199 319 4 522
Depreciation
At 1 January 2025 (8) (20) - (28)
Charged during the year (41) (84) (2) (127)
Disposals 3 10 - 13
At 31 December 2025 (46) (94) (2) (142)
Net book value at 31 December 2025 153 225 2 380
Land and buildings Motor vehicles Total
£'000 £'000 £'000
Cost
At 1 January 2024 432 - 432
Arising on acquisition 108 140 248
Disposals (427) - (427)
Foreign exchange (5) - (5)
At 31 December 2024 108 140 248
Depreciation
At 1 January 2024 (126) - (126)
Charged during the year (44) (20) (64)
Disposals 160 - 160
Foreign exchange 2 - 2
At 31 December 2024 (8) (20) (28)
Net book value at 31 December 2024 100 120 220
11. Goodwill and intangible assets
The carrying amounts of goodwill and acquired intangible assets at 31 December
2024 have been restated following correction of a prior period error. Further
details are provided on page 43 - Prior period restatement of comparative
information.
Restated
Goodwill Intangibles Intangibles Total
Customer relationships Other
£'000 £'000 £'000 £'000
Cost
At 1 January 2025 2,954 557 - 3,511
Additions - - 22 22
Arising on acquisition 886 50 - 936
Reclassification - - 11 11
Impairment - - (7) (7)
Amortisation - (58) (3) (61)
At 31 December 2025 3,840 549 23 4,412
Goodwill Customer relationships Other Total
£'000 £'000 £'000 £'000
At 1 January 2024
Arising on acquisition 3,577 576 - 4,153
Impairment (623) - - (623)
Amortisation - (19) - (19)
At 31 December 2024 2,954 557 - 3,511
In 2025 the Group acquired A&D Carbon resulting in goodwill of £0.9m and
£0.05 of intangible assets. (2024: the Group made acquisitions resulting in
goodwill of £3.58m and £0.6m of intangible assets)
Intangible assets relate to Customer relationships, amortised based on their
estimated useful life, typically ranging from 5 to 10 years. No intangibles
held are considered to have an indefinite useful life.
Amortisation charges in the year are included in administrative expenses in
the profit and loss statement.
12. Business combinations
2025
A&D Carbon Solutions Limited
On 1 July 2025, Earnz Plc, through its intermediate holding company, Earnz
Holdings Limited, acquired 100% of the issued share capital of A&D
Carbon Solutions Limited. Management concluded that the transaction
constitutes a business combination under IFRS 3 Business Combinations, as the
Group acquired 100% of the share capital and therefore obtained control, being
the power to govern the financial and operating policies of the acquiree to
obtain benefits from its activities.
Initial consideration comprised £1.3m (£1.04 cash and £0.26m consideration
shares).
The cash element was split £0.35m (£0.84m payable on completion, adjusted
for net debt and normalised working capital of £0.49m) and £0.2m to be held
in escrow and payable on achieving EBITDA targets. Following an addendum to
the Share Purchase Agreement, the £0.2m was returned and included as an
increased amount agreed as contingent consideration.
The remaining initial consideration of £0.26m was settled in new ordinary
shares in EARNZ plc at an agreed placing price of 7.2p.
Further consideration is deferred and contingent upon reaching EBITDA targets
for up to 3 years post completion and is payable 60% cash and 40% new ordinary
shares in EARNZ plc.
Goodwill of £0.89m is attributable to the team acquired, their sector
expertise and long-standing reputation in the industry, in addition to
accreditations held. It will not be deductible for tax purposes.
The acquisition aligns with the Group's strategic focus on decarbonisation,
marking its entry into the retrofit sector and enhancing its market
positioning.
As at 31 December 2025, the full discounted contingent consideration has not
been recognised in line with management's expectation, at that date, that the
targets will not be achieved.
The following table summarises the consideration paid, book value and the fair
value of assets acquired, and the liabilities assumed.
2025 A&D A&D A&D
Ltd FV FV
Book value Adjustment Adjustment
£'000 £'000 £'000
Intangible assets - 50 50
Property, plant and equipment 23 - 23
Right-of-use assets 108 - 108
Inventories 10 - 10
Trade and other receivables 262 - 262
Cash and cash equivalents 43 - 43
Total assets 446 50 496
Trade and other payables (337) - (337)
Lease liabilities (110) - (110)
Borrowings (379) - (379)
Deferred tax liabilities (5) (13) (18)
Total Liabilities (831) (13) (844)
Net identifiable assets acquired (385) 37 (348)
Goodwill 886
Total consideration 538
Less consideration paid in shares (189)
Consideration paid in cash 349
The acquired business contributed revenues of £0.8m and net loss of (£0.8m)
to the group for the period from 1 July to 31 December 2025.
If the acquisition had occurred on 1 January 2025, consolidated pro-forma
revenue and loss for the year ended 31 December 2025 would have been £2.16m
and (£1.22m) respectively.
The table below sets out the net cash outflow of the acquisitions:
2025 2024
£'000 £'000
A&D Carbon Solutions Limited 349 -
Cosgrove & Drew Ltd cash consideration - 405
South West Heating Services Limited cash consideration - 772
349 1,177
Less: cash acquired (43) (391)
Less: Non-cash transaction offsetting amount owed by owner - (39)
Net outflow of cash - investing activities 306 747
Acquisition related costs in the year of £0.25m relate to finder fees, legal
due diligence and corporate advisory fees on the acquisition and are included
in administrative expenses in the statement of profit or loss, and in
operating cash flows in the statement of cash flows.
(2024:Acquisition related costs of £1.62m, predominantly relating to the
financial and legal due diligence on the two acquisitions noted above, in
addition to one further aborted acquisition, are included in administrative
expenses in the statement of profit or loss, and in operating cash flows in
the statement of cash flows.)
2024
Cosgrove & Drew Ltd
On 29 August 2024, Earnz Plc, through its intermediate holding company, Earnz
Holdings Limited, acquired 100% of the issued share capital of Cosgrove &
Drew Ltd.
Initial consideration comprised cash of £0.41m and £0.3m consideration
shares in Earnz Plc. Discounted contingent consideration of up to £1.043m
(£1.226m undiscounted), payable in shares and /or cash at the Board of
Director's discretion, is dependent on the achievement of post-transaction
earnings targets and ongoing employment of the managing directors. The amount
will become payable following confirmation of exceeding an annual adjusted
EBITDA of £0.5m, to 31 August each year, until the maximum consideration is
reached. The fair value of the contingent consideration was estimated by
calculating the present value of future expected cash flows based on a
discount rate of 6.2%.
This acquisition represents a strong strategic fit, enabling immediate entry
into the maintenance and installation of energy efficient products market, in
commercial and industrial sectors.
Goodwill of £2.95m is attributable to the team acquired, their deep sector
knowledge and strategic benefits arising from integrating their expertise into
the Group. It will not be deductible for tax purposes.
South West Heating Services Limited
On 29 August 2024, Earnz Plc, through its intermediate holding company, Earnz
Holdings Limited, acquired 100% of the issued share capital of South West
Heating Services Limited.
Initial consideration comprised £0.78m and £0.35m consideration shares.
Discounted contingent consideration of up to £0.27m (£0.30m undiscounted)
was to be payable, in cash or shares, dependent on the achievement of
post-transaction earning targets and ongoing employment of the managing
director, this was retrospectively derecognised as a prior year adjustment.
For further details see page 43 - Prior period restatement of comparative
information.
This acquisition was a great strategic fit, providing access into the domestic
maintenance and installation market covered by national insurers, a client
base with significant barriers to entry.
Revised goodwill of £0.69m was initially attributable to the team acquired,
their sector expertise and long-standing reputation in the industry. While
these underlying attributes of the business remain, the revised impairment
assessment concluded that the forecast cash flows of the CGU did not support
the carrying value of goodwill at 31 December 2024, and, accordingly, the
goodwill was fully impaired. It was not deductible for tax purposes.
The following table summarises the consideration paid, book value and the fair
value of assets acquired, and the liabilities assumed.
Restated
2024 C&D C&D C&D SWH SWH SWH
Ltd FV FV FV FV FV
Book value Adjustment Book value Adjustment
£'000 £'000 £'000 £'000 £'000 £'000
Intangible assets - 576 576 - - -
Property, plant and equipment 203 - 203 56 - 56
Right-of-use assets 208 - 208 40 - 40
Inventories 40 - 40 114 - 114
Trade and other receivables 1,780 - 1,780 104 - 104
Cash and cash equivalents 41 - 41 350 - 350
Deferred tax asset 194 - 194 - - -
Total assets 2,466 576 3,042 664 - 664
Trade and other payables (2,144) - (2,144) (166) - (166)
Lease liabilities (231) - (231) (37) - (37)
Provisions (240) - (240)* - - -
Borrowings (1,472) - (1,472) (40) - (40)
Deferred tax liabilities - (144) (144) - - -
Total Liabilities (4,087) (144) (4,231) (243) - (243)
Net identifiable assets acquired (1,621) 432 (1,189) 421 - 421
Goodwill 2,953 694
Total consideration 1,764 1,115
Less consideration paid in shares (316) (343)
Less contingent consideration (1,043) -
Consideration paid in cash 405 772
*At the date of the acquisition, Cosgrove & Drew had recognised an onerous
contract provision of £240k in respect of two long-term contracts, where
forecasted costs to complete exceeded expected revenues, in line with IAS 37.
During the 4-month period to 31 December 2024, the Group exited one contract
and completed the other. The costs to terminate the contracts were fully
offset by the utilisation of the £240k onerous contract provision. As a
result, no net impact was recognised in the income statement in respect of
either onerous contract in the period from acquisition to 31 December 2024.
The table below details the revenue and net profit after tax contributed to
the Group from the acquisition date to 31 December 2024:
Cosgrove & Drew Ltd South West Heating Limited
£'000 £'000
Revenue contributed since acquisition 2,169 468
Net (loss)/profit after tax since acquisition (117) 29
13. Discontinued operations
There were no discontinued operations in the current year to 31 December 2025.
On 29 February 2024, the company completed the disposal of Verditek Solar srl,
(100% wholly owned sole operating subsidiary in Italy) in return for the
satisfaction of the outstanding secured convertible loan notes and accrued
interest totalling £528,340, to Verditek Solar Limited, a company owned by
the convertible loan note holders.
13a. Financial performance and cash flow information
The financial performance and cashflow information presented below are for the
two months ended 29 February 2024.
2025 2024
Results of discontinued operations £'000 £'000
Revenue - 40
Expenses - (117)
Post tax results from operating activities - (77)
Loss on sale of discontinued operation - (58)
Loss from discontinued operation, net of tax - (135)
Loss attributable to:
Equity owners of the parent company - (135)
Earnings per Share
Basic and diluted - (0.002p)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Translation of foreign operations - 9
Total comprehensive loss from discontinued operations - (126)
Cashflows
Net cash inflow / (outflow) from operating activities - 31
Net cash inflow/(outflow) from investing activities - (162)
Net cash inflow / (outflow) from financing activities - (28)
Net decrease in cash generated by discontinued operations - (159)
Cash and cash equivalents at beginning of period - 7
- (152)
Costs of disposal paid in cash - (152)
Cash and cash equivalents disposed of - (10)
Cash cost of disposal - (162)
13b. Details of the sale of the subsidiary
Verditek Solar srl
£'000
Property, plant and equipment 82
Right-of-use assets 267
Inventories 414
Trade and other receivables 147
Cash and cash equivalents 10
Trade and other payables (211)
Lease liabilities (270)
Provisions (30)
Carrying amount of net assets sold 409
Non-cash consideration - convertible loan principal and interest satisfied 528
Cost of disposal paid in cash (152)
Carrying amount on net assets on disposal (409)
Carrying amount of Company plant & equipment on disposal (10)
Foreign exchange including reversal of translation reserve (15)
Loss on sale of discontinued operation (58)
14. Impairment testing of goodwill and intangibles
The Group performs an annual goodwill impairment test at the year-end date or
at any point throughout the year, if there are indictors of impairment in
accordance with IAS 36 Impairment of Assets.
Goodwill is allocated to cash-generating units ('CGUs') that are expected to
benefit from the business combination in which the goodwill arose.
The Group's intangible assets consist solely of customer relationships which
are subject to amortisation over their useful economic lives in accordance
with IAS 38. Impairment testing of these intangible assets is only carried out
if there is an indicator of impairment. Based on stable performance of the
related businesses and the absence of adverse market or operational
conditions, management has concluded there are no indicators of impairment and
therefore no impairment test has been carried out in relation to the
intangible assets.
The carrying amount of goodwill acquired through business combinations of
£3,840k (2024: £2,954k) after impairment is allocated to the following CGUs:
2025 2024
£'000 £'000
A&D Carbon Solutions Limited ('A&D') 886 -
Cosgrove & Drew Ltd ('C&D') 2,954 2,954
3,840 2,954
The recoverable amount of each CGU is determined based on a value-in-use
calculation. The value-in-use is derived from projected cash flows based on
financial budgets approved by the Directors covering a 5-year period. The
Directors consider these estimates to be reasonably
achievable based on current performance. Cash flows beyond that period are
extrapolated using a terminal growth rate that reflects expected business
long-term growth rates.
Key assumptions used in the value-in-use calculations include:
· Revenue growth rates : 5%
· EBITDA margins: 1%-2% (C&D) / 4-10% (A&D)
· Pre-tax discount rate: 13.4% (C&D) / 13.59% (A&D)
· Terminal growth rate: 2%
These assumptions reflect past experience, current operating performance, and
external market data.
Sensitivity Analysis:
Management has performed sensitivity analysis on key assumptions as follows:
For the two CGUs that did not require an impairment, a base case and two
further scenarios were equally weighted to provide a sensitised scenario. The
assumed independent sensitivities in the scenarios were decreasing revenue by
10% and increasing Cost of sales and operating expenses by 10%.
15. Inventories
2025 2024
£'000 £'000
Raw materials 154 145
154 145
On 1 July 2025 £10k inventories were acquired on the acquisition of A&D
Carbon Solutions Limited. (On 29 August 2024, inventories with a combined
value of £154k, comprising raw materials only, were acquired on the
acquisition of Cosgrove & Drew Ltd and South West Heating Services
Limited).
During the period £42k inventories relating to revenue were recognised as a
cost in the P&L (2024: £32k).
No write-downs or reversals occurred in the year and no inventories were
pledged as security. (2024: none)
16. Financial assets and financial liabilities
The group holds the following financial instruments:
2025 2024
Financial assets £'000 £'000
Cash and cash equivalents (i) 1,076 1,965
Trade and other receivables (ii) 1,766 1,221
Contract assets (iii) 210 170
Other current assets (iv) 20 29
Total current financial assets 3,072 3,385
Non-financial current assets 603 313
(iv)
Total current assets 3,675 3,698
Financial liabilities £'000 £'000
Trade and other payables (v) (1,402) (1,533)
Contingent consideration (vi) (1,141) (1,057)
Loans and other borrowings (incl. Hire Purchase) (vii) (1,322) (772)
Loans and other borrowings - Factoring liabilities (viii) (552) (599)
Lease liabilities (ix) (394) (245)
Total financial liabilities (4,811) (4,206)
Non-financial liabilities (453) (478)
(x)
Total liabilities (5,264) (4,684)
Fair values
In accordance with IFRS 13, financial instruments measured at fair value are
classified within a three-level hierarchy based on the observability of inputs
used in their valuation. This hierarchy provides transparency regarding the
reliability and source of data used to determine fair values:
Level 1: Quoted prices in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices that are observable, either directly
or indirectly
Level 3: Unobservable inputs requiring significant management judgement and
estimation.
The Group's only financial instrument measured at fair value on a recurring
basis is the contingent consideration related to business combinations. This
financial instrument is classified as Level 3 due to reliance on unobservable
inputs, including estimates of future performance and probabilities (See note
16(vi)).
16(i). Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, and short-term
deposits with original maturities of three months or less.
2025 2024
£'000 £'000
Unrestricted cash and bank 976 1,382
Restricted cash (Performance bond) 100 583
Total (i) 1,076 1,965
The restricted cash of £0.1m is held by HCC International Insurance Company
Plc as collateral for a performance bond issued in connection with the Equans
contract held by A&D Carbon Solutions Limited.
The amount is repayable upon the earlier of the completion of the underlying
contract or 31 March 2026, the contractual release date.
2024: The restricted cash balance of £0.6m represents funds raised through
Venture Capital Trust (VCT) investments. These funds are subject to investment
restrictions under VCT regulations and are held in segregated accounts pending
deployment in qualifying investments.
16(ii). Trade and other receivables
2025 2024
£'000 £'000
Trade receivables 1,501 995
Less: Loss allowance (69) (40)
Certified works not yet invoiced 334 266
(ii) 1,766 1,221
The Group's trade receivables are all denominated in pounds sterling (£)
therefore there is no foreign exchange risk on realisation of receivables.
Trade receivables are non-interest bearing and generally on terms payable
within 60 days. As at 31 December 2025, the allowance for impairment of trade
receivables was £69k (2024: £40k).
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses. The allowance is based on management experience and judgement,
adjusted for forward-looking macroeconomic information where necessary.
The following table shows the exposure to credit risk and expected credit
losses of trade receivables as at 31 December:
ECL base rate Adjusted ECL rate* Gross carrying amount Expected loss allowance Net carrying amount ECL loss rate Gross carrying amount Expected loss allowance Net carrying amount
% % £'000 £'000 £'000 % £'000 £'000 £'000
0-30 days 1% 1% 1,221 (7) 1,214 1.8% 831 (15) 816
31-60 days 3% 4% 155 (7) 148 0.5% 98 - 98
61-90 days 10% 58% 21 (12) 9 12.9% 5 (1) 4
Over 90 days 100% 43% 104 (43) 61 39% 61 (24) 37
1,501 (69) 1,432 995 (40) 955
*The ECL rates have been adjusted where appropriate to reflect actual cash
receipts received and known bad debt right offs after the year-end but prior
to reporting finalisation. These adjustments were made to better reflect the
recoverability of aged balances that are presented in the table above.
Movements in the loss allowance for trade receivables were as follows:
2025 2024
£'000 £'000
At 1 January 40 44
Release of loss allowance (11) (44)
Receivable written off during the year as uncollectible (15) -
Increase in loss allowance 55 40
At 31 December 69 40
16(iii). Contract assets
Contract assets represent amounts due from customers for major project work
completed but not yet invoiced at the reporting date. These include:
· Revenue accruals for performance obligations satisfied over time
where the right to payment was not unconditional at the year-end date; and
· Retention amounts contractually withheld by customers pending defect
liability periods.
As at 31 December 2025, contract assets were as follows:
2025 2024
Description £'000 £'000
Retentions 210 170
Total contract assets (iii) 210 170
Contract assets relating to accrued revenue are expected to be invoiced and
collected within 2 months. Contract assets relating to retentions are
typically invoiced at the end of a major project (50%) and on the first
anniversary of the end of the major project (50%) The expectation is that
materially all retention balances will be invoiced and collected within 12
months.
16(iv). Other current assets
2025 2024
£'000 £'000
Other current assets (incl. staff advances and cash- settled supplier rebates) 20 29
Total other current assets (financial assets) (iv) 20 29
Supplier rebates 23 -
Inventories (see Note15) 154 145
Contract fulfilment costs 7 -
Other current assets - prepayments 313 127
Current tax asset 39 -
Other current assets - VAT and other indirect taxes 67 41
Total other current assets (non-financial assets) (iv) 603 313
Total other current assets (excluding inventories) (iv) 469 197
16(v). Trade and other payables
2025 2024
£'000 £'000
Trade payables 1,019 1,224
Accruals 321 288
Other financial liabilities 62 21
(v) 1,402 1,533
Trade and other payables - non financial liabilities - see Note 16 (x) (x) 434 414
Total trade and other payables (v) 1,836 1,947
16(vi). Contingent consideration
As part of the consideration transferred for the acquisition of Cosgrove &
Drew Ltd and South West Heating Services Limited, the Group recognised a
contingent consideration for additional payments that may be required to the
former shareholders, contingent on the future performance of the acquired
businesses.
There is no specified timeframe for the contingent consideration arrangement
with C&D, payments will become due only on the achievement of defined
performance targets.
For SWH, the additional amount payable was contingent on certain performance
milestones over a period of 2 years from the date of acquisition. The full
amount of contingent consideration for South West Heating Services Limited was
retrospectively derecognised as a prior year adjustments - see page 43.
At 31 December 2025, the fair value of the contingent consideration relating
to Cosgrove & Drew Limited was remeasured, resulting in a loss of £15k
recognised in profit or loss. The liability has been reassessed based on
actual performance achieved to date against agreed targets, together with
management's best estimate of future performance over the remaining earn-out
period.
The movement reflects stronger-than-previously-anticipated trading
performance, which has resulted in the expected milestone being achieved
earlier than initially forecast. This has reduced the remaining discounting
period and increased the present value of the expected payout, giving rise to
a charge in the income statement
At the acquisition date, the fair value of total contingent consideration was
estimated to be £1.3m and was included in the total consideration
transferred. The fair value was determined using a probability -weighted
expected payment approach and classified as a financial liability measured at
fair value through profit or loss.
Subsequent changes in the fair value of the contingent consideration that do
not relate to measurement period adjustments are recognised in profit or loss
in accordance with IFRS 9.
The key assumptions used in estimating the fair value include:
· Estimated probability of achieving performance targets;
· Forecasts of EBITDA of the acquired businesses;
· A discount rate of 6.21% applied to expected future payments.
Restated
Movement in contingent consideration 2025 2024
£'000 £'000
Opening balance at 1 January 1,057 -
Addition on acquisitions - 1,043
Unwinding of discount 69 14
Loss on remeasurement of contingent consideration 15
Closing balance at 31 December (viii) 1,141 1,057
Included in current liabilities 348 42
Included in non-current liabilities 793 1,015
16(vii). Loans and Borrowings
2025 2024
£'000 £'000
Included in current liabilities 1,235 1,110
Included in non-current liabilities 639 261
Total loans and borrowings 1,874 1,371
2025 2024
Maturity analysis - contractual undiscounted liability at year end £'000 £'000
On demand 289 307
Less than one year 497 259
One to two years 340 216
Two to five years 406 68
More than five years - -
Total undiscounted cash flows 1,532 850
Total discounted borrowings (vii) 1,322 772
Current - related party loan 225 225
Current - credit cards 65 82
Current - bank borrowings 362 158
Current - HP 32 46
Non-current - bank borrowings 611 200
Non-current -HP 27 61
1,322 772
Current - Invoice factoring - see Note 16(viii) 552 599
Total loans and borrowings 1,874 1,371
On 5 November 2025, Earnz Plc agreed a sterling loan facility of £0.5m with
HSBC. The loan is repayable over three years from the date of drawdown, in
monthly instalments. Interest is charged at 3% per annum above the Bank of
England base rate. The facility is supported by Group security arrangements
including cross guarantees and debentures over certain subsidiary
undertakings. As at the reporting date, the carrying value of the loan was
£0.48m (2024: nil)
Hire purchase and finance lease contracts are secured against the assets to
which they relate.
The total Group cash outflow relating to repayment of loans and HP in the year
was £600k (2024: £89k)
2025 2024
Amounts recognised in the consolidated income statement £'000 £'000
Interest on borrowings 97 31
All loans and borrowings are interest bearing, except for the related party
loan.
16(viii). Factoring liability
The Group has an invoice factoring arrangement under which legal title to
certain trade receivables is transferred to a third-party finance provider.
The Group retains substantially all the risks and rewards of ownership,
including credit and late payment risk, and accordingly the receivables
continue to be recognised, with a corresponding financial liability recognised
in accordance with IFRS 9.
At 31 December 2025, trade receivables of £1.5m (2024: £1.0m) remained
recognised on the statement of financial position in respect of the factoring
arrangement, with an associated liability of £0.55m (2024:£0.6m). Included
in the debtor balance used as a basis for drawdowns on the £0.6m facility
is £0.2m relating to project applications yet to be invoiced, included in
contract assets.(2024:£0.2m)
16(ix). Lease liabilities - Group
The Group has recognised lease liabilities under IFRS 16 for property and
vehicle leases. These liabilities represent the present value of future lease
payments, discounted using an entity specific incremental borrowing rate. The
IBR reflects the rate at which the entity would obtain borrowings over a
similar term, with similar security, in a comparable environment.
The table below includes the total contractual payments due on leases held by
the Group.
2025 2024
Maturity analysis - contractual undiscounted cash flows £'000 £'000
Less than one year 222 108
One to two years 127 88
Two to five years 103 84
More than five years - -
Total undiscounted cash flows 452 280
Total discounted lease 394 245
liabilities
(vii)
Included in current liabilities 188 92
Included in non-current liabilities 206 153
The total Group cash outflow for leases during 2025 was £173k (2024: £73k)
2025 2024
Amounts recognised in the consolidated income statement £'000 £'000
Interest on lease liabilities - continuing operations 38 31
Interest on lease liabilities - discontinued operations - 3
Expenses relating to short-term leases 57 4
The Group manages lease-related liquidity risk by maintaining adequate cash
reserves and continuous forecasting of its lease payment obligations.
Management believes the Group has sufficient resources to meet its lease
obligations as they fall due.
16(x). Other liabilities (non-financial liabilities)
2025 2024
£'000 £'000
Payroll taxes 237 288
VAT and other indirect taxes 162 115
Pension accrual 35 11
Trade and other payables 434 414
Corporation tax - 64
Provisions (see Note 17) 19 -
Total other liabilities (non-financial) 453 478
17. Provisions
The Group recognises provisions when there is a present legal or
constructive obligation as a result of past events, it is probable that an
outflow of resources will be required to settle the obligation, and a reliable
estimate can be made of the amount of that obligation.
In accordance with IAS 37, a provision for an onerous contract is recognised
when:
· The contract is non-cancellable, or cancellation would incur
significant penalties, and
· The unavoidable costs of meeting the obligations exceed the economic
benefits expected to be received.
All provisions are reviewed at each reporting date and adjusted to reflect the
current best estimate.
2025 2024
£'000 £'000
Opening balance at 1 January - (30)
Onerous contracts recognised on acquisitions - (240)
Provision for contractual penalties (19) -
Utilised - 270
Total provisions (19) -
The provision in the year to 31 December 2025 relates to estimated contractual
penalties arising on a shortfall in delivery of agreed monthly completion
schedules.
In 2024, on the acquisition of Cosgrove & Drew Limited, the Group
recognised a provision of £240k in relation to two long-term contracts where
forecast costs to fulfil or terminate the contract exceeded the expected
revenue. In the period to 31 December 2024, one contract was settled through
termination and agreement with the counterparty, and the other contract was
completed in full, resulting in the fulfilment of the Group's obligations
under the arrangement and the provision was utilised accordingly.
18. Share capital
31 December 2025 31 December 2024
No. £ No. £
All issued shares are ordinary shares, which are fully paid 133,908,362 5,356,335 102,206,397 4,088,256
The Company's articles do not specify an authorised share capital.
Ordinary shares
The Ordinary shares in issue all rank equally with regards to the Company's
residual assets, and each carries the right to exercise once vote at a general
meeting. There are no special voting or dividend rights beyond those
prescribed in the Companies Act 2006. There are no redemption rights.
Movements in ordinary shares:
Note No. shares Par value Share Premium Total
£ £ £
Opening balance 1 January 2024 554,649,417 221,860 12,626,283 12,848,143
Share subscription 5 March 2024
18(i) 400,000,000 160,000 118,000 278,000
Share issue 4 April 2024 18(ii) 83 - - -
Share consolidation 4 April 2024
18(iii) (945,103,005) - - -
Loan conversion 8 April 2024 18(iv) 4,000,000 160,000 140,000 300,000
Share placing 8 April 2024 18(v) 39,554,667 1,582,187 1,166,672 2,748,859
Share subscription 8 April 2024
18 (vi) 9,778,666 391,147 320,878 712,025
VCT placing 28 August 2024 18(vii) 20,798,491 831,940 625,372 1,457,312
Loan conversion 29 August 2024
18(viii) 3,000,000 120,000 105,000 225,000
Consideration-share issue 29 August 2024
18(ix) 8,975,119 359,005 314,129 673,134
Share placing 29 August 2024 18(x) 6,552,959 262,118 204,780 466,898
Balance at 31 December 2024 102,206,397 4,088,257 15,621,114 19,709,371
Share placing 17 June 2025 18(xi) 14,201,965 568,079 414,237 982,316
Consideration-share issue 1 July 2025
18(xii) 3,611,112 144,444 115,556 260.000
Share placing 17 September 2025
18(xiii) 13,888,888 555,555 403,944 959,499
Balance at 31 December 2025 133,908,362 5,356,335 16,554,851 21,911,186
(i) On 5 March 2024, 400,000,000 new ordinary shares were issued at
0.075 pence, raising £300,000 before share issue costs of £22,000.
(ii) On 4 April 2024, 83 ordinary shares were allotted solely to
facilitate the share consolidation on a 1-for-10 basis. These shares were not
issued for consideration and did not change total shareholder rights or
ownership.
(iii) On 4 April 2024, there was a share consolidation of every 100
ordinary shares of 0.04 pence each into one new ordinary share of 4 pence
each.
(iv) On 8 April 2024, 4,000,000 new ordinary shares were issued at 7.5
pence on conversion of a £300,000 loan, made to the Company by Bob Holt,
prior to his appointment as director of the Company.
(v) On 8 April 2024, there was a placing of 39,554,667 new ordinary
shares at a price of 7.5 pence raising £2,966,600 before share issue costs of
£217,741.
(vi) On 8 April, there was a share subscription for 9,778,666 new
ordinary shares at 7.5 pence, raising £733,400 before share issue costs of
£21,375.
(vii) On 28 August 2024, there was a VCT placing of 20,798,491 new
ordinary shares at 7.5 pence raised £1,559,887 before share issue costs of
£102,574.
(viii) On 29 August 2024, 3,000,000 new ordinary shares at 7.5 pence were
issued on conversion of a £225,000 loan, made to Cosgrove & Drew Ltd by
Robert Holt prior to the acquisition.
(ix) On 29 August 2024, consideration shares were issued to acquire
Cosgrove & Drew Ltd (4,308,452) and South West Heating Services Limited
(4,666,667) at an agreed placing price of 7.5 pence
(x) On 29 August 2024, there was a placing of 6,552,959 new ordinary
shares at 7.5 pence, raising £491,472 before share issue costs of £24,574.
(xi) On 17 June 2025, there was a placing of 14,201,965 new ordinary
shares at 7.2 pence, raising £1,022,541 before share issue costs of £40,225.
(xii) On 1 July 2025, 3,611,112 consideration shares were issued to
acquire A&D Carbon Solutions Limited at an agreed placing price of 7.2
pence.
(xiii) On 17 September 2025, there was a placing of 13,888,888 new
ordinary shares at 7.2 pence raising a total of £1,000,000 before share issue
costs of £40,500.
19. Share-based payment
The Group operates an equity-settled share-based remuneration scheme, the
Earnz plc Long Term Incentive Plan 2024 (the "LTIP") effective from the
re-admission to AIM, 29 August 2024. All employees of the group are eligible
however currently share awards have only been granted to the Executive Board
and Directors of A&D Carbon Solutions Limited.
Prior to the re-admission the Group operated an equity settled share-based
remuneration scheme for Senior Executives, the Verditek plc EMI and
Non-Qualifying Share Option Plan (the "Option Plan"). All awards under this
plan lapsed during the year.
The Group also operates a Save As You Earn (SAYE) scheme, which is an
all-employee equity-settled share-based payment arrangement. The SAYE scheme
allows eligible employees to acquire shares in the Company at a future date at
a pre-determined price, subject to continued employment over the vesting
period.
The fair value of the employee services received in exchange for the grant of
options is recognised as an expense. The total amount to be expensed is
determined by reference to the fair value of the options granted including any
market performance conditions but excluding the impact of any service or
non-market performance vesting conditions.
Non-market vesting conditions are included in the assumptions regarding the
number of options that are expected to vest. The total expense is recognised
over the vesting period. At the end of each period the Group revises its
estimates of the number of options expected to vest based on the non-market
vesting conditions. It recognises the impact of any revision in the income
statement with a corresponding adjustment to equity.
The total expense recognised for equity-settled share-based payments during
the year was £71k (2024: £23k). This is included within administrative
expenses.
General terms and conditions of each award and key assumptions used for the
fair value calculations are noted in the table below:
Option Plan LTIP 2024 LTIP 2024 LTIP 2024 SAYE
Type of instrument Option Nil- cost option Nil- cost option Nil- cost option Nil- cost option
Grant date 17 September 2021 9 September 2024 23 October 2025 1 July 2025 21 November 2025
Vesting period 3(rd) anniversary of grant date 3(rd) anniversary of grant date 3(rd) anniversary of grant date 3(rd) anniversary of grant date 37 months
Exercise date 17 September 2022 (2023 &2024) 9 September 2027 23 October 2028 1 July 2028 1 January 2029
Holding period N/A To 9 September 2028 1 year from vesting date 1 year from vesting date Not specified
Service condition 1/3 entitlement pa from grant date Not specified Continuous employment Continuous employment Continuous employment
Performance conditions N/A N/A N/A EBITDA target N/A
Market conditions N/A Share price at vesting date TSR Growth at vesting date N/A N/A
Expiry term 10 years from date of grant 10 years from date of grant 10 years from date of grant - 6 months from bonus date
Forfeiture 1(st) anniversary of leaving date on leaving date on leaving date on leaving date on leaving date
Option valuation model Black Scholes model Monte Carlo model Monte Carlo model Black Scholes model Black Scholes model
Exercise price £3.80 (£0.038 pre-share consolidation) £0.00 £0.00 £0.00 £0.042
Share price at grant date 3.8p 7.35p 4.86p 5.25p 5.00p
Expected volatility 100% 48.88% 56.84% 50.95% 61.13%
Expected life (months) 36 48 48 36 37
Risk-free interest rate 0.07088% 3.64% 3.72% 3.77% 3.73%
Dividend yield 0% 0% 0% 0% 0%
The following tables illustrates the number of, and movements in, share
options during the year in addition to weighted average contractual life and
exercise price (WAEP)
Movement in year to 31 December 2025 No. share options (Option plan) No. share options (LTIP) No. share options (SAYE) WAEP Weighted average term
(pence) (years)
Opening balance 1 January 2025 6,667 5,110,320 - 0.49 9.35
Lapsed in year (6,667) - - - -
Granted in year - 4,777,778 - 0.00
Granted in year - - 186,845 4.20 -
Outstanding balance at 31 December 2025 - 9,888,098 186,845 0.07 7.39
Movement in year to 31 December 2024 No. share options (Option plan) No. share options (LTIP) No. warrants WAEP Weighted average term
(pence) (years)
Opening balance 1 January 2024 3,700,000 - 2,250,000 4.68 3.81
Forfeited in year (3,033,334) - - - -
Adjustment on share consolidation*(1) (659,999) - (2,227,500) - -
Lapsed in year - - (22,500) - -
Granted in year - 5,110,320 - - -
Outstanding balance at 31 December 2024 6,667 5,110,320 - 0.49 9.35
*(1) Following the share consolidation of 100:1 on 4 April 2024 the share
options in issue were adjusted accordingl
20. Subsidiaries
Earnz Plc held investments in the following subsidiaries as at 31 December
2025. All shares in subsidiaries are ordinary share capital unless otherwise
stated.
Name of subsidiary Principal activity Registered office Proportion of ownership interest and voting rights held Audit exemption**
2025 2024
Earnz Holdings Limited* Intermediate holding 1(st) Floor, St James House, 100% 100% Yes
St James' Square, Cheltenham,
Gloucestershire, GL50 3PR
A&D Carbon Solutions Limited Provision and installation of residential energy efficiency and heating 1(st) Floor, St James House, 100% - Yes
solutions
St James' Square, Cheltenham,
Gloucestershire, GL50 3PR
Cosgrove & Drew Ltd Commercial and industrial mechanical and electrical installation services 1(st) Floor, St James House, 100% 100% Yes
St James' Square, Cheltenham,
Gloucestershire, GL50 3PR
National Retrofit Solutions Limited Provision and installation of residential energy efficiency and heating 1(st) Floor, St James House, 100% 100% Yes
solutions
(Previously Earnz Regeneration Limited) St James' Square, Cheltenham,
Gloucestershire, GL50 3PR
South West Heating Services Limited Domestic maintenance and heating installation services 1(st) Floor, St James House, 100% 100% Yes
St James' Square, Cheltenham,
Gloucestershire, GL50 3PR
South West Heating Services Bristol Limited Domestic maintenance and heating installation services 1(st) Floor, St James House, 100% 100% Yes
St James' Square, Cheltenham,
Gloucestershire, GL50 3PR
Warm Low Living Limited Provision and installation of residential energy efficiency and heating 1(st) Floor, St James House, 100% 100% Yes
solutions
(Previously SW Assessors Limited) St James' Square, Cheltenham,
Gloucestershire, GL50 3PR
Verditek USA Limited* Dormant Corporation Trust Centre, 1209 Orange Street, Wilmington, Delaware 19801 100% 100% Yes
*Indicates direct investment in the company
** All current subsidiaries have taken advantage of audit exemptions available
under the Companies Act 2006 (sections 479 and 480) due to their size or
dormant status and are therefore not subject to a statutory audit.
21. Financial risk management
The Group's activities expose it to a variety of financial risks: credit risk,
liquidity risk, and market risk. The Group's overall risk management program
focuses on the unpredictability of financial markets and seeks to minimize or
mitigate where possible the potential adverse effects on the Group's financial
performance.
Risk management is carried out by the Board of Directors. The Group
identifies, evaluates, and manages financial risks in close cooperation with
its operating entities. The Group does not engage in speculative trading of
financial instruments.
Credit risk
Credit risk refers to the risk of financial loss if a customer or counterparty
to a financial instrument fails to meet its contractual obligations. The Group
is exposed to credit risk from operating activities, primarily trade
receivables, and from its financing activities including deposits with banks
and financial institutions.
To minimize the credit risk exposure of cash and cash equivalents, which are
considered a low credit risk, the Group only places cash and cash equivalents
with established banks that maintain high credit ratings and monitors the
concentration of exposure to any single institution.
In relation to trade receivables, which are considered a moderate credit
risk, the Group conducts credit evaluations and actively monitors
outstanding balances to reduce the risk of default. The analysis of trade
receivables and expected credit loss allocation is detail in Note 16(ii).
At the reporting date, the maximum exposure to credit risk was £3.1m
(2024:£3.38m).
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. The Group monitors its liquidity
requirements on a regular basis to ensure it has sufficient funds to meet its
operational needs.
To minimize the liquidity risk, the Group continuously monitors forecasted and
actual cash flows with the objective of ensuring sufficient funds are
available to meet its liabilities when due, under both normal and stressed
conditions. The Group also maintains strong relationships with its principal
banking partners and 3(rd) party credit facility providers, increasing the
prospect of them facilitating access to funding if required.
The following table details the Group's remaining contractual maturities for
its financial liabilities. The amounts disclosed are the contractual
undiscounted cash flows.
< 1 year Between 1 and 2 years Between 2 and 5 years Over 5 years
£'000 £'000 £'000 £'000
Wages and pensions payable 49 - - -
Trade payables 1,019 - - -
Accruals 321 - - -
Lease liabilities 221 127 103 -
Loans and borrowings 1,337 340 406 -
Contingent consideration 348 550 328 -
Total at 31 December 2025 3,295 1,017 837 -
< 1 year Between 1 and 2 years Between 2 and 5 years Over 5 years
£'000 £'000 £'000 £'000
Wages and pensions payable 21 - - -
Trade payables 1,224 - - -
Accruals 288 - - -
Lease liabilities 92 73 78 -
Loans and borrowings 1,165 217 68 -
Contingent consideration 150 150 - -
Total at 31 December 2024 2,940 440 146 -
*The invoice factoring facility included in loans and borrowings is a
revolving facility secured on trade receivables. Contractual outflows are
presented in line with expected receivable maturities. While individual
drawdowns are short-term, the facility is expected to be continually utilised,
and therefore total exposure may extend beyond 3 months. The facility limit is
£600k, £552k was drawn down at the year-end.
Market risk
In the prior year, the Group was exposed to foreign exchange risk, primarily
through its investment in a foreign subsidiary, Verditek Solar srl, whose
functional currency (euros), differed from that of the parent company. The
Group's exposure related to translation of net assets and intercompany
balances denominated in foreign currency in addition to supplier payables and
customer receivables denominated in foreign currency.
During the year, the Group disposed of the foreign subsidiary, eliminating its
material exposure to foreign currency risk. As such, the Group is no longer
subject to foreign exchange currency risk as at the reporting date.
All of the Group's financial instruments are denominated in pounds sterling,
which is the Group's functional and presentational currency. Accordingly, no
sensitivity analysis has been presented for foreign currency risk.
Interest rate risk
Interest rate risk is the risk that changes in market interest rates will
adversely affect the Group's financial performance or the value of its
financial instruments.
Capital Risk
The Group's objectives when managing capital are to:
· Safeguard its ability to continue as a going concern
· Provide returns to shareholders
· Maintain an optimal capital structure to reduce the cost of capital,
and
· Comply with externally imposed capital requirements, if any.
The Group manages its capital structure and makes adjustments in light of
economic conditions and the requirements of its operations. In order to
maintain or adjust the capital structure, the Group may:
· Issue new shares
· Return capital to shareholders
· Adjust or abstain from payments of dividends, and/or
· Adjust levels of debt
Capital structure overview
The Group regularly reviews its gearing ratio to ensure alignment with
strategic goads and compare to industry benchmarks.
22. Employee benefits
The Group operates a defined contribution pension scheme only. The assets of
the schemes are held separately from those of the Group in independently
administered funds.
The amount recognised as an expense in the statement of profit or loss in
respect of defined contribution schemes was £124k (2024:£27k).
23. Related party transactions
The ultimate parent company of the Group is Earnz Plc, which is listed on the
AIM market of the London Stock Exchange. No individual shareholder or group of
shareholders holds more than 50% of the voting rights or exercises control
over the Group. Accordingly, control is considered to be dispersed amount a
wide range of shareholders.
The remuneration of key management personnel, which includes the directors of
the Company, is set out below in aggregate for each of the applicable
categories as required by IAS 24. Further details of individual directors'
remuneration are provided in the Directors' Remuneration Report.
Key management personnel compensation
2025 2024
£'000 £'000
KMP KMP
Short-term employee benefits 911 331
Post-employment benefits 42 10
Share-based payment expenses 71 23
Total employee benefits 1,024 364
Transactions between Group entities have been eliminated on consolidation and
are not disclosed in this note.
Transactions with related parties
Related party Nature of relationship Nature of transaction 2025 value 2024 value
£'000 £'000
Bob Holt Director Share placing 17 June 25 [1,319,444 shares @ 7.2p] 94 -
Bob Holt Director Share placing 17 September 25 70 -
[972,222 shares @ 7.2p]
Elizabeth Lake Director Share placing 17 June 25 94 -
[1,319,444 shares @7.2p]
Elizabeth Lake Director Share placing 17 September 25 30 -
[416,667 shares @ 7.2p]
Peter Lake Director spouse Share placing 17 June 25 30 -
[416,666 @7.2p]
Peter Smith Director Share placing 17 June 25 25 -
[347,222 shares @ 7.2p]
John Charlton Director Share placing 17 June 25 13 -
[180,555 shares @ 7.2p]
Linda Main Non-executive Director Share placing 17 June 25 4 -
[55,555 shares @ 7.2p]
Sandra Skeete Non-executive Director Share placing 17 June 25 1 -
[13,888 shares @ 7.2p]
Quoted Companies Alliance Common Directorship Annual membership subscription 4 3
Logical Utilities Company Common Directorship Cost reimbursement relating to potential acquisition - (60)
Bob Holt Director Loan to Company (prior to becoming Director) - 300
Bob Holt Director Loan share conversion - (300)
Bob Holt Director Loan to subsidiary - 450
Bob Holt Director Reimbursement of personal invoice in full - 12
Bob Holt Director Loan share conversion - (225)
Bob Holt Director Consideration shares on acquisition of subsidiary - 189
Bob Holt Director Contingent consideration agreed - 405
In accordance with IAS 24, the current year share placing is disclosed as a
related party transaction due to participation by Directors in a selective
placing arrangement. In the prior year, although Directors also participated,
the placing was open to a wider investor base and conducted on identical
market terms for all participants; accordingly, it was not considered a
related party transaction requiring separate disclosure under IAS 24.
Outstanding balances with related parties
Related party Nature of relationship Type 31.12.25 Terms
£'000
Bob Holt Director Interest free loan repayable on demand (225) Unsecured, interest-free, repayable on demand
Bob Holt Director Advance payment in respect of services to be provided in the future (48) N/A (amount VAT inclusive)
Bob Holt Director Contingent consideration (376) Fair value of payable amount - discounted
24. Commitments, contingencies and guarantees
There were no capital commitments as at 31 December 2025 (2024: none)
There are instances that the Group is engaged in litigation in the ordinary
course of business. The Group has professional indemnity insurance.
25. Events after the reporting period
On 31 March 2026, Earnz Plc, through its intermediary holding company, Earnz
Holdings Limited, acquired 100% of the issued share capital of Zero Carbon
Group Limited for a maximum consideration of £9.5m on a debt free, cash-free
basis. The transaction was financed through a Placing of 70,000,000 Placing
Shares at 5p per ordinary share, raising gross proceeds of £3.5m, together
with a Retail Offer at 5p per ordinary share raising £0.3m
Initial consideration of up to £5m comprises £1.5m in cash, £1.5m
consideration shares at the placing price and a further £2m payable subject
to the achievement of specified EBITDA targets, to be settled 50% in cash and
50% in shares.
Zero Carbon Group Limited are specialists in multi-measure retrofit and
renewable energy solutions. The acquisition represents a strategic expansion
of the Group's operations, strengthening its capability and market position in
the retrofit and low-carbon energy transition space.
As the acquisition occurred after the reporting date, the results and
financial position of the acquired company have not been included in these
financial statements.
The assessment of the fair value of the identifiable assets and liabilities
acquired is ongoing and has not yet been finalised.
The amounts presented below are provisional and reflect the book values of
assets and liabilities at the acquisition date. No fair value adjustments or
separately intangible assets have been recognised at this stage. Consequently,
goodwill has not been finalised and remains subject to change on completion of
the purchase price allocation exercise.
ZCG
Book Value
£'000
Intangible assets 1
Property, plant and equipment 24
Trade and other receivables 746
Cash and cash equivalents 258
Total assets 1,029
Trade and other payables (747)
Total Liabilities 282
Company statement of financial position
for the year ended 31 December 2025
Restated
Note 2025 2024
£'000 £'000
Non-current assets
Investments in subsidiaries I 0 0
Property, plant and equipment J 21 3
Intangible assets K 10 -
Total non-current assets 31 3
Current assets
Cash and cash equivalents M(i) 634 1,341
Trade and other receivables M(ii)/M(iii) 174 133
Net amounts due from subsidiaries M(ii) 5,990 4,048
Total current assets 6,798 5,522
Current liabilities
Trade and other payables M(iv)/M(vii) (192) (329)
Loans and other borrowings <1 year M(v) (150) -
Contingent consideration <1 year M(vi) (348) (42)
Total current liabilities (690) (371)
Net current (liabilities) / assets 6,108 5,151
Non-current liabilities
Loans and other borrowings >1 year M(v) (327) -
Contingent consideration >1 year M(vi) (793) (1,015)
Total non-current liabilities (1,120) (1,015)
Net assets 5,019 4,139
Capital and reserves
Share capital 5,356 4,088
Share premium 16,555 15,621
Share-based payment reserve 94 39
Retained earnings (16,986) (15,609)
Total equity 5,019 4,139
The accompanying notes on pages 79-86 are an integral part of these financial
statements.
The Company's loss for the year was £1.4m (2024: £2.7m)
These financial statements were approved and authorised for issue by the board
on 22 May 2026 and signed on its behalf by:
Peter Smith
Chief Executive Officer
Company statement of changes in equity
for the year ended 31 December 2025
Share capital Share Premium Share-based payment reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000
222 12,626 179 (13,109) (82)
Balance at 1 January 2024
Loss for the year - - - (2,663) (2,663)
Total comprehensive loss - - - (2,663) (2,663)
Transactions with owners:
Shares issued, net of costs 3,227 2,436 - - 5,663
Consideration shares issued on acquisitions 639 559 - - 1,198
Transfer of lapsed share-based payments - - (163) 163 -
Equity settled share-based payments - - 23 - 23
Total transactions with owners 3,866 2,995 (140) 163 6,884
Balance at 31 December 2024 4,088 15,621 39 (15,609) 4,139
Total comprehensive loss - - - (1,393) (1,393)
Transactions with owners:
Shares issued, net of costs 1,124 818 - - 1,942
Consideration shares issued on acquisitions 144 116 - - 260
Transfer of lapsed share-based payments - - (16) 16 -
Equity-settled share-based payments - - 71 - 71
Total transactions with owners 1,268 934 55 16 2,273
Balance at 31 December 2025 5,356 16,555 94 (16,986) 5,019
The accompanying notes on pages 79-86 are an integral part of these
financial statements.
Notes to the financial statements
A Statement of compliance
The financial statements of Earnz Plc, the Company, have been prepared in
accordance with Financial Reporting Standard 101 - Reduced Disclosure
Framework ('FRS101') and the Companies Act 2006 as applicable to companies
using FRS101.
B Basis of preparation
The financial statements have been prepared under the historical cost
convention, as modified and in accordance with the Companies Act 2006.
The Company's financial statements are presented in pounds sterling, which is
the Company's functional and presentation currency. All amounts are rounded to
the nearest £1,000, unless otherwise stated.
The Company has taken advantage of s.408 of the Companies Act 2006 in not
preparing its own statement of profit or loss and statement of other
comprehensive income.
As permitted by FRS101, Earnz Plc has taken advantage of disclosure exemptions
on the basis that equivalent disclosures are, where required, given in the
consolidated financial statements of Earnz Plc. On the basis the Company is a
qualifying entity, the following exemptions have been applied in the
preparation of these financial statements:
(a) Paragraphs 45(b) and 46 to 52 of IFRS 2, 'Share-based payment' (details
of the number and weighted average exercise prices of share options, and how
the fair value of goods or services received was determined) - permitted by
FRS101 para.8(a).
(b) IFRS 7, 'Financial instruments: Disclosures - permitted by FRS101
para.8(d).
(c) Paragraphs 91 to 99 of IFRS 13, 'Fair value measurement' (disclosure of
valuation techniques and inputs used for fair value measurement of assets and
liabilities) - permitted by FRS101 para.8(e).
(d) Paragraph 38 of IAS 1, 'Presentation of financial statements' -
comparative information requirements in respect of: - Paragraph 79(a)(iv) of
IAS 1, - Paragraph 73(e) of IAS 16, 'Property, plant and equipment', and -
Paragraph 118(e) of IAS 38, 'Intangible assets' (reconciliations between the
carrying amount at the beginning and end of the period) - permitted by FRS101
para.8(f).
(e) The following paragraphs of IAS 1, 'Presentation of financial
statements': - 10(d) (statement of cash flows), - 16 (statement of compliance
with all IFRS), - 38A (requirement for minimum of two primary statements,
including cash flow statements), - 38B-D (additional comparative information),
- 111 (statement of cash flows information), and - 134-136 (capital management
disclosures) - permitted by FRS101 para.8(g).
(f) IAS 7, 'Statement of cash flows' - permitted by FRS101 para.8(h)
(g) The requirements of paragraphs 88C and 88D of IAS 12 Income Taxes -
permitted by FRS 101 para.8(iZA)
(h) Paragraphs 30 and 31 of IAS 8, 'Accounting policies, changes in
accounting estimates and errors' (requirement for the disclosure of
information when an entity has not applied a new IFRS that has been issued but
is not yet effective) - permitted by FRS101 para.8(i)
(i) Paragraph 17 of IAS 24, 'Related party disclosures' (key management
compensation)-permitted by FRS101 para.8(j)
(j) The requirements in IAS 24, 'Related party disclosures', to disclose
related party transactions entered into between two or more members of a group
- permitted by FRS101 para.8(k).
Going concern
The Directors have assessed the Company's ability to continue as a going
concern and are satisfied that the Company has adequate resources to continue
in operational existence for the foreseeable future.
For a more detailed assessment of going concern, please refer to the
consolidated financial statements.
C Critical accounting judgements and estimates
The critical accounting judgements and estimates applied in the preparation of
the parent company accounts are consistent with those disclosed in the
consolidated financial statements. For further details on the key assumptions
and estimates, refer to the consolidated financial statements.
D Prior period restatement of comparative information
During the year, the Company identified an error in the forecast model used to
determine contingent consideration relating to the acquisition undertaken by
its subsidiary undertaking, Earnz Holdings Limited. Following reassessment,
management concluded that the contingent consideration recognised in prior
periods was overstated. Comparative information has therefore been restated to
reduce both the contingent consideration liability and the corresponding
receivable included within amounts due from subsidiary undertakings.
The following tables summarise the impact of the retrospective correction on
each affected financial statement line item:
Statement of financial position:
31 December 2024 Previously reported Adjustment Restated
£'000 £'000 £'000
Net amounts due from subsidiaries 4,326 (278) 4,048
Contingent consideration < 1 year (180) 138 (42)
Contingent consideration > 1 year (1,155) 140 (1,015)
The correction had no impact on the Company's loss for the year, retained
earnings or net cash flows.
E Accounting policies
The accounting policies applied in the preparation of the Parent Company
financial statements are the same as those set out in Note 2 to the
consolidated financial statements, except for the following additional
policies.
Investment in subsidiaries
The Company does not hold direct equity investments in its trading
subsidiaries. Instead, all operating subsidiaries are held through an
intermediate holding company, which is a 100% wholly owned subsidiary of the
Company.
Impairment of investments
The Company's investment in subsidiaries is primarily reflected in the
intercompany loan receivable from its holding company that has direct
ownership of all trading entities.
This loan is classified as a financial asset and is measured at amortised
cost, less any impairment. The recoverability of the loan is assessed based on
the net asset position and expected future cash flows of the wider group
structure. Any impairment is recognised in the profit or loss when there is
objective evidence that the carrying amount is not fully recoverable.
Share-based payments
The Company operates equity-settled share-based payment arrangements for
certain employees. The cost of these arrangements is measured at fair value at
grant date and recognised over the vesting period.
The Company has taken advantage of the exemption available under FRS101 and
therefore has not disclosed detailed information about share-based payments.
Equivalent disclosures are included in the consolidated financial statements.
Intercompany receivables
Amounts due from group undertakings are initially recognised at fair value and
subsequently measured at amortised cost. No unconditional right to defer
settlement for at least 12 months after the reporting date exists and
therefore all intercompany loans are classified as current.
F Staff costs
Average monthly number of persons employed by the Company during the year:
2025 2024
No. No.
Directors 5 4
Administration 3 1
Total average number of employees 8 5
The cost of employees (including directors) during the period was made up as
follows:
2025 2024
£'000 £'000
Salaries (including directors) 528 285
Share-based payments 71 23
Social security costs 70 29
Pension costs 35 12
Short-term employee benefits 2 -
Total staff costs 706 349
Directors' remuneration is disclosed separately in Note 5.
G Auditor remuneration
The Company paid £65k audit fees in the year to 31 December 2025. This
included £49k for the audit of the company and consolidated financial
statements and £16k for work on the acquisition of A&D Carbon Solutions
Limited. A further £35k of fees was paid in 2025 relating to overruns on the
2024 audit. (2024: The Company paid all audit and non-audit fees for the
Group. The audit included £161k for the audit of the company and
consolidated financial statements and £433k for non-audit services relating
to financial due diligence on acquisition targets in the year).
H Operating expenses
Included in operating expenses are costs associated with the acquisition of
A&D Carbons Solutions Ltd and other reorganisation costs, incurred by the
Company, totalling £0.27m (2024: £1.6m).
I Investments in subsidiary undertakings
2025 2024
Cost £'000 £'000
At 1 January 0 609
Investment - 0*
Disposal 0* (609)
At 31 December 0 0
2025 2024
Impairment £'000 £'000
At 1 January - (600)
Disposal - 600
At 31 December - -
Net book value - 0
During the year the Company transferred ownership of its 100% wholly owned
subsidiary, National Retrofit Solutions Limited (previously named Earnz
Regeneration Limited), to its 100% wholly owned subsidiary Earnz Holdings
Limited.
Earnz Holdings Limited was incorporated in 2024 as the Group's intermediate
holding company.
*The investment on incorporation in both entities was a nominal amount of £1
, which has been rounded to £0 in the table above.
Full details of the Company's subsidiaries, held directly or indirectly
through Earnz Holdings Limited, are provided in Note 20 of the consolidated
financial statements.
J Property, plant and Equipment
Computers & Electronic equipment Plant & Machinery Total
£'000 £'000 £'000
Cost
At 1 January 2025 4 - 4
Additions 19 - 19
Disposals - - -
At 31 December 2025 23 - 23
Depreciation
At 1 January 2025 (1) - (1)
Charged during the year (1) - (1)
Disposals - - -
At 31 December 2025 (2) - (2)
Net book value at 31 December 2025 21 - 21
Computers & Electronic equipment Plant & Machinery Total
£'000 £'000 £'000
Cost
At 1 January 2024 5 14 19
Additions 4 - 4
Disposals (5) (14) (19)
At 31 December 2024 4 - 4
Depreciation
At 1 January 2024 (3) (6) (9)
Charged during the year (1) (1) (2)
Disposals 3 7 10
At 31 December 2024 (1) - (1)
Net book value at 31 December 2024 3 - 3
K Intangible assets
Intangible assets comprise capitalised website development costs. Costs
directly attributable to the development of the website are capitalised and
amortised over their estimated useful economic life.
At 31 December 2025, the carrying amount of intangible assets was £10k
(2024:nil). Amortisation charged during the year was £1k.
L Financial Instruments
The Company's principal financial instruments comprise intercompany
receivables, trade receivables, trade payables and interest-bearing
borrowings.
At 31 December 2025 the carrying amounts of financial instruments were:
Restated
2025 2024
Category £'000 £'000
Cash and cash equivalents M(i) 634 1,341
Intercompany receivables 5,990 4,048
Trade and other receivables M(ii) 47 14
Total financial assets 6,671 5,403
Non-financial assets M(iii) 127 119
Total assets 6,798 5,522
Trade and other payables M(iv) (158) (311)
Loans and borrowings M(v) (477) -
Contingent consideration M(vi) (1,141) (1,057)
Total financial liabilities (1,776) (1,368)
Other non-financial liabilities M(vii) (34) (18)
Total liabilities 1,810 (1,386)
The Company has applied the exemptions available in FRS101 and has not
disclosed further information required by IFRS7 and IFRS 13 relating to
financial risk management and fair value hierarchy. Equivalent disclosures are
included in the consolidated financial statements of the group.
M(i) Cash and cash equivalents
2025 2024
£'000 £'000
Cash at bank and in hand 534 512
Restricted cash 100 829
Total cash and cash equivalents 634 1,341
The restricted cash of £0.1m at 31 December 2025 is held by HCC International
Insurance Company Plc as collateral for a performance bond issued in respect
of the Equans contract held by A&D Carbon Solutions Limited.
(2024:Restricted cash of £829k relates to cash held arising from capital
raised under VCT tax-advantaged status. These funds are ring-fenced and are
not available for general use by the Company. The Company can only use this
money in accordance with the qualifying investment criteria of the VCT
regulations.)
M(ii) Trade and other receivables
2025 2024
£'000 £'000
Rent deposits 8 -
Trade receivables 39 14
Total trade and other receivables 47 14
Net amounts due from subsidiaries
Amounts due from group undertakings are non-interest bearing and repayable on
demand. AS the Group entities do not have an unconditional right to defer
settlement for at least twelve months from the reporting date, the balances
are classified within current assets. The balances principally comprise cash
advances, payments made on behalf of group entities and management recharges.
M(iii) Other non-financial assets
2025 2024
£'000 £'000
Prepayments 93 76
VAT receivable 34 43
Total trade and other receivables 127 119
M(iv) Trade and other payables
2025 2024
£'000 £'000
Trade payables (115) (64)
Accruals and deferred income (43) (247)
Total trade and other receivables (158) (311)
M(v) Loans and borrowings
2025 2024
Non-current - movement £'000 £'000
Balance 1 January - (523)
Proceeds from borrowing (489) -
Interest on loan (4)
Repayment 16
Accrued interest on corporate bonds - (5)
Derecognition on disposal of subsidiary - 528
Balance 31 December (477) -
On 5 November 2025, Earnz Plc agreed a sterling loan facility of £0.5m with
HSBC. The loan is repayable over three years from the date of drawdown in
monthly instalments. Interest is charged at 3% per annum above the Bank of
England base rate. The facility is supported by Group security arrangements
including cross guarantees and debentures over certain subsidiary
undertakings. As at the reporting date, the carrying value of the loan was
£0.48m (2024:nil)
On 27 February 2024, the convertible loan note holders incorporated Verditek
Solar Limited, and on 28 February 2024, Earnz Plc (previously Verditek Plc
until 6 March 2024) disposed of its sole operating subsidiary, Verditek Solar
Italy srl, to Verditek Solar Limited in return for satisfaction of the
outstanding secured convertible loan notes and accrued interest of £528k.
M(vi) Contingent consideration
The Company has recognised a financial liability, relating to the obligation
to issue shares or settle in cash, the contingent consideration on behalf of
its 100% wholly owned subsidiary Earnz Holdings Limited.
An equal and corresponding receivable of £1.14m has been recognised as a
financial asset in the balance 'net amounts due from subsidiaries'. (2024:
£1.06m)
M(vii) Non-financial liabilities
2025 2024
£'000 £'000
Social security & other taxes payable (26) (14)
Pension cost (8) (4)
Total trade and other receivables (34) (18)
N Taxation
(i) There is no current tax or deferred tax charge for the year in
respect of the Company.
(ii) No deferred tax asset has been recognised in respect of accumulated
tax losses due to the uncertainty over availability of future taxable profits
against which these losses can be utilised.
At 31 December 2025, the Company had unrecognised tax losses of £7.7m that
may be available for relief against taxable profits of its subsidiaries,
subject to relevant tax rules and elections. (2024: £5.7m)
O Share capital and reserves
For details of share capital see Note 18 in the consolidated financial
statements.
P Commitments
At 31 December 2025, the Company had no material commitments for capital
expenditure or other contractual obligations, including guarantees given in
respect of subsidiaries or third parties.
Q Contingent liabilities
At 31 December 2025, the Company had no contingent liabilities, including
potential liabilities arising from guarantees or indemnities provided to
subsidiaries or other parties.
R Ultimate controlling party
The Company is the ultimate parent undertaking and controlling party of the
Group.
S Events after the reporting period
There were no material events after the reporting period specific to the
company. Refer to Note 25 of the consolidated financial statements for details
of events after the reporting period affecting the Group.
1 EBITDA is operating profit before impairment of goodwill, amortisation of
acquisition related intangibles, and exceptional, one-off items.
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