Notes to the Interim Report & Accounts
(unaudited)
3 Headline profit measures
The Company seeks to present a measure of underlying performance which is not impacted by exceptional items or items considered non-operational in nature. This measure of profit is described as ‘headline’ and is used by management to measure and monitor performance. Normal restructuring costs are charged against profits.
The following items have been excluded from the headline measure:
- exceptional items, including income and expenditure relating to John Crane, Inc. asbestos litigation;
- amortisation of intangible assets acquired in a business combination – the amortisation charge is a non-cash item, and the directors believe that it should be added back to give a clearer picture of underlying performance; and
- other financing gains and losses.
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Period ended |
Period ended |
Period ended |
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Other financing gains and losses |
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Financing gains and losses on financial instruments |
(2.7) |
1.1 |
2.1 |
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Exceptional finance costs – adjustment to discounted provision (note 4) |
(2.5) |
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Other financing gains/(losses) |
(5.2) |
1.1 |
2.1 |
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Financing gains and losses in operating profit |
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Financing gains and losses on financial instruments |
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0.1 |
(1.5) |
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(5.2) |
1.2 |
0.6 |
Financing gains and losses on financial instruments represent the results of derivatives and other financial instruments which do not fall to be hedge accounted under IAS 39. These items are included either within operating profit or profit before taxation depending on the nature of the transaction. The application of IFRS accounting principles makes this item potentially volatile, and it is therefore excluded to give a clearer picture of the underlying performance.