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 attached to orders not yet fulfilled.
Comments on results
Our order book for the coming year is strong, at $117 million excluding armor. In particular, it benefits from orders under the NATO respiratory contract which are expected to drive growth in our respiratory business.
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, excluding the impact of acquisitions.
Comments on results
Our small organic decline in revenue is due to military ballistic revenue which declined by 30.6%, while military respiratory and first responder grew by 8.1% and 1.3% respectively.
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 and exceptional items. It excludes any effect of discontinued operations.
Comments on results
The EBITDA margin has declined due to the operational gearing effect of lower ballistic revenues and overheads that are fixed in the short-term.
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 have continued to invest in selective product development. We continue to focus on maintaining our reputation for technological excellence and innovation.
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
Cash conversion was impacted by inventory build-up to manage supply chain challenges, partially offset by tight control of receivables in our last quarter.
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 exceptional items and discontinued operations.
Comments on results
Adjusted earnings per share declined due to the impact on profit from the decline in military ballistic revenue and the operational gearing impact on profit.
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
The capital base of the Group has increased in the last two years from the recognition of the gain on divestment of milkrite | InterPuls and the reinvestment in the Ceradyne and Team Wendy acquisitions which combined with the profit out turn this year, this has resulted in a fall in ROCE.