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Property, plant and equipment and investment property
 12 Months Ended
Dec. 31, 2023
Text block [abstract]  
Property, plant and equipment and investment property
10. Property, plant and equipment and investment property
 
               
               
               
               
               
               
               
           
Right-of-use
assets
           
Owned assets
         
                                 
Assets in
        
   
Investment
    
Land and
    
Plant and
    
Land and
    
Plant and
    
the course of
        
All figures in £ millions
  
property
    
buildings
    
equipment
    
buildings
    
equipment
    
construction
    
Total
  
Cost
              
 
At 1 January 2022
  
 
–
 
  
 
465
 
  
 
5
 
  
 
226
 
  
 
250
 
  
 
29
 
  
 
975
 
 
Exchange differences
  
 
–
 
  
 
30
 
  
 
–
 
  
 
18
 
  
 
23
 
  
 
–
 
  
 
71
 
 
Additions
  
 
22
 
  
 
33
 
  
 
1
 
  
 
4
 
  
 
8
 
  
 
33
 
  
 
101
 
 
Transfers to investment property
  
 
174
 
  
 
(141
) 
  
 
–
 
  
 
(32
) 
  
 
(1
) 
  
 
–
 
  
 
–
 
 
Disposals of businesses (see note 31)
  
 
–
 
  
 
(10
) 
  
 
–
 
  
 
(1
) 
  
 
(8
) 
  
 
–
 
  
 
(19
) 
 
Disposals and retirements
  
 
(6
) 
  
 
(23
) 
  
 
(1
) 
  
 
(5
) 
  
 
(39
) 
  
 
–
 
  
 
(74
) 
 
Reclassifications and transfers
  
 
–
 
  
 
–
 
  
 
–
 
  
 
13
 
  
 
27
 
  
 
(40
) 
  
 
–
 
 
Transfer to assets classified as held for sale
  
 
–
 
  
 
–
 
  
 
–
 
  
 
(45
) 
  
 
(3
) 
  
 
–
 
  
 
(48
) 
At 31 December 2022
  
 
190
 
  
 
354
 
  
 
5
 
  
 
178
 
  
 
257
 
  
 
22
 
  
 
1,006
 
 
Exchange differences
  
 
–
 
  
 
(14
) 
  
 
–
 
  
 
(9
) 
  
 
(11
) 
  
 
(1
) 
  
 
(35
) 
 
Additions
  
 
24
 
  
 
26
 
  
 
1
 
  
 
–
 
  
 
6
 
  
 
24
 
  
 
81
 
 
Transfers to investment property
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
 
Disposals of businesses (note 31)
  
 
–
 
  
 
–
 
  
 
–
 
  
 
(4
) 
  
 
(3
) 
  
 
(2
) 
  
 
(9
) 
 
Disposals and retirements
  
 
–
 
  
 
(29
) 
  
 
(1
) 
  
 
(10
) 
  
 
(36
) 
  
 
–
 
  
 
(76
) 
 
Reclassifications and transfers
  
 
–
 
  
 
–
 
  
 
–
 
  
 
10
 
  
 
24
 
  
 
(34
) 
  
 
–
 
 
Transfer to assets classified as held for sale
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
At 31 December 2023
  
 
214
 
  
 
337
 
  
 
5
 
  
 
165
 
  
 
237
 
  
 
9
 
  
 
967
 
 
 
           
 
Right-of-use
assets
                  
 
Owned assets
         
                                        Assets in        
    Investment     Land and     Plant and           Land and     Plant and     the course of        
All figures in £ millions   property     buildings     equipment           buildings     equipment     construction     Total  
Depreciation and impairment
                
At 1 January 2022     –       (269 )      (5 )        (136 )      (199 )      –       (609 ) 
Exchange differences     –       (17 )      –         (14 )      (18 )      –       (49 ) 
Transfers to investment property     (105 )      101       –         3       1       –       –  
Charge for the year     (6 )      (44 )      (1 )        (13 )      (26 )      –       (90 ) 
Disposals of businesses (note 31)     –       2       –         1       5       –       8  
Disposals and retirements     –       13       1         5       39       –       58  
Reclassifications and transfers     –       –       –         –       –       –       –  
Impairment     (19 )      (15 )      –         (9 )      (3 )      –       (46 ) 
Transfer to assets classified as held for sale     –       –       –    
 
 
 
     30       2       –       32  
At 31 December 2022
     (130 )      (229 )      (5 )   
 
 
 
     (133 )      (199 )      –       (696 ) 
Exchange differences  
 
–
 
  
 
12
 
  
 
–
 
    
 
6
 
  
 
10
 
  
 
–
 
  
 
28
 
Charge for the year  
 
(5
) 
  
 
(38
) 
  
 
(1
) 
    
 
(10
) 
  
 
(25
) 
  
 
–
 
  
 
(79
) 
Disposals of businesses (note 31)  
 
–
 
  
 
–
 
  
 
–
 
    
 
2
 
  
 
2
 
  
 
–
 
  
 
4
 
Disposals and retirements  
 
–
 
  
 
28
 
  
 
1
 
    
 
10
 
  
 
35
 
  
 
–
 
  
 
74
 
Reclassifications and transfers  
 
–
 
  
 
–
 
  
 
–
 
    
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
Impairment  
 
–
 
  
 
(2
) 
  
 
–
 
    
 
–
 
  
 
–
 
  
 
–
 
  
 
(2
) 
Transfer to assets classified as held for sale  
 
–
 
  
 
–
 
  
 
–
 
  
 
 
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
At 31 December 2023
  
 
(135
) 
  
 
(229
) 
  
 
(5
) 
  
 
 
 
  
 
(125
) 
  
 
(177
) 
  
 
–
 
  
 
(671
) 
Carrying amounts
                
At 1 January 2022     –       196       –         90       51       29       366  
At 31 December 2022     60       125       –    
 
 
 
     45       58       22       310  
At 31 December 2023
  
 
79
 
  
 
108
 
  
 
–
 
  
 
 
 
  
 
40
 
  
 
60
 
  
 
9
 
  
 
296
 
          
  LOGO    Key areas of estimation  
    —    The recoverability of
right-of-use
assets and in particular assumptions related to the ability to sublease vacant leased assets in the future.		  
        
Depreciation expense of £40m (2022: £45m; 2021: £40m) has been included in the income statement in cost of goods sold and £39m (2022: £45m; 2021: £55m) in operating expenses. The impairment charge of £2m (2022: £46m; 2021: £146m) has been included within operating expenses within the income statement.
Property, plant and equipment (including investment property) assets are assessed for impairment triggers annually or when triggering events occur. In 2022 and 2021, as part of a major restructuring programme, the Group continued to simplify its property portfolio, reducing the overall office space required. All property related assets were assessed for impairment as a result of this triggering event and impairment charges of £46m in 2022 and £141m in 2021 recognised within costs of major restructuring (see note 4 for details). In 2023, there were impairment charges of £11m in respect of property assets including £9m in relation to property assets which are classified as assets held for sale. The recoverability of certain of the Group’s
right-of-use
assets is now based on the Group’s ability to sublease vacant space. This involves the use of assumptions related to future subleases including the achievable rent, lease start dates, lease incentives such as rent free periods and the discount rate applied. Should the future sublease outcomes be more or less favourable than the assumptions used by management this could result in additional impairment charges or reversals of impairment charges.
In 2023, total additions to
right-of-use-assets
are £42m (2022: £49m) including £15m (2022: £15m) in respect of investment property.
Investment property
Buildings, or portions of buildings, that are no longer occupied by the Group and are held for operating lease rental are classified as investment property. Investment property includes both,
right-of-use
assets and owned assets. The Group recognised rental income of £6m (2022: £3m; 2021 £nil) in relation to properties classified as investment property. Investment property is measured using the cost model. As a result of recent impairments, the fair value of investment property is equal to the carrying value. The fair value of investment property has been determined using a discounted cash flow model. The valuation model is internally generated but uses inputs from external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The valuations require the application of judgement and involve the use of known inputs for existing contracted subleases as well as assumptions related to future potential subleases including the achievable rent, lease start dates, lease incentives such as rent free periods and the discount rate applied. The fair value measurement of investment properties has been classified as level 3 within the fair value hierarchy based on the inputs and valuation technique used. Should the future sublease outcomes be more or less favourable than the assumptions used by management this could result in additional impairment charges or reversals of impairment charges.