Full Annual Report - Inchcape

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Financial statements Notes to the accounts continued 2 Exceptional items Impairment of property, plant and equipment (10.3) – Restructuring costs (5.1) (28.3) Vacant property (3.0) – Goodwill impairment (note 11) – (54.2) Operating exceptional items (18.4) (82.5) Exceptional tax credit / (charge) 1.8 (3.6) Total exceptional items (16.6) (86.1) The impairment charge for property, plant and equipment of £10.3m arises from an impairment review of the Group’s business in Latvia which was updated following a further deterioration in trading conditions. The restructuring costs of £5.1m represent the costs of headcount reduction and site closures in Finland, the Baltics and Russia, together with changes in the composition of the Executive Committee. The charge for restructuring costs in 2008 related to the cost of restructuring the Group’s businesses in response to the downturn in the automotive industry and primarily represents the costs of reducing employee headcount and closing less profitable sites. The vacant property cost of £3.0m represents an onerous lease provision relating to a site occupied by the Inchcape Automotive business that was sold in 2007 and which went into administration in early 2009. The Group remains responsible for the head lease on this property. The goodwill impairment charge in 2008 was in respect of the business in Latvia and certain sites in the United Kingdom which have been sold or closed. The 2009 exceptional tax credit represents a deferred tax credit of £0.9m in respect of the future deduction for overseas redundancy costs in the local territories and a current tax credit of £0.9m in respect of onerous lease costs on UK properties. 2009 £m 2008 £m 98 Inchcape plc ¦ Annual Report and Accounts 2009
Section Three Financial statements 3 Revenue and expenses a. Revenue An analysis of the Group’s revenue for the year is as follows: Sale of goods 4,964.6 5,680.9 Provision of services 619.1 578.9 5,583.7 6,259.8 2009 £m 2008 £m b. Analysis of net operating expenses Net operating expenses before exceptional items 2009 £m Exceptional items 2009 £m Net operating expenses 2009 £m Net operating expenses before exceptional items 2008 £m Exceptional items 2008 £m Net operating expenses 2008 £m Distribution costs 352.4 0.2 352.6 380.9 5.5 386.4 Administrative expenses 303.1 7.6 310.7 280.6 13.8 294.4 Other operating (income) / expense (4.0) 10.6 6.6 (1.0) 61.4 60.4 651.5 18.4 669.9 660.5 80.7 741.2 Other operating (income) / expense includes a charge of £14.5m in respect of property impairment (2008 – £54.2m related to goodwill impairment). c. Profit before tax is stated after the following charges / (credits): Depreciation of property, plant and equipment: – Owned assets 28.1 35.9 – Assets held under finance leases 0.5 0.2 – Interest in leased vehicles 24.7 19.6 Amortisation of intangible assets 2.8 3.7 Impairment of goodwill – 54.2 Impairment of property, plant and equipment 14.5 – Bad debt provision 3.8 2.3 Profit on sale of property, plant and equipment (2.6) (2.6) Operating lease rentals 45.0 41.7 2009 £m 2008 £m www.inchcape.com 99
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Annual Report and Accounts 2009 Ind
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Section One Business review Financi
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Full Annual Report - Inchcape

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