Notes to the Financial Statements continued for the year ended 30 September 2025
Appendix 1 – Alternative Performance Measures (APMs) and adjusting items continued
Closest equivalent IFRS measure
Adjustments to reconcile to IFRS measure
APM
Definition, purpose and considerations made by the Directors
Balance Sheet measures:
Represents total borrowings (excluding lease liabilities) offset by cash and cash equivalents. It is a useful measure of the progress in generating cash, strengthening of the Group Balance Sheet position, overall net indebtedness and gearing on a like-for-like basis. Net cash/debt, when compared to available borrowing facilities, also gives an indication of available financial resources to fund potential future business investment decisions and/or potential acquisitions. Represents total borrowings (including lease liabilities) offset by cash and cash equivalents. It is a useful measure of the progress in generating cash, strengthening of the Group’s Balance Sheet position, overall net indebtedness and gearing including lease liabilities. Net cash/debt, when compared to available borrowing facilities, also gives an indication of available financial resources to fund potential future business investment decisions and/or potential acquisitions. The cash conversion ratio is a measure of how effectively operating profit is converted into cash and effectively highlights both non-cash accounting items within operating profit and also movements in working capital. It is calculated as net cash flow from operating activities before interest and taxation (as disclosed on the face of the Cash Flow Statement) divided by Adjusted EBITDA. The cash conversion ratio is a measure widely used by various stakeholders and hence is disclosed to show the quality of cash generation and also to allow comparison to other similar companies.
Total borrowings (excluding
Net cash/debt excluding lease liabilities
lease liabilities) offset by cash and cash equivalents
Net cash/debt
Total borrowings
(including lease liabilities) offset by cash and cash equivalents
Cash flow measures:
Ratio % of net cash flow from operating activities before interest and tax divided by Adjusted EBITDA
Cash conversion ratio
Ratio % of net cash flow from operating activities before interest and tax divided by operating profit
NCC Group plc — Annual report and accounts for the year ended 30 September 2025 158
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