Carphone Warehouse 2006 Annual Report Download - page 61

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14 Non-current asset investments continued
iii) Hugh Symons
On 6 December 2005, the Group acquired the UK trade and assets of Hugh Symons Communications Limited, a distributor registered in England and Wales, for a
gross cash consideration of £5.2m and further deferred consideration, which is contingent on future financial performance, of up to £5.0m payable over two years.
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 to
value alignments the Group
£’000 £’000 £’000
Current assets
Trade and other receivables 5,426 – 5,426
Stock 969 – 969
Total assets 6,395 – 6,395
Current liabilities
Trade and other payables (5,395) (300) (5,695)
Total liabilities (5,395) (300) (5,695)
Total assets and liabilities 1,000 (300) 700
Goodwill 9,451
10,151
Satisfied by
Cash 5,151
Deferred consideration 5,000
10,151
Net cash outflows in respect of the acquisition comprised:
£’000
Gross cash consideration 5,151
The Group’s results for the period reflect revenue from Hugh Symons of £12.8m and a profit before taxation of £0.3m.
iv) Other acquisitions
The Group made a number of other acquisitions during the period for a gross cash consideration of £6.9m and provided for contingent deferred consideration
of up to £0.2m payable over the next two years. These acquisitions resulted in goodwill of £2.1m.
Included within other cash paid in the period is £3.0m in relation to deferred consideration for acquisitions made in previous periods.
In addition, goodwill was reduced by £4.5m during the period as a result of adjustments to contingent deferred consideration and increased by £1.6m as a result
of adjustments to fair value on previous acquisitions.
The following summary shows the net cash outflow on acquisitions during the year:
Gross cash
consideration Cash acquired Net cash outflow
£’000 £’000 £’000
Onetel 169,639 (35,006) 134,633
Tele2 UK 11,533 (3,315) 8,218
Hugh Symons 5,151 – 5,151
Other 9,861 (28) 9,833
196,184 (38,349) 157,835
Companies acquired in the period contributed £17.3m to the Group’s net operating cashflows, gave rise to net interest costs of £2.4m and utilised £1.5m for
capital expenditure.
Combined proforma revenue and profit before taxation for the Group, assuming all acquisitions had been made on 3 April 2005, are £3,462.0m and
£59.0m respectively.
15 Stock
£’000 £’000
Finished goods and goods for resale 138,047 95,185
The difference between the balance sheet value of stock and its replacement cost is not material.
Notes to the Financial Statements continued www.cpwplc.com 57
Financial Statements