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Discontinued operations
Performance during the year
Performance
Our discontinued operations operated safely, reliably and efficiently during the year. There were two employee lost time injuries in 2006/07 both in our wireless infrastructure operations, compared with one in 2005/06 and five in 2004/05. The financial performance of these operations is described below, excluding operations discontinued in prior years.
Investment
Capital investment in operations discontinued in the year was £30 million in 2006/07 compared with £114 million in 2005/06 and £157 million in 2004/05. The decrease in capital expenditure in 2006/07 primarily reflects the completion and commissioning of the Basslink interconnector in April 2006. The decrease in 2005/06 compared with 2004/05 arose for the same reason, but was partially offset by increased capital spend on wireless infrastructure reflecting a full year's capital expenditure compared with seven months' capital spending in 2004/05.
Financial results
The operating results for discontinued operations for the years ended 31 March 2007, 2006 and 2005 relating to operations discontinued during the year were as follows:
| Years ended 31 March | 2007 £m |
2006 £m |
2005 £m |
|---|---|---|---|
| Revenue and other operating income | 383 | 325 | 211 |
| Operating costs excluding exceptional items | (266) | (255) | (169) |
| Adjusted operating profit | 117 | 70 | 42 |
| Exceptional items | (55) | (5) | (13) |
| Operating profit | 62 | 65 | 29 |
In 2006/07, the £58 million increase in revenue and other operating income, £11 million increase in operating costs excluding exceptional items and £47 million increase in adjusted operating profit compared with 2005/06 arose from the first year of operation of the Basslink interconnector, continued growth in wireless infrastructure in the UK, and contributions from acquisitions in wireless infrastructure in the US.
In 2005/06, the £114 million increase in revenue and other operating income, £86 million increase in operating costs and £28 million increase in adjusted operating profit between 2005/06 and 2004/05 primarily reflects a full year's (2004/05 seven months') contribution from the UK operations of Crown Castle International Corp., synergies and underlying profit growth.
Exceptional charges in 2006/07 of £55 million arose from an impairment to goodwill recorded in our US wireless operations. Exceptional charges of £5 million in 2005/06 and £13 million in 2004/05 related to restructuring costs incurred in relation to the acquisition and integration of the UK operations of Crown Castle International Corp. with our then existing wireless infrastructure operations.
Operating profit decreased by £3 million in 2006/07 compared with 2005/06 as a consequence of the increase in adjusted operating profit of £47 million offset by the £50 million increase in exceptional items described above. Operating profit in 2005/06 was £36 million higher than 2004/05 as a consequence of the increase in adjusted operating profit and decrease in exceptional items as described above.