Business & financial review
Overall Group performance has strengthened, as evidenced by the growth in profit before tax before exceptional items and the significant improvement in net cash inflow from operations.
Group overview
This strengthened performance comes despite a reduction in revenue, as a consequence of reduced discretionary expenditure amongst large corporate customers served by our I&MS division.
During the second half of the financial year, the Group has progressively reduced its cost base whilst continuing to be disciplined in its capital investment decisions. The management of the Group’s cost base resulted in a further significant reduction of headcount in the final quarter of the year. While this has given rise to exceptional costs of £14.6 million, it has enabled I&MS to record a net operating profit, prior to exceptional items, for the three months to 30 April 2009.
The Group remains well financed with a committed non-amortising bank facility in place until March 2012. Group net debt has reduced significantly to £157.9 million (2008: £168.9 million) from the peak level of £180.2 million reported at 30 September 2008. This has been achieved through strong working capital management across all Group activities and therefore resulted in the year end net debt to EBITDA ratio being 2.5 times. The Board is committed to reducing indebtedness to less than two times EBITDA.
The Board confirms its intention, as set out at the interim results statement, to pay a total full year dividend of not less than 1.5 pence per share. Accordingly, the Board is proposing a final dividend of 1.0 pence per share.