Glossary of terms – Alternative Performance Measures (APMs) continued
Closest equivalent IFRS measure
Adjustments to reconcile to IFRS measure
Note reference for reconciliation
Definition, purpose and considerations made by the Directors
APM
Income Statement measures continued: Adjusted basic EPS Statutory basic EPS
11 Represents basic EPS before amortisation of acquired intangibles, share-based payments and Individually Significant Items. This measure is to allow the user to understand the Group’s underlying financial performance as measured by management, reported to the Board and used as a financial measure in senior management’s compensation schemes. See further details above in relation to amortisation of acquired intangibles and share-based payments. 3 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. 3 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 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. 3 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 EBITDA for continued and discontinued activities. 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.
Statutory basic EPS before amortisation of acquired intangibles, share-based
payments, Individually Significant Items and the tax effect thereon
Balance Sheet measures: Net cash/(debt) excluding lease liabilities
Total borrowings (excluding lease liabilities) offset by cash and cash equivalents
Net cash/(debt)
Total borrowings (including lease liabilities) offset by cash and cash equivalents
Cash flow measure: Cash conversion ratio
Ratio % of net cash flow from operating activities before interest and tax divided by EBITDA
Ratio % of net cash flow from operating activities before interest and tax divided by operating profit
204
NCC Group plc — Annual report and accounts for the year ended 31 May 2022
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