2020 
R'000 
2019 
Restated*
R'000 
  
13.  Acquisition of businesses, subsidiaries and associates 
Property, plant and equipment  (1 150 004) (98 586)   
Right-of-use assets  (922 448) –     
Deferred taxation  (49 685) 128 250    
Interest in associates and joint ventures  (1 514) (654 033)   
Investments and advances  (4 728) (4 167)   
Inventories  (236 557) (53 563)   
Trade and other receivables  (1 659 738) (254 210)   
Cash and cash equivalents  (1 281 038) (73 982)   
Borrowings  12 390 274  15 916    
Trade and other payables and provisions  3 124 936  281 676    
Lease liabilities  907 877  –    
Taxation  189 278  15 082    
Net fair value of liabilities (assets) 11 306 653  (697 617)   
Goodwill  (12 408 811) (713 777)   
Intangible assets  (496 866) (460 128)   
Non-controlling interest  –  (19 963)   
Total value of acquisitions  (1 599 024) (1 891 485)   
Less: Cash and cash equivalents acquired  1 281 038  73 982    
Vendors for acquisition at beginning of year  (518 231) (22 708)   
Vendors for acquisition at end of year  2 611  518 231    
Costs incurred in respect of acquisitions  (178 179) (22 940)   
Net amounts paid  (1 011 785) (1 344 920)   
  * Refer accounting policies note 27.
 

Effective 7 May 2020, the Group acquired 100% of the share capital and voting rights of, and claims on loan accounts against PHS Bidco Limited and PHS Group Limited (PHS Group) via its UK subsidiary, Bidvest Services Group (UK) Limited. The PHS Group are specialists in washroom, healthcare and floorcare hygiene, and are the leading hygiene service provider in the UK, Spain and Ireland. With over 120 000 customers in over 300 000 locations the Group supports, among others, restaurants, offices, hospitals and schools and meets the hygiene needs of up to 100 million people. The acquisition adds significance to the Group's hygiene service offerings as a whole and in the UK and Europe geography. The Group will gain and achieve substantial synergies from this acquisition, which has been funded with a one year sterling bridge facility, with an option to extend for a further one year period.

Effective 1 July 2019, the Group acquired 100% of the share capital and voting rights of Future Cleaning Services Limited (Future Cleaning) via its UK subsidiary, Noonan Services Group (UK) Limited. Future Cleaning, a North Yorkshire company formed in 2003, is an office and commercial cleaning services company operating throughout the UK and Ireland through bespoke packages designed to service any size company and budget providing the best value contracts. Specialist cleaning services include boat, transport and escalator cleaning, jet washing and road sweeping. General cleaning services include, daily contract, commercial, industrial, window and carpet cleaning. This bolt-on acquisition increases the Group's cleaning service footprint and market share in the UK and Ireland and was funded from existing cash resources and facilities.

As at 1 July 2019 the Group acquired 100% of the share capital and voting rights of New Frontiers Tours Proprietary Limited (New Frontiers). New Frontiers is a full service ground handler, specialising in the deluxe end of the market and offering accommodation, safaris, car rental, transfers, day tours, private touring, charter flights and VIP Meet and Greet services throughout Southern Africa. The consulting team is made up of travel professionals who have been in the industry a minimum of seven years and who are driven by passion and creativity to ensure impeccable on the ground service and responses. This inbound travel and tourism acquisition compliments the Group's existing portfolio of internal and out bound travel and tourism offerings. The acquisition was funded from existing cash resources and facilities.

Included in other acquisitions is Plush Professional Leather Care Proprietary Limited (Plush). Adcock Ingram acquired 100% of Plush, a company offering an extensive range of homecare, cleaning and leather care products, which are sold through most major retailers in South Africa and selected Southern African countries. The acquisition of Plush is part of Adcock Ingram's strategy to expand into non-regulated markets, including homecare. Plush was acquired for R322 million.

The goodwill, intangible and tangible asset values represented for PHS Group are provisional, as this acquisition was completed close the Group's reporting date. The remaining values represent the final at acquisition fair values consolidated by the Group.

The Group also made a number of less significant acquisitions and disposals during the year. These acquisitions were funded from existing cash resources.

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 directors believe that the goodwill of the acquisitions reflects, the expectation that the businesses will continue to generate new customers over time, the acquired workforce (which is not an identifiable asset for financial reporting purposes), and the growth opportunities. 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 and geographic reach in the market place.

Trade receivables acquired above are stated net of impairment allowances of R151 million (2019: R11.5 million). There were no significant contingent liabilities identified in the businesses acquired.

The impact of these acquisitions on the Group's results can be summarised as follows:

 
PHS 
Group 
R'000 
   Future 
Cleaning 
R'000 
   New 
Frontiers 
R'000 
   Other 
acquisitions 
R'000 
Total 
R'000
 
  
Identifiable assets and liabilities acquired 
Property, plant and equipment  1 079 088     60 885     2 291     7 740  1 150 004    
Right-of-use assets  916 375     4 037     2 036     –  922 448    
Deferred taxation  166 683     (48 603)    (1 822)    (66 573) 49 685    
Interest in associates and joint ventures  –     –     617     897  1 514    
Investments and advances  –     –     4 728     –  4 728    
Inventories  177 736     147     –     58 674  236 557    
Trade and other receivables  1 413 900     112 115     93 926     39 797  1 659 738    
Cash and cash equivalents  1 218 465     9 201     31 720     21 652  1 281 038    
Borrowings  (12 377 334)    –     –     (12 940) (12 390 274)   
Trade and other payables and provisions  (2 891 003)    (100 986)    (83 443)    (49 504) (3 124 936)   
Lease liabilities  (901 659)    (4 037)    (2 181)    –  (907 877)   
Taxation  (186 155)    (5 832)    3 777     (1 068) (189 278)   
Intangible assets  –     236 034     25 022     235 810  496 866    
(11 383 904)    262 961     76 671     234 485  (10 809 787)   
Goodwill  11 685 164     296 493     215 715     211 439  12 408 811    
Net assets acquired  301 260     559 454     292 386     445 924  1 599 024    
Less: Cash and cash equivalents acquired  (1 218 465)    (9 201)    (31 720)    (21 652) (1 281 038)   
Net consideration  (917 205)    550 253     260 666     424 272  317 986    
Contribution to results for the year 
Revenue  767 204     572 088     1 112 227     177 549  2 629 068    
Profit or loss  121 040     25 654     41 367     (2 788) 185 273    
Contribution to results for the year if the acquisitions had been effective on 1 July 2019                            
Revenue  5 143 764     572 088     1 112 227     406 549  7 234 628    
Profit or loss  741 449     25 654     41 367     19 516  827 986