HMV Group PLC Interim Results -9-
13 December 2012 - 6:00PM
UK Regulatory
Restructuring costs (6.9) - (6.9)
Impairment loss on remeasurment
to fair value less costs to
sell of associate - (1.6) (1.6)
Share of post-tax profits of
associates and joint ventures (0.3) (0.8) (1.1)
----------------------------------- -------- ------------ ------------- --------
Total operating loss (15.0) (42.7) (57.7)
Net finance costs (17.2) (0.8) (18.0)
Exceptional finance costs (6.4) - (6.4)
----------------------------------- -------- ------------ ------------- --------
Profit (loss) before taxation
(continuing and discontinued) (38.6) (43.5) (82.1)
Taxation 1.7
----------------------------------- -------- ------------ ------------- --------
Loss for the period (80.4)
----------------------------------- -------- ------------ ------------- --------
The following table presents certain asset information regarding
the Group's reportable segments:
26 weeks to 27 October
2012
---------------------------------------
HMV Retail Discontinued Total
operations
GBPm GBPm GBPm
--------------------------------------- ----------- ------------- -------
Assets 170.6 20.0 190.6
--------------------------------------- ----------- -------------
Unallocated assets managed on a Group
basis:
Investments accounted for using the
equity method 7.6
Deferred income tax asset 1.0
Centrally held cash and short-term
deposits 19.8
--------------------------------------- ----------- ------------- -------
Total assets 219.0
--------------------------------------- ----------- ------------- -------
52 weeks to 28
April 2012
------------------------------------- -------
HMV Retail Discontinued
operations Total
GBPm GBPm GBPm
------------------------------------- --- --- ------------- ------------- --------
Segment assets 176.0 60.8 236.8
----------------------------------------------- ------------- -------------
Unallocated assets managed on
a Group basis:
Investments accounted for using
the equity method 7.1
Deferred income tax asset 1.4
Centrally held cash and short-term
deposits 10.5
----------------------------------------------- ------------- ------------- --------
Total assets 255.8
----------------------------------------------- ------------- ------------- --------
Unallocated assets include balances relating to cash, taxation
and investments in joint ventures, which are managed on a Group
basis.
5. Exceptional items (before taxation)
26 weeks to 26 weeks 52 weeks
27 October to to
2012 29 October 28 April
Total 2011 2012
Total Total
GBPm GBPm GBPm
------------------------------------ ------------ ------------ ----------
Recognised in arriving
at operating profit (continuing
operations):
Restructuring costs (1.8) (4.7) (11.1)
Store closure costs (1.5) - (2.1)
Gain on deemed disposal
of holding
in joint venture 1.1 - -
Impairment costs - - (2.8)
Operating exceptional
items (2.2) (4.7) (16.0)
Recognised in arriving
at operating profit (discontinued
operations):
Restructuring costs (0.6) - -
Festival cancellation
costs - - (0.3)
Profit on disposal of
business (Note 7) 11.6 5.6 5.5
Impairment loss on remeasurement
to fair value less costs
to sell (Note 7) (10.4) - (38.7)
------------------------------------ ------------ ------------ ----------
(1.6) 0.9 (49.5)
Exceptional finance costs
- refinancing (0.4) (4.6) (6.4)
Total exceptional items (2.0) (3.7) (55.9)
------------------------------------ ------------ ------------ ----------
In the 26 weeks to 27 October 2012 exceptional items comprised
the following:
- Restructuring costs of GBP1.8m relating to redundancy costs of
non-store employees, professional advisory fees and other related
costs;
- GBP1.5m of costs relating to the closure of several UK stores
and the relocation of a distribution centre from Guernsey to the
UK;
- GBP1.1m gain on the revaluation of the Group's investment in
7digital on dilution of the stake held from 50% to 35% and
reclassification from joint venture to associate;
- Restructuring costs of GBP0.6m in HMV Live relating to
redundancy costs and other related charges;
- Profit on disposal of Hammersmith Apollo Limited of GBP11.6m,
including transaction fees (see Note 7);
- Impairment loss of GBP10.4m on remeasurement to fair value
less costs to sell of the remainder of the Live business;
- GBP0.4m of costs relating to the refinancing of the business
in June 2012.
In the 52 weeks ended 28 April 2012, exceptional items comprised
the following:
- Restructuring costs totalling GBP11.1m relating to
restructuring of HMV Europe (GBP4.2m), and the restructuring of the
Group (GBP6.9m), including staff-related costs, closure of a Head
Office location and professional fees incurred;
- Store closure costs totalling GBP2.1m in HMV UK & Ireland,
including fixed asset write-offs, redundancy costs incurred,
strip-out costs, stock obsolescence and an assessment of provisions
required for future property costs on stores where the leases have
not yet expired;
- Fixed asset impairment charges totalling GBP2.8m were incurred
by HMV UK & Ireland following a review of the carrying value of
retail assets based on prevailing market trading conditions;
- Costs totalling GBP0.3m in HMV Live relating to the
cancellation of the 2012 Vintage music festival;
- On 27 June 2011 the Group sold the HMV Canada business for a
total cash consideration of GBP2.0m. This resulted in a loss on
disposal of GBP5.9m. On 28 June 2011 the Group sold Waterstone's
for GBP53.0m resulting in a profit on disposal of GBP11.4m. These
results include transaction fees and foreign exchange recycled from
the translation reserve (see Note 12);
- At 24 December 2011 the Group classified its investment in
aNobii Limited as held for sale (see Note 7). At this point it was
remeasured to the lower of carrying value and fair value less costs
to sell, which resulted in an exceptional charge of GBP1.6m. At 31
March 2012 the HMV Live business was classified as a disposal group
held for sale (see Note 7). At this point it was remeasured to the
lower of carrying value and fair value less costs to sell, which
resulted in an exceptional charge of GBP37.1m;
- Exceptional costs of GBP4.6m incurred with respect to the
refinancing completed in June 2011 and a further GBP1.8m relating
to the refinancing completed 8 August 2012. Of the total of
GBP6.4m, GBP2.7m was non-cash and comprised fees relating to the
old facility which had previously been deferred and were expensed
on extinguishment of that facility in June 2011.
6. Taxation
The taxation credit for continuing operations for the period of
GBP0.1m reflects the impact on the deferred tax liability of the
reduction in the UK corporate income tax rate from 24% to 23% with
effect from 1 April 2013 (2011: GBP0.2m). A tax charge of GBP0.1m
(2011: GBPnil) has been recognised in respect of the operating
profit of discontinued operations. No current tax credit has been
recognised in the income statement in respect of continuing
operations for the period.
7. Discontinued operations
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