Dixons Retail PLC Final Results -9-

  Net fair value remeasurements of financial instruments     (vii)            -        (1.9) 
  Accelerated amortisation of facility fees                 (viii)        (2.0)            - 
  2012 Bonds and 2015 Notes redemption costs and 
   fees                                                     (viii)            -        (4.3) 
  Finance lease interest on onerous lease                     (ix)        (0.7)            - 
---------------------------------------------------------  -------  -----------  ----------- 
                                                                         (19.8)       (19.0) 
 -----------------------------------------------------------------  -----------  ----------- 
 
Total impact on profit / (loss) before tax                               (33.3)       (64.4) 
 
Tax on other non-underlying items                                           5.4         10.3 
------------------------------------------------------------------  -----------  ----------- 
Total impact on profit / (loss) after tax                                (27.9)       (54.1) 
------------------------------------------------------------------  -----------  ----------- 
 

(i) Businesses exited: comprises the trading results of exited businesses where they do not meet the criteria under IFRS 5 for separate disclosure as discontinued operations and comprise:

-- Equanet, which was sold in March 2013 and which constituted the majority of the B2B activities of the UK & Ireland division; and

-- PC City Spain which was closed in June 2011 whereby these activities comprise the unwinding of residual deferred income and related costs.

Discontinued operations, which comprise the results of Electroworld Turkey, Unieuro, PIXmania and Central Europe (comprising Electroworld Czech Republic and Electroworld Slovakia) are shown separately after post-tax results in accordance with IFRS 5 and are described further in note 8.

   (ii)   Net restructuring charges - strategic reorganisation: 
 
                     Year ended     Year ended 
                       30 April       30 April 
                           2014           2013 
                                  Re-presented 
                     GBPmillion     GBPmillion 
------------------  -----------  ------------- 
Asset impairments         (8.7)          (5.6) 
Property charges              -         (14.3) 
Other charges                 -          (4.9) 
------------------  -----------  ------------- 
                          (8.7)         (24.8) 
------------------  -----------  ------------- 
 

Year ended 30 April 2014:

Charges comprise asset impairments of other intangibles work in progress in respect of UK system costs which, following a revision in the Group's systems strategy as a result of the disposals of businesses which have occurred during the year have been concluded as no longer having value.

Year ended 30 April 2013:

Charges related predominantly to the reorganisation of the remaining retained UK B2B operations following the sale of Equanet for which the charges were GBP22.9 million. The charges related mainly to an onerous operating lease which was retained in respect of these sold operations together with related fixed asset write offs.

   3     Non-underlying items (continued) 

(iii) Business impairment charges:

 
                Year ended     Year ended 
                  30 April       30 April 
                      2014           2013 
                             Re-presented 
                GBPmillion     GBPmillion 
-------------  -----------  ------------- 
Goodwill                 -          (6.6) 
Other assets             -          (2.5) 
-------------  -----------  ------------- 
                         -          (9.1) 
-------------  -----------  ------------- 
 

Year ended 30 April 2013:

Related to the impairment of goodwill of a small UK B2B operation following the reorganisation and significant reduction in the UK & Ireland's B2B operations following the sale of Equanet as well as the full write down of the investment in an associate following continued declining results.

(iv) Other items comprise the following:

 
                            Year ended     Year ended 
                              30 April       30 April 
                                  2014           2013 
                                         Re-presented 
                            GBPmillion     GBPmillion 
-------------------------  -----------  ------------- 
Investment remeasurement         (5.4)              - 
UK Riot related income             1.6            0.9 
Exceptional charges              (0.3)          (1.4) 
-------------------------  -----------  ------------- 
                                 (4.1)          (0.5) 
-------------------------  -----------  ------------- 
 

The investment remeasurement relates to an increase in deferred consideration payable on a business acquired in the Nordics in 2011/12 following better than expected actual and forecast trading. UK Riot related income comprises insurance recoveries in respect of charges incurred in 2011/12.

   (v)   Loss on sale of business: 

Year ended 30 April 2013:

On 28 March 2013, the Group completed the disposal of its Equanet B2B operations (Equanet) to Kelway (UK) Limited for consideration of GBP4.2 million. The loss on disposal is analysed as follows:

 
                               GBPmillion 
-----------------------------  ---------- 
Net assets disposed: 
  Goodwill                           10.7 
  Other assets                        1.7 
-----------------------------  ---------- 
                                     12.4 
Loss on disposal                    (9.6) 
-----------------------------  ---------- 
Consideration and costs               2.8 
-----------------------------  ---------- 
 
Consideration                         4.2 
Disposal fees and exit costs        (1.4) 
-----------------------------  ---------- 
Consideration and costs               2.8 
-----------------------------  ---------- 
 

As described in note (i), above, the disposal did not satisfy the requirements of IFRS 5 for treatment as a discontinued operation and accordingly the loss on disposal has been included within "continuing" operations.

(vi) Net non-cash financing costs on defined benefit pension schemes: Under IAS 19 'Employee Benefits', the net interest charge on defined benefit pension schemes is calculated by applying the corporate bond yield rates applicable on the last day of the previous financial year and to the net defined benefit liability. Corporate bond yield rates vary over time which in turn creates volatility in the income statement and balance sheet and results in a non-cash remeasurement cost which can be volatile due to corporate bond yield rates prevailing on a particular day and is also unrepresentative of the actual investment gains or losses made or the liabilities paid and payable. Consistent with a number of other companies, the accounting effects of these non-cash revaluations of net defined benefit pension liabilities have been excluded from underlying earnings.

   3     Non-underlying items (continued) 

(vii) Net fair value remeasurement gains and losses on revaluation of financial instruments: items excluded from underlying finance income and expense represent the gains and losses arising from the revaluation of derivative financial instruments under methodologies stipulated by IAS 39 compared with those on an accruals basis (the basis upon which all other items in the financial statements are prepared). Such a treatment is a form of revaluation gain or loss created by an assumption that the derivatives will be settled before their maturity.

Such gains and losses are unrealised and in the directors' view also conflict with both the commercial reasons for entering into such arrangements as well as Group Treasury policy whereby early settlement in the majority of cases would amount to speculative use of derivatives.

   (viii)         Year ended 30 April 2014: 

On 19 May 2014, the Group signed a new revolving credit facility agreement (the New Facility) for GBP150 million. The New Facility is described further in note 10. The New Facility replaced the pre-existing facility of GBP200 million and has triggered the acceleration of the amortisation of fees related to this facility which would otherwise have been charged evenly over the period to the pre-existing facility's maturity in June 2015 and which have therefore been charged in 2013/14.

Year ended 30 April 2013:

On 20 September 2012, the Group repurchased GBP15.6 million in nominal amount of its 6.125% Guaranteed Bonds due November 2012 (the 2012 Bonds) as well as GBP49.4 million in nominal amount of its 8.75% Guaranteed Notes due August 2015 (the 2015 Notes). The latter repurchase was funded by part of a new issue of GBP150 million 8.75% Guaranteed Notes due September 2017 (the 2017 Notes).

As a result of the repurchases of the 2012 Bonds and 2015 Notes, charges were incurred relating to the acceleration of the amortisation of fees from the 2012 Bonds and the 2015 Notes which would otherwise have been charged evenly over the period to the 2012 Bonds' maturity in November 2012 and the 2015 Notes' maturity in August 2015, together with a redemption premium.