| Cash flow information |
27.1 Cash generated from operations | | | | | | | | | | | | | 2026 | | 2025 | | 2024 | | | Note | | £’000 | | £’000 | | £’000 | Loss before income tax | | | | (46,985) | | (39,664) | | (130,724) | Adjustments for: | | | | | | | | | Depreciation | | 13, 14, 15 | | 20,631 | | 17,002 | | 16,526 | Amortization | | 16 | | 211,813 | | 196,373 | | 190,123 | Profit on disposal of intangible assets | | 8 | | (46,881) | | (48,742) | | (37,422) | Net finance costs | | 9 | | 69,620 | | 21,234 | | 61,371 | Non-cash employee benefit expense - equity-settled share-based payments | | 28 | | 243 | | 658 | | 875 | Foreign exchange losses on operating activities | | | | 3,638 | | 3,594 | | 2,041 | Reclassified from hedging reserve | | | | (159) | | (1,322) | | — | Changes in working capital: | | | | | | | | | Inventories | | | | 832 | | (9,510) | | (378) | Prepayments | | | | 509 | | 113 | | (1,726) | Contract assets – accrued revenue | | | | (7,635) | | 20,250 | | 3,554 | Trade receivables(1) | | | | 25,278 | | (86,244) | | 2,358 | Other receivables | | | | 12,577 | | (10,959) | | 7,193 | Contract liabilities – deferred revenue | | | | 2,088 | | 7,430 | | 27,692 | Trade and other payables(1) | | | | (26,403) | | 28,995 | | (18,904) | Provisions | | | | (2,982) | | 8,290 | | (5,118) | Cash generated from operations | | | | 216,184 | | 107,498 | | 117,461 |
| (1) | These amounts exclude non-cash movements and movements in respect of items reported elsewhere in the consolidated statement of cash flows, primarily in investing activities (where the timing of acquisitions and disposals and related cash flows can differ), resulting in: |
| ● | a decrease in changes to trade receivables of £19,672,000 (2025: increase of £25,974,000; 2024: increase of £13,817,000); and |
| ● | a decrease in changes to trade and other payables of £64,226,000 (2025: increase of £110,686,000; 2024: increase of £46,215,000). |
27.2 | Net debt reconciliation |
Net debt is defined as non-current and current borrowings minus cash and cash equivalents. Net debt is a financial performance indicator that is used by the Group’s management to monitor liquidity risk. The Group believes that net debt is meaningful for investors as it provides a clear overview of the net indebtedness position of the Group and is used by the chief operating decision maker in managing the business. 27Cash flow information (continued) 27.2 | Net debt reconciliation (continued) |
The following table provides an analysis of net debt and the movements in net debt for each of the periods presented. | | | | | | | | | | | Non-current | | Current | | Cash and cash | | | | | borrowings | | borrowings | | equivalents | | Total | | | £’000 | | £’000 | | £’000 | | £’000 | Net debt at 1 July 2024 | | 511,047 | | 35,574 | | (73,549) | | 473,072 | Net cash flows | | — | | 93,921 | | (7,609) | | 86,312 | Other changes | | (39,192) | | 35,624 | | (4,947) | | (8,515) | Net debt at 30 June 2025 | | 471,855 | | 165,119 | | (86,105) | | 550,869 | Net cash flows | | 89,477 | | (88,385) | | 15,551 | | 16,643 | Other changes | | 16,222 | | 34,666 | | 3,308 | | 54,196 | Net debt at 30 June 2026 | | 577,554 | | 111,400 | | (67,246) | | 621,708 |
Other changes in non-current borrowings primarily relate to the refinancing of our senior secured notes as explained further in Note 25 and foreign exchange gains or losses arising on re-translation of the US dollar denominated secured term loan facility and senior secured notes, and the incurrence and amortization of debt issue costs. Other changes in current borrowings primarily relate to interest incurred on the Group’s borrowings, with the payments in relation to this accrued interest shown in the cash flows column. We have noted no material changes in respect of lease liabilities.
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