v3.25.4
Classification of financial instruments
 12 Months Ended
Dec. 31, 2025
Texts Block [Abstract]  
Classification of financial instruments
14. Classification of financial instruments
The accounting classification of each class of the Group’s financial assets, and their carrying values, is as follows:
 
                                 
2025
  
                     
Fair value
    
Amortised
cost
        
         
Fair value
    
Fair value
                    
         
through other
    
through
    
Fair value
          
Total
  
         
comprehensive
    
 profit and
    
 – hedging
    
 Financial
    
 carrying
  
  All figures in £ millions
  
Notes
    
income
    
loss
    
instrument
    
assets
    
value
  
Investments in listed and unlisted securities
     15      
24
      
101
      
–
      
–
      
125
  
Cash and cash equivalents
     17      
–
      
11
      
–
      
322
      
333
  
Derivative financial instruments
     16      
–
      
14
      
2
      
–
      
16
  
Trade receivables
     22      
–
      
–
      
–
      
661
      
661
  
Investment in finance lease receivable
     22      
–
      
–
      
–
      
66
      
66
  
Other receivable
      
–
      
16
      
–
      
–
      
16
  
             
Total financial assets
  
 
 
 
    
24
      
142
      
2
      
1,049
      
1,217
  
 
 
 
 
 
 
                                 
2024
  
                     
Fair value
    
Amortised
cost
        
         
Fair value
    
Fair value
                    
         
through other
    
through
    
Fair value
          
Total
  
         
  comprehensive
    
  profit and
    
  – hedging
    
  Financial
    
  carrying
  
  All figures in £ millions
  
Notes
    
income
    
loss
    
instrument
    
assets
    
value
  
Investments in listed and unlisted securities
     15       28       113       –       –       141  
Cash and cash equivalents
     17       –       62       –       481       543  
Derivative financial instruments
     16       –       30       21       –       51  
Trade receivables
     22       –       –       –       614       614   
Contract assets - unbilled1
     22       –       –       –       71       71  
Investment in finance lease receivable
     22       –       –       –       83       83  
Other receivable
       –       12       –       –       12  
             
Total financial assets
  
 
 
 
     28       217       21       1,249       1,515  
 
1.
In 2025, we have removed the amounts related to unbilled revenue as they are not required to be disclosed in this note. The 2024 comparative has not been restated on the grounds of materiality.
The carrying value of the Group’s financial assets is equal to, or approximately equal to, the market value. The other receivable
i
ncludes
 the contingent consideration receivable on
the
disposal of POLs.
The accounting classification of each class of the Group’s financial liabilities, together with their carrying values and market values, is as follows:
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2025
 
 
 
 
 
 
 
 
 
Fair value
 
 
Amortised
cost
 
 
 
 
 
 
 
 
 
 
 
 
 Fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
through
 
 
 Fair value
 
 
Other
 
 
Total
 
 
Total
 
 
 
 
 
 
profit and
 
 
– hedging
 
 
  financial
 
 
 carrying
 
 
 market
 
  All figures in £ millions
 
Notes
 
 
loss
 
 
instrument
 
 
liabilities
 
 
value
 
 
value
 
Derivative financial instruments
     16      
(2
)
 
 
(1
)
 
  
–
      
(3
)
    
(3
)
Trade payables
     24      
–
      
–
      
(281
)
    
(281
)
    
(281
)
Deferred and contingent consideration
     24      
(1
)
 
 
  
–
      
(16
)
 
    
(17
)
 
    
(17
)
 
Borrowings due within one year
     18      
–
      
–
      
(62
)
    
(62
)
    
(62
)
Borrowings due after more than one year
     18      
–
      
–
      
(1,419
)
    
(1,419
)
    
(1,398
)
       
 
 
 
Total financial liabilities
  
 
 
 
    
(3
)
 
 
(1
)
    
(1,778
)
    
(1,782
)
    
(1,761
)
 
 
 
 
 
 
                                  
2024
  
               
Fair value
    
Amortised
cost
              
         
 Fair value
                          
         
through
    
Fair value
    
Other
    
Total
    
Total
  
         
profit
    
– hedging
    
financial
    
carrying
    
market
  
  All figures in £ millions
  
Notes
    
and loss
    
instrument
    
liabilities
    
value
    
value
  
Derivative financial instruments
     16       (10 )      (48 )      –       (58 )      (58 ) 
Trade payables
     24       –       –       (273 )      (273 )      (273 ) 
Deferred and contingent consideration
     24       (1 )      –       (21 )      (22 )      (22 ) 
Borrowings due within one year
     18       –       –       (315 )      (315 )      (312 ) 
Borrowings due after more than one year
     18       –       –       (1,157 )      (1,157 )      (1,123 ) 
             
Total financial liabilities
  
 
 
 
     (11 )      (48 )      (1,766 )      (1,825 )      (1,788 ) 
 
 
 
 
Fair value measurement
Financial instruments that are measured subsequently to initial recognition at fair value are grouped into levels 1 to 3, based on the degree to which the fair value is observable, as follows:
Level 1 fair value measurements are those derived from unadjusted quoted prices in active markets for identical assets or liabilities. The Group’s bonds valued at £
685
m (2024: £918m) and money market funds of £
11
m (2024: £62m) included within cash and cash equivalents, listed securities of £
1
m (2024: £6m)
 
and £3m (2024: £nil) of other receivables relating to an escrow account (see note 30) are classified as level 1. 
Level 2 fair value measurements are those derived from inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). The Group’s derivative assets valued at £
16
m (2024: £51m) and derivative liabilities valued at £
3
m (2024: £58m) are classified as level 2.
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Group’s investments in unlisted securities are valued at £
124
m (2024: £135m), contingent consideration of £1m (2024: £1m) and the other receivable of £
13
m (2024: £12m) are classified as level 3.
The movements in fair values of level 3 financial assets measured at fair value are shown in the table below:
 
                   
2025
     
2024
  
  All figures in £ millions
   
Other
receivable
    
Investments
in unlisted
securities
    
   Total
    
   Total
  
At 1 January
     
12
 
     
135
 
     
147
 
      155  
Exchange differences
     
–
 
     
(7
) 
     
(7
) 
      2  
Acquisition of investments and other receivable
     
–
 
     
5
 
     
5
 
      9  
Repayments
     
(1
) 
     
–
 
     
(1
)
      –  
Reclassification out of level 3
     
–
 
     
–
 
     
–
 
      (6 ) 
Fair value movements – OCI
     
–
 
     
(2
)
     
(2
)
      (2 ) 
Fair value movements – income statement
     
2
 
     
(7
)
     
(5
)
      (11 ) 
 
 
 
 
  
At 31 December
     
13
 
     
124
 
     
137
 
      147  
The fair value of the investments in unlisted securities is determined by reference to the financial performance of the underlying asset, recent funding rounds and amounts realised on the sale of similar assets. In 2024, one of the investments held was listed, and therefore the investment of £6m was reclassified out of level 3
 and into level 1. The investment had a carrying value of £1m as at 31 December 2025. 
The other receivable relates to £
13
m (2024: £12m) in respect of the contingent consideration receivable for the sale of the POLS business, which comprises a 27.5% share of positive adjusted EBITDA in each calendar year for six years from the date of disposal, and 27.5% of the proceeds received by the purchaser in relation to any future monetisation event.
The valuation of the contingent consideration receivable has been determined on the basis of a discounted cash flow model, and valued by a third-party specialist. The key inputs into the discounted cash flow model are the estimates of adjusted EBITDA for the 6 years from the date of disposal and the estimate of the valuation of the business thereafter. Reasonably possible changes in assumptions for the inputs into the model would not have a material impact on the carrying value of the contingent consideration, and therefore sensitivities have not been disclosed.
The deferred and contingent consideration payable in respect of prior year acquisitions is measured as the net present value of the expected cash flows. The movement in the fair value of the deferred and contingent consideration payable measured at fair value or amortised cost is shown in the table below:
 
                   
2025
     
2024
  
  All figures in £ millions
   
Deferred
consideration
    
Contingent
consideration
    
   Total
    
   Total
  
At 1 January
 
 
(21
) 
 
 
(1
) 
 
 
(22
) 
 
 
 (57 ) 
 
 
 
 
 
Exchange differences
     
1
 
     
–
 
     
1
 
      –  
Acquisitions
     
–
 
     
–
 
     
–
 
      (1 ) 
Fair value movements – income statement
     
–
 
     
–
 
     
–
 
      (2 ) 
Repayments
     
4
 
     
–
 
     
4
 
      38  
 
 
 
 
  
At 31 December
     
(16
)
     
(1
)
     
(17
)
      (22 )