Notes 1-5
For the year ended 31 December 2007
- 1. General information
- 2. Segment information
- 3. Operating costs
- 4. Share of results of associates
- 5. Our people
3. Operating costs
| 2007 £m |
2006 £m |
2005 £m |
|
|---|---|---|---|
| Total staff costs (note 5) | 3,607.9 | 3,474.4 | 3,186.3 |
| Establishment costs | 427.2 | 419.1 | 387.6 |
| Other operating costs (net) | 1,010.6 | 975.9 | 906.0 |
| Total operating costs | 5,045.7 | 4,869.4 | 4,479.9 |
| Operating costs include: | |||
| Goodwill impairment | 44.1 | 35.5 | 46.0 |
| Goodwill write-down relating to utilisation of pre-acquisition tax losses (note 12)1 |
1.7 | 8.8 | 1.1 |
| Amortisation and impairment of acquired intangible assets (note 12) |
40.3 | 43.3 | 25.3 |
| Amortisation of other intangible assets (note 12) | 18.1 | 13.5 | 10.7 |
| Depreciation of property, plant and equipment | 123.7 | 127.3 | 110.0 |
| Losses/(Gains) on sale of property, plant and equipment | 1.0 | (3.7) | 1.1 |
| Gains on disposal of investments | (3.4) | (7.3) | (4.3) |
| Net foreign exchange losses | 1.1 | 5.0 | 0.8 |
| Operating lease rentals: | |||
| Land and buildings | 261.1 | 251.7 | 237.8 |
| Plant and machinery | 25.8 | 30.4 | 34.8 |
| 286.9 | 282.1 | 272.6 | |
Note
1 The goodwill write-down in relation to the utilisation of pre-acquisition tax losses is due to the better than expected performance of certain acquisitions in the year. This enabled the utilisation of pre-acquisition tax attributes that previously could not be recognised at the time of acquisition due to insufficient evidence that they were recoverable.
In 2007, operating profit includes credits totalling £16.8 million (2006: £10.6 million, 2005: £10.1 million) relating to the release of excess provisions and other balances established in respect of acquisitions completed prior to 2006. Further details of the Group's approach to acquisition reserves, as required by IFRS 3 'Business combinations', are given in note 28.
All of the operating costs of the Group are related to administrative expenses.
Auditors' remuneration:
| 2007 £m |
2006 £m |
2005 £m |
|
|---|---|---|---|
| Fees payable to the Company's auditors for the audit of the Company's annual accounts |
1.7 | 1.7 | 1.9 |
| The audit of the Company's subsidiaries pursuant to legislation | 11.4 | 10.8 | 10.0 |
| 13.1 | 12.5 | 11.9 | |
| Other services pursuant to legislation | 3.5 | 4.0 | 3.0 |
| Fees payable to the auditors pursuant to legislation | 16.6 | 16.5 | 14.9 |
| Tax advisory services | 2.7 | 2.8 | 2.6 |
| Tax compliance services | 0.9 | 1.1 | 1.0 |
| 3.6 | 3.9 | 3.6 | |
| Corporate finance services | 1.0 | – | 0.2 |
| Other services | 3.0 | 3.3 | 2.8 |
| Total non-audit fees | 7.6 | 7.2 | 6.6 |
| Total fees | 24.2 | 23.7 | 21.5 |
Minimum committed annual rentals
Amounts payable in 2008 under the foregoing leases will be as follows:
| Plant and machinery | Land and buildings | ||||||
|---|---|---|---|---|---|---|---|
| 2008 £m |
2007 £m |
2006 £m |
2008 £m |
2007 £m |
2006 £m |
||
| In respect of operating leases which expire: |
|||||||
| – within one year | 6.4 | 6.9 | 7.0 | 27.9 | 30.8 | 20.6 | |
| – within two to five years | 12.9 | 13.5 | 17.9 | 115.5 | 95.5 | 94.5 | |
| – after five years | 0.3 | 1.8 | 1.8 | 75.0 | 75.8 | 90.0 | |
| 19.6 | 22.2 | 26.7 | 218.4 | 202.1 | 205.1 | ||
Future minimum annual amounts payable under all lease commitments in existence at 31 December 2007 are as follows:
| Minimum rental payments £m |
Less sub-let rentals £m |
Net payment £m |
|
|---|---|---|---|
| Year ending 31 December | |||
| 2008 | 238.0 | (20.8) | 217.2 |
| 2009 | 192.0 | (16.9) | 175.1 |
| 2010 | 169.3 | (14.7) | 154.6 |
| 2011 | 136.9 | (13.1) | 123.8 |
| 2012 | 118.1 | (11.9) | 106.2 |
| Later years | 591.4 | (9.1) | 582.3 |
| 1,445.7 | (86.5) | 1,359.2 | |