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 closing order book of £79.8m provides excellent revenue visibility and confidence for 2021.
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. This calculation excludes the impact of acquisitions.
Comments on results
Revenue grew by 0.1% with Military revenue reducing by 3.6% given the strong comparator in 2019, being offset by First Responder, which grew strongly by 7.7% notwithstanding our exit from the Fire SCBA market.
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
There was a full year of deliveries of both the M69 aircrew mask and M53A1 mask and powered air systems and first deliveries of the commercial priced sustainment volumes of M50 mask systems, which combined with very strong spares and accessories orders all contributed to strong EBITDA margin growth.
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
We invested a total of £9.0m, representing 5.4% of revenue, in research and development. We expect to continue to invest at this level over the medium term, reflecting our confidence in our expanded research and development capability to innovate across our broader personal protection portfolio to meet more of the integrated future technical needs of our customers for the benefit of further revenue and profit growth.
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
Operating cash conversion from adjusted EBITDA increased to 84.9%, and excluding Helmets & Armor, cash conversion was 123.3% on an organic continuing operations basis.
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 together with the first 9 months of contribution from Helmets & Armor resulted in a significant increase in adjusted earnings per share.
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. Adjusted operating profit and average capital employed includes the profit and capital for Avon Protection, milkrite | InterPuls and Helmets & Armor. Capital employed is the sum of shareholders’ funds, non-current liabilities and current borrowings.
Comments on results
Our strong improvement in profit and utilising our balance sheet for the value enhancing acquisition of Helmets & Armor has increased our ROCE to 22.7%.