KPIs

Reason for choice

Provides an indication of revenue to be recognised in the next financial period.

How we calculate

Orders received by the Group and not yet fulfilled. This is measured by the value of future revenue attaching to orders not yet fulfilled.

Comments on results

Strong closing order book of £40.4m provides excellent revenue visibility and

confidence for 2020.

Reason for choice

Indicates the rate at which the Group’s business activity is changing over time.

How we calculate

The growth in revenue comparing current year revenue with prior year revenue retranslated at current year exchange rates.

Comments on results

Strong core revenue growth across our Military business with both the U.S. DOD and our Rest of World customers has resulted in constant currency growth of 4.2%, above our 3%+ objective.

Reason for choice

Provides a measure of the underlying profitability of the ordinary activities of the business and their potential to generate cash.

How we calculate

The ratio of Adjusted EBITDA to revenue. Adjusted EBITDA is defined as operating profit before depreciation, amortisation, exceptional items and defined benefit pension scheme costs. It excludes any effect of discontinued operations.

Comments on results

First deliveries of our higher margin M53A1 mask systems and lower volumes of lower margin M50 systems, contributed to EBITDA margin growing by 70bps to 22.0%; significantly ahead of our 20%+ objective.

Reason for choice

Provides a measure of the Group’s investment in new products and processes. Investment provides a foundation for the Group’s future growth.

How we calculate

Total expenditure on research and development including amounts funded by customers, development expenditure capitalised and amounts expensed directly to the Income Statement expressed as a percentage of revenue.

Comments on results

4.6% of revenue has been spent on product development which has predominantly focused on Avon Protection, with significant investment in the U.K. GSR, MCM100 and next generation hood programmes. Development expenditure for milkrite | InterPuls included the compact milk meter to address the market for smaller milk producing animals.

Reason for choice

Provides a measure of the management of working capital and the ability of the Group to convert profits to cash.

How we calculate

The ratio of cash generated from operations before the effect of exceptional items to adjusted EBITDA.

Comments on results

Our continued focus on cash management was impacted by the timing of the fulfilment of the $16.6m Rest of World mask contract, which resulted in 63.5% of EBITDA being converted into cash, below our objective of 90%+. This is purely timing with the receipt expected in the first quarter of the 2020 financial year.

Reason for choice

Measures the ability to generate a return to shareholders. It takes into account our success in growing our business organically and by acquisition coupled with management of the Group’s financing and tax.

How we calculate

Adjusted profit for the year divided by the weighted average number of shares in issue. Adjusted profit excludes the amortisation of acquired intangibles and the after tax effect of exceptional items, defined benefit pension scheme costs and discontinued operations.

Comments on results

Strong core revenue and profit growth combined with the benefit of concluding some uncertain tax provision releases resulted in a significant increase in adjusted earnings per share of 18.9%.

Reason for choice

Measures profitability and the efficiency with which capital is employed.

How we calculate

Adjusted operating profit as a percentage of average capital employed. Capital employed is the sum of shareholders’ funds, non-current liabilities and current borrowings.

Comments on results

Our 10.4% improvement in profit has offset the effects of the continued strong net cash balance throughout the year which has increased our ROCE to 23.9%.