Business performance


Operating profit102.193.0
Profit on disposal of investments(2.4)
Acquisition costs2.5
Reorganisation costs0.82.4
Operating profit prior to exceptional items102.995.5
Amortisation of acquired intangible fixed assets4.52.0
Headline operating profit107.497.5

Group revenue was £619.6m, an increase of 5.4%, of which acquisitions accounted for 5.5%, with organic revenues down 2.5% and foreign exchange rate movements having a positive impact of 2.4%.

Headline operating profit for the year increased by 10.2% from £97.5m to £107.4m, and headline operating margin was 17.3% (2012: 16.6%). Acquisitions made in the prior year increased headline operating profit by £6.7m. The impact of foreign currency movements in the year was an increase in headline operating profit of £3.6m. Despite a £14.8m decline in organic revenue, organic headline operating profit decreased by only £0.4m.

Cash flow is analysed as follows:


Headline operating profit107.497.5
Add back non-cash items:
Depreciation and amortisation52.950.5
Impairment of fixed assets5.10.7
Share-based payments3.63.9
(Profit) / loss on disposal of property, plant and equipment(0.1)0.1
Headline EBITDA1168.9152.7
Net capital expenditure(57.3)(47.7)
Net working capital movement(2.7)5.8
Headline operating cash flow108.9110.8
Cash cost of restructuring(4.3)(5.3)
Acquisition costs(2.5)
Operating cash flow104.6103.0
Free cash flow78.881.2

Strong profit growth, disciplined capital spending and working capital control have resulted in excellent operating cash flow of £104.6m (2012: £103.0m). Group net cash at 31 December 2013 was £15.0m (2012: net debt £34.2m).

Capital expenditure continued to be managed carefully. Capital spend (net of asset sales) in 2013 was £57.3m (2012: £47.7m), being 1.0 times depreciation2 (2012: 0.9 times). There has been a continued focus on cash collection and receivable days at 31 December 2013 were 59 days (31 December 2012: 58 days). The net working capital outflow in the year is primarily a result of a decrease in payables, offset by a modest decrease in receivables.

  1. Earnings before interest, tax, depreciation, amortisation, share-based payments, impairment of fixed assets, profit or loss on disposal of property, plant and equipment and exceptional items.
  2. Net capital expenditure to depreciation ratio is defined as capital expenditure less proceeds from asset disposals as a proportion of depreciation and amortisation plus impairment of fixed assets.