Business performance

Operating profit93.480.4
Add back / (subtract):
Impairment of goodwill and acquired intangible fixed assets4.2
Acquisition costs2.5
Reorganisation costs2.4
Profit on disposal of investment(2.4)
Amortisation of acquired intangible fixed assets2.00.9
Headline operating profit97.985.5

Group revenue was £587.8m, an increase of 3.0%, of which acquisitions accounted for 3.9%, organic growth contributed 2.5% and foreign exchange rate movements had a negative impact of 3.4%.

Headline operating profit was £97.9m, an increase of 14.4%, of which acquisitions accounted for 6.0%, organic growth contributed 11.0% and foreign exchange rate movements had a negative impact of 2.6%. Headline operating margin increased from 15.0% to 16.6%.

Cash flow is analysed as follows:

Headline operating profit97.985.5
Add back non-cash items:
Depreciation and amortisation50.550.2
Impairment of fixed assets0.70.5
Share-based payments3.95.4
Loss on disposal of property, plant and equipment0.10.7
Headline EBITDA1153.1142.3
Net capital expenditure(47.7)(44.5)
Net working capital movement5.4(1.8)
Headline operating cash flow110.896.0
Cash cost of restructuring(5.3)(5.7)
Acquisition costs(2.5)
Operating cash flow103.090.3
Free cash flow81.270.5

Strong profit growth, disciplined capital spending and working capital control have resulted in excellent operating cash flow of £103.0m (2011: £90.3m). This has allowed £84.7m of acquisitions to be funded, while Group net debt at 31 December 2012 remains modest at £34.2m (2011: net cash £0.1m).

Capital expenditure has continued to be managed carefully. Capital spend (net of asset sales) in 2012 was £47.7m, being 0.9 times depreciation (2011: 0.9 times). There has been a continued focus on cash collection and receivable days at 31 December 2012 are 58 days (31 December 2011: 59 days). Receivables are little changed in the year and a modest increase in inventories (£1.8m) has been more than offset by an increase in payables of £6.4m.


  1. Earnings before interest, tax, depreciation, amortisation, share-based payments, impairment of fixed assets, loss on disposal of property, plant and equipment and exceptional items.