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Definitions

Adjusted earnings
This comprises the profit for the financial year after adjusting for profits and losses on items of a capital nature, as well as the impact of exceptional items and goodwill amortisation.
Adjusted profit before tax
This is defined as profit before tax, goodwill amortisation and exceptional items.
Cash operating margin (%)
This is calculated on a pre-exceptional basis, by expressing EBITDA as a percentage of turnover, excluding associates.
Cash operating return (%)
This is calculated on a pre-exceptional basis, by expressing the sum of EBITDA and cash dividends received from associates and other investments, as a percentage of net operating assets, adjusted for cumulative goodwill eliminated against shareholders’ funds and accumulated depreciation and amortisation.
EBITA
This is calculated by expressing earnings before interest, taxation and goodwill amortisation.
EBITA margin (%)
This is calculated by expressing earnings before interest, taxation and goodwill amortisation as a percentage of turnover (including associates).
EBITDA
This comprises net cash inflow from operating activities, before working capital movements.
Effective tax rate (%)
This is calculated by dividing the tax charge for the year by the profit before taxation excluding exceptional items and goodwill amortisation.
Free cash flow
This comprises net cash inflow from operations plus dividends received from associates and other investments, and cash from the sales of tangible fixed assets and investments less net interest paid, taxation paid and cash paid for capital expenditure on tangible fixed assets.
Net asset value per share
This is calculated by dividing shareholders’ funds by the closing number of shares in issue.
Net interest cover (EBIT)
This is the ratio of profit before interest, taxation and exceptional items to net financing costs before exceptional items.
Net operating assets
This is the sum of fixed assets, stocks and debtors less interest free liabilities. A reconciliation of this number is provided in note 3.
Operating margin (%)
This is calculated on a pre-exceptional basis, by expressing profit before interest and taxation as a percentage of turnover, including associates.
Operating return (%)
This is calculated on a pre-exceptional basis, by expressing profit before interest and taxation, including associates, as a percentage of net operating assets, excluding goodwill.
Return on equity (%)
This is calculated by dividing adjusted earnings by shareholders’ funds.
Total borrowings
This comprises the sum of the interest bearing liabilities included in creditors due within and after one year.

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