Carphone Warehouse 2003 Annual Report Download - page 30

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Notes to the Financial Statements continued
28
The Carphone Warehouse Group PLC Annual Report 2003
4 Profit (loss) on ordinary activities before taxation
Profit (loss) on ordinary activities before taxation is stated after charging (crediting):
2003 2002
£’000 £’000
Amortisation of goodwill 20,585 14,736
Depreciation of tangible fixed assets 31,977 26,335
Rentals under operating leases – property 44,811 38,713
Operating profit on disposal of fixed assets (912) (646)
Exceptional (profit) loss on disposal of fixed assets (13,199) 6,336
Auditors’ remuneration – audit services 500 450
Auditors’ remuneration – non-audit services 360 250
5 Employees
Employee costs consist of:
2003 2002
£’000 £’000
Wages and salaries 144,568 114,125
Social security costs 24,691 21,395
Other pension costs 947 1,632
170,206 137,152
The average monthly number of people employed by the Group during the period was:
2003 2002
Number Number
Administration 1,274 1,113
Selling and distribution 6,859 5,879
8,133 6,992
Details of Directors’ remuneration are provided in the Remuneration Report on pages 16 to 19.
6 Exceptional items
Exceptional items include the following operating exceptional items, non-operating exceptional items and amounts written off investments:
2003 2002
Note £’000 £’000
Costs of operational reorganisation
Store closures (a) – (11,956)
Business closures and reorganisation (a) – (12,907)
Exceptional operating items –(24,863)
Profit (loss) on disposal of fixed assets (b) 13,199 (6,336)
Amounts written off fixed asset investments (c) (15,145) (18,681)
Cost of fundamental reorganisation (d) – (5,210)
Total exceptional items (1,946) (55,090)
(a) Costs of operational reorganisation
During the period ended 30 March 2002, the Group incurred costs in reorganising its operations across Europe. This reorganisation comprised:
– the withdrawal from certain non-key territories;
– the closure of a significant number of under-performing retail outlets;
– the reorganisation of back office operations across the Group, including the establishment of shared service centres in the UK and Portugal.
(b) Profit (loss) on disposal of fixed assets
In August 2002 the Group completed the sale and leaseback of its freehold offices in London for a consideration of £36.6m, generating a net profit
on disposal of £13.2m.
During the period ended 30 March 2002 fixed assets with a net book value of £6.3m were written down principally as a result of the withdrawal
from non-key territories and store closures explained in note 6a.
(c) Amounts written off fixed asset investments
During the period ended 29 March 2003 a further £15.1m (2002 – £18.7m) has been written off the Group’s holding in Wireless Frontiers, an
independently managed wireless technology fund, to reflect the diminution in the value of the fund at 29 March 2003.
(d) Cost of fundamental reorganisation
A charge of £5.2m, reflecting the write-down of fixed assets and other restructuring costs, was made during the period ended 30 March 2002,
principally in respect of the fundamental reorganisation of the Group’s Data Services division, involving a significant downscaling of wireless internet
portal activities.