Notes to the Interim report (unaudited)
4 Exceptional items
Items which are material either because of their size or their nature, or which are non-recurring, are presented within their relevant consolidated income statement category, but highlighted separately on the face of the income statement. The separate reporting of exceptional items helps provide a better picture of the Company’s underlying performance. Items which may be included within the exceptional category include:
- profits/(losses) on disposal of businesses;
- spend on the integration of significant acquisitions;
- significant goodwill or other asset impairments;
- income and expenditure relating to John Crane, Inc. asbestos litigation; and
- other particularly significant or unusual items.
An analysis of the amounts presented as exceptional items in these financial statements is given below:
|
Period ended |
Period ended |
Year ended |
|
Operating items |
|
|
|
|
Restructuring of corporate and divisional headquarters |
(8.4) |
|
(4.5) |
|
Integration of acquisitions |
|
(2.4) |
(9.1) |
|
Profit on disposal of businesses |
0.7 |
27.0 |
27.2 |
|
Profit on disposal of property |
13.5 |
|
|
|
Litigation |
|
|
|
|
– Provision for John Crane, Inc. litigation (note 13) |
(16.2) |
(5.7) |
(49.0) |
|
(10.4) |
18.9 |
(35.4) |
|
Financing items |
|
|
|
|
Exceptional finance costs – adjustment to discounted provision (note 13) |
(3.7) |
(2.5) |
(4.7) |
|
(14.1) |
16.4 |
(40.1) |
On 3 June 2008 the Company announced a number of changes to its corporate centre and divisional headquarters. The total cost of this restructuring including redundancy, relocation and consolidation of manufacturing, is considered exceptional by virtue of its size. It is now expected to amount to approximately £48m over the period to 2010, of which £8.4m has been charged in the current period.
The profit on disposal of businesses represents adjustments to provisions in respect of prior year disposals.
The profit on disposal of property relates to the sale of land in Basingstoke.
The operating charge in respect of John Crane, Inc. litigation comprises £8.6m arising from movements in discounting due to changes in US interest rates (period ended 2 February 2008: £5.7m), £6.5m in respect of increased provision for adverse legal judgments and £1.1m in respect of legal fees in connection with litigation against insurers.