21 Provisions
Loss-making contracts £m
Onerous property costs £m
Other provisions £m
Total £m
Balance as at 31 May 2020 and 1 June 2020
0.2
2.9
0.6
3.7
Reclassification to right-of-use assets
–
(1.4)
– – –
(1.4)
Reclassification
1.7 1.9
–
1.7 2.9
Provisions created in the year Provisions utilised during the year
1.0
(2.7)
(0.8)
(0.4)
(3.9)
Balance as at 31 May 2021 and 1 June 2021
1.1
1.7
0.2
3.0
1.9
–
0.6
2.5
Provisions created in the year Provisions utilised during the year
(1.2)
(0.7)
(0.1)
(2.0)
Balance as at 31 May 2022
1.8
1.0
0.7
3.5
Analysed as follows (2022): Current
1.5 0.3
0.5 0.5
0.7
2.7 0.8
–
Non-current
Analysed as follows (2021): Current
1.1
1.1 0.6
0.2
2.4 0.6
Non-current
–
–
The loss-making contracts provision represents the estimated remaining net lifetime loss on long-term development and supply contracts that are now expected to be fully completed in the 2023 calendar year mainly due to supply chain sourcing. It was expected in the prior year that these contracts would have been completed in 2022. During the year, revenue has been recognised in relation to these long-term contracts of £2.3m (2021: £1.8m). The onerous property costs provision relates to unused floors in the Manchester head office building. The provision of £1.0m (2021: £1.7m) at 31 May 2022 includes £0.4m (2021: £1.2m) of non-rent costs relating to the onerous properties including service charges and insurance and also the estimated costs of disposing or terminating these leases, which includes rent incentives, renovation costs and letting fees. The provision at 31 May 2022 also includes estimated dilapidations liabilities of £0.6m (2021: £0.5m) relating to the Group’s leased premises. Both of these provisions are expected to unwind over the period of the relevant leases (2022–2034). Other provisions of £0.7m (2021: £0.2m) include reorganisation and CEO transition costs to which the Group was committed at 31 May 2022 and are expected to be settled within the next financial year. 22 Contract liabilities – deferred revenue Deferred revenue represents advanced consideration received from customers, for which revenue is recognised over time. Deferred revenue is analysed as follows and is considered a contract liability:
Group 2022 £m
Group 2021 £m
Analysed as follows: Current
61.7
43.6
0.6
Non-current
0.7
62.3
44.3
Revenue recognised in the year ended 31 May 2022 that was included in the contract liability at 1 June 2021 amounted to £43.6m (2021: £39.5m). The Group has taken advantage of the IFRS 15 practical expedient not to disclose when revenue will unwind for all contracts less than 12 months in length. The increase in deferred revenue in the year is due to the growth of the Assurance division and the acquisition of IPM.
NCC Group plc — Annual report and accounts for the year ended 31 May 2022
185
Made with FlippingBook Online newsletter maker