EBITDA meaning

Re Poundland Ltd [2025] EWHC 2755 (Ch) What was the background? Poundland Ltd ran around 800 discount stores across the UK, employing 13,100 people, but fell into financial distress after unsuccessful moves into chilled and frozen categories and e‑commerce, while higher National Insurance and the living wage pushed up operating costs. EBITDA dropped steeply from £87m in FY22 to £25m in FY24, with FY25 projected at a negative £117m. The business was owned by Pepco NV via PEU (Tre) Ltd, and between 2021–2022 Pepco advanced £237m in unsecured loans to meet post‑coronavirus (COVID‑19) needs and fund the diversification programme. A limited M&A process in spring 2024 produced only two interested parties, neither proceeding due to sharply worsening profitability. Pepco then began a strategic review, including a CBRE leasehold estate review that found extensive over‑renting across the portfolio. Efforts to reach consensual lease restructurings with landlords saw only modest progress, constrained by the portfolio’s scale and cash flow‑driven time limits. In March 2025 Pepco supplied further liquidity through a £30m...

On 26 November 2025, Rachel Reeves, the Chancellor of the Exchequer, presented the Labour administration’s second Budget, widely referred to simply as Budget 2025. On the same day, the Office for Budget Responsibility (OBR) set out its economic and fiscal outlook for the UK. Proceedings opened poorly, and chaotically, with an OBR forecast leaking amidst a slew of prior government-led briefings and the release of a frustratingly static index of ‘Budget 2025 tax related documents’ to which hyperlinks were not inserted until close to 8pm, together with a piecemeal, stop‑start publication of tax information across scattered web pages, sending readers on a fruitless treasure hunt for clarity or coherence and with no appearance whatsoever of the Overview of Tax Legislation and Rates (OOTLAR). Headline measures comprised, among other items, extending, for another three years to April 2031, the existing personal allowance and income tax bands for taxpayers, and increasing income tax rates applied to property, savings and dividend receipts, as well as imposing employer and employee National Insurance contributions (NICs)...

The corporate interest restriction (CIR) framework is extensive and intricate. This Practice Note concentrates on the elections a group can choose to make within its interest restriction return. Readers are also directed to: Practice Note: Corporate interest restriction—quick guide for a brief, high-level overview of the CIR and the background to its introduction Practice Note: Corporate interest restriction—glossary of key terms for the meanings of key terms and concepts used throughout the CIR legislation Practice Note: Corporate interest restriction—the main rules for a closer look at the principal operative provisions of the CIR Practice Note: Corporate interest restriction—administration for the more administrative aspects of the CIR, including the interest restriction return The CIR rules permit groups to make specific elections that change the computation of group-interest and other amounts that feed into the group ratio method. Group-interest (rather than tax-interest) is an accounts-based measure of interest and the central component in the calculations of NGIE, ANGIE and QNGIE. Each of the...

This Practice Note examines methods for valuing law firms and sets out the elements most prone to shape that assessment. Although several conventional approaches exist, it offers a worked illustration of an earnings-led valuation (discounted economic income). Investors commonly adopt this approach when pricing a company and, therefore, it is a vital computation to undertake before starting any talks. The outcome might be below your expectations, yet it provides a window into the sum an investor or acquirer could be prepared to offer. The discounted economic value model In brief, this model projects a firm’s future net cash profits and discounts them to today’s value. By applying an appropriate discount rate, it seeks to reflect the spectrum of risks the business encounters in generating that earnings flow over time. The exercise, therefore, converts anticipated cash returns across multiple years into a single current figure that recognises uncertainty, timing, and sustainability in the delivery of the net income stream...

Overview This Practice Note outlines key characteristics of covenant loose and covenant lite financings and considers certain risks that investors in these facilities may encounter. It assumes a degree of familiarity with leveraged finance terminology and documentation. For introductory material on leveraged finance financial covenants, see Practice Note: Leveraged finance—financial covenants. For an introductory guide to acquisition finance, see Practice Note: Introductory guide to acquisition finance. The Glossary of acquisition finance terms and jargon may also be helpful... Terminology Traditional ‘covenanted’ facility European leveraged facility agreements have traditionally included a package of financial covenants designed to monitor the borrower‑group’s financial performance against a base case financial model. The full suite typically comprises the following covenants: Leverage — this is the ratio of the group’s total [net] indebtedness to its earnings before interest, tax, depreciation and amortisation ( EBITDA ). The leverage ratio gauges the group’s indebtedness against its ordinary operating profit; the higher the ratio, the more indebted the group and the greater...

This Precedent This Precedent is an illustrative bonus schedule for insertion as a schedule into an employment contract or a director’s service agreement. It grants entitlement to an annual bonus determined by reference to a company’s earnings before interest, tax, depreciation and amortisation (EBITDA). EBITDA is a benchmark used to assess a company’s overall performance...