Highlights

Full Year Results 2010/11

£m	31 March 2011	31 March 2010	Change
Revenue	2,257	2,265	(0.4)%
EBITDA ¹	442	431	2.6%
Profit before tax, before exceptional items	143	116	23%
Earnings per share	7.9p	0.0p	nm
Trading cash flow²	116	71	63%
Free cash flow ³	61	(1)	nm
Dividend per share ⁴	4.5p	-	nm

This table should be read in conjunction with the explanatory notes below.

Financial highlights

EBITDA up 2.6% to £442 million
Profit before tax, before exceptional items, up 23% at £143 million
Delivered free cash flow of £61 million
Hosting and Applications margin up 10%
Final dividend of 3.0 pence per share recommended; full year dividend 4.5 pence
Board intends to hold the annual dividend level at 4.5 pence until covered by free cash flow

Operational progress

Extended relationship with Boots UK in an agreement to supply and manage a range of data and telephony services
Won a three year contract with Babcock to consolidate their network estate and connect 250 UK and international sites
Agreed framework contract to provide a highly resilient global network for the UK Government
Launched ‘Flexible Computing’, our innovative cloud proposition

Jim Marsh, Chief Executive Officer, said:

"This year we passed the important milestone of turning cash positive for the first time with free cash flow generation of £61 million. EBITDA was up 2.6% to £442 million and profit before tax, before exceptional items, was up 23% to £143 million.

Looking forward into 2011/12 we expect trading cash flow growth to continue despite EBITDA remaining at the same level as 2010/11. The movement to cloud, along with the ongoing convergence between mobile and fixed line communications and the rapid growth in global data traffic create good opportunities for our business."

Explanatory notes

EBITDA is defined as earnings before interest, tax, depreciation and amortisation, LTIP credit/charge, net other operating income/expense, exceptional items and gains/losses on disposal of non-current assets and is reconciled to GAAP measures on page 24.
Trading cash flow is defined as EBITDA, less cash exceptionals, less cash capex, adjusted for the movement in working capital and other items.
Free cash flow represents net cash flow before repayment of and proceeds from borrowings other than finance leases, dividends paid and proceeds from share issues.
Dividend per share represents proposed final dividend and paid interim dividend.

nm – not measurable.

All current financial results listed are for the year ended 31 March 2011. All references to 'the prior period', 'the prior year', '2010', 'last year' and '2009/10' mean the year ended 31 March 2010 unless otherwise specified.

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