Carphone Warehouse 2007 Annual Report Download - page 48

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Notes to the Financial Statements continued
4 Reorganisation costs
The following items were shown separately in the period ended 1 April 2006 given their size or one-off nature:
2007 2006
Notes £’000 £’000
Reorganisation costs a–22,288
Accelerated amortisation b–12,957
–35,245
a) The Group acquired Onetel in December 2005. Since then, the Group has commenced a reorganisation programme to integrate Onetel with the rest of the
Group. The costs of this integration were estimated at £22.3m, comprising the following:
£’000
Redundancy and other employee costs 11,934
Contract termination costs 4,977
Network and customer migration costs 4,919
Other 458
22,288
b) The substantial customer growth achieved through the acquisition of Onetel and Tele2 UK, together with the Group’s major investment plans in respect of local
loop unbundling and billing platforms, prompted a review during the prior period of the Group’s systems and network infrastructure.
This review represented a consideration of the extent to which the carrying value of the Group’s assets should be reduced either because they had no further
use or because their useful economic lives had reduced significantly. The result of this review was an accelerated or one-off amortisation charge in respect of
the following assets:
£’000
Billing infrastructure and customer management systems 8,908
Other 4,049
12,957
Both these items are expected to attract tax relief at 30% and accordingly a deferred tax asset of £10.6m was recognised at 1 April 2006.
The Carphone Warehouse Group PLC Annual Report 2007
44