1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45
| 2007 | 2006 | ||
| €m | €m | ||
| Exceptional administrative expenses: | |||
| a) Restructuring costs | 7.1 | 25.3 | |
| b) Goodwill impairment | 4.0 | – | |
| c) Independent investigation and associated costs | 4.8 | ||
| d) Net project termination (credit)/costs | (2.6) | 7.4 | |
| e) Pension scheme amendment | – | (3.2) | |
| f) Centrus receivables | (0.7) | (0.6) | |
| g) Insurance provision release | (5.7) | – | |
| Net exceptional items before tax – continuing operations | 6.9 | 28.9 | |
| h) Goodwill impairment and loss on disposal of discontinued operation (see Note 39) | 15.9 | – | |
| Net exceptional items before tax including discontinued operation | 22.8 | 28.9 | |
| Tax on exceptional items (see Note 7) | 6.4 | (5.7) | |
| Net exceptional items after tax including discontinued operation | 29.2 | 23.2 |
- a) Restructuring costs of €7.1 million (2006: €25.3 million) were incurred in the year. This was partly in connection with the final elements of the restructuring project the Group commenced in late 2005 covering the roles of its European headquarters, corporate operations, shared service centre and call centres and also certain restructuring activities which commenced in December 2007. Restructuring costs include redundancy costs and onerous lease provisions and in the prior year were net of exceptional pension curtailments of €1.2 million.
- b) In June 2007 the Group acquired the assets of a licensee in Germany. The acquired assets and locations have been integrated into an existing cash-generating unit. The goodwill previously arising in this unit had been fully provided for in the past and following a re-evaluation of the impairment calculations following the latest acquisition, an impairment provision of €4.0 million has been recognised in respect of the goodwill arising on the acquisition (see Note 38).
- c) Following the identification of potential malpractice in Portugal, the Group has recognised €4.8 million of costs in the year (2006: nil) in respect of an independent investigation, both in Portugal and a review then throughout the Group‘s corporately owned operations in Europe, together with certain directly related employee termination costs.
- d) Following the Group’s decision in 2004 to terminate an agreement with an IT contractor, a net exceptional credit of €2.6 million has been recognised, after certain additional termination costs, following the conclusion of a legal case.
- e) In June 2006, significant changes were made to the unfunded pension scheme in Germany resulting in an exceptional credit to past service costs of €3.2 million.
- f) During the current and prior year, the collection of credit hire receivable balances in respect of the closed Centrus business was more successful than previously anticipated and resulted in an exceptional credit of €0.7 million (2006: €0.6 million), reflecting a partial reversal of the receivable write-offs and adjustment of reorganisation provisions made in previous years.
- g) During the second half of 2007 the Group reviewed its methodology for calculating the level of provision required in respect of third party motor liability losses, including those not yet reported. The provision level is inevitably subject to a degree of uncertainty as a result of the significant timescales for claims being made. However, as a result of more accurate industry data being made available, the Group has updated the method of calculating the provision, based upon the historic claims profile and the application of insurance industry rental loss development factors. This should ensure a more consistent and robust assessment of the provision requirement. The provision re-assessment resulted in an exceptional credit to the Income Statement of €5.7 million. A periodic re-assessment of the provision requirement will be carried out, based upon the latest claims profile and loss development factors, with a subsequent adjustment made annually in December if required.
- h) On 25 July 2007, the Group disposed of its subsidiary in Greece, Olympic Commercial and Tourist Enterprises SA. In the Interim accounts, the Group recorded a goodwill impairment charge of €7.1 million to write down the associated goodwill to its estimated fair value. In the second half a loss on disposal of €8.8 million was recognised, giving a total exceptional charge in the year of €15.9 million. Details of the loss on disposal are provided in Note 39.
