Wizz Air cancellation claim

Omega25iv6

Hi, I'm a total novice with travelling abroad. I've flown twice since 1995, so not at all familiar with claiming for flight cancellations.
On 30th May 2022, My 11.15 return flight with Wizz Air (Pristina, Kosovo - Luton) was cancelled just hours before.
They have not given me any reason for the cancellation.
It would have been another 3 days before they put me on another flight.
They had a scheduled flight for Luton, leaving Skopje, North Macedonia that same evening, so I asked to be re-routed to this flight.
I made my way by taxi to Skopje and boarded the flight back to Luton.
I then needed to get back to Birmingham via coach (nothing extra there as luckily I bought an open return ticket for the out going trip)
But I arrived at Birmingham in the early hours on 31st May and needed to call a taxi to get back home.
I completed a compensation claim for the cancelled flight + the extra travel expenses for the 2 taxis.

Today I have received an email from Wizz Air with the following

"Thank you for contacting Wizz Air Customer Service Department. 

We are sorry to hear about this unfortunate situation.

Let me please draw your attention to the fact that in accordance with EC Regulation 261/2004, we will reimburse the expenses encountered directly due to the cancellation such as meals and refreshments and communication charges (2 phone calls, e-mails, fax). The amount can be reimbursed in reasonable relation to the waiting time. As for the additional expenses, we kindly ask you to forward all related receipts, as an attachment to your reply, so that we can determine a possible compensation.

Should you have any further questions we will be delighted to answer them."

Still no reason given for the cancellation, but my question relates to their worded response.

Are they saying they will only reimburse expenses?
As I understand it, there should be compensation for the cancellation notice  being within 7 days, the flight distance and the hours in delay being +4 hours, totalling 400€ + expenses

Is that correct?
TIA