- Part 2: For the preceding part double click ID:nRSO7032Za
Other intangible asset£'000 Estimated lifeYears
Contracts acquired 1,345 1.25
Marketing agreements, future orders and prospects 14,333 4.50
15,678
A deferred tax liability of £3.1m in respect of the other intangible asset
balance above was established on acquisition and is disclosed as part of the
deferred tax liability.
The goodwill of £2.4m arising from the acquisition represents the customer
contacts, supplier relationships and know-how to which no certain value can be
ascribed. None of the goodwill is expected to be deductable for income tax
purposes.
The non-controlling interest share of goodwill as the acquisition of MCL was
£2.2m.
Acquisition costs of £197,000 in respect of MCL were charged as an exceptional
item in the consolidated income statement.
MCL contributed £2,694,000 of revenue and £164,000 to the Group's adjusted
operating profit for the period from 9 July 2014 to 31 October 2014.
The Group has recognised 100% of MCL's result and net assets as it has
effective control.
The Sale and Purchase Agreement in respect of the acquisition of MCL includes
an option for the purchase of the remaining shares (just under 50%) in MCL,
the non-controlling interest.
Notes to the interim report continued
This option is exercisable by 31 December 2016 and is capped at £12.5m. If
the performance of MCL in the period to 30 September 2016 is such that the
amount payable for the non-controlling interest's shares exceeds the cap, the
Group has the right to negotiate the amount payable at that time or not to
acquire the non-controlling interest.
The non-controlling interest is entitled to participate in any dividends
payable by MCL in the period to 30 September 2016.
In accordance with IFRS3, the Group has ascribed a value to the option to
acquire the non-controlling interest of MCL. This value is £12.5m and the
option is shown as a non-current liability and as the non-controlling interest
has a right to dividends, in the other reserves as 'option for acquiring
non-controlling interest in MCL'.
8. Acquisition of J+S Ltd (J+S)
The Group's subsidiary, SEA, acquired 100% of J+S Ltd (J+S) on 1 October 2014
for a cash consideration of £11.7m. No further consideration is payable in
respect of this acquisition.
Book Value£'000 Fair value£'000
Recognised amounts of identifiable assets acquired and liabilities assumed:
Property, plant and equipment 2,669 2,669
Other intangible assets 1,069 6,795
Inventory 1,956 1,402
Trade and other receivables 2,206 1,983
Trade and other payables (2,486) (2,486)
Deferred tax (214) (1,359)
Overdraft (149) (149)
Bank borrowings and overdrafts (131) (131)
4,920 8,724
Goodwill 3,005
Total consideration 11,729
Satisfied by:
Cash 11,729
Net cash outflow arising on acquisition:
Cash consideration 11,729
Plus: overdrafts acquired 149
11,878
Other intangible assets of £6.8m and their estimated useful lives are analysed
as follows:
Other intangible asset£'000 Estimated lifeYears
Contracts acquired 6,795 9.5
A deferred tax liability of £1.4m in respect of the other intangible asset
balance above was established on acquisition and is disclosed as part of the
deferred tax liability.
The goodwill of £3.0m arising from the acquisition represents the customer
contacts, supplier relationships and know-how to which no certain value can be
ascribed. None of the goodwill is expected to be deductable for income tax
purposes.
Acquisition costs of £417,000 in respect of J+S were charged as an exceptional
item in the consolidated income statement.
J+S contributed £633,000 of revenue and a loss of £144,000 to the Group's
adjusted operating profit for the period from 1 October 2014 to 31 October
2014.
9. Disposal of SEA's Space business
As previously reported, the Group's subsidiary, SEA sold its Space business,
in its entirety, to Thales Alenia Space (UK) Ltd (TAS) for a total
consideration of £6.5m, of which £5.0m has been received.
A further £1.5m of the expected consideration remains outstanding pending
determination of the completion accounts. Further costs of £33,000 have been
incurred completing the disposal and have been disclosed as an exceptional
item in the income statement, as previously reported.
The total costs of disposal to date are £372,000 and the revised loss on the
disposal of SEA's Space business is £1,419,000.
Independent review report to Cohort plc
for the six months ended 31 October 2014
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly report for the six months ended 31 October 2014
which comprises the Consolidated Income Statement, Consolidated Statement of
Comprehensive Income, Consolidated Statement of Financial Position,
Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement
and the related explanatory notes. We have read the other information
contained in the half-yearly report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the
condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our
engagement. Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company for our review work,
for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the half-yearly report
in accordance with the AIM Rules.
The annual financial statements of the Group are prepared in accordance with
IFRSs as adopted by the EU. The condensed set of financial statements included
in this half-yearly report has been prepared in accordance with the
recognition and measurement requirements of IFRSs as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently
does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
report for the six months ended 31 October 2014 is not prepared, in all
material respects, in accordance with the recognition and measurement
requirements of IFRSs as adopted by the EU and the AIM Rules.
Andrew Campbell-Orde for and on behalf of KPMG LLP
Chartered Accountants
Arlington Business Park
Theale
Berkshire
RG7 4SD
15 December 2014
This information is provided by RNS
The company news service from the London Stock Exchange