• Independent auditor’s report
• Consolidated income statement
• Consolidated statement of comprehensive income
• Consolidated and Parent Company balance sheets
• Consolidated statement of changes in equity
• Parent Company statement of changes in equity
• Consolidated and Parent Company statement of cash flows
• Accounting policies
• Notes to the financial statements
• Group financial history
• Shareholders’ information

Notes to the financial statements

29 Business combinations and disposals

Year ended 31 March 2014

Disposal of Northern Depots

As part of the ongoing rationalisation of the depot network, on 27 July 2013, the Group completed the disposal of seven depots located in the north-west of England for a cash consideration of £1.2 million. The carrying value of assets sold was £0.8 million including net working capital and fees of £0.1 million resulting in a profit on disposal of £0.3 million. The gain on disposal of these depots has been included in other income – property in the consolidated income statement.

Disposal of Discontinued Operation

£1.4 million of the original tax provision resulting from the trading of St Hubert SAS (‘St Hubert’) up to its disposal in August 2012 has now been released back to the income statement as discontinued operations. The provision for taxes crystallising as a result of the disposal are unchanged – see below.

Year ended 31 March 2013

Disposal of Discontinued Operation

Following a strategic review of the Group’s overseas operations in the light of the inability to undertake synergistic acquisitions, on 28 August 2012 the Group completed the disposal of St Hubert SAS (‘St Hubert’) for a cash consideration of £341.1 million (€430.5 million). St Hubert formed part of the Spreads reportable segment. Cash held in the disposed business at that date amounted to £4.1 million, resulting in a net cash inflow to the Group of £337.0 million. This amount has been reduced by fees of £6.2 million. The disposal resulted in a post-tax profit of £47.7 million which can be analysed as follows:

		£m		£m
Sales proceeds – cash consideration				341.1
Book value of assets disposed of:
Property, plant and equipment		10.3
Goodwill		176.4
Intangible assets		131.5
Inventories		3.3
Trade and other receivables		14.9
Cash and short-term deposits		4.1
Trade and other payables		(18.4)
Current tax		(5.5)
Deferred tax		(44.5)		(272.1)
Gain on disposal before fees and recycling of exchange differences				69.0
Fees				(6.2)
Amounts reclassified to profit and loss				(11.4)
Pre-tax gain on disposal				51.4
Expected tax charge				(3.7)
Post-tax gain on disposal of Discontinued Operation				47.7

The expected tax charge principally comprises capital gains taxes resulting from the disposal as well as expected taxation on €74 million of dividends paid in the period up to the date of disposal. These taxes were crystallised as a result of the divestment and as a consequence the breaking of the St Hubert tax group. An estimate has been made of the likely tax costs resulting from these transactions however the final assessment has yet to be agreed with the French tax authorities which may result in a change to the level of tax provisioning.

As a result of the disposal the St Hubert business has been classified as discontinued operations. The post-tax profit of discontinued operations can be analysed as follows:

		Year ended 31 March 2014 £m		Year ended 31 March 2013 £m
Revenue		–		41.7
Operating costs before amortisation of acquired intangibles		–		(27.5)
Trading profit		–		14.2
Amortisation of acquired intangibles		–		(3.0)
Profit on operations		–		11.2
Finance income		–		0.1
Profit before tax		–		11.3
Tax credit/(expense)		1.4		(4.5)
Profit for the year from Discontinued Operation		1.4		6.8

The cash flows of the St Hubert business in the period to the date of disposal can be analysed as follows:

Cash flow from operating activities		–		0.3
Cash used in investing activities		–		(0.6)
Cash generated from financing activities		–		0.1
Net movement in cash and cash equivalents		–		(0.2)

Acquisitions

On 1 March 2013, the Group acquired the business and certain assets of Proper Welsh Milk Company Limited from the administrators BDO LLP for £0.3 million. The fair value of the net assets acquired was £0.3 million, comprising property, plant and equipment of £0.5 million less statutory and other liabilities taken over of £0.2 million, resulting in goodwill on acquisition of nil.

During the year ended 31 March 2013, the Group acquired 7% of the share capital of HIECO Limited for a consideration of £0.3 million.