At 31 May 2022, our cash conversion 1 was 101.9% (2021: 88.2%). Net debt 1 amounts to £85.0m (2021: net cash of £48.9m). Net debt excluding lease liabilities 1 amounts to £52.4m (2021: net cash £83.3m). Total borrowings (including lease liabilities) offset by cash and cash equivalents amounts to £85.0m (2021: net cash £48.9m). Following the acquisition of IPM and a reduction in our net cash position, our Balance Sheet remains strong with headroom of £101.9m and we have continued to demonstrate effective cash management. Our Balance Sheet strength enables us to continue to fund organic and inorganic opportunities as they arise, as evident by the recent acquisitions of IPM and Adelard (for further details please refer to Note 34 to the consolidated Financial Statements). Turning to our Balance Sheet, goodwill, intangible assets and deferred revenue have increased during the year following the acquisition of IPM. The Board is also declaring an unchanged final dividend of 3.15p per ordinary share (2021: 3.15p). This represents a dividend equal to that paid in the prior year as the Board is conscious of the need to invest in initiatives to support longer-term growth and service the debt profile following the recent acquisition.
During the year, the Group has incurred £0.9m (2021: £7.6m) of Individually Significant Items (ISIs), relating to the acquisition of the IPM business on 7 June 2021, bringing total acquisition costs (excluding share placing costs of £2.4m) to £8.5m. In the prior year, Individually Significant Items also included £5.1m relating to configuration and customisation costs associated with the Group’s SGT transformation programme. For further detail, please refer to Note 5 to the consolidated Financial Statements. Acquired intangible amortisation increased during the year by £2.2m as certain historical acquisitions became fully amortised over their useful economic life offset by the US acquisition of the IPM business, which created certain acquired intangibles that are being amortised over a useful economic life of ten years (£4.8m). Share-based payments increased during the year to £3.9m following the introduction of new share schemes for key management beyond the Directors. Profit before taxation increased 109.5% to £31.0m (2021: £14.8m) and profit for the year increased 130.0% to £23.0m (2021: £10.0m). Following the share placing for the IPM acquisition in May 2021, the basic EPS amounted to 7.4p (2021: 3.6p) and diluted EPS amounted to 7.4p (2021: 3.5p). Adjusted basic EPS 1 amounts to 10.8p (2021: 9.5p).
Financial summary Summary Income Statement 1
2022 £m
2021
£m % change
Revenue
314.8
270.5 16.4%
(182.2)
Cost of sales
(159.9)
13.9%
Gross profit
132.6
110.6 19.9%
(11.1) (73.4)
Depreciation and amortisation 2
(13.3) (58.1)
(16.5%)
Administrative expenses 3
26.3%
48.1
Adjusted operating profit 1 Individually Significant Items Acquired intangible amortisation
39.2 22.7%
(0.9) (8.6) (3.9)
(12.7)
(92.9%)
(6.4) (2.8)
34.4% 39.3%
Share-based payments
Operating profit
34.7
17.3 100.6%
(3.7)
Finance costs
(2.5)
48.0%
Profit before taxation
31.0
14.8 109.5%
(8.0)
Taxation
(4.8)
66.7%
Profit for the year
23.0
10.0 130.0%
2022
2021
Change
EPS Basic
7.4p 7.4p
3.6p 3.5p
3.8p 3.9p
Diluted
1 S ee Note 3 for an explanation of Alternative Performance Measures (APMs) and adjusting items. Further information is also contained within the Chief Financial Officer’s Review and the Glossary of terms. 2 Depreciation and amortisation excludes amortisation of acquired intangibles. 3 Administrative expenses excluding depreciation and amortisation, Individually Significant Items, amortisation of acquired intangibles and share-based payments.
NCC Group plc — Annual report and accounts for the year ended 31 May 2022
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