Good morning and a warm welcome to ReFuels' Q1 2026 results, representing the period April to June 2025. With me today, I have live in studio, CEO of ReFuels, Philip Fjeld, and with us online, we have CFO and Managing Director, Baden Gowrie-Smith. We will first have a presentation, and then after the presentation, we will have a Q&A session. You can submit your written questions during the webcast. With that, I hand the word over to Philip.
Thank you very much, Alan, and good morning to all of you who are watching this live, and for the ones of you who are watching this on catch-up. As Alan said, we're going to go through our first quarter for this financial year. As a reminder, our financial year runs from the 1st of April to the end of March. We will go through that today. Just as a reminder, who we are, what we do. We are decarbonizing Europe's truck fleet, focusing initially on the U.K. We supply biomethane, 100% renewable and sustainable gas, to decarbonize trucks in the U.K. We are a market leader in that segment. We've been around for now 11 years or so. We've got 16 large stations in operation. We refuel close to 2,100 trucks a day across that network.
We're very proud that in the last financial year, we helped our customers save north of 220,000 tons of greenhouse gas emissions. This is what a typical station looks like. We have this through all the quarterly presentations, and we think maybe we should remove it. I think it's a good visual for those of you who are new to us and new to the company in what we do. This is a very, very efficient way of putting huge quantities of renewable energy into vehicles. This is in Newton Acliff in the northeast of England. We can refuel here close to 800 trucks per day, typically at peak utilization, 80 trucks per hour. They're unmanned. We operate them remotely. These are very, very efficient ways of putting renewable energy into vehicles.
Just to give you a sort of a better understanding maybe of how much energy we can put through here at full utilization, or what we call steady state utilization, we will be dispensing into vehicles energy equivalent of five to six full diesel tankers arriving at site every day. For those of you who've been following us for a while, you will know that in April, we announced that we had concluded a transaction with the Foresight Group to simplify our structure. This quarter is the first quarter where we are now reporting under the new structure and where we are seeing the benefits of that structure. If you just look at some of the figures here, we had strong volume growth in the last quarter. We're also seeing supportive price movements and stronger prices in the RTC market that I know Baden will touch upon later on.
Also important to mention here that we have acquired, this is a post-close here, it was in August, but we've acquired our first biomethane production facility, which we'll also touch upon in a bit. Finally, we are looking at very soon, hopefully in the coming month or so, we will be signing a GBP 25 million agreement, a credit facility which will help us to continue to roll out stations. Finally, we're very proud and very pleased, I think, that for the first time, we now have the visibility and the confidence to provide earnings guidance, and we're currently guiding for GBP 8 million- GBP 10 million of EBITDA at CNG Fuels level for this financial year. If we then take a bit of a look at operational review, I think it's important here just to set the scene slightly.
The haulage sector across Europe in the EU and in the U.K. is struggling at the moment. It had rapid growth through the COVID period, probably in hindsight, overexpanded. There is now a quite significant contraction going on in that market, consolidation going on in that market. There's a lot of haulage companies that are being acquired and so on and so forth. That means that we are seeing a considerable drop in new truck registrations across Europe. There is also an age issue here, I'd say. The fleet is getting older, and at some point in time, registrations will have to pick up again because not only will the contraction, if you want, have run its course, but also vehicles can only be kept on the road for so long before they become uneconomical to keep on the road.
Despite, I would say, headwinds, if you want, from an overall haulage sector that is struggling, we continue to grow and what we are offering to our customers continues to grow in popularity. We have now close to 2,100 trucks per day that go through our network. The vast majority of those are 4x2 trucks, but we're starting to see the 6x2s now also get delivered. If you look at the volume growth here as well, you know that is a monthly chart there. You will see there is some volatility month on month, but the direction is really only one way, and that is upwards. Mentioned previously that we made our first acquisition upstream. Once again, in the past, all of the biomethane that we have been dispensing to our customers, supplying to our customers through our network has been contracted and has been acquired by RTFS across Europe.
We have now taken ownership of a facility in the Netherlands that we acquired earlier in August. This is our first one that we will then have basically in-house, if you want. Now, what does this mean for us with volume, et cetera? It is not a large plant, that has to be said, but it is important for us because it gives us confidence, it gives us learnings here with regards to how we may or may not expand further upstream in the years ahead. I also want to make it clear that if you look at the overall dispensing that we'll be doing this year, which is around one terawatt hour, about 1%- 2% of that volume will be coming from this facility.
Our bread and butter going forward will continue to be sourcing biomethane on short, medium to long-term contracts from facilities that we clearly don't own. In the last two, three, four months, we've started to see some interesting trends in the biofuel markets, but also in the fuel markets in general. On the left here, you see essentially how Bio-CNG, which is 100% biomethane, stacks up against fossil diesel and again stacks up against HVO. What you see here now, particularly between Bio-CNG and HVO, is that the spread is really moving out at this point in time, meaning that fleets that are operating their diesel trucks on 100% HVO, where there was a much narrower spread in the past, we are now back to what we've seen two, three years ago, where we saw 30%, 40%, 50% price premium of running on HVO versus Bio-CNG.
On the right-hand side here, we're not talking about biomethane there, but there we're starting to see the impact that the SAF mandates, sustainable aviation fuel mandates, are having within the market. Here you see that there has been a fairly tight correlation between SAF pricing and HVO. They are both used or both traditionally made from more or less the same feedstocks. Now you see there's a quite big spread opening up. That could be temporary, but what we're hearing in the market is that this does seem to be more fundamental in the sense that SAF demand is picking up and that is likely to have an impact also on the feedstocks used for HVO in the future, which again could mean, if we go back to the graph on the left, could mean that HVO as such, as a price, could increase further.
Bio-CNG, as such, could become more attractive. What are we seeing in the RTC markets? Once again, Baden will talk a bit about that later on, but here we see that we are in the GBP 0.245- GBP 0.26 range, which is historically where we've been. As long as we're in those ranges, it is possible for us to achieve decent or attractive margins. I just mentioned that we are starting to see some of the effect from sustainable aviation fuel and HVO, which again has a positive impact on RTC pricing. Also, the Trade Remedies Authority in the U.K. are proposing to put anti-dumping measures on Chinese biodiesel. Those have already been implemented in the EU, and this is just the U.K. essentially following six to nine months behind what the EU have been doing.
All in all, we've come through some years where there has been pretty significant volatility in the biofuel markets or biodiesel markets, which again have had a negative impact on RTC pricing. We are now starting to see, and this seems to be more than just light in the tunnel, but now seems to be some quite positive movements there. If we then look at stations, you know, we today operate 16 large public access stations. We have a plan to roll out another nine over the next three years. The debt facility that I mentioned previously, GBP 25 million, will be important in that regard, but also the fact that we are cash flow positive across the group, and as such, we're in a strong position to continue to roll out more stations going forward.
Looking at stations in June, we opened our second station in Scotland, Livingston, and then we've got Magor in South Wales and Swindon as well in Southwest England. Both of those will be going into development shortly. Magor in the next couple of months. Swindon, we still need to discharge some conditions, but there as well, very attractive site going into development soon. There are a lot more coming behind these, but we won't single them out or other sites out until we've got all the planning approvals in place, and we are only months away from actually going into construction on them. With that, I'll hand it over to Baden to take us through the financial review section.
Thank you very much, Philip. Just to follow on from what Philip mentioned before, obviously had a pretty substantial price dislocation in the markets, which caused a substantial impact on the RTC prices going back about two years. We've continued to see an improvement in the instability of the markets. That has led to an increase in the RTC prices, which has stabilized the last few months in the GBP 0.24- GBP 0.26 range. What that means for us is we've now seen margins that we've had historically witnessed about around the 30% mark. We've now reached those again, and this quarter, our gross profit margin on biomethane improved to 33%. Gross profit margin on biomethane is the difference between what we sell an RTC for and what we buy the underlying biomethane for. That's a combination therefore of the biomethane price holding relatively steady and the RTC price having improved.
Some of the old forward contracts that we had previously set up a year and a year and a half prior are now starting to roll off, and of course those were at lower prices. To remind you of the journey we've been on over the last year and a half or so, we're up 39% year on year to where we are this quarter, and 100%, we're back from the lows around GBP 0.13 at its lowest point about a year and a half ago. The recovery to these levels, which we do feel are historically sustainable, has obviously been excellent for the business. What it's also meant is that we've been able to access biomethane at very compelling prices and enough of it to fully source ourselves for the 2025 year. That's the calendar year, I might add, which is the obligation year in which we source.
Against that, we've sold the RTCs forward for that period and therefore locked in those biomethane margins for the remainder of the calendar year. Not only that, we're also active in 2026, we're also actively sourcing 2026 and able to sell those 2026 RTCs forward, providing that earning stability and earnings comfort that will now carry on into the next calendar year, which of course is also our next financial year. It provides our customers comfort that they're going to have the biomethane they want to be sourced and have their fuel savings. I explained this in the last quarter, but it's well worth explaining again, and it comes ahead of discussing the financials for the quarter.
We dispense obviously volumes through the CNG Fuels station, and as you've seen in the earlier graph, that's a relatively steady increase over time as more customers are added and the vehicles are obviously very sticky to our sites. We generate RTCs when we match biomethane against those dispensed volumes of CNG, and it's important to note that under the RTFO, which is the Renewable Transport Fuel Obligation, we are able to map the important period for us as the calendar year in which we want to be fully sourced for our customers in biomethane. We are able to be undersourced in various periods versus the volumes of CNG we've dispensed to match against biomethane, which means that we are able to catch up biomethane later in the financial year and later in the calendar year in order to match against volumes previously dispensed.
That's really important for us because the RTC, other fuel producers who are obligated can prefer to have RTCs later in the period. There are certain benefits to timing your biomethane purchases. What this does is it provides us the flexibility to buy biomethane and RTCs in periods where we feel it's economically beneficial to us. What we'll see now is in the financial year Q1, Q1 and Q2 will probably often in the future be our softer periods where we will dispense the CNG, but we won't necessarily have been fully sourced. Q3, which is the end of the calendar year, we will make sure we're fully sourced to the extent possible. For our customers who usually have an end of March financial reporting end, we obviously try and be fully sourced in that period to the extent possible because that will then define their annual savings.
We expect higher biomethane purchases and RTC sales in the Q3 and Q4 periods. With that, I'll just remind you again of the transaction we've just completed and what that means for ReFuels. ReFuels now owns 40% of CNG Fuels, and CNG Fuels itself now owns 100% of the CNG stations that were previously owned in the joint venture, which wasn't consolidated into the business. Additionally, CNG Fuels has now increased its ownership in RTFS from 29.7% to 78.4%, meaning that now both of the revenue streams from the station business and the RTC sales and RTFS business are now flowing, are now consolidated up into CNG Fuels. The balance sheet and the assets that were previously off-balance-sheet, being the CNG stations, are now on balance sheet.
That means that ReFuels is now probably, it is now probably best for us to discuss CNG Fuels' financial performance in these presentations and in our reports, and then present the ReFuels financials towards the end so that you can understand the individual standalone business of ReFuels. Understanding CNG Fuels' financials will be very important to understand the business, the value we're creating for shareholders, and our performance. With that, revenue has increased year on year. I'll again remind you that Q1 is a quieter, it will be a quieter quarter. That's driven by higher dispense volumes and an increase in the number of RTC sold. Interestingly, because of course we source less biomethane, we had an even gross profit split between the CNG station side of the business and the biomethane side of the business in this quarter.
You can see, and we've had a very large jump in the EBITDA contribution to the business from the combination of GBP 1.4 million. How that's broken out, that's split between GBP 500,000 EBITDA loss from the CNG station business and the overheads of CNG Fuels, and then GBP 1.9 million EBITDA contribution from the RTFC sales over biomethane to the RTFS business. Why do I define the overheads and make the point of the overheads in the CNG station network is that historically, if you've been watching these presentations, we have shown the standalone CNG station performance, which is separate obviously from the overheads of running the CNG Fuels business and the logistic operations and the development operations for new stations.
If you look purely at the CNG station business itself, we had a 15% uplift in EBITDA in the last quarter, and we are now annualizing about GBP 8.4 million per year from the CNG station business itself. Although the loss in the quarter on that was GBP 500,000 , just half of the confirmed order book that we currently have, which is a book we currently have for delivery, would close that gap. From there, both the CNG station business and the overheads of CNG Fuels will be operating profitably, as well as continued performance from the RTFS business. With this confidence, obviously around the improvement in the station network, which is fairly consistent, and the RTFS business, which we know we've been successful in sourcing and hedging the RTC sales, we've been able to provide guidance for the first time of GBP 8 million- GBP 10 million of EBITDA.
One of the big pieces, one of the sort of strong pieces of logic behind the transaction we conducted with Foresight and the restructuring was to improve the balance sheet of CNG Fuels and to bring those two revenue streams together. The transaction concluded on April 11, 2026, and from that point now, we have no current external debt, aside from some lease liabilities. We are, of course, seeking the credit facility, which now has terms agreed and is progressing well towards signing. There are the shareholder loans to both the Foresight entities, and ReFuels also has a number of shareholder loans to it too. The business now has net equity of GBP 89.4 million, which, of course, is assets we've now managed to bring onto the balance sheet and will be subject to evaluation exercise as well for next year's audits.
Customers and our counterparties, suppliers have been obviously pleased to see the assets are now within CNG Fuels, having had them off balance sheet for so long. These additional revenue streams now mean that we can continue to grow out the network and add more value to the services we offer them. We also now have GBP 11.3 million of cash on the balance sheet at CNG Fuels level. Thank you.
Thanks, Baden. I will briefly summarize and then we will take some questions. Baden mentioned it as well, but it is a bit of a watershed moment for us now. It is the first time that we are providing earnings guidance, and for this year, we are guiding GBP 8 million- GBP 10 million in EBITDA.
Baden also mentioned that the first couple of quarters in our financial year, which is the April to June and the July to September quarter, are often softer than the next two quarters. We are now providing guidance, and if you look at what we've provided in the past as well, because one thing is looking at us now, but, of course, we today have 1.3%, 1.4% market share of the overall articulated truck segment in the U.K. If we grow that market share, which we're very confident we will, both through more 4x2 trucks, but more importantly, the 6x2 truck, what does that mean potentially for EBITDA looking out to 2030? What you see here is something that we provided, I think, back in April. What we now see is, you know, we're on a trajectory, a profitable trajectory where we're generating cash.
The external debt that's coming in is very important as well, but we are now in a very much changed position compared to what we were just six or 12 months ago. The trajectory we see there, you know, we're on the way to, and we're still confident we are going to meet that. I think providing guidance this year is a good indication that we're quite comfortable with the position we're in. To summarize, despite, I would say, headwinds, overall headwinds in the haulage sector, logistics sector, not just in the U.K., but across Europe, we are continuing to see mass adoption of Bio-CNG continue. There's no, I would say, letting up when it comes to ordering from customers, despite a soft haulage sector as a whole. We are now busy scaling what we've already got. Baden mentioned, you know, overheads, et cetera.
We've spent many, many years building a very strong base, if you want, with regards to expertise and organizational capabilities internally. We can, in theory, operate almost three times as many stations with maybe only increasing our overhead by 20%-30%. There's huge scale benefits that we're now starting to realize. Finally, we are profitable. We're cash flow generative. That will continue going forward, hence the guidance. That puts us in a really, really strong position to realize further value creation, as I showed on the previous slide, for our shareholders. With that, I will hand it over to Alan for some questions, please.
Yes, thank you, Philip. We move into the Q&A session. Just as a reminder, you can submit questions on the chat with the webcast. We have a couple of questions. The first one is, can you provide more detail about the station buildouts? Are these stations standard in terms of capacity, ramp-up time, and expected earnings contributions?
Yes, absolutely. A typical station that we now build will have the capacity to refuel 600- 800 trucks per day. The stations, both Magor, Swindon, and the ones to come thereafter, are all in the category where we can refuel 10- 14 trucks simultaneously, 600- 800 trucks per day when it comes to earnings contributions, IRRs, et cetera. Absolutely, that's correct.
Good. Is there likely to be more upstream additions, or was this more of an opportunistic move? If the former, what is the broader strategy on upstream acquisitions? To follow up on a related note, will you be using all of the biomethane to match against Bio-CNG dispensed, or will you potentially arbitrage this if there is more revenue to be gained from selling the biomethane into another market?
Okay, I'll answer the second part of that question first and then go into the first part of it. All the biomethane that we source, we have the ability to arbitrage. We do sometimes arbitrage it because biomethane produced from certain feedstocks might be of greater value in other markets, such as Germany potentially, or the Netherlands, and vice versa. We already do that. The answer there is yes, it will come into our portfolio. It is likely to end up through the station network in the U.K. If we can arbitrage it, or if we can bundle it with something that is value-add, then we will do that. When it comes to other upstream opportunities, here it's important to understand that we have had a strategy for years where we have been looking at upstream opportunities.
We see that as important for us to become a fully integrated biomethane player as such, where we're not just contracting it, but also producing it. I'd also like to say that we've done this one transaction, which is of a perfect scale, perfect size for us. It is an existing proven plant. It doesn't have subsidies to it. That means that it's unsupported biomethane, which is important for what we need over here for our network. It was a perfect fit for us, both in regards to size, to scale, and flexibility. We also have the ability to expand it in the future. Are we now actively looking at larger investments upstream? No, we're not doing that at this point in time. Our bread and butter will continue to be building out stations downstream, and the debt facility that we're currently raising is allocated solely for that.
That doesn't mean that we won't continue to look at opportunities upstream, but I don't want anyone on this call to be of the opinion that we are now going to go upstream and spend a lot of capital upstream for now. What happens in years down the line is different, but over the next couple of years, no. Whether we call it an opportunistic opportunity or whether it was just something that came along and made sense for us and made sense for the seller, I'd more put it into that category, and then we'll see where we are in a couple of years' time.
The next question is also on upstream. Can you explain the outlook of the upstream business? Which markets would be of interest for expansion? What needs to happen to facilitate such an expansion?
I think I've pretty much answered that one, that there will be a watching brief on that. We are not necessarily actively now looking to make big investments upstream for now. What happens in 18 months, two years' time, let's see. For now, as I say, we've made this investment, and we're now going to embed that into what we do, and then we'll see what we do in a couple of years' time.
Very good. One question on sourcing strategy. Is the biomethane sourced largely from the U.K. or internationally? What markets provide the most interesting opportunities?
The benefit we have, and not just us, but other players across Europe as well, is that we can mass balance biomethane across borders using the international pipeline grid and using the pan-EU and pan-European pipeline grid. We source biomethane all across Europe. We source it in the U.K., but we source the majority from the EU, the majority on the continent. What will that look like in years ahead? That depends on a number of factors, such as how regulatory changes will affect various markets, how the potential of loss of subsidies in some markets versus introducing subsidies in certain markets, and so on and so forth. I don't think we can give a clear answer and say this market is more interesting to us than that market. It's more an overall picture.
I think the message there is, as of today, there's considerably more biomethane tracing transport demand than there is transport demand. We are comfortable, we're fully sourced for this year. We're getting very close to being fully sourced for 2026. We're already sourcing for 2027. There's a lot of new capital coming in to grow out biomethane production across Europe, which we see as very attractive to us and very fortunate for us, because with our growing demand, we will need more supply. I think we're in a good position, but I don't want to single out certain markets because one market might be really attractive this year, and that could change in two years' time and vice versa.
Very good. Okay, we have one question on the 6x2 trucks. How many 6x2 axle configured trucks are currently in the order book, which you expect over the next 12 months?
As of today, it's about 10%-ish. I say "ish" because of course we don't have full visibility on all orders that are in place. You know, we know there are about, I can't remember the numbers now, if it's 800- 900 that we're expecting over the next 12 months. I would say it's probably just shy of 100 that we are aware of that are 6x2s. I would say it's important to understand that a lot of the 6x2, a lot of the potential fleets that want to adopt 6x2s are still waiting on trialing a vehicle. There are now a lot of new demos that are arriving into the U.K. as we speak, literally this week, last week, and next week. As this trialing activity, demo activity really ramps up, we're expecting that also then to result in larger orders.
I wouldn't necessarily say that just because it's only 10% of what we're seeing today, that's indicative of how it's going to be going forward. You know, ask me again in six months' time, and I'm sure the picture is very different.
Good. We have another question on, do you expect the most current trade agreements between the EU and USA to impact your business in any way, i.e., CNG imports?
No. I mean, famous last words, because there are trade agreements that can affect us in ways that have actually got nothing to do with our business, right? It could affect dynamics in the biodiesel market. It could affect other dynamics that are in other feedstock markets, which again could spill over into biodiesel markets. Just because I say no today doesn't mean that couldn't happen in three or six months' time. What we're seeing today, it does affect ethanol markets as an example in the U.K. That again doesn't really affect or doesn't affect us at all. No, we're not expecting any sort of carryover or any issues from what's going on there. Once again, things might come out of the woodwork in the next three or six months that we're not aware of today.
Good. We have one final question here. Are the lower truck registrations in the U.K. and EU impacting delivery times for CNG trucks?
Good question. The answer is yes, actually in a positive way. If we go back a year, go back to let's say late summer 2024, if you went to one of the truck manufacturers and you ordered a CNG truck, it would probably be nine months before you got it delivered. Some could get it for six, some would be 12, but let's say nine months there or thereabouts. Just yesterday, we had a customer who told us they'd just ordered trucks, and about half of their order is arriving in November, December. That means that the truck manufacturers can supply vehicles much sooner. That's great for us, of course, because that means that if we're no longer talking nine months, but we're talking four months, five months, three months, then orders get pulled forward, and as such, we see that volume much sooner.
I'd also like to mention a bit maybe about the downturn in the haulage sector as a whole. There was over-expansion clearly during COVID. When there is over-expansion at some point in time, there needs to be a reaction to that, and that's what we're probably currently seeing. I think it's also important to note that the U.K. economy is not exactly going from strength to strength currently. There is a fairly weak economy, underlying economy as well. That said, why aren't we necessarily very worried about this? We are a very small part of the overall haulage sector, right? As I say, 1.3%, 1.4% of articulated trucks in the U.K. are CNG, and they run exclusively through our network. The majority of those customers have large fleets.
Yes, whilst they might not have the overall fleet growth that they might have had two or three years ago, they still need to meet quite ambitious decarbonization targets. As such, just because the economy isn't doing well, doesn't necessarily mean that we're going to see a huge impact on orders. However, it will affect some of the smaller operators for sure, which also means that some of the, I would say, some of the marginal demand we could otherwise have been seeing in a booming market, we're not going to see. That said, we're growing, we're very comfortable with our position. Whether we grow a couple of percentage points more or slower, let's not be too difficult about that.
As there are no further questions, I hand it back to Philip to conclude the call.
Thank you, and thank you all for taking the time to follow us and to tune in today. A lot of exciting times ahead, and we're very pleased that this is the first quarter that we've actually been able to announce guidance. Looking forward to the coming quarters. If there's anything that we haven't answered today that you didn't feel comfortable asking directly, then reach out directly to myself or Baden, and we'll see what we can do with regards to providing further clarity. Thank you for tuning in.
Thank you.