Annual Report & ACCOUNTS for the year ended 30 June 2014

HYR 2014

The divestment of the Services Segment was completed on 16 August 2013 for sale proceeds of £91.2 million. The costs to sell were £1.6 million (of which £1.5 million was incurred in the prior year), with an associated tax deduction of £0.1 million.

The Services businesses constitute a reporting segment in accordance with IFRS 8.

The results of the discontinued operations included in the profit for the year are set out below. The Segment was classified as discontinued operations and as held for sale at 30 June 2013. The Consolidated Income Statement has been presented to show the discontinued operations separately from continuing operations.

Profit for the Year from Discontinued Operations

Cost of sales(44,519)(303,389)
Gross profit3,74029,855
Distribution costs(1,669)(12,540)
Administrative expenses(755)(6,203)
Non-underlying expenses*(38)
Operating profit1,31611,074
Net finance expense(5)
Profit before taxation from operating activities1,31611,069
Income tax expenses(296)(2,649)
Profit for the year from operating activities1,0208,420
Profit on disposal and related expenses38,711(1,467)
Tax on profit on disposal and related expenses(100)110
Total profit for the year from discontinued operations attributable to owners of the parent39,6317,063

* Non-underlying items comprise amortisation of acquired intangibles and rationalisation costs.

See note 10 for the Earnings per Share split between continued and discontinued operations.

Cash Flows from Discontinued Operations

Net cash (outflow)/inflow from operating activities(14,210)1,305
Net cash inflow/(outflow) from investing activities89,626(810)
Net cash outflow from financing activities (including repayment of intercompany funding)(508)

As completion occurred half way through the month, the working capital position on 16 August 2013 was significantly higher than at year end. This increase in the Services Segment working capital affected our operating cash flow before interest and tax payments, generating a cash inflow of £11.5 million at 30 June 2014 compared to £36.9 million at 30 June 2013. Excluding the Services' operating cash outflow of £14.2 million (the majority of which relates to trade and other receivables), cash generated from operations before interest and tax payments for the continuing operations was £25.7 million.

Effect of the disposal on the financial position of the Group

Intangible assets(1,049)
Property, plant and equipment(1,677)
Trade and other receivables(73,330)
Trade and other payables55,569
Net assets sold(52,382)
Consideration received87,500
Working capital adjustment3,702
Expenses related to disposal (including those accrued in the prior year)(1,576)
Net cash inflow89,626