Acquisitions
The Group made a number of small acquisitions during the year, namely:
- Festival City Food & Wine (Australia)
- Goldline Distributors Proprietary Limited (Australia)
- Pier 7 Holding GmbH (Germany)
- Frustock Foodservice, S.A. (Portugal)
- Cárnicas Sáez, S.L. (Spain)
- Jilin Food Service Limited (Mainland China)
- Linson Global Seafood Trading Limited (Hong Kong)
- D&D S.p.A. (Italy)
- Van de Mheen Foodservices B.V. (Netherlands)
- Prepared Produce (New Zealand)
- Aeroshield (Malaysia)
- Famous Fresh Holdings Proprietary Limited (South Africa)
- Efe Dağıtım ve Pazarlama A.Ş. (Turkey)
These acquisitions form part of the Group’s strategic expansion plans in the international foodservice industry. Goodwill arose on the acquisitions as the anticipated value of future cash flows that were taken into account in determining the purchase consideration exceeded the net assets or net liabilities acquired at fair value. The acquisitions have enabled the Group to expand its range of complementary products and services and, as a consequence, has broadened the Group’s base in the market place.
There were no significant contingent liabilities identified in the businesses acquired.
The acquisitions increased the Group’s revenue by R3,3 billion, and its trading profit by R22,5 million. If these acquisitions had been effective on July 1 2017, the total contribution to revenue would have been R4,6 billion and an increase in trading profit of R56,9 million.
The impact of these acquisitions on the Group’s results can be summarised as follows:
| R000s | 2018 Audited |
2017 Audited |
||
| Property, plant and equipment | (301 443) | (264 945) | ||
|---|---|---|---|---|
| Intangible assets | (26 283) | (16 924) | ||
| Deferred taxation | 3 914 | (56 666) | ||
| Interest in associates | (7 302) | (89) | ||
| Investments and advances | (4 548) | (6 920) | ||
| Inventories | (328 740) | (126 784) | ||
| Trade and other receivables | (317 441) | (353 649) | ||
| Cash and cash equivalents | 25 071 | 26 353 | ||
| Borrowings | 271 219 | 505 495 | ||
| Trade and other payables and provisions | 383 102 | 611 517 | ||
| Taxation | (1 263) | 11 509 | ||
| Net tangible fair value of (assets) liabilities acquired | (303 714) | 328 897 | ||
| Goodwill | (1 142 558) | (1 417 544) | ||
| Gain from bargain purchase | 4 222 | – | ||
| Non-controlling interest | 12 283 | (53 626) | ||
| Total value of acquisitions | (1 429 767) | (1 142 273) | ||
| Less: Cash and cash equivalents assumed | (25 071) | (26 353) | ||
| Net movements in vendors for acquisition and puttable non-controlling interest liabilities | 524 768 | (100 451) | ||
| Costs incurred in respect of acquisitions | (35 541) | (46 084) | ||
| Net amounts paid | (965 611) | (1 315 161) |