Non-underlying items charged/(credited) comprise:
|Amortisation of acquired intangibles|
|– classified within selling, general and administrative expenses||63.9||70.0|
|– classified within research and development expenses||5.7||6.8|
|Remeasurement of contingent consideration||–||(0.1)|
|Fair value uplift of inventory acquired through business combinations||–||5.1|
|Expenses relating to Brexit||–||0.9|
|Expenses relating to acquisitions and subsequent integration activities||4.3||3.7|
|Rationalisation of manufacturing organisation||2.2||2.0|
|Non-underlying operating loss items||76.1||88.4|
|Amortisation in relation to Medical Ethics Pty Ltd (net of tax)||0.6||0.2|
|Loss on extinguishment of debt||1.0||–|
|Fair value and other movements on contingent consideration||1.5||1.0|
|Non-underlying loss before tax items||79.2||89.6|
|Tax on non-underlying loss before tax items||(18.0)||(20.0)|
|Revaluation of deferred tax balances following the change in Dutch tax rates/US tax rates||0.3||(8.0)|
|Non-underlying loss after tax items||61.5||61.6|
Amortisation of acquired intangibles reflects the amortisation of the fair values of future cash flows recognised on acquisition in relation to the identifiable intangible assets acquired.
The remeasurement of the contingent consideration balance relates to the net credit to the income statement on the reassessment of future milestone and royalty payments on a licensing agreement.
The fair value uplift of inventory acquired through business combinations is recognised in accordance with IFRS 3 'Business Combinations' to record the inventory acquired at fair value and its subsequent release into the income statement.
Expenses relating to Brexit represents one-off regulatory and technology transfer costs that were incurred in advance of Brexit.
Expenses relating to acquisitions and subsequent integration activities represents costs incurred during the acquisition and integration of Ampharmco (£1.2 million), AST Farma and Le Vet (£0.7 million), Dechra Brazil (£0.4 million) and other prospective projects (£0.7 million). Pre-acquisition costs in relation to Osurnia (£1.3 million) which completed in July 2020 are also included.
Rationalisation of manufacturing organisation relates to the income statement cost associated with this strategic programme. Costs since the inception of the programme have been £7.1 million. The total planned spend on this project is now £8.4 million, and will conclude in the year ended 30 June 2021.
The loss on extinguishment of debt relates to the acceleration of the amortisation of arrangement fees relating to the Term Loan on termination.