Note 4: Reorganisation costs

The reorganisation costs of £295,000 (2006: £700,000) relate to the transfer of trade of August One Limited into Text 100 Limited which occurred on 1 April 2007. The £295,000 comprises £199,000 of establishment costs and £96,000 of redundancy costs. The establishment costs relate to dilapidation charges, lease break penalties, and a loss on disposal of fixed assets.

The reorganisation costs of £700,000 incurred in the year ended 31 July 2006 related to a headcount reduction in Text 100 after spending cuts from IBM, and professional fees connected with a Group reorganisation in the US.