Today we will have a fully virtual presentation. I am joined by CEO Philip Fjeld and CFO Baden Gowrie-Smith. We will, as usual, first have a presentation, and afterwards we will have a Q&A session. You can submit your written questions during the webcast. With that, I will hand the word over to Philip.
Thank you very much, Allen, and welcome to everyone this morning who is either watching it live or on catch up. As Allen said, please feel free to send through some questions and then Baden and I will get into that in a bit. As per usual, I will take you through the highlights of the quarter, a bit of the market developments. Baden will then do the financial update, and then we will round off and take some questions. As per usual, just reminding you what we do. We have stations, very large public access stations and mobile refueling stations in the U.K. that are decarbonizing large trucks, primarily, also known as HGVs.
Currently, we have north of 2,250 trucks going through our stations exclusively. In the last six years, we have saved our customers north of GBP 65 million worth of fuel costs. In the last calendar year, about 250,000 tons of greenhouse gas emissions. As we always say, this is no longer a niche application that is just being used by a handful of large fleets. We are now getting close to 200 customers that are using our station network every day.
Once again, just a bit of a refresher as to the underlying structure here. ReFuels owns 40% of CNG Fuels, which is an integrated clean fuel platform that sources biomethane, generates certificates, trades those, and then through RTFS and then downstream, we have the CNG Fuels network in the U.K. that you just saw on the map previously. This is an example of one of our stations, Warrington, between Manchester and Liverpool. It has taken time to build out the network. Now we are moving into a phase where we are cash generative.
We are profitable, as you will see from our earnings today. This is a good example of a typical station that we developed. They are unmanned. As such, the drivers do all the work. We remotely monitor them, have a team of engineers that will come out and make repairs if need be. Currently here, we are refueling more than 300 trucks a day, and it is currently north of 50% capacity. So this station alone has the ability over time to refuel more than 600 trucks daily. If we then look at the highlights of this quarter, our adjusted EBITDA has more than tripled compared to the same period last year to GBP 4.9 million.
We reiterate our guidance of GBP 16 million- GBP 20 million worth of adjusted EBITDA for this financial year. Two main drivers for that, it is increased station profitability and attractive margins of sourcing biomethane and generating RTFCs. We are expecting more than 900 new CNG trucks to be delivered over the next 12- 18 months, putting us on a clear trajectory towards more than 8,000 HGVs going through our network by 2030.
As you will see a bit later on, there is growing political support for a multi-fueled approach to decarbonize trucks. Previously, that has been heavily focused towards electrification. There is now more realism creeping in, and we are starting to see that once again on some slides later on. Finally, we just recently announced that our third high-capacity station, that one is in Carlisle, has gone into construction, and we have now got three stations simultaneously in construction that will come online over the next nine months. Baden will go through the financial section here a bit later.
If we then look at what is going on in the world, particularly over the last six, seven months, the closure or the effective closure, or at least the difficulty of getting regular ships in and out of the Strait of Hormuz has meant that, yes, we have higher natural gas prices, which I will talk a bit later on. More importantly, we have even higher diesel prices. As such, the savings of our customers of running CNG trucks today are greater than they were a while back. We see the same for HVO, which is 100% biodiesel, and we are now in a world where previously our customers were focused on saving money by running CNG trucks and going green.
Now they are also focused on energy security. The way we look at the situation, there are no easy fixes to some of the underlying problems, particularly around the availability of diesel, which is not only related to the Strait of Hormuz, it is also related to the Ukraine-Russia war, with Ukraine becoming increasingly good and effective at striking Russian refineries. Russia used to be one of the largest exporters of diesel globally.
Now they are potentially needing to import diesel. So we have some structural issues here that are affecting the diesel market. Yes, gas prices have come up, but here it is important to understand that diesel price as such and the spread that our customers are looking at has increased since the outbreak of the war in the Middle East. We do face some headwinds in the U.K. with regards to the overall status of and health of the U.K. haulage market.
It heavily expanded during the COVID years, and of course, it is a cyclical market, so it is natural that there will take a time where it will also contract as vehicles, as there was maybe overexpansion, and then we will take a couple of years before it starts growing again. However, it is also fair to say the U.K. economy is not exactly in a strong position currently. We are seeing very meager growth in the U.K. sector, and more importantly, in the private sector, it is fair to say that conversations we are having with our customers, we are seeing a contraction in many parts of the private sector.
That, of course, has an effect on the need to replace trucks, which of course, is a headwind for us in general. That said, a small percentage of the overall truck market is running on CNG trucks. As such, it isn't affecting us as much as it will the diesel sector. Couple of things still remain, though. Biomethane offers 80%-90% lower GHG emissions. We are seeing lower fuel costs still, despite natural gas prices have come up in price. Why? Because diesel and HVO in particular has done exactly the same.
Therefore, we are continuing to see strong payback periods for our customers who are adopting CNG trucks, even in the current environment. We often get questions, is there going to be enough biomethane around? Is there enough biomethane around? As of today, there is far more biomethane chasing transport than there is transport demand, not only in the U.K., but across Europe. Since we started tracking these statistics about 12- 18 months ago, the number of reported investments going into upstream expansion, that is additional biomethane production, has increased significantly.
Last year, we were at EUR 28 billion. Now it's reported EUR 36 billion. Based on discussions that we are having with some of the large new platforms coming to market, infrastructure and PE platforms coming to market, I would not be surprised if that figure now is north of EUR 40 billion. So there's a lot of money going in upstream to increase production. Some of that will be subsidized biomethane, meaning it's not going to go into transport, but some of it, or quite a lot of it, will be unsubsidized, and they will need to seek demand downstream, which is why we're quite optimistic about there being sufficient biomethane for the foreseeable future.
We continue to talk about 6x2 adoption within the CNG space. Good things are happening there. If we go back about a year ago, we had 12 fleets in the U.K. that were running CNG 6x2s. As of this quarter or the quarter just gone, we have come up to 22 fleets, and there are more coming on every month. The number of 6x2 trucks in operation is also increasing along a trajectory that we have been expecting. But I think what's really important here is the number of trials we're seeing.
There were 15 trials with 6x2 trucks completed in the April to June quarter. As you can see from the 12 to 22 fleets, that is really an indication that this is starting to become a mainstream solution and that we are starting to see true mass adoption also for 6x2s. We have visibility through our customer base, going out to 2030, our current large customer base going out to 2030, that they have plans to adopt ± 8,000 CNG trucks by that time.
This, of course, does not take into account any new large customers that we're bringing on board, particularly through the 6x2 adoption. As such, we have good visibility that the growth trajectory that we've communicated in the past is not only feasible, but is also very realistic and is something that we have strong confidence will actually be delivered over the coming three to four years. Policy is always a topic that we can spend a lot of time discussing.
What we're now starting to see is more realism, and we've been expecting this for years, is more realism starting to creep in, both from the political parties, but also through some of the large trade associations like Logistics U.K. and the Society of Motor Manufacturers and Traders. They now see that the electrify everything approach isn't working. It's not delivering the type of growth and along the trajectory that was required.
As such, technology neutrality is becoming a word that is finally now being understood by many politicians. The Conservative Party came out just a couple of weeks ago and said that they would back a technology neutral approach, and that the 2035, 2040 dates that have been floating around is something that they will scrap. Mentioned construction. We've now got three stations into construction. Highly anticipated stations. Magor will open later this year, Swindon and Carlisle during the first half of next year.
Construction is going well. We're on track there for delivering those stations on time, and we've got a lot of customers who are really excited about them and who have been holding back truck orders, further truck growth until these stations went into construction, and they could see that these were actually going to be delivered in the coming quarters. With that, I will hand it over to Baden.
Thank you very much, Philip. Let me run you through the financial performance of CNG Fuels for the first quarter. CNG Fuels being the best proxy for the ReFuels performance and the value attributed to the shareholders. CNG Fuels delivered adjusted EBITDA of GBP 4.9 million in Q1, compared to GBP 1.4 million in the same quarter last year. Adjusted EBITDA, as Philip mentioned, has more than tripled year on year. A reminder on adjusted EBITDA, they are essentially the removal of all non-cash fair value remeasurements and the value movements in the-- S upported.
Yep, so we'll come back. That improvement was supported by a combination of three factors. So higher Bio-CNG volumes, stronger certificate margins, and increased scale benefits across the network as we've been growing. The certificate business remained the largest contributor, but most importantly, this was also the second consecutive quarter in which the station business produced a positive EBITDA. That's an important milestone because it shows that the improving utilization is increasingly translating into an additional and complementary earning stream for the business.
The certificate margin for the quarter was approximately 29%, although the average market price for RTFCs during the quarter was GBP 0.192 . So our realized selling price was GBP 0.261 per certificate for the same period. So that reflects the benefit of the forward contracts that we're using that are already in place. We are reiterating our guidance for FY 2027 of GBP 16 million-GBP 20 million, based on the Q1 result, expected volume growth, and the visibility we have over the certificate earnings.
We also continue to expect 15%-20% growth in dispensed biomethane volumes for the whole financial year, although noting, of course, as Philip said, it is still a challenging market for haulage in the U.K. Next slide, please, Allen. This slide shows how EBITDA growth is translating through the income statement. Revenue for the quarter increased by 62% to GBP 47.9 million from GBP 29.6 million in Q1 last year. The revenue increase was driven by higher dispensed volumes, higher natural gas prices, and a greater number of certificates sold.
It is worth noting, the higher gas prices increase reported revenue, but as our customer arrangements seek to pass through the gas cost to customers, that does not naturally reflect the performance of the business. A much more meaningful measure of underlying progress, therefore, is the gross profit and EBITDA. Gross profit increased by 74% to GBP 9.4 million, from GBP 5.4 million last year. This reflects volume growth, improved certificate margins again, and the scale benefits from high utilization.
RTFS contributed 58% of the total gross profit for the period, and the station business contributed 42% in the period too. Relatively even, and obviously both very good to see. Adjusted EBITDA increased to GBP 4.9 million, up 250% year-on-year. Of that, RTFS contributed GBP 4.3 million, while the station business contributed GBP 600,000. That GBP 0.6 million contribution from the stations is strategically significant. In the last year's annual report that we put out recently, we showed that the annual station portfolio EBITDA was GBP 5.5 million before the central CNG Fuels overheads.
The Q1 result now demonstrates that with the relevant station business costs, and as well as CNG Fuels overheads as well, the network is now producing positive EBITDA for the second successive quarter. The bottom line, CNG Fuels reported at the bottom line for profitability, CNG Fuels reported GBP 3 million, which is a much larger profit than Q1 last year, although that number was swayed by an exceptional large accounting item, which made it hard to compare. Obviously it is positive to see the net bottom line result being positive.
Next slide, please, Allen. Thank you. A key part of our earnings performance is how we manage the RTFC pricing and margin visibility. This chart illustrates both the underlying RTFC market and the benefit of our forward sales strategy. RTFC pricing, as we have discussed before, but always useful to be reminded, is principally influenced by the spread between fossil diesel and waste-based biodiesel or UCOME. That underlying spread can be very volatile, and during the quarter, higher diesel prices associated with the disruption in global fuel markets narrowed the biodiesel to diesel spread and reduced spot RTFC prices.
Despite the average market RTFC price being GBP 0.192 in the quarter, we realized an average price of GBP 0.261 on the certificates we sold. This is because all of the RTFCs delivered in the quarter were delivered against forward contracts we entered into previously at higher prices. In total, we generated and sold 65.4 million RTFCs compared with 40.2 million in the corresponding quarter last year. The realized pricing, together with the attractive biomethane sourcing, produced a certificate margin of 29.3%, up from 22.6% in Q1 last year.
To be clear, our approach is not to speculate on RTFC or certificate prices. We seek to match contracted biomethane sourcing with forward RTFC sales at margins that are sustainably profitable across the relevant obligation year. We have already secured our biomethane requirements for the 2026 calendar year, and we are actively sourcing for calendar 2027 at the moment. Next slide, please, Allen. Okay, on cash generation, CNG Fuels generated GBP 6.5 million of cash from operations in Q1 compared to an adjusted EBITDA of GBP 4.9 million.
The difference between the EBITDA and the operating cash flow primarily reflects the working capital movements associated with biomethane sourcing and RTFC generation and the timing of certificate sales and settlement. Working capital will generally fluctuate between quarters, of course. Investment expenditure was GBP 4 million, primarily relating to the construction of the new stations at Magor and Swindon, obviously with Carlisle still to come soon, and this is an investment in growth to support the next phase of the network capacity.
To help fund these stations, our financing activities, you can see, provided a net inflow of approximately GBP 2.8 million, and that also includes lease payments in the business. It is important to note that future station growth will be funded both through a combination of operating cash flow, and through debt facilities. Finally, as you can see, our operating cash balance has increased from GBP 10.8 million to a very healthy GBP 15.6 million at June 30th. Next slide, please, Allen. That brings us to the balance sheet, and our current business resources.
Just before moving on to the CNG Fuels balance sheet, I wanted to briefly address the ReFuels level movement reported in the annual report. Following the year-end audit and valuation work, ReFuels recognized a non-cash accounting loss relating to the Foresight transaction of GBP 34.1 million and a consolidated group loss of GBP 71.6 million in the parent company accounts. This resulted in a consolidated loss of GBP 37.7 million, compared with the GBP 48.5 million of net profit reported in the preliminary figures of May 2026.
To be clear, this movement reflects fair value remeasurement of and loss of control accounting, not an operating cash loss or deterioration in the underlying CNG Fuels platform, where the key value drivers very much remain intact. Onto CNG Fuels. At June 30th, we had total assets of GBP 235 million and equity of GBP 86 million, representing an equity ratio of 36%. Property, plant and equipment was approximately GBP 108 million, reflecting the operational station network and the balance will continue to increase with the construction at Magor, Swindon and then Carlisle.
Quarterly cash balance was GBP 15.6 million, an increase of GBP 4.9 million from the previous quarter. Lastly, CNG Fuels has a GBP 25 million credit facility, of which GBP 9.2 million have been drawn. Finally, I would just make note the balance sheet also includes GBP 110 million of shareholder loans. These form a part of the post-transaction capital and should be distinguished from external bank debt. These are shareholder loans, they say. That is, in summary, a very positive Q1 result, I agree. Thank you.
Thank you very much, Baden. We will move on. A brief summary before we go into Q&A, and yet another reminder that if you want to ask questions, then feel free to do so and post those now. In the past, we've talked about what we could be as a company, what we could be doing in 2028, 2030, et c. As I showed on one of the previous slides, we do have visibility out to 2030, that we feel is conservative of reaching 8,000 CNG HGVs by that time. Clearly, things can happen globally, geopolitical events, terrible economy for many years, et c.
But all else stable, all else neutral, we feel that is very much something that we can achieve. If you then look at where we've come from as a company, we've spent many, many years building what we can now only, I think, refer to as a very comprehensive platform. It takes time to build out a new industry, it takes time to build out infrastructure. The seeds that we've been planting for many, many years have now given us crops, basically, that we can start harvesting, and you're seeing that through the EBITDA growth that we are showing, and as Baden showed a couple of slides ago, also through being in a strong cash generative position.
And that then puts us on track, once again, by 2030, of getting us to GBP 100 million plus or minus EBITDA potential. So in summary, we are seeing higher station profitability without the help of biomethane sourcing and certificate generation. Second quarter in a row where the stations are now EBITDA positive. We are also seeing that the strategy we have of matching biomethane purchases to RTFC sales is a very good, useful strategy to have in a volatile world, and that is supporting our EBITDA growth.
The visibility of the trucks out to 2030 we feel is strong, and we need more stations in order to deliver on that. Hence it's great to see three more fixed stations, permanent stations in build, and of course, we are continuing to increase our mobile refueling station fleet. And finally, we are reiterating our guidance of GBP 16 million- GBP 20 million for this financial year, and of course, we will continue to provide an update on that as we progress through the year. And with that, I will stop sharing, and then we will hopefully take some questions now.
Good Thank you, Philip. So we have received a couple of questions, and the first question is on the gas prices. How is CNG ReFuels impacted by higher natural gas prices?
I mean, Baden mentioned that briefly. We are not exposed to that or CNG Fuels, sorry, CNG Fuels as a station owner operator is not exposed to those prices. Our customers pay more if the price goes up, and they pay less if the price goes down. I think what is important here is really the spread to diesel. What we have seen, sure there is month-over-month volatility, but what we have seen here, since the conflict in the Middle East started, is that the spread that our customers are paying has remained the same or has increased for certain months. In summary, we are not exposed directly to the high natural gas prices. What is important here is the spread, and we see that those move in tandem and have historically moved in tandem.
Good. Then we have one question on CapEx. How much CapEx does the business require to hit the full year 2030 EBITDA target?
Yeah, I can take that one. Obviously we are currently building stations 17- 19 at the moment. The EBITDA target in 2030 assumes an additional six stations are developed over the next 24 months, subsequent, prior to that. Of course, some of those new stations towards the back end will not have time to have ramped up before 2030 target. But in general, our sites have cost us somewhere between GBP 8 million and GBP 10 million, depending on the land cost over the last couple of years. So, another six stations within that range, we would expect, which are going to be funded through operational cash flow and most likely an increased debt facility.
Good. I have one question on RTFCs. How much of the RTFCs for the next obligation year have you already sold, and what are the current forward prices?
As I've already said, we have sold all of this year's at prior prices, and have been active now for a few quarters in next year, in the 2027 obligation year. We can't disclose, of course, given that we are a fairly significant player in the liquid RTFC market, given obviously the amount of biomethane that we generate, and the RTFCs that we generate. Just for commercially sensitivity reasons, I can't disclose the number we have sold forward already for next year and how many we have remaining, nor of course, the prices.
Then moving on to one question on truck growth. What are the main bottlenecks to reach the 8,000 HGVs by end 2030, and what gives you confidence in this expectation?
I'll deal with the last point first. What gives us confidence is we have very close relationships to the majority of our customers, particularly the large ones, the ones that have been with us for many years. They have communicated plans. If they haven't done it publicly, then they've done it towards us. When we then collate all of those estimates that these customers are giving us, then that gives us good confidence with regards to their adoption plans over the coming years. Clearly, we showed that for the April to June quarter alone, we had 50 trials happening with 6x2s.
We have now received our own demo vehicles, so we would expect that to ramp up going forward. Of course, in there, we would expect some of those fleets, quite a few of them probably, to order trucks as well. All in all, we have good confidence on our customers' plans to do so. There are many things in this world outside of our control, clearly, economy, economic factors, macro factors, and so on and so forth.
What could sort of derail that? Good question. I mean, if we have a sustained, really bad economic growth in the U.K. for many years, then of course that will affect truck replacements. Here it's also important to understand that, as of today, we have 2,250+ trucks on the road that go through our network exclusively. There are about 165,000 articulated trucks in the U.K. As such, we are somewhere in the range between 1.3%, 1.4%, or whatever it is, of the overall articulated truck market are running on CNG today.
Even if the overall need for replacement of vehicles goes down, that doesn't necessarily affect CNG orders the same. Overall, we're feeling quite good about it, but there are factors out there that could influence this. On the policy side of things, we are starting to see some really helpful, and I would say common sense moves here. The EU have been on the lead here for a couple of years, indicating more of a multi-fuel approach. We now see the U.K. doing the same. That, all else equal, should be a positive for us over the coming years.
Good. Then there's just one follow-up question to the earlier CapEx question, and that's one clarification. Six more stations planned on top of the three currently under construction, is that correct?
I'll take that one again. Thanks, Allen. Just to quickly set the scene, before I respond to that, we are 25 stations is our ambition to build in the potentially next year is an additional three, and then three more the following year after that. That would take us to 25 stations by the end of in operations towards the end of 2029 calendar year. We obviously have ambitions for far more stations than that after then, but it's important to note that the stations being built now will contribute to the EBITDA in 2030 in some fashion.
The stations built next year, less so, and the stations built the following year, probably very little, although they may contribute something to EBITDA. The vast majority, and I mean, the absolute lion's share of EBITDA in that 2030 figure, is from the stations that are already open now. The 16 stations already open now, many will be reaching maturity, several will be coming through at the sort of mid-stage maturity, and those are the ones that are really going to build it. The reality is actually, without the next six stations, we would probably get very close to that number. But without the next six stations, we wouldn't continue to build this network effect that continues to drive adoption through the existing 16 sites. They all help each other in its portfolio.
Good. Then a question on volume increase: "As the volumes and trucks continue to increase, how do you see the operating leverage develop?"
You want to-
Yeah, sure. Absolutely. I guess that comes very similar to my last answer. We have built a network now. It's pretty much a U.K.-wide network. We are filling in some of the final nodes, or we're popping on a couple of final nodes, but then it's really mostly going to be filling in for the business. For us, we have to operate our stations 24/7. We have to operate them with 100% availability of CNG, which we do. To do that requires a certain amount of overhead, which we have outlaid over the years, as well as outlaying, obviously, for our capacity to continue to build stations and add them to the network over time. So, to have these capabilities does take a lot of overhead upfront.
We have reached essentially a level where we hit the mass we required for that, and over the last two years, we've had really very small increases in the overall operating cost of the business, while recognizing very high volume increases. It's our belief and our analysis that actually increasing our overhead by relatively small amounts, 20%-30%, we could double or triple volume through the networks. Of course, you've already seen the operating leverage we have when it comes to increases in volumes through the stations from, for instance, last year to tripling our EBITDA this year just by getting up over those hurdles. So we have real operating leverage to generate very substantial earnings in the years ahead with basically our cost base now.
Good. Then a question on the market. You touched on this in the presentation, Philip. We see that, what's required for the general U.K. transport truck market to turn?
It's a good question. Eventually, trucks fall apart. That might sound a bit silly, but it is a reality, right? You can only run a truck, whether it's diesel or CNG or whatever energy vector a truck runs on, eventually it will need replacing. So, the cycle will need to start turning. It's of course a factor of not only the fact that the trucks will need replacing, it's also a function of how much haulage volume is required. Of course that's a function of the economy. The industry is expecting, potentially, we'll see, it's only August now and data lags a bit, was expecting 2026 to be a bit of a turning point.
We've had three years where truck orders or truck deliveries of new trucks have shown a downward trajectory. Clearly, we've got geopolitics currently, which are hard and you have to remember that the vast majority of our customers still operate diesel trucks, or the majority of the trucks that they operate are diesel. With diesel prices coming up 30%, 40%, some of them will have clauses where they can pass that on to the customers, some won't.
Clearly in there, that's going to be a huge hit to operating cash flow, which again is have an impact on how much CapEx can they spend on new trucks. So, several points here and variables here that impact when this will turn. All else equal, we would have expected this year to turn. Now it might drag on into 2027, but eventually it has to turn because trucks literally fall apart and as such, we need replacements on the road.
Good. Then we have one further question: "Is there an update concerning your international expansion, especially given the significantly increased investments in the space?
Yeah. Good question. First of all, let's look at our home market and the state of our home market. It's not like we are constrained by lack of growth opportunity in the U.K., right? We have decades left of growth here. As such, and we're very focused on making sure that we execute well on our home market, which is the U.K., and as such that we deliver on the operational leverage that Baden was talking about and we continue to take advantage of our market position here. Anything that we do internationally shouldn't detract and shouldn't really jeopardize what we're doing in the U.K., because here we haven't run out of road when it comes to growth.
If you then look internationally, we will be constructive and slash opportunistic as to what we do internationally. It has taken us 12 years to create and build what we have done in the U.K. For us to go into international market organically and start from scratch with hiring people and permitting and building stuff, that makes no sense. What we would do internationally, either we would need to do it through JVs or we would need to do it through M&A. M&A requires capital and so on and so forth. That is, of course, something we are continuously monitoring.
There have been some interesting opportunities in the past that we have said no to for various reasons. We will continue to monitor it in 2027 and 2028. There is no doubt that what we do in the U.K., the scale we do the stations at, how we operate them, the IP we have got is unique in the European context, and as such, it is something that is attractive to some of the core continental European markets.
But yeah, it is not something we are going to just jump into for the sake of doing it. It needs to be right, and it needs to tick the box of not jeopardizing what we are doing here in the U.K., because that is after all our bread and butter and is what is going to pay the bills and create shareholder value for the foreseeable future.
Good. There are no further questions, so I will just hand it back to you, Philip, to close the call.
Thank you, Allen, for those questions. Thank you for everyone who has tuned in live or catching up on this later on. Yeah, strong quarter. We are really looking forward to coming back here in the next months, to update you on our Q2. Lots of exciting stuff going on in our space. If you do not already receive our news updates, please go onto refuels.com and you can register there to get these sent to you whenever they go live. So yeah, looking forward to seeing you on the next one, and thank you once again