Reported operating profit of £1,243 million included a net benefit of £20 million consisting of a £31 million gain relating to the break fee from News Corporation net of related costs and £11 million of restructuring costs which comprise severance payments in relation to a number of senior roles as part of a restructuring initiative to improve operational efficiency. Both exceptional items were recognised in administration costs.
Reported profit after tax of £906 million also included an additional £11 million exceptional gain, which consisted of a £7 million profit on disposal of our stake in Chelsea Digital Media, an exceptional gain of £19 million relating to the re-measurement of derivative financial instruments not
qualifying for hedge accounting (2011: £18 million gain), a £5 million charge due to writing-off the fees relating to the previous revolving credit facility, and a £10 million charge relating to the tax effect on exceptional items. See note 1 of Summary financial statement.
Cash flow and financial position
Adjusted free cash flow increased by 14% to £992 million (2011: £869 million), excluding a one-off payment of £82 million in respect of the Premier League rights deposit for the season starting August 2013 (including the one-off payment, adjusted free cash flow was £910 million, see Summary financial statement for a reconciliation). The strong underlying cash flow growth reflects a 12% increase in adjusted EBITDA and a 9% improvement in working capital, offset by increased capital expenditure.
Capital expenditure increased by £34 million to £457 million (2011: £423 million), 6.7% of sales. The largest contributor to growth was the growing scale of our broadband network as we unbundled a further 388 exchanges to reach 83% coverage of the UK, expanded The Cloud WiFi network and launched a fibre product.
Net debt as at 30 June 2012 was £876 million (2011: £750 million). The value of shares repurchased to date under the £750 million share repurchase plan approved by shareholders on 29 November 2011 totalled £549 million, of which £236 million was completed in the fourth quarter.
The Group's liquidity and headroom are comfortable with no bond redemptions until October 2015 when £428 million falls due. As at the end of the year, cash and cash equivalents and short-term deposits were £1,174 million and the Company's £743 million revolving credit facility remained wholly undrawn.
Distributions to shareholders
The Directors propose an increase of 11% in the final dividend to 16.2 pence per share. Taking this into account the full-year dividend will be 25.4 pence per share, consistent with our policy of maintaining a payout ratio of 50% of adjusted earnings.
The proposed dividend continues our strong track record of delivering returns to shareholders and represents the eighth consecutive year-on-year increase in the dividend. Our full-year dividend has doubled since 2006 and has grown at a compound annual growth rate of 20% since it was restarted in 2004. Including the share buy-back, we will have returned almost £1 billion to shareholders in the last 12 months.
The ex-dividend date will be 24 October 2012 and, subject to shareholder approval at the Annual General Meeting to be held on 1 November 2012, the final dividend of 16.2 pence will be paid on 16 November 2012 to shareholders appearing on the register at the close of business on 26 October 2012.