HMV Group PLC Interim Results -9-

  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