REG - Halfords Group PLC - Preliminary Results: Financial Year 2017 <Origin Href="QuoteRef">HFD.L</Origin> - Part 3

HalfordsAnnouncement

25/05/2017 07:06

- Part 3: For the preceding part double click  ID:nRSY1711Gb 

                         28.7p         32.5p  
                 Diluted earnings per ordinary share                            28.6p         32.4p  
                                                                                                     
                 Basic underlying earnings per ordinary share                   30.3p         33.2p  
                 Diluted underlying earnings per ordinary share                 30.2p         33.0p  
                                                                                                     
 
 
9.      Analysis of movements in the Group's net debt in the period 
 
                                                At 1 April 2016  Cash flow  Other non-cash changes  At 31 March 2017  
                                                £m               £m         £m                      £m                
 Cash and cash equivalents at bank and in hand  (10.8)           8.9        -                       (1.9)             
 Debt due after one year                        (25.4)           (46.0)     (0.6)                   (72.0)            
 Total net debt excluding finance leases        (36.2)           (37.1)     (0.6)                   (73.9)            
                                                                                                                      
 Finance leases due within one year             (0.7)            0.6        (1.3)                   (1.4)             
 Finance lease due after one year               (11.0)           -          0.4                     (10.6)            
 Total finance leases                           (11.7)           0.6        (0.9)                   (12.0)            
                                                                                                                      
 Total net debt                                 (47.9)           (36.5)     (1.5)                   (85.9)            
 
 
Non-cash changes include finance costs in relation to the amortisation of
capitalised debt issue costs of £0.7m (2016: £0.7m) and changes in
classification between amounts due within and after one year. 
 
Cash and cash equivalents at the period end consist of £16.5m (2016: £11.9m)
of liquid assets and £18.4m (2016: £22.7m) of bank overdrafts. 
 
10.    Acquisition of subsidiary 
 
On 23 May 2016 the Group acquired 100% of the issued share capital of Tredz
Limited and Wheelies Direct Limited for initial cash consideration of £19.2m
(excluding transaction costs). The acquired business comprises an online
retailer of premium bikes and cycling parts, accessories and clothing, which
trades UK-wide under the brand Tredz, and the UK's largest provider of bicycle
replacement for insurance companies which trades under the brand Wheelies. The
transaction has been accounted for using the acquisition method of
accounting. 
 
Contingent Consideration 
 
In addition to the initial consideration, a liability of £5.5m was recognised
at fair value in respect of contingent consideration due to the previous
shareholders. The contingent consideration is dependent upon the performance
of Tredz for the year ended 28 February 2017. The range of possible payments
under the contingent arrangement is £nil to £12.5m. 
 
The acquisition had the following impact on the Group's assets and
liabilities: 
 
                                                        Book value  Fair value adjustment  Final fair value  
                                                        £m          £m                     £m                
 Tredz and Wheelies net assets at the acquisition date                                                       
 Intangible assets and goodwill                         0.8         (0.8)                  -                 
 Tangible assets                                        1.3         (0.1)                  1.2               
 Inventories                                            5.7         (0.1)                  5.6               
 Trade and other receivables                            1.8         -                      1.8               
 Cash                                                   1.2         -                      1.2               
 Trade and other payables                               (6.1)       -                      (6.1)             
 Borrowings                                             (0.3)       -                      (0.3)             
 Current tax liabilities                                (0.2)       -                      (0.2)             
 Deferred tax liability                                 (0.2)       -                      (0.2)             
 Total                                                  4.0         (1.0)                  3.0               
 
 
Goodwill 
 
Goodwill was recognised as a result of the acquisition as follows: 
 
                                         £m     
 Total consideration                     23.9   
 Less fair value of identifiable assets  (3.0)  
 Goodwill and intangible assets          20.9   
                                                
 Intangible Assets:                             
 Supplier relationships                  7.8    
 Tredz and Wheelies Brand Names          5.6    
 Computer Software                       0.5    
 Deferred tax liability                  (2.5)  
 Goodwill                                9.5    
 
 
None of the goodwill acquired is expected to be deductible for income tax
purposes. The goodwill relates to the assembled workforce of Tredz and
Wheelies and future expansion and growth opportunities. 
 
The Tredz and Wheelies businesses contributed £36.7m revenue and a profit of
£1.8m to the Group's profit before tax for the period between the date of
acquisition and the balance sheet date. 
 
If the acquisition of the Tredz and Wheelies businesses had been completed on
the first day of the financial year, Group revenues for the period would have
been £6.7m higher and Group profit before tax of the parent would have been
£0.5m higher (before amortisation of intangible assets arising on
consolidation). 
 
11.    Post Balance Sheet Events 
 
On 3 May 2017 the Group announced the resignation of its Group Chief Executive
Officer, Jill McDonald, with a leaving date of the end of October 2017. 
 
This information is provided by RNS
The company news service from the London Stock Exchange