Free
cash flow
Free cash flow is one of our key
performance indicators with which our performance against our strategy
is measured. Free cash flow is defined as the net increase in cash and
cash equivalents less cash flows from financing activities (except interest
paid) and less the acquisition or disposal of group undertakings and
less the net sale of short term investments. Free cash flow is primarily
a liquidity measure, however we also believe it is an important indicator
of our overall operational performance as it reflects the cash we generate
from operations after capital expenditure and financing costs, both
of which are significant ongoing cash outflows associated with investing
in our infrastructure and financing our operations. In addition, free
cash flow excludes cash flows that are determined at a corporate level
independently of ongoing trading operations such as dividends, share
buy backs, acquisitions and disposals and repayment of debt. Our use
of the term free cash flow does not mean that this is a measure of the
funds that are available for distribution to shareholders. A reconciliation
of free cash flow to net cash inflow from operating activities, the
most directly comparable IFRS measure, is included in this Financial review.
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