Company: RKLIF
Filing Date: 2025-03-06
Form Type: 6-K
Source: 0001654954-25-002335
Chunk: 23

Company: RENTOKIL INITIAL PLC /FI
Filing Date: 2025-03-06
Form: 6-K
Chunk 23
---
: £24m); amortisation and impairment of intangibles £43m (2023: £44m); and net interest adjustments £3m (2023: £2m).

Adjusted cash measures

The Group aims to generate sustainable cash flow in order to support its acquisition programme and to fund dividend payments to shareholders. Management considers that this is useful information for investors. Adjusted cash measures in use are Free Cash Flow, Adjusted Free Cash Flow, and Adjusted Free Cash Flow Conversion.

Free Cash Flow

Free Cash Flow is measured as net cash flows from operating activities, adjusted for cash flows related to the purchase and sale of property, plant, equipment and intangible assets, cash flows related to leased assets, cash flows related to one-off and adjusting items, and dividends received from associates. These items are considered by management to be non-discretionary, as continued investment in these assets is required to support the day-to-day operations of the business. Free Cash Flow is used by management for incentive purposes and is a measure shared with and used by investors.

A reconciliation of net cash flows from operating activities in the Consolidated Cash Flow Statement to Free Cash Flow is provided in the table below.

|                                   | 2024 
   £m | 2023 
   £m |
| Net cash flows                    
 from operating activities         |  678 |  737 |
| Purchase of property, plant and   
 equipment                         | -171 | -167 |
| Purchase of intangible            
 assets                            |  -44 |  -44 |
| Capital element of lease payments 
 and initial direct costs incurred | -145 | -151 |
| Proceeds from sale of property,   
 plant, equipment and software     |    4 |   14 |
| Cash impact of one-off and        
 adjusting items                   |   77 |  107 |
| Dividends received from           
 associates                        |   11 |    4 |
| Free Cash                         
 Flow                              |  410 |  500 |

Adjusted Free Cash Flow and Adjusted Free Cash Flow Conversion

Adjusted Free Cash Flow Conversion is provided to demonstrate to investors the proportion of Adjusted Profit After Tax that is converted to cash. It is calculated by dividing Adjusted Free Cash Flow by Adjusted Profit After Tax, expressed as a percentage. Adjusted Free Cash Flow is measured as Free Cash Flow adjusted for product development additions and net investment hedge cash interest through other comprehensive income. Product development additions are adjusted due to their variable size and non-underlying nature. Net