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The Board regularly monitors a range of financial and non-financial performance indicators to allow it to measure performance against expected targets.

Definition

The accurate daily reporting of gross profit achieved by each operating division across the Group with comparison to prior year or plan is our fundamental performance measure. This is further supported by additional calculations giving indicative full month estimates on a daily basis. The daily gross profit report is issued to all business units by 9.00 am daily.

Gross profit % is also reviewed on a daily and monthly basis to ensure consistency with prior year and plan (for further commentary see Operational and Financial Review)

Performance

PMC

£000

Flowtechnology

£000

Process

£000

Commentary on performance

Performance across all segments remained in line with forecasts and prior year.

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Acquisition and Integration

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How these measures support our strategic focus

As part of any acquisition programme, new businesses that join the Group will be required to comply with this daily reporting requirement as soon as it is practicable. The primary benefit is to allow the Board to reinforce close scrutiny of trading performance, provide local management focus and an early indication of any negative growth, if evident.

Definition

We have a clear focus on the management of profitability at customer and product levels. Within the Group's IT systems, appropriate Business Intelligence modules are maintained to allow ease of analysis on a timely basis to both underpin sales development initiatives at a strategic and tactical level, and to quickly identify underperformance.

Performance

Revenue

£000

Gross profit

£000

Commentary on performance

Granular KPI review has led to overall growth targets being achieved.

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Brand positioning

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How these measures support our strategic focus

The regular measurement of performance enables us to identify broader issues impacting a brand post acquisition.

Continued focus on product performance allows us to identify product brand expansion opportunities.

Definition

This is the percentage of orders despatched same day in the Flowtechnology division for the top 1,000 lines.

Performance

Commentary on performance

Supply chain and logistics continue to deliver consistent performance.

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Supply chain

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How these measures support our strategic focus

The aim of the Flowtechnology division is to provide a wide and deep product range, competitive pricing, consistently high service levels and a unique dependable next day delivery for stock items. These attributes are all linked to optimised inventory levels to provide an unparalleled customer support service.

Definition

Retention is measured as the number of employees retained at the end of the year as a percentage of the number at the start of the year.

Performance

Commentary on performance

Overall retention remains high and above national average.

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People

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How these measures support our strategic focus

People are one of our strongest assets, they are the key to our strategy to achieving our overall goals. Measuring retention across the business units enables us to identify both good practices and where corrective action may be needed.

Definition

Control of cash flow within the Group is essential to ensuring we are able to service all liabilities as they fall due, remain within Banking facilities and covenants, and are able to service dividend payments

Performance

Commentary on performance

Conversion of operating profit to cash has been strong during the year with an overall reduction in working capital achieved despite an increase in sales. A new "Profit Sharing Scheme", based on rewarding staff based on return on gross working capital employed, was introduced during the year and focuses local decision making on cash generation.

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Product and sourcing

How these measures support our strategic focus

Ensuring that the Group efficiently converts profit into cash underpins our ability to grow, by both organic and acquisitive means.