103
Annual Report and Accounts 2014
2.5
Discontinued operations and non-current
assets and liabilities held for sale
When the Group has assets and liabilities that are likely to be sold rather than
being held for continuing use and when accounting standards require, these
assets and liabilities are included in current assets and liabilities and denoted
‘held for sale’ rather than in their usual categories.
If they represent a significant enough proportion of the Group, they are also
treated as discontinued operations. This means that their trading performance,
i.e. their revenues, costs and other items of income and expense, are no longer
reported within the headline figures in the income statement and are instead
reported in a separate line, net of tax, called ‘discontinued operations’. These
amounts no longer form part of continuing earnings per share. Comparative
figures are restated to be shown on the same basis.
This enables the income statement for the current and prior year to be
presented on a consistent basis and to convey a more forward-looking
version of the results for the year.
On 15 October 2013, the Board approved the sale of the Retail Dispense
businesses, which subsequently completed on 1 January 2014. The disposal
group represented a major class of business as defined by IFRS5
‘Non-current
assets held for sale and discontinued operations’
and it was determined that this
disposal group met the criteria to be disclosed as a discontinued operation in
the income statement. The Retail Dispense businesses were therefore classified
as held for sale following the agreement for the sale of these businesses to the
Marmon Group, a Berkshire Hathaway Company.
The disposal proceeds were used to return £620.3m of cash to shareholders and
invest £70.0m into the UK Pension Fund.
2014
2013
£m
£m
Revenue
-
511
Depreciation
-
(3.9)
Amortisation
-
(1.3)
Other operating expenses
-
(424.8)
Segmental operating profit
-
81.0
Restructuring costs
-
(3.0)
Gain on disposal of operations (see Section 3.5)
480.0
-
Operating profit
480.0
78.0
Financial income
-
0.2
Financial expense
-
(0.4)
Net finance expense related to pension schemes
-
(0.4)
Profit before tax
480.0
77.4
Taxation
(2.5)
(39.0)
Profit after tax
477.5
38.4
The results of the Retail Dispense businesses and the associated profit on
disposal are presented above, in addition to which, a pre-tax and post-tax gain
of £1.0m (2013: loss of £5.0m) relating to other discontinued operations have
also been included in this line in the income statement.
The major classes of assets and liabilities of the Retail Dispense businesses
classified as held for sale were as follows:
2014
2013
£m
£m
Segmental assets
Intangible assets
-
114.1
Property, plant and equipment
-
25.1
Inventories
-
50.8
Trade and other receivables
-
67.1
Total segmental assets
-
257.1
Non-segmental assets
Current tax
-
0.2
Deferred tax
-
3.8
Cash and cash equivalents
-
28.2
Investments
-
0.1
Total assets classified as held for sale
-
289.4
Segmental liabilities
Trade and other payables
-
(56.2)
Provisions
-
(5.4)
Total segmental liabilities
-
(61.6)
Non-segmental liabilities
Current tax
-
(3.2)
Deferred tax
-
(10.0)
Bank overdraft
-
(1.7)
Employee benefit obligations
-
(0.8)
Total liabilities associated with assets classified
as held for sale
-
(77.3)
Net assets directly associated with disposal group
-
212.1
Net cash flows from discontinued operations
2014
2013
£m
£m
Operating
(6.6)
53.8
Investing
661.6
(8.1)
Financing
-
(0.4)
Net cash inflow
655.0
45.3
The prior year discontinued cash flows relating to financing activities reported
above exclude any allocation of items relating to the entire Group such as
external dividends paid, share buybacks and drawdown of borrowings,
which has the net effect of significantly reducing the outflows reported
for the discontinued activities in comparison to the Group as a whole.
The disposals of Eley and AFP are not considered to be a major class of
business for the Group. As a result they are not classified as discontinued
operations under IFRS5. Details of all disposals are included within Section 3.5.
