5. Non-underlying Items

For the period53 weeks to
3 April
2020
£m		52 weeks to
29 March
2019
£m
Non-underlying operating expenses:
Non-underlying operating expenses:
Organisational restructure costs (a)2.86.8
Group-wide strategic review (b)1.02.4
Closure costs (c)26.8–
Acquisition and investment-related fees (d)1.90.2
One-off claims (e)0.8–
Impairment of right-of-use-asset (f)0.9–
One-off royalty income (g)–(1.6)
Non-underlying items before tax34.27.8
Tax on non-underlying items (h)(5.0)(1.4)
Non-underlying items after tax29.26.4
  1. In the current and prior period separate and unrelated organisational restructuring activities were undertaken.

    Current period costs comprised:

    • Redundancy and transition costs of £1.4m relating to roles which have been outsourced or otherwise will not be replaced (FY19: £1.5m); and
    • £1.4m of asset write-offs, principally resulting from the strategic decision to re-platform the Retail and Autocentres websites (FY19: £5.3m)
  2. In the current and prior periods costs were incurred in preparing and implementing the new Group strategy.
    • £0.4m of external consultant costs (FY19: £2.0m); and
    • £0.6m of store labour costs, point of sale equipment and other associated costs in completing the cycling space relay across the store estate (FY19: £nil).

Prior period costs also included £0.4m of warehouse and distribution costs in order to align our network with the new strategy.

    1. Closure costs represent costs associated with the closure of the operations of Cycle Republic and the Boardman Performance Centre ("Cycle Republic") following a strategic review of the Group's cycling businesses. The provision mostly relates to the impairment of right-of-use assets, intangible assets, tangible assets and inventories.
    2. In the current and prior periods costs were incurred in relation to the investment in McConechy's Tyre Services and Tyres On The Drive.
      • Tyres On The Drive acquisition costs comprise of £1m principally relating to the costs of dual running Halfords Mobile Expert and Tyres on The Drive, as well as the write-off of the receivables balance due from Tyres On the Drive related to Halfords Mobile Expert prior to acquisition; and
      • £0.9m relating to professional fees in respect of the acquisition of McConechy's Tyres Services

£0.2m of costs were incurred in the prior period in relation to the investment in Tyres on The Drive and costs relating to a potential acquisition which did not progress.

    1. During the year a provision was created for expected costs of settling an ongoing court case, which was then settled during the second half of the period. In addition, a provision of £0.6m has been created in relation to the audit by HMRC relating to the national minimum wage.
    2. In light of the ongoing COVID-19 pandemic, the Group has revised future cash flow projections for stores and garages. As a result, £0.9m incremental impairment has been recognised in relation to garages where the current and anticipated future performance does not support the carrying value of the right-of-use asset and associated tangible assets. This charge is directly attributable incremental impairment due to COVID-19 and relates primarily to the right-of-use asset value.
    3. A one-off royalty income was received in the prior period in relation to the use of a software licence.
    4. The tax credit of £5.0m represents a tax rate of 14.6% applied to non-underlying items. The prior period represents a tax credit at 18.0% applied to non-underlying items.