11 Purchase of Subsidiary Companies and Deferred Consideration Cashflow
The net cash outflow during the current year shown as ‘purchase of subsidiary companies’ on the face of the Consolidated Cash Flow Statement relates to: 2015
£000
Cash consideration paid in respect of Fletchers Group of Bakeries acquisition Cash consideration paid in respect of Johnstone’s Just Desserts Ltd acquisition Cash consideration paid in respect of 25% share of Dr Zak’s Ltd
Deferred consideration paid in respect of Goswell Enterprises Ltd acquisition Cash outflow
Deferred consideration received in respect of the sale of Free From
12 Intangibles Intangible assets comprise customer relationships, brands and goodwill.
Goodwill £000
Cost at 29 June 2013 and 28 June 2014 On acquisition of subsidiary (Note 2) Cost at 27 June 2015
Amortisation at 29 June 2013 Charge for the year 28 June 2014 Amortisation at 28 June 2014 Charge for the year 27 June 2015 Amortisation at 27 June 2015
NBV at 29 June 2013 NBV at 28 June 2014 NBV at 27 June 2015
52,968 18,736 71,704
- - - - -
52,968 52,968 71,704
Brands and Customer licences relationships £000
822
2,861 3,683
(657) (165) (822) (107) (929)
165 -
2,754 £000
Total £000
- 53,790
5,909 27,506 5,909 81,296
- - -
(296) (296)
(657) (165) (822) (403)
(1,225)
- 53,133 - 52,968
5,613 80,071
The brand and customer relationships recognised were purchased as part of the acquisition of Fletchers Group of Bakeries in October 2014. They are considered to have finite useful lives and are amortised on a straight line basis over their estimated useful lives of twenty years for brands and fifteen years for customers. The intangibles were valued using an income approach, using Multi-Period excess earnings Method approach for customer relationships and Relief from Royalty Method for brand valuation.
Goodwill has arisen on acquisitions and reflects the future economic benefits arising from assets that are not capable of being identified individually and recognised as separate assets. The goodwill reflects the anticipated profitability and synergistic benefits arising from the enlarged Group structure. The goodwill is the balance of the total consideration less fair value of assets acquired and identified. The carrying value of the goodwill is reviewed annually for impairment.
The carrying amount of goodwill has been allocated to cash generating units or groups of cash generating units as follows:
2015 £000
Nicholas & Harris
Lightbody of Hamilton Memory Lane Cakes Fletchers
Johnstone’s Food Service 2,980
48,474 1,514
18,364 372
71,704
2014 £000
2,980
48,474 1,514 - -
52,968
39,084 1,550 175 -
40,809 (3,000)
2014 £000
- - -
217 217
-
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