Annual Reports Keepmoat Homes Annual Report 2018 | Page 40

Notes to the consolidated financial statements
Keepmoat.com
4 – Exceptional items
2018 2017
£’000 £’000
(13,220) -
(13,220) -
Restructuring costs (4,237) -
Onerous lease provision (1,608) -
- (5,655)
(1,058) (353)
250 -
2,319 1,183
(4,334) (4,825)
(17,554) (4,825)
Continuing operations
Included within cost of sales:
Site losses
Included within administrative expenses:
Cost associated with the sale of Regeneration business (note 7)
Acquisition related fees
Deferred receipt on sale of shared equity portfolio
Gain on disposal of property
Total
Site losses
Exceptional site losses relate to a number of sites arising within the West Midlands region where significant trading issues,
including significant cost over-runs that were not adequately managed, have resulted in site losses which, by size of loss and
nature, warrant a separate presentation as exceptional items. Losses on sites were fully provided against in the year ended
March 2018, with trading on all such sites completed no later than the end of the first quarter of the following financial year.
To ensure profitable on-going trading, following detailed review, the decision was taken to close the West Midlands regional
office, with the site portfolio rationalised and the management of on-going profitable sites successfully transferred to other
regional offices, fully sustaining the presence of the Group within the Midlands region as a whole.
Restructuring costs
Following the disposal of the Regeneration division a corporate restructuring exercise, including redundancies, was
undertaken during the year ended March 2018 to reflect the significant change in the size and focus of the Group. As part
of this a one-off supply-chain re-engineering process was undertaken supported by external consultants. In addition, the
West Midlands regional office was closed, as described above. Exceptional restructuring costs relate to redundancy costs and
consultancy fees associated with these actions.
Onerous lease provision
As part of the restructuring of the West Midlands region, during the year ended 31 March 2018 the Group made an onerous
lease provision in respect of the lease obligation for the regional office at Coleshill, which has become surplus to on-going
operational requirements.
Sale of Regeneration business
These costs relate to advisory costs incurred during the disposal of the Regeneration division, of which £5,244,000 was
accrued as at 31 March 2017.
Acquisition related fees
During year ended 31 March 2018, the Group incurred advisor fees related to abortive merger and acquisition activity.
During the year ended 31 March 2017, the Group incurred adviser fees relating to the acquisition of MCI Developments
Limited on 10 January 2017.
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