Notes to the Financial Statements continued for the year ended 31 May 2021
3 Alternative Performance Measures (APMs) and adjusting items continued Net cash/(debt) The calculation of net cash/(debt) is set out below:
2021 £m
2020 £m
116.5
Cash and cash equivalents (Note 24)
95.0
(33.2)
Borrowings (Note 24)
(99.2)
Net cash/(debt) excluding lease liabilities
83.3
(4.2)
Lease liabilities
(34.4)
(38.2)
Net cash/(debt)
48.9
(42.4)
Cash conversion ratio The calculation of the cash conversion ratio is set out below:
2020 (restated) 2 £m
2021 £m 46.3 52.5
Cash generated from operating activities before interest and taxation (A)
46.8 45.5
Adjusted EBITDA (B)
Cash conversion ratio (%) (A)/(B)
88.2%
102.9%
4 Segmental information The Group is organised into the following two (2020: two) reportable segments: Assurance and Software Resilience. The two reporting segments provide distinct types of service. Within each of the reporting segments the operating segments provide a homogeneous group of services. The operating segments are grouped into the reporting segments on the basis of how they are reported to the chief operating decision maker (CODM) for the purposes of IFRS 8 ‘Operating Segments’, which is considered to be the Board of Directors of NCC Group plc. Operating segments are aggregated into the two reportable segments based on the types and delivery methods of services they provide, common management structures, and their relatively homogeneous commercial and strategic market environments. Performance is measured based on reporting segment profit, which comprises Adjusted operating profit 1 and adjusting items are not allocated to business segments . . Interest and tax are also not allocated to business segments and there are no intra-segment sales.
Software Resilience £m
Central and head office £m
Assurance £m
Group £m
Segmental analysis 2021
Revenue
233.9
36.6
– 270.5 – (159.9) – 110.6 – 40.9%
(149.5)
(10.4)
Cost of sales
Gross profit
84.4
26.2
36.1% 71.6%
Gross margin %
(45.4)
(9.5)
(3.2)
(58.1)
General administrative expenses allocated
39.0
16.7
(3.2) (3.2)
52.5
Adjusted EBITDA 1
(9.4)
(0.7)
(13.3)
Depreciation and amortisation
Adjusted operating profit 1
29.6
16.0
(6.4)
39.2
– – –
– – –
(12.7)
(12.7)
Individually Significant Items (Note 5) Amortisation of acquired intangibles
(6.4) (2.8)
(6.4) (2.8)
Share-based payments
Operating profit
29.6
16.0
(28.3)
17.3
154
NCC Group plc — Annual report and accounts for the year ended 31 May 2021
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