KPIs - These are used to measure progress against objectives and strategy.

Adjusted profit before tax £11.4 m

Why and how we measure: Adjusted profit before tax measures the Group's underlying profit performance and is stated before amortisation of intangible assets identified in business combinations, exceptional items, gain or loss on disposal of businesses and fair value charges on acquisition of non-controlling shares.

How we have performed: Adjusted profit has increased by 4% in 2018 resulting in another year of record profit for the Group.

Net fee income £72.3m

Why and how we measure: Net fee income is the Group's principle 'revenue' measure incorporating both permanent fees and the gross margin earned on temporary and contract workers, and ORS.

How we have performed: Net fee income has increased by 4% in 2018 with the positive performances across the Group more than outweighing the reductions due to the impact of regulatory changes in Germany and Japan.

Adjusted, diluted Earnings per share 12.1 p

Why and how we measure: Adjusted, diluted earnings per share measures the underlying performance of the Group's earnings for its shareholders. Adjusted earnings is taken before those items excluded in adjusted profit before tax along with their related tax impacts.

How we have performed: Adjusted, diluted earnings per share has fallen slightly during 2018 with the increase in profit offset by a change in the mix, with those businesses where there is a higher non-controlling interest contributing more of the Group's profit.


Free Cash Flow £9.6 m

Why and how we measure: Free cash flow is the level of cash generated that is available for investment by the Group. It is calculated as net cash from operating activities per the cash flow statement, adjusted to exclude working capital movements related to cash held in respect of pilot bonds. As an international business tax cash flows can be volatile so a pre-tax free cash flow figure is also presented.

How we have performed: Free cash flow improved in the year with the benefit of lower tax cash outflows offset by working capital outflows. Pre-tax cash flows are very stable and for 2018 represent an 84% conversion of adjusted profit before tax to cash. In 2018 our strong cash flow enabled us to invest in Grupo Solimano while reducing our adjusted net debt and proposing an increased dividend.

Debt to debtors ratio 36%

Why and how we measure: The majority of the Group's debt is short term and matched against working capital requirements. The Groups debt to debtors ratio is calculated as adjusted net debt as a percentage of trade debtors. Adjusted net debt excludes cash held in respect of pilot bonds.

How we have performed: The Group's debt to debtors ratio has reduced during the year. We continue to focus on reducing the overall level of debt with the medium term aim of reducing the debt to debtors ratio to 25%.

Conversion ratio 17.0%

Why and how we measure: The conversion ratio measures how efficient we are at converting our net fee income to profit. It is calculated as adjusted operating profit as a percentage of net fee income.

How we have performed: The conversion ratio has increased again in the year. We continue to focus on efficiencies and productivity in the business with the longer term ambition of achieving a 20% conversion ratio.

Staff productivity 1.72X

Why and how we measure: Staff productivity measures how effective our staff are at delivering income for the Group. It is measured as total net fee income divided by total staff costs.

How we have performed: Staff productivity has remained relatively unchanged in the year. A key part of the Group's strategy is focused on improving staff productivity.


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