(a) COVID-19

The Group has continued to account for the ongoing COVID-19 pandemic as an exceptional item and has incurred an exceptional charge of €4.6m from operating activities at 28 February 2021 in this regard (FY2020: €47.6m). The Group reviewed the recoverability of its debtor book and advances to customers and booked a credit of €6.1m with respect to its provision against trade debtors (FY2020: charge of €19.4m) and a charge of €1.2m with respect to its provision for advances to customers (FY2020: €5.8m). The Group incurred exceptional charges of €5.8m with respect to inventory (FY2020: €10.6m), this related to inventory that became obsolete, all as a consequence of the COVID-19 restrictions. The Group incurred costs of €1.7m with respect to a provision for lost kegs, €0.3m with respect to the write off of an IT intangible asset where the project will now not be completed (FY2020: €2.4m) due to COVID-19 and a net credit of €0.6m (FY2020: charge €9.4m) with respect to the release of a trade provision. Other costs of €2.3m were incurred, which included site improvement costs, impairment of brand dispense equipment and an excess holiday accrual all directly linked to the pandemic.

(b) Restructuring costs

Restructuring costs of €8.1m were incurred in the current financial year. These included severance costs of €6.8m, of which €4.9m was incurred with respect to the restructuring of the Group as a consequence of the COVID-19 pandemic and €1.9m arose as a consequence of the optimisation of the delivery networks in England and Scotland. The Group also incurred additional costs of €2.0m with respect to the optimisation of the delivery networks in England and Scotland which was offset by a credit of €0.7m relating to the profit on disposal of a property as a direct consequence of the optimisation project.

Restructuring costs of €3.0m were incurred in the prior financial year. These costs primarily related to severance costs arising from the acquisition and subsequent integration of Matthew Clark and Bibendum of €2.3m. Restructuring costs of €0.5m related to the centralisation of accounting services. Other restructuring initiatives across the Group in the prior financial year resulted in a further charge of €0.2m.

(c) Equity accounted investments’ exceptional items

The hospitality and pub industry in the United Kingdom have been significantly curtailed by lockdowns and trading restrictions since March 2020. The Group assessed the carrying value of its equity accounted investments at 28 February 2021, in light of the underutilisation of their pub assets as a direct consequence of such lockdowns, and recorded an impairment charge of €8.9m with respect to its carrying value of its investment in Admiral Taverns and €0.2m with respect to the carrying value of its investment in Drygate Brewing Company Limited.

The Group also incurred €8.8m with respect to its share of Admiral Taverns’ exceptional items. These included a charge of €7.0m (FY2020: €2.7m) with respect to the Group’s share of the revaluation loss arising from the fair value exercise to value Admiral’s property assets at 28 February 2021. As a result of the same valuation exercise, a loss of €0.4m (FY2020: a gain of €3.7m) with respect to the Group’s share of the revaluation, was recognised in Other Comprehensive Income. The Group also recognised €1.8m with respect to its share of Admiral’s other exceptional items for the year, including €0.8m with respect to a provision against trade debtors as a consequence of COVID-19, €0.5m with respect to an Asbestos provision with the remaining €0.5m in relation to other charges directly attributable to COVID-19.

In the prior financial year, the Group invested €10.7m which gave rise to capital duties to be expensed in relation to the acquisition (the Group’s share of this expense was €2.9m). This was offset by recognition of the Group’s share of an adjustment made by the investee to recognise a higher deferred tax asset in respect of timing differences on fixed assets in respect of prior years (the Group’s share of this gain was €3.2m).

(d) Impairment of property, plant & equipment

Property (comprising freehold land & buildings) and plant & machinery are valued at fair value on the Consolidated Balance Sheet and reviewed for impairment on an annual basis. During the current financial year, as outlined in detail in note 11, the Group engaged external valuers to value the freehold land & buildings and plant & machinery at the Group’s Clonmel (Tipperary), Wellpark (Glasgow) and Portugal sites. Using the valuation methodologies, this resulted in a net revaluation loss of €1.2m (FY2020: €1.0m) accounted for in the Consolidated Income Statement and a gain of €0.9m (FY2020: €1.1m) accounted for within Other Comprehensive Income.

(e) Impairment of intangible assets

To ensure that goodwill and brands considered to have an indefinite useful economic life are not carried at above their recoverable amount, impairment reviews are performed annually or more frequently if there is an indication that their carrying amount(s) may not be recoverable, comparing the carrying value of the assets with their recoverable amount using value in use computations. The Group performed an impairment review at 28 February 2021 and all assets were deemed to be recoverable.

In the prior financial year, the Group recorded an impairment charge of €34.1m with respect to the Group’s North America segment and in particular the Woodchuck suite of brands. An impairment of €0.1m was also taken with respect to the Group’s Matthew Clark Bibendum cash generating unit directly attributable to a discontinued brand.

(f) Contract termination

In the prior financial year, the Group terminated a number of its long-term apple contracts, which were deemed surplus to requirements, incurring a cost of €4.4m.

(g) Other

Other exceptional costs of €2.2m were incurred by the Group in the year with respect to a provision against legal disputes. In the prior financial year, the Group incurred costs of €0.2m associated with a previous acquisition and incurred €0.6m with respect to incremental costs associated with the dual running of warehouse management systems in Scotland due to system implementation delays.

(h) Profit on disposal

During the current financial year, as outlined in further detail in note 10, the Group disposed of its Tipperary Water Cooler business for an initial consideration of €7.4m, realising a profit of €5.8m on disposal.

During the prior financial year, the Group disposed of its equity accounted investment in a Canadian company for cash proceeds of €6.1m, realising a profit of €2.6m on disposal. The Group also disposed of its investment and non-controlling interest in Peppermint Events Limited at a loss of €1.7m.

(i) Exceptional finance charges

During the current financial year, the Group successfully negotiated covenant waivers due to the impact of COVID-19 with its lenders. Costs of €7.9m were incurred directly associated with these waivers including waiver fees, increased margins payable and other professional fees associated with covenant waivers.

(j) Income tax credit

The tax credit in the current financial year, with respect to exceptional items amounted to €2.4m (FY2020: €9.8m).