REG - Oxford Instruments - Half-year Report <Origin Href="QuoteRef">OXIG.L</Origin> - Part 2
15/11/2016 07:06
- Part 2: For the preceding part double click ID:nRSO1525Pa
3.70 3.70
* Adjusted numbers are stated to give a better understanding of the underlying
business performance. Details of adjusting items can be found in note 2 of
this Half Year Report.
Condensed Consolidated Statement of Income
Half year ended 30 September 2016 - unaudited
Year to 31 March 2016
Adjusted Adjusting items* Total
Notes £m £m £m
Revenue 3 361.6 - 361.6
Cost of sales (199.7) (1.0) (200.7)
Gross profit 161.9 (1.0) 160.9
Research and development 4 (24.6) - (24.6)
Selling and marketing (59.8) - (59.8)
Administration and shared services (33.4) (23.0) (56.4)
Share of loss of associate, net of tax (0.2) (1.3) (1.5)
Other operating income - 4.9 4.9
Foreign exchange gain 0.7 - 0.7
Operating profit 44.6 (20.4) 24.2
Other financial income - - -
Financial income - - -
Interest charge on pension scheme net liabilitiesOther financial expenditure (1.7)(5.9) -(3.5) (1.7)(9.4)
Financial expenditure (7.6) (3.5) (11.1)
Profit before income tax from continuing operations 37.0 (23.9) 13.1
Income tax (expense)/credit 8 (8.9) 5.0 (3.9)
Profit for the period from continuing operations 28.1 (18.9) 9.2
Loss from discontinued operations after tax (0.3) (1.9) (2.2)
Profit for the period attributable to equity holders of the parent 27.8 (20.8) 7.0
Earnings per share
Basic earnings per share 9
From continuing operations 49.2 16.1
From discontinued operations (0.5) (3.9)
From profit for the period 48.7 12.2
Diluted earnings per share 9
From continuing operations 49.1 16.1
From discontinued operations (0.5) (3.8)
From profit for the period 48.6 12.3
Dividends per share
Dividends paid 10 13.0
Dividends proposed 10 13.0
*Adjusted numbers are stated to give a better understanding of the underlying
business performance. Details of adjusting items can be found in note 2 of
this Half Year Report.
Condensed Consolidated Statement of Comprehensive Income
Half year ended 30 September 2015 - unaudited
Half year to Half year to Year to
30 Sept 30 Sept 31 March
2016 2015 2016
£m £m £m
(Loss)/profit for the period (0.7) 2.7 7.0
Other comprehensive income/(expense):
Items that may be reclassified subsequently to profit or loss
Foreign exchange differences recycled from other comprehensive income on disposal of subsidiary - 1.8 -
Foreign exchange translation differences 14.7 (2.1) 5.6
Net foreign exchange loss on disposal of subsidiaries taken to the Income Statement - - 1.2
Gain/(loss) on effective portion of changes in fair value of cash flow hedges, net of amounts recycled 0.1 0.1 (0.1)
Tax on items that may be reclassified to profit or loss - - -
Items that will not be reclassified subsequently to profit or loss
Remeasurement (loss)/gain in respect of post retirement benefits (15.1) 10.5 13.6
Tax on items that will not be reclassified to profit or loss 2.7 (2.2) (2.6)
Total other comprehensive income 2.4 8.1 17.7
Total comprehensive income for the period attributable to equity shareholders of the parent 1.7 10.8 24.7
Condensed Consolidated Statement of Changes in Equity
Half year ended 30 September 2016 - unaudited
Sharecapital£m Sharepremiumaccount£m Otherreserves£m Foreignexchangetranslationreserve£m Retainedearnings£m Total£m
Balance at 1 April 2016 2.9 61.5 0.1 9.7 68.8 143.0
Total comprehensive income:
Loss for the period - - - - (0.7) (0.7)
Other comprehensive income:
- Foreign exchange translation differences - - - 14.7 - 14.7
- Gain on effective portion of changes in fair value of cash flow hedges, net of amounts recycled - - 0.1 - - 0.1
- Remeasurement loss in respect of post-retirement benefits - - - - (15.1) (15.1)
- Tax on items recognised directly in other comprehensive income - - - - 2.7 2.7
Total comprehensive income/(expense) attributable to equity shareholders of the parent - - 0.1 14.7 (13.1) 1.7
Transactions with owners recorded directly in equity:
- Credit in respect of employee service costs settled by award of share options - - - - - -
- Dividends payable - - - - (7.4) (7.4)
Total transactions with owners recorded directly in equity: - - - - (7.4) (7.4)
Balance at 30 September 2016 2.9 61.5 0.2 24.4 48.3 137.3
Sharecapital£m Sharepremiumaccount£m Otherreserves£m Foreignexchangetranslationreserve£m Retainedearnings£m Total£m
Balance at 1 April 2015 2.9 61.5 0.2 2.9 58.0 125.5
Total comprehensive income:
Profit for the period - - - - 2.7 2.7
Other comprehensive income:
- Foreign exchange differences recycled from other comprehensive income on disposal of subsidiary - - - 1.8 - 1.8
- Foreign exchange translation differences - - - (2.1) - (2.1)
- Gain on effective portion of changes in fair value of cash flow hedges, net of amounts recycled - - 0.1 - - 0.1
- Remeasurement gain in respect of post-retirement benefits - - - - 10.5 10.5
- Tax on items recognised directly in other comprehensive income - - - - (2.2) (2.2)
Total comprehensive income/(expense) attributable to equity shareholders of the parent - - 0.1 (0.3) 11.0 10.8
Transactions with owners recorded directly in equity:
- Credit in respect of employee service costs settled by award of share options - - - - 0.2 0.2
- Dividends payable - - - - (7.4) (7.4)
Total transactions with owners recorded directly in equity: - - - - (7.2) (7.2)
Balance at 30 September 2015 2.9 61.5 0.3 2.6 61.8 129.1
Condensed Consolidated Statement of Changes in Equity
Half year ended 30 September 2016 - unaudited continued
Sharecapital£m Sharepremiumaccount£m Otherreserves£m Foreignexchangetranslationreserve£m Retainedearnings£m Total£m
Balance at 1 April 2015 2.9 61.5 0.2 2.9 58.0 125.5
Total comprehensive income:
Profit for the year - - - - 7.0 7.0
Other comprehensive income:
- Foreign exchange translation differences - - - 5.6 - 5.6
- Net foreign exchange loss on disposal of subsidiaries taken to the Income Statement - - - 1.2 - 1.2
- Loss on effective portion of changes in fair value of cash flow hedges, net of amounts recycled - - (0.1) - - (0.1)
- Remeasurement gain in respect of post-retirement benefits - - - - 13.6 13.6
- Tax on items recognised directly in other comprehensive income - - - - (2.6) (2.6)
Total comprehensive (expense)/income attributable to equity shareholders of the parent - - (0.1) 6.8 18.0 24.7
Transactions with owners recorded directly in equity:
- Charge in respect of employee service costs settled by award of share options - - - - 0.4 0.4
- Dividends payable - - - - (7.6) (7.6)
Total transactions with owners recorded directly in equity: - - - - (7.2) (7.2)
Balance at 31 March 2016 2.9 61.5 0.1 9.7 68.8 143.0
Condensed Consolidated Statement of Financial Position
As at 30 September 2016 - unaudited
As at As at As at
30 Sept 30 Sept 31 March
2016 2015 2016
Notes £m £m £m
Assets
Non-current assets
Property, plant and equipment 36.0 35.2 35.2
Intangible assets 220.7 225.8 220.8
Investment in associate 12.6 14.4 13.1
Long-term receivables 3.6 3.1 3.4
Deferred tax assets 21.5 17.8 19.0
294.4 296.3 291.5
Current assets
Inventories 69.8 68.8 61.1
Trade and other receivables 79.2 71.5 77.5
Current income tax receivable 2.4 4.1 2.7
Derivative financial instruments - 2.3 1.5
Assets of discontinued operations held for sale 7 - 1.2 -
Cash and cash equivalents 20.9 15.3 21.8
172.3 163.2 164.6
Total assets 466.7 459.5 456.1
Equity
Capital and reserves attributable to the Company's equity shareholders
Share capital 2.9 2.9 2.9
Share premium 61.5 61.5 61.5
Other reserves 0.2 0.3 0.1
Translation reserve 24.4 2.6 9.7
Retained earnings 48.3 61.8 68.8
137.3 129.1 143.0
Liabilities
Non-current liabilities
Bank loans 154.0 154.8 147.0
Other payables - 1.2 -
Retirement benefit obligations 47.5 40.5 35.0
Deferred tax liabilities 1.8 7.1 5.7
203.3 203.6 187.7
Current liabilities
Bank loans and overdrafts 8.0 - 3.0
Trade and other payables 87.3 102.6 102.4
Current income tax payables 3.5 5.2 2.1
Accrued dividend 5.3 5.3 -
Derivative financial instruments 10.9 2.0 5.8
Liabilities of discontinued operations held for sale 7 - 0.4 -
Provisions 11.1 11.3 12.1
126.1 126.8 125.4
Total liabilities 329.4 330.4 313.1
Total liabilities and equity 466.7 459.5 456.1
Condensed Consolidated Statement of Cash Flows
Half year ended 30 September 2016 - unaudited
Half year to Half year to Year to
30 Sept 30 Sept 31 March
2016 2015 2016
£m £m £m
(Loss)/profit for the period from continuing operations (0.7) 3.0 9.2
Adjustments for:
Income tax (credit)/expense 0.2 3.1 3.9
Net financial expense 9.9 3.6 11.1
Reversal of acquisition related fair value adjustments - - 1.0
Acquisition related costs 0.7 0.8 2.5
Restructuring costs - 0.6 2.9
Restructuring costs - relating to associate 0.1 0.2 1.3
Loss on disposal of subsidiary - - 0.9
Contingent consideration deemed no longer payable - (3.2) (4.9)
Contingent consideration - further amount deemed payable - 0.7 -
Share of loss from associate 0.4 - 0.2
Impairment loss of assets held for sale - 2.8 -
Amortisation and impairment of acquired intangibles 8.1 8.4 16.7
Depreciation of property, plant and equipment 3.3 3.1 6.3
Amortisation and impairment of capitalised development costs 2.7 1.6 3.9
Adjusted earnings before interest, tax, depreciation and amortisation 24.7 24.7 55.0
Loss on disposal of plant, property and equipment 0.3 0.1 0.1
Cost of equity settled employee share schemes - 0.2 0.4
Acquisition related costs paid (0.8) (1.2) (1.8)
Restructuring costs paid - (3.5) (4.7)
Cash payments to the pension scheme more than the charge to operating profit (3.5) (3.3) (6.7)
Operating cash flows before movements in working capital 20.7 17.0 42.3
(Increase)/decrease in inventories (5.0) (6.7) 2.7
Decrease in receivables 3.7 7.6 9.3
Decrease in payables and provisions (15.3) (9.4) (1.2)
Increase/(decrease) in customer deposits 0.1 3.2 (0.5)
Purchase of rental assets held for subsequent sale (0.5) - (3.0)
Cash generated by operations 3.7 11.7 49.6
Interest paid (2.6) (2.8) (5.6)
Income taxes paid (0.7) (1.4) (3.5)
Net cash from operating activities 0.4 7.5 40.5
Cash flows from investing activities
Acquisition of subsidiaries - deferred consideration paid (6.8) (15.6) (27.1)
Acquisition of property, plant and equipment (1.9) (2.1) (2.5)
Acquisition of intangible assets (0.1) (0.2) (0.2)
Net cash flow on disposal of subsidiary - - 0.6
Capitalised development expenditure (4.0) (3.3) (8.2)
Net cash used in investing activities (12.8) (21.2) (37.4)
Cash flows from financing activities
Increase in long-term receivables - (3.1) (3.0)
Increase in borrowings 11.6 10.8 4.6
Dividends paid (2.1) (2.1) (7.6)
Net cash generated from/(used in) financing activities 9.5 5.6 (6.0)
Net decrease in cash and cash equivalents from continuing operations (2.9) (8.1) (2.9)
Decrease in cash from discontinued operations - (0.4) (0.9)
Cash and cash equivalents at beginning of the period 20.4 25.1 25.1
Effect of exchange rate fluctuations on cash held 1.6 (1.3) (0.9)
Cash and cash equivalents at end of the period 19.1 15.3 20.4
Reconciliation of changes in cash and cash equivalents to movement in net debt
Half year to Half year to Year to
30 Sept 30 Sept 31 March
2016 2015 2016
£m £m £m
Decrease in cash and cash equivalents (2.9) (8.5) (3.8)
Effect of foreign exchange rate changes on cash and cash equivalents 1.6 (1.3) (0.9)
(1.3) (9.8) (4.7)
Cash inflow from increase in debt (11.6) (10.8) (4.6)
Increase in net debt in the period (12.9) (20.6) (9.3)
Net debt at start of the period (128.2) (118.9) (118.9)
Net debt at the end of the period (141.1) (139.5) (128.2)
Notes on the Half Year Financial Statements
Half year ended 30 September 2016 - unaudited
1 BASIS OF PREparATION OF ACCOUNTS
Reporting entity
Oxford Instruments plc is a company incorporated in England and Wales. The
condensed consolidated half year financial statements consolidate the results
of the Company and its subsidiaries (together referred to as the Group). They
have been prepared and approved by the Directors in accordance with
International Financial Reporting Standard (IFRS) IAS 34 Interim Financial
Reporting as adopted by the EU. They do not include all of the information
required for full annual financial statements, and should be read in
conjunction with the consolidated financial statements of the Group for the
year ended 31 March 2016.
The financial information contained herein is unaudited and does not
constitute statutory accounts as defined by Section 435 of the Companies Act
2006. The comparative figures for the financial year ended 31 March 2016 are
not the company's statutory accounts for that financial year. Those accounts
have been reported on by the Company's auditors and delivered to the registrar
of companies. The report of the auditors was (i) unqualified, (ii) did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006.
Significant accounting policies
As required by the Disclosure and Transparency Rules of the Financial Conduct
Authority, the condensed set of financial statements has been prepared
applying the accounting policies and presentation that were applied in the
preparation of the Company's published consolidated financial statements for
the year ended 31 March 2016, except as explained below.
Adoption of new and revised standards
At present, there are no other new standards, amendments to standards or
interpretations mandatory for the first time for the year ending 31 March
2017.
Estimates
The preparation of half year financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
In preparing these half year financial statements, the significant judgements
made by management in applying the group's accounting policies and key sources
of estimation uncertainty were the same as those that applied to the
Consolidated Financial Statements as at and for the year ended 31 March 2016.
Going concern
The condensed consolidated half year financial statements have been prepared
on a going concern basis, based on the Directors' opinion, after making
reasonable enquiries, that the Group has adequate resources to continue in
operational existence for the foreseeable future.
Exchange rates
The principal exchange rates used to translate the Group's overseas results
were as follows:
Period end rates Half year to Half year to Year to
30 Sept 30 Sept 31 March
2016 2015 2016
US Dollar 1.30 1.51 1.44
Euro 1.16 1.36 1.26
Yen 132 181 162
Average translation rates US Dollar Euro Yen
Half year to 30 September 2016
April 1.45 1.27 159
May 1.46 1.30 159
June 1.41 1.27 150
July 1.35 1.21 138
August 1.32 1.18 134
September 1.31 1.16 132
Average translation rates year ended 30 March 2016 US Dollar Euro Yen
April 1.50 1.37 180
May 1.52 1.37 186
June 1.55 1.40 192
July 1.57 1.41 194
August 1.55 1.39 190
September 1.53 1.36 184
October 1.53 1.38 184
November 1.53 1.41 186
December 1.49 1.39 181
January 1.45 1.33 175
February 1.40 1.29 165
March 1.41 1.27 160
2 NON-GAAP MEASURES
The Directors present the following non-GAAP measures as they believe it gives
a better indication of the underlying performance of the business.
RECONCILIATION BETWEEN PROFIT BEFORE INCOME TAX AND ADJUSTED PROFIT
Half year to Half year to Year to
30 Sept 30 Sept 31 March
2016 2015 2016
£m £m £m
(Loss)/profit before income tax from continuing operations (0.5) 6.1 13.1
Reversal of acquisition related fair value adjustments to inventory - - 0.2
Reversal of acquisition related fair value adjustments to property, plant and equipment - - 0.8
Acquisition related costs 0.7 0.8 2.5
Restructuring costs - 0.8 2.9
Restructuring costs - relating to associate 0.1 - 1.3
Loss on disposal of subsidiary - - 0.9
Amortisation and impairment of acquired intangibles 8.1 8.4 16.7
Impairment loss on assets held for sale - 2.8 -
One-off impairment of capitalised development costs 0.7 - -
Contingent consideration - further amount deemed payable - 0.7 -
Contingent consideration deemed no longer payable - (3.2) (4.9)
Unwind of discount in respect of deferred consideration and acquisition related accruals 0.2 0.7 0.8
Mark to market loss/(gain) in respect of derivative financial instruments 6.4 (0.8) 2.7
Adjusted profit before income tax from continuing operations 15.7 16.3 37.0
Share of taxation (3.5) (3.9) (8.9)
Adjusted profit from continuing operations 12.2 12.4 28.1
Acquisition related costs comprise professional fees incurred in relation to
mergers and acquisitions activity and any consideration which, under IFRS 3
(revised), falls to be treated as a post-acquisition employment expense.
Restructuring costs relating to the Group's investment in ScientaOmicron
relate to the ongoing integration programme of the former Scienta and Omicron
businesses.
In common with a number of other companies adjusted profit excludes the
non-cash amortisation and impairment of acquired intangible assets and the
unwind of discounts in respect of contingent consideration relating to
business combinations.
During the year the Group has impaired development costs of £0.7 million on a
specific project that has been stopped as we focus and direct resources so as
to accelerate key projects.
Under IAS 39, all derivative financial instruments are recognised initially at
fair value. Subsequent to initial recognition, they are also measured at fair
value. In respect of instruments used to hedge foreign exchange risk and
interest rate risk the Group does not take advantage of the hedge accounting
rules provided for in IAS 39 since that standard requires certain stringent
criteria to be met in order to hedge account, which, in the particular
circumstances of the Group, are considered by the Board not to bring any
significant economic benefit. Accordingly, the Group accounts for these
derivative financial instruments at fair value through profit or loss. To the
extent that instruments are hedges of future transactions, adjusted profit for
the year is stated before changes in the valuation of these instruments so
that the underlying performance of the Group can be more clearly seen.
In the prior year the reversal of acquisition related fair value adjustments
to inventory and property, plant and equipment were excluded from adjusted
profit to provide a measure that includes results from acquired businesses on
a consistent basis over time to assist comparison of performance.
Prior year restructuring costs comprise one-off costs in respect of the cost
reduction programme begun in 2014/15, including an impairment of inventory and
capitalised development costs in the Plasma Technology business in relation to
the exit from the HBLED market.
In the prior half year the Group classified its Austin Scientific Business as
held for sale and recognised an impairment charge of £2.8 million to reduce
the carrying value of the net assets of the Austin Scientific Business to the
fair value less costs to sell. By the year end, this amount had been
transferred to discontinued operations.
In the prior year, the Group made a loss on disposal of its Omicron business
of £0.9 million and £4.9 million was released relating to contingent
consideration on the acquisition of Asylum Research Corporation following the
end of the earnout period.
In calculating the share of tax attributable to adjusted profit before tax in
2011 a one-off recognition of deferred tax assets relating to the Group's UK
businesses of £11.3 million was excluded. At that time the Group announced its
intention to exclude the reversal of this deferred tax from the calculation of
the share of tax attributable to adjusted profit before tax in the years in
which it reverses. In the prior half year deferred tax of £0.4 million
reversed and consequently was excluded from the tax attributable to adjusted
profit before tax.
3 SEGMENT Information
The Group has eight operating segments. These operating segments have been
combined into three aggregated operating segments to the extent that they have
similar economic characteristics, with relevance to products and services,
type and class of customer, methods of sale and distribution and the
regulatory environment in which they operate. Each of these three aggregated
operating segments is a reportable segment.
The Group's internal management structure and financial reporting systems
differentiate the three aggregated operating segments on the basis of the
economic characteristics discussed below:
· the NanoTechnology Tools segment contains a group of businesses supplying
similar products, characterised by a high degree of customisation and high
unit prices. These are the Group's highest technology products serving
research customers in both the public and private sectors;
· the Industrial Products segment contains a group of businesses supplying
high technology products and components manufactured in medium volume for
industrial customers; and
· the Service segment contains the Group's service, rental and refurbished
asset sales business as well as service revenues from other parts of the
Group.
Reportable segment results include items directly attributable to a segment as
well as those which can be allocated on a reasonable basis. Inter-segment
pricing is determined on an arm's length basis. The operating results of each
are regularly reviewed by the Chief Operating Decision Maker, which is deemed
to be the Board of Directors. Discrete financial information is available for
each segment and used by the Board of Directors for decisions on resource
allocation and to assess performance. No asset information is presented below
as this information is not presented in reporting to the Group's Board of
Directors.
Half year to 30 September 2016
NanoTechnology Industrial
Tools Products Service Total
£m £m £m £m
External revenue 90.9 42.9 37.7 171.5
Inter-segment revenue - 0.8 -
Total segment revenue 90.9 43.7 37.7
Segment operating profit from continuing operations 11.2 1.4 6.4 19.0
Half year to 30 September 2015
NanoTechnology Industrial
Tools Products Service Total
£m £m £m £m
External revenue 85.4 45.5 33.9 164.8
Inter-segment revenue - 0.5 -
Total segment revenue 85.4 46.0 33.9
Segment operating profit from continuing operations 9.5 1.7 8.8 20.0
Year to 31 March 2016
NanoTechnology Industrial
Tools Products Service Total
£m £m £m £m
External revenue 187.3 95.9 78.4 361.6
Inter-segment revenue 0.1 0.7 -
Total segment revenue 187.4 96.6 78.4
Segment operating profit from continuing operations 21.3 4.5 18.8 44.6
Reconciliation of reportable segment profit from continuing operations
Half year to Half year to Year to
30 Sept 30 Sept 31 March
2016 2015 2016
£m £m £m
Operating profit for reportable segments from continuing operations 19.0 20.0 44.6
Reversal of acquisition related fair value adjustments to inventory - - (0.2)
Reversal of acquisition related fair value adjustments to property, plant and equipment - - (0.8)
Acquisition related costs (0.7) (0.8) (2.5)
Restructuring costs - (0.8) (2.9)
Restructuring costs - relating to associate (0.1) - (1.3)
Loss on disposal of subsidiary - - (0.9)
Amortisation of acquired intangibles (8.1) (8.4) (16.7)
Impairment loss on assets held for sale - (2.8) -
One-off impairment of capitalised development costs (0.7) - -
Contingent consideration - further amount deemed payable - (0.7) -
Contingent consideration deemed no longer payable - 3.2 4.9
Financial income 0.1 1.0 -
Financial expenditure (10.0) (4.6) (11.1)
Profit before income tax from continuing operations (0.5) 6.1 13.1
4 RESEARCH AND DEVELOPMENT
Adjusted research and development spend by the Group is as follows:
Half year to Half year to Year to
30 Sept 30 Sept 31 March
2016 2015 2016
£m £m £m
Research and development expense charged to the consolidated statement of income 13.3 11.8 24.6
Less: depreciation of R&D related fixed assets (0.4) (0.4) (0.8)
Add: amounts capitalised as fixed assets 0.2 0.4 1.2
Less: amortisation and impairment of R&D costs previously capitalised as intangibles (2.0) (1.6) (3.9)
Add: amounts capitalised as intangible assets 4.0 3.3 8.2
Total cash spent on research and development during the period 15.1 13.5 29.3
5 ACQUISITIONS - prior period
Medical Imaging Resources, Inc.
On 1 May 2015 the Group acquired 100% of the issued share capital of Medical
Imaging Resources, Inc. (MIR) for a net cash consideration of £8.7 million.
Further contingent consideration of up to £6.3 million was payable based on
the performance of the Oxford Instruments Healthcare business in the year to
31 March 2016. MIR specialises in the build, lease and service of mobile
medical imaging labs.
The book and fair values of the assets and liabilities acquired are given in
the table below. Fair value adjustments have been made to better align the
accounting policies of the acquired business with the Group accounting
policies and to reflect the fair value of assets and liabilities acquired. The
business has been acquired for the purpose of integrating into the Oxford
Instruments Healthcare business where it is believed that a number of
synergies can be obtained.
Book value£m Provisional Adjustments£m Provisional Fair value£m
Intangible fixed assets - 5.7 5.7
Tangible fixed assets 3.8 0.5 4.3
Inventories 1.4 0.1 1.5
Trade and other receivables 0.9 - 0.9
Trade and other payables (1.7) - (1.7)
Deferred tax 0.2 (0.4) (0.2)
Net debt (2.6) - (2.6)
Net assets acquired 2.0 5.9 7.9
Goodwill 4.5
Total consideration 12.4
Net debt acquired 2.6
Contingent consideration at acquisition (6.3)
Net cash outflow relating to the acquisition 8.7
The goodwill arising is not tax deductible and is considered to represent the
value of the acquired workforce and synergistic benefits expected to arise
from the acquisition. Further contingent consideration of £6.5 million was
paid during May 2016 based on the performance of the Oxford Instruments
Healthcare business in the year to 31 March 2016. The difference of £0.2
million between contingent consideration at acquisition and that paid during
May 2016 was due to foreign currency movements.
The book value of receivables in the tables above represents the gross
contractual amounts receivable.
6 INVESTMENT IN ASSOCIATE - prior period
On 27 May 2015 the Group entered into a strategic alliance with GD
Intressenter AB of Sweden ("GDI") to create the world's largest company in the
highly specialised Ultra High Vacuum Surface Science field. The alliance
comprises Oxford Instruments' Omicron Nanotechnology GmbH ("Omicron") and
associated subsidiaries and GDI's Scienta Scientific AB ("Scienta") and
associated subsidiaries. Scienta Scientific AB is registered and has its
principal place of business in Sweden.
In consideration for new shares in Scienta, Oxford Instruments transferred all
of its shares in the capital of Omicron to Scienta. Oxford Instruments holds a
47% interest in the share
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