The Group completed the sale of its wholly owned US subsidiary, Vermont Hard Cider Company (VHCC) to Northeast Kingdom Drinks Group LLC on the 2 April 2021 for a total consideration of €17.5m (USD 20.5m) comprised of cash proceeds of €13.4m (€12.9m net cash impact on disposal) and promissory notes of €4.1m (USD 4.8m), realising a profit of €4.5m on disposal (note 5). The sale was completed on 2 April 2021. VHCC was previously classified as a disposal group held for sale as at 28 February 2021.
The net identifiable assets disposed were as follows:
Asset value on disposal €m | |||
Non-current assets | |||
Property, plant & equipment | 5.8 | ||
Leased right-of-use assets | 0.2 | ||
Non-current assets | 6.0 | ||
Current assets | |||
Inventories | 4.1 | ||
Trade & other receivables | 4.2 | ||
Current assets | 8.3 | ||
Current liabilities | |||
Lease liabilities | (0.2) | ||
Trade & other payables | (2.0) | ||
Current liabilities | (2.2) | ||
Total net identifiable assets disposed | 12.1 | ||
Total consideration | 17.5 | ||
Net identifiable assets disposed | (12.1) | ||
Working capital adjustment | (0.6) | ||
Foreign currency recycled on disposal of subsidiary | 0.2 | ||
Transaction costs incurred | (0.5) | ||
Profit on disposal | 4.5 | ||
Satisfied by: | |||
Cash consideration received | 13.4 | ||
Non-cash consideration received | 4.1* | ||
Total consideration | 17.5 | ||
Analysis of cash flows on disposal: | |||
Cash consideration received | 13.4 | ||
Cash and cash equivalents outflow | (0.5) | ||
Net cash inflow | 12.9 | ||
The cumulative foreign exchange gain recognised in other comprehensive income in relation to VHCC was €0.2m. This was reclassified out of the Currency Translation Reserve via the Consolidated Statement of Comprehensive Income and recognised in the Consolidated Income Statement as part of the profit on disposal.
*As at 28 February 2022, the non-cash consideration which relates to the promissory notes issued on the date of transaction at €4.1m (USD 4.8m) were revalued to €4.3m, with a translation adjustment of €0.2m recognised.
Year ended 28 February 2021
In the prior financial year, the Group disposed of €1.3m of net assets with respect to its non-core Tipperary Water Cooler business for an initial consideration of €7.4m, with further consideration potentially being dependent on further revenue targets being achieved. Transaction costs of €0.3m were also incurred (included in the cash flows from operating activities) resulting in a profit on disposal of €5.8m.
Acquisition of equity accounted investments
Details of the Group’s equity accounted investments in the current and prior financial year are outlined in note 13.