Carphone Warehouse 2006 Annual Report Download - page 59

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14 Non-current asset investments continued
b) Acquisitions
i) Onetel
On 19 December 2005, the Group acquired 100% of the issued share capital of Centrica Telecommunications Limited, Onetel Limited, Telco Holdings Limited,
Awardmodel Limited and their subsidiaries (Onetel), all of which are registered in England and Wales, for a gross cash consideration of £169.6m. Onetel is involved
in the provision of telecommunications services to both residential and business customers.
The following table sets out the book values of the identifiable assets and liabilities acquired and their provisional fair value to the Group:
Book Accounting policy Fair value Fair value to
value alignments adjustments the Group
£’000 £’000 £’000 £’000
Non-current assets
Intangible assets – – 62,179 62,179
Property, plant and equipment 18,776 – (15,106) 3,670
Deferred tax assets 755 – 6,960 7,715
Current assets
Stock 384 – (331) 53
Trade and other receivables 51,357 (1,656) (508) 49,193
Cash and cash equivalents 35,006 – – 35,006
Total assets 106,278 (1,656) 53,194 157,816
Current liabilities
Trade and other payables (66,170) (335) (5,103) (71,608)
Corporation tax liabilities (440) – – (440)
Provisions (931) – (11,305) (12,236)
Total liabilities (67,541) (335) (16,408) (84,284)
Total assets and liabilities 38,737 (1,991) 36,786 73,532
Goodwill 96,107
Satisfied by cash 169,639
Net cash outflows in respect of the acquisition comprised:
£’000
Gross cash consideration 169,639
Cash acquired (35,006)
134,633
Fair value adjustments relate principally to:
•the recognition of acquisition intangibles, being customer bases with a value of £25.1m and a distribution agreement with British Gas with a value of £37.1m;
•the write-down of property, plant and equipment to its market value or value in use;
•the recognition of deferred tax assets, principally in respect of accelerated capital allowances;
•the recognition of unrecorded liabilities and provision for onerous contracts.
No value has been attributed to the Onetel brand.
The goodwill arising on the acquisition of Onetel is attributable primarily to the removal of a significant competitor to TalkTalk in the residential telecommunications
market and the anticipated future operating synergies arising from the combination.
The Group’s results for the period reflect revenue from Onetel of £87.3m and a loss before taxation of £26.0m, after reorganisation costs of £22.3m.
Notes to the Financial Statements continued www.cpwplc.com 55
Financial Statements