42
AVESCO GROUP PLC ANNUAL REPORT 2011
www.avesco.com
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 30 SEPTEMBER 2011
b) Depreciation The Group depreciates Hire Stock over its estimated useful economic life between 2 and 10 years and applies a residual value of zero on all fixed assets. The estimation of useful economic life and residual value involves judgement from management and is subjective. Given the value of Hire Stock maintained by the Group, the estimation will have a significant impact on the income statement in the period and the net book value of property, plant and equipment.
c) Deferred tax asset The Group recognises deferred tax assets to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. The future taxable profit is based upon forecast profitability of the Group’s companies after adjusting for risk factors. Both the forecast profitability and application of risk factors requires significant judgement from management.
5. Segmental information Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.
The Board of Directors categorises Group companies based on the services they provide and as a result the business is split into four segments. These correspond to three operating segments (Creative Technology, Full Service and Broadcast Services) which together provide the Group's principal activity of services to the corporate presentation, entertainment and broadcast markets. In addition, the Group recognises a further segment, Head Office, which provides administrative support to the rest of the Group.
Creative Technology provides specialist AV services and equipment to the live events, broadcast and entertainment markets. The Full Service segment consists of companies which provide full technical support for conferences, sports, music, corporate and television programmes. Finally, the Broadcast Services segment provides broadcast equipment, systems and services to the broadcast industry.
The Board of Directors assess performance of the operating segments based on trading profit (see note 2.3). As segmental performance does not therefore include finance costs and tax, such items are not allocated to segments.
The segmental results for the year ended 30 September 2011 are as follows: Creative
Technology £000s
Total segment revenue Inter segment revenue
Revenue
Trading EBITDA* Less depreciation Less amortisation
Trading profit/(loss) Restructuring costs (note 7)
Other non-recurring and prior year costs Operating profit/(loss)
Net finance costs (note 11) Profit before income tax
Income tax expense (note 12) Loss for the financial year
*Trading EBITDA includes profit on sale of property, plant and equipment of £103,000 for Creative Technology, £768,000 for Full Service and £931,000 for Broadcast Services.
81,154 (685)
80,469 12,212
(10,580) (133)
1,499 (300)
- 1,199
Full Service £000s
20,931 (122)
20,809
1,681 (1,217) (69)
395 (299)
- 96
Broadcast Services £000s
24,608 (357)
24,251 6,710
(5,885) (41)
784 (70)
- 714
Head Office £000s
- -
-
(341) (8) (2)
(351) -
(140) (491)
Group £000s
126,693 (1,164)
125,529
20,262 (17,690) (245)
2,327 (669)
(140) 1,518
(1,416) 102
(236) (134)
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