| Brand
names and
trademarks
£m | Customer
relationships
£m | Favourable
leases
£m | Computer
software
£m | Goodwill
£m | Total
£m |
|---|
| Cost | | | | | | |
| At 28 March 2014 | 1.1 | 14.9 | 2.3 | 18.9 | 344.5 | 381.7 |
| Additions | 3.1 | — | — | 7.5 | 10.7 | 21.3 |
| Disposals | — | — | — | (0.7) | — | (0.7) |
| Transfer to tangible assets | — | — | — | (0.6) | — | (0.6) |
| At 3 April 2015 | 4.2 | 14.9 | 2.3 | 25.1 | 355.2 | 401.7 |
| Additions | — | — | — | 12.5 | — | 12.5 |
| Disposals | — | — | — | (0.1) | — | (0.1) |
| At 1 April 2016 | 4.2 | 14.9 | 2.3 | 37.5 | 355.2 | 414.1 |
| Amortisation | | | | | | |
| At 28 March 2014 | 1.1 | 6.9 | 0.3 | 9.5 | 21.7 | 39.5 |
| Charge for the period | 0.2 | 1.6 | 0.1 | 3.6 | — | 5.5 |
| Disposals | — | — | — | (0.1) | — | (0.1) |
| At 3 April 2015 | 1.3 | 8.5 | 0.4 | 13.0 | 21.7 | 44.9 |
| Charge for the period | 0.3 | 0.7 | 0.1 | 5.2 | — | 6.3 |
| At 1 April 2016 | 1.6 | 9.2 | 0.5 | 18.2 | 21.7 | 51.2 |
| Net book value at 1 April 2016 | 2.6 | 5.7 | 1.8 | 19.3 | 333.5 | 362.9 |
| Net book value at 3 April 2015 | 2.9 | 6.4 | 1.9 | 12.1 | 333.5 | 356.8 |
No intangible assets are held as security for external borrowings.
Product rights of £0.2m, which are fully amortised, have been included within Brand names and trademarks.
Goodwill of £253.1m (2015: £253.1m) arose on the acquisition of Halfords Holdings Limited by the Company on 31 August 2002 and is allocated to the Retail segment. The goodwill relates to a portfolio of sites within the UK which management monitors on an overall basis as a group of cash-generating units being Retail. Goodwill of £69.7m arose on the acquisition of Nationwide Autocentres on 17 February 2010 and is allocated to the Car Servicing segment. The goodwill relates to a portfolio of centres within the UK which management monitors on an overall basis as a group of cash-generating units being Car Servicing. Goodwill of £10.7m arose on the acquisition of Boardman Bikes Limited and Boardman International Limited on 4 June 2014 and is allocated to the Retail segment. The goodwill relates to the two Boardman entities which management monitors on an overall basis as a group of cash-generating units within Retail.
The goodwill arising on the acquisition of the Nationwide Autocentres is attributable to: a) future income to be generated from new retail, fleet customer contracts and related relationships; b) the workforce; c) the value of immaterial other intangible assets; and d) operating synergies. The goodwill on acquisition of the Boardman Bikes is attributable to: a) operating synergies and increased control of operations; b) the value of immaterial other intangible assets; and c) future income to be generated from new retail customer contracts and related relationships.
The recoverable amount of goodwill is determined based on "value-in-use" calculations for each of the three groups of cash-generating units, being Retail, Car Servicing and Boardman Bikes. This is the lowest level within the Group at which the goodwill is monitored for internal management purposes, which is not higher than the Group's operating segments prior to aggregation. These calculations use cash flow projections based on financial budgets approved by management covering a three year period with growth no higher than past experience and after consideration of all available information, incorporating the strategies and risks of each segment.
The value-in-use of the goodwill held at 1 April 2016 and 3 April 2015 is driven by, and is most sensitive to, the key assumptions underlying the Group cash-generating units' recoverable amounts as follows:
| Note | Retail | Car Servicing |
|---|
| 2016 | 2015 | 2016 | 2015 |
|---|
| Discount rate | 1 | 8.5% | 7.3% | 7.7% | 8.3% |
| Growth rate | 2 | 0.0% | 0.0% | 1.0% | 1.0% |
Notes:
- Pre-tax discount rate applied to the cash flow projections.
- Growth rate used to extrapolate cash flows beyond the three year budget period.
The Directors are confident that a reasonably possible change in the key assumptions, including a +/- 1.0% change in the discount rate, would not cause the carrying amounts to exceed the recoverable amounts.