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In December 2017, management committed to a plan to discontinue the UK Contract Distribution (CD) business segment which operates
in the United Kingdom. The CD business segment is a component of the group’s United Kingdom business, the operations and cash
flows of which can be clearly distinguished from the rest of the group. By June 30 2018, Bidcorp was close to finalising its proposed exit
from this non-core segment. Post-June 30 2018, the prospective purchaser of the CD business notified Bidcorp that for its own internal
reasons, it has decided not to proceed with the transaction. The CD business remains a non-core activity in respect of Bidcorp’s global
foodservice operations. Accordingly, Bidcorp pursued alternative exit proposals, and engaged in a formal sale process, managed by
independent advisers. The sale process is ongoing at June 30 2019. We are hopeful of being able to announce the details of this
transaction within the near future. Any transaction would still be subject to regulatory competition commission approval, which is
anticipated to take up to four months to complete.
PCL’s (dairy distribution business for Arla) performance for the year was disappointing. Towards the end of 2018, following a dispute with
Arla, management committed to exit the PCL business by either selling the PCL transport operations to Arla or to close down the PCL
business. At June 30 2019, the PCL transport operations had been sold to Arla and the sales process/exit of the remaining insignificant
warehousing and handling components are ongoing at June 30 2019.
The comparative consolidated statement of profit or loss and the consolidated statement of cash flows has been re-presented as a result
of classifying the remaining UK logistics’ activity, PCL, as a discontinued operation. The results of the discontinued operations included in
the group’s results are detailed below:
| |
2019
R’000 |
|
|
2018
R’000 |
|
| Revenue |
19 502 386 |
|
|
19 408 282 |
|
| Cost of revenue |
(16 838 559) |
|
|
(16 686 301) |
|
| Gross profit |
2 663 827 |
|
|
2 721 981 |
|
| Operating expenses |
(3 049 910) |
|
|
(3 353 932) |
|
| Trading loss |
(386 083) |
|
|
(631 951) |
|
| Share-based payment expense |
(2 414) |
|
|
(3 110) |
|
| Net capital items |
(470 514) |
|
|
(145 545) |
|
| Operating loss |
(859 011) |
|
|
(780 606) |
|
| Net finance charges |
(12 326) |
|
|
(8 459) |
|
| Finance income |
193 |
|
|
45 |
|
| Finance charges |
(12 519) |
|
|
(8 504) |
|
|
|
|
|
|
|
| Loss before taxation |
(871 337) |
|
|
(789 065) |
|
| Taxation relief |
139 368 |
|
|
126 352 |
|
| Loss for the year from discontinued operations |
(731 969) |
|
|
(662 713) |
|
The following adjustments to loss attributable to shareholders were taken into account in the calculation of headline loss:
| |
|
|
2018
R’000 |
|
| Loss attributable to shareholders of the company from discontinued operations |
(731 969) |
|
|
(662 713) |
|
| Impairments |
383 907 |
|
|
145 394 |
|
| Intangible assets |
465 147 |
|
|
– |
|
| Property, plant and equipment |
– |
|
|
3 408 |
|
| Goodwill |
– |
|
|
142 137 |
|
| Taxation relief |
(81 240) |
|
|
(151) |
|
| Loss on disposal of intangible assets and property, plant and equipment |
4 347 |
|
|
– |
|
| Intangible assets |
3 185 |
|
|
– |
|
| Property, plant and equipment |
2 182 |
|
|
– |
|
| Taxation relief |
(1 020) |
|
|
– |
|
|
|
|
|
|
|
| Headline loss from discontinued operations |
(343 715) |
|
|
(517 319) |
|
| Basic loss per share (cents) |
(219,6) |
|
|
(199,2) |
|
| Diluted basic loss per share (cents) |
(219,2) |
|
|
(198,6) |
|
| Headline loss per share (cents) |
(103,1) |
|
|
(155,5) |
|
| Diluted headline loss per share (cents) |
(103,0) |
|
|
(155,0) |
|
| Effect of the discontinued operations on the statement of financial position of the group |
|
|
|
|
|
| Assets classified as held-for-sale |
2 944 460 |
|
|
2 590 657 |
|
| Property, plant and equipment |
323 355 |
|
|
212 090 |
|
| Intangible assets |
5 871 |
|
|
7 437 |
|
| Deferred tax asset |
6 952 |
|
|
1 338 |
|
| Investments and loans |
434 |
|
|
440 |
|
| Inventories |
523 457 |
|
|
428 733 |
|
| Trade and other receivables |
1 687 617 |
|
|
1 161 229 |
|
| Taxation |
114 368 |
|
|
101 043 |
|
| Cash and cash equivalents |
282 406 |
|
|
678 347 |
|
| Liabilities classified as held-for-sale |
3 116 633 |
|
|
2 613 207 |
|
| Deferred tax liability |
11 704 |
|
|
6 476 |
|
| Long-term portion of provisions |
128 056 |
|
|
30 013 |
|
| Trade and other payables |
2 976 873 |
|
|
2 576 718 |
|
| An amount of R375 million (2018: R712 million) has been allocated from continuing operations to discontinued operations in order to fund the normalised working capital of the discontinued operations. |
|
|
|
|
|
| Cash flows from discontinued operations |
|
|
|
|
|
| Net operating cash flows from discontinued operations |
(582 319) |
|
|
51 273 |
|
| Net investing cash flows from discontinued operations |
(50 137) |
|
|
(16 319) |
|
| Net (decrease) increase in cash and cash equivalents |
(632 456) |
|
|
(34 954) |
|
|
|
|
|
|
|
|