A
Adjusted
The term “adjusted” refers to figures adjusted for exceptional items before amortisation of acquired intangible assets, acquisition integration costs, and share of taxation of joint ventures. “Adjusted” figures are non-IFRS compliant financial figures, but are internally regarded as key performance indicators to measure the underlying performance of our business. They are stated before amortisation of acquired intangible assets and acquisition integration costs, and, in respect of earnings, reflect a tax rate that exclude the effect of movements in deferred taxation assets and liabilities that are not expected to crystallise in the near term. Profit and loss on disposals and other non operating items are also excluded from the adjusted figures. The key performance measures monitored by management on an adjusted basis are described below:
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Adjusted profit attributable to shareholders
Reported profit attributable to shareholders before amortisation of acquired intangible assets, acquisition integration costs, disposals and other non operating items, related tax effects and movements on deferred tax balances not expected to crystallise in the near term.
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Adjusted operating cash flow
Cash generated from operations plus dividends from joint ventures less net capital expenditure on property, plant and equipment and internally developed intangible assets, and excluding payments in relation to acquisition integration costs. Calculated as Adjusted operating profit less capital expenditure plus depreciation and amortisation, less share based payments and pension costs plus working capital movements during the period.
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Adjusted profit before tax
Reported profit before tax before amortisation of acquired intangible assets, acquisition integration costs, share of taxation of joint ventures, disposals and other non operating items.
Annual General Meeting
The annual meeting where shareholders formally approve the directors' actions on their behalf during the past financial year and adopt the Annual Report and Accounts. It is also the meeting at which directors generally retire and are formally appointed.
Adjusted profit attributable to shareholders of each parent company divided by the respective average number of ordinary shares in issue in the period.
B
Best Bid
The best market makers price to buy a security or instrument.
Best Offer
The best market makers price to sell a security or instrument.
C
Capital employed
Aggregate of gross goodwill and acquired intangible assets, property, plant and equipment, internally developed intangible assets, working capital, net pension assets, less provisions.
Cash conversion ratio
Adjusted operating cash flow expressed as a percentage of adjusted operating profit.
Constant Currencies
Income and expense in local currencies are recalculated to sterling or euro as appropriate, using the average and hedge exchange rates of the previous calendar year.
Constant currency growth
Growth rates calculated using the prior year average and hedge exchange rates.
D
Diluted earnings per share
Diluted earnings per share is calculated in the same way as earnings per share but takes account of the effect of potential additional ordinary shares arising from the exercise of share options and conditional shares.
Dividend Cover
Dividend cover is defined as the number of times the dividend can be covered by adjusted net income. The dividend cover is: Adjusted earnings per share divided by dividend per share.
Dividend yield: The annualised gross dividend per share for the last reported period expressed as a percentage of the latest share price. The calculation for dividend yield is as follows:
Dividend yield (%) = 100 * Gross dividend per share (net dividend *100/90)/latest share price
E
Earnings per share
Earnings per share (eps) is defined as the post-tax profit or loss attributable to shareholders of the company, divided by the weighted average number of shares outstanding during the period. This can be calculated on a reported or an adjusted basis.
Earnings per share growth (%)
Growth in earnings per share in comparison to a previous comparable period.
EBITA
Earnings before interest, tax, amortisation of publishing rights and other intangible assets, and impairments of goodwill and publishing rights.
EBITDA
Earnings before interest, tax, depreciation, amortisation of publishing rights and other intangible assets, and impairments of goodwill and publishing rights.
Effective tax rate on adjusted profit before tax
Reflects the tax rate excluding movements on deferred tax balances not expected to crystallise in the near term, more closely aligning with cash taxes payable, and includes the benefit of deductible tax amortisation on acquired goodwill and intangible assets.
F
Free cash flow
Adjusted operating cash flow less interest and tax paid, prior to distributions to shareholders. This is the cash flow available for payments of dividends and share buybacks as well as repayments of capital on loans.
I
Invested Capital
Capital employed plus accumulated amortisation of intangible assets.
K
KPI
Key Performance Indicator.
L
Last Close
The market price for the share at the end of the last day of trading.
M
Market Capitalisation
The total Stock Market value of the company's shares, being the total number of shares issued to shareholders multiplied by the current share price.
N
Net borrowings
Net borrowings includes bonds, bank loans and overdrafts, commercial paper and finance leases, minus cash and cash equivalents and the fair value of derivative financial instruments.
Net interest cover adjusted operating profit divided by net interest expense.
O
Organic Revenue Growth
Organic revenue growth is defined as revenue of the period divided by revenue of the period in the previous reporting period, excluding the impact of acquisitions and disposals, all translated at the average exchange rate of the previous calendar year (at constant currencies).
P/E ratio
The Price earning ratio (P/E ratio). This expresses the current share price (P) as a multiple of the earnings per share (E). The P/E ratio is used as a measure of how much the investor is being asked to pay for the investment. It is a means of assessing both the value of the company and also its comparative value and attraction compared to other companies.
The calculation for P/E ratio is as follows: P/E ratio = latest share price/EPS.
In the case of a prospective or forward P/E, the EPS used is based on estimated future results, in which case forecasts for the next two reported periods are apportioned to give a rolling 12 months-ahead view.
R
Renewal rate
Value of the subscription portfolio at the start of the year minus losses (attrition) during the year, expressed as a percentage of the starting position.
Return on capital employed
Adjusted operating profit less taxation (at the effective rate for the year) expressed as a percentage of average capital employed, being the aggregate of gross goodwill and acquired intangible assets, property, plant and equipment, internally developed intangible assets, working capital, net pension assets, less provisions.
T
Total revenue growth
Growth of revenues over a period with respect to the previous comparable period (includes impact of organic growth, acquisitions and disposals and, where applicable, currency effects).
U
Underlying growth
Constant currency growth rates excluding acquisitions and disposals.
W
Workflow solution
A combination of integrated content, technology and services that is embedded in a customer’s workflow, which addresses a customer’s need by relying on a set of core offerings and proprietary knowledge, increasing customer value.
Working capital
Working capital is defined as current assets less current liabilities.