| |
The Group acquired the entire issued share capital of Home of Living Brands Holdings Limited (formerly Amalgamated Appliance Holdings
Limited) (HoLB) that it did not already own, being 71,7%, for a consideration of R532 million, with effect from July 1 2013; and the entire
issued share capital of Mvelaserve Limited (Mvela) that it did not already own, being 65,3%, for a consideration of R847 million, with effect
from November 1 2013. Management believes that these acquisitions will enable HoLB and Mvela to continue to service their customers
more efficiently, with significantly enhanced offerings. HoLB and Mvela will also benefit from being able to offer their products to the wider
customer base of the Group.
A 60% interest in the share capital of Distribuidora E Importadora Irmãos Avelino Limitada (Avelino) in Brazil for a consideration of
R$48,6 million (R524 million) was acquired by the Group with effect from January 1 2014. This acquisition forms part of the Group’s strategic
expansion plans in the international foodservice industry.
During the year 31,9% of the issued ordinary capital of Adcock Ingram Holdings Limited (Adcock) was acquired by the Group, to add to the
2,3% held at June 30 2013, for a consideration of R3,9 billion. The majority of the shares acquired were acquired in the months of January
and February 2014. The Group has accounted for Adcock as an associate with effect from March 1 2014.
The Group also undertook a number of other smaller acquisitions during the year.
Goodwill arose on the acquisitions as the anticipated value of future cash flows that were taken into account in determining the purchase
consideration exceeded the net assets acquired at fair value. The acquisitions have enabled the Group to expand its range of complementary
products and services and, as a consequence, has broadened the Group’s base in the market place.
Trade receivables acquired above are stated net of impairment allowances of R11,6 million. There were no significant contingent liabilities
identified in the businesses acquired.
| |
Adcock
R’000 |
Mvela
R’000 |
HoLB
R’000 |
Avelino
R’000 |
Other
smaller
acquisitions
R’000 |
|
Total
R’000 |
|
| The impact of these acquisitions on the Group’s results can be summarised as follows: |
|
|
|
|
|
|
|
|
| Identifiable assets acquired and liabilities assumed |
|
|
|
|
|
|
|
|
| Property, plant and equipment |
|
414 324 |
19 588 |
21 707 |
218 004 |
|
673 623 |
|
| Deferred taxation |
|
(38 394) |
(37 494) |
– |
(10 067) |
|
(85 955) |
|
| Interest in associates |
3 878 145 |
8 508 |
– |
– |
11 624 |
|
3 898 277 |
|
| Investments and advances |
|
18 380 |
– |
55 |
7 |
|
18 442 |
|
| Inventories |
|
98 453 |
246 496 |
48 689 |
129 689 |
|
523 327 |
|
| Trade and other receivables |
|
1 134 503 |
178 425 |
41 552 |
207 310 |
|
1 561 790 |
|
| Cash and cash equivalents |
|
212 262 |
208 760 |
34 088 |
6 825 |
|
461 935 |
|
| Borrowings |
|
(327 699) |
– |
(667) |
(166 800) |
|
(495 166) |
|
| Trade and other payables and provisions |
|
(1 319 318) |
(138 188) |
(101 138) |
(219 227) |
|
(1 777 871) |
|
| Taxation |
|
(58 213) |
(5 776) |
– |
(5 869) |
|
(69 858) |
|
| Intangible assets |
|
380 225 |
153 000 |
1 196 |
38 404 |
|
572 825 |
|
| Total net identifiable assets |
3 878 145 |
523 031 |
624 811 |
45 482 |
209 900 |
|
5 281 369 |
|
| Contribution to results of the year |
|
|
|
|
|
|
|
|
| Revenue |
|
4 008 008 |
1 267 245 |
313 815 |
1 609 314 |
|
7 198 382 |
|
| Operating profit before acquisition costs |
|
268 669 |
102 073 |
13 931 |
10 951 |
|
395 624 |
|
| Contribution to results for the year had the acquisitions been effective on July 1 2013 |
|
|
|
|
|
|
|
|
| Revenue |
|
6 001 012 |
1 267 245 |
636 752 |
2 081 129 |
|
9 986 138 |
|
| Operating profit before acquisition costs |
|
181 491 |
102 073 |
27 289 |
26 285 |
|
337 138 |
|
|