Notes to the Financial Statements continued for the year ended 31 May 2022
3 Alternative Performance Measures (APMs) and adjusting items continued Adjusted EBITDA and Adjusted operating profit The calculation of Adjusted EBITDA and Adjusted operating profit is set out below:
2022 £m
2021 £m
Operating profit
34.7
17.3
3.9 5.4 8.6 1.8 0.9 3.9
Depreciation of property, plant and equipment
4.4 5.9 6.4 3.0
Depreciation of right-of-use assets
Amortisation of customer contracts and relationships (acquired intangibles)
Amortisation of software and development costs Individually Significant Items (Note 5) Share-based payments charge (Note 26)
12.7
2.8
Adjusted EBITDA
59.2
52.5
(11.1)
Depreciation and amortisation (excluding amortisation charged on acquired intangibles)
(13.3)
Adjusted operating profit
48.1
39.2
Net (debt)/cash The calculation of net (debt)/cash is set out below:
2022 £m
2021 £m
73.2
Cash and cash equivalents (Note 24)
116.5
(125.6)
Borrowings (Note 24)
(33.2)
Net (debt)/cash excluding lease liabilities
(52.4) (32.6)
83.3
Lease liabilities
(34.4)
Net (debt)/cash
(85.0)
48.9
Cash conversion ratio The calculation of the cash conversion ratio is set out below:
2022 £m 60.3 59.2
2021 £m 46.3 52.5
Cash generated from operating activities before interest and taxation (A)
Adjusted EBITDA (B)
Cash conversion ratio (%) (A)/(B)
101.9%
88.2%
Net operating cash flow before interest and taxation includes the cash outflow from acquisition costs of £7.3m (2021: £1.2m). Adjusting the cash conversion ratio for these acquisition costs would give rise to a cash conversion ratio of 114.2% compared to the prior period of 90.5%. Constant currency revenue The following tables show how constant currency revenue growth has been calculated and reconciled to statutory actual rate growth. Group Revenue:
Constant currency revenue 2021 £m
% change at constant currency
Revenue 2022 £m
Revenue 2022 £m
Revenue 2021 £m
% change at actual rates
314.8
314.8
Revenue
270.5 16.4%
267.0 17.9%
Revenue excluding the performance of IPM:
Constant currency revenue 2021 £m
% change at constant currency
Revenue 2022 £m
Revenue 2022 £m
Revenue 2021 £m
% change at actual rates
314.8
314.8
Revenue
270.5 16.4%
267.0 17.9%
(20.2)
(20.2)
Less: IPM acquisition
–
n/a
–
n/a
Revenue excluding IPM acquisition
294.6
294.6
270.5
8.9%
267.0 10.3%
166
NCC Group plc — Annual report and accounts for the year ended 31 May 2022
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