The Group uses a variety of key performance indicators and we have revised them this year to align more closely with our updated strategy and investor proposition.
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 order intake in the second half of the year has resulted in a closing order book of £37.8m providing excellent revenue visibility for 2019.
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 in milkrite | InterPuls and across Military and Law Enforcement has resulted in constant currency growth of 8.7%, significantly ahead of 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
The sales product mix, with the delivery of more M50 mask systems in the year has reduced our EBITDA margin by 110bps; this remains 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
5.9% of revenue has been spent on product development including investment in the UK GSR, MCM100 and next generation hoods programmes in Avon Protection. milkrite | InterPuls development expenditure included investment in the Milk Meter equipment upgrade and the PCI heavy duty range.
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 has resulted in 108.2% of EBITDA being converted into cash.
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 has been offset by lower tax provision releases in 2018 which resulted in a reduction in adjusted earnings per share of 8.0%.
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 improved profitability has been offset by the strong net cash position throughout the year which has caused a reduction in our ROCE to 23.3%.