IFRS 5 para 33, IAS 33 para 68, disclosure of discontinued operations

UDG Healthcare plc – Annual report – 30 September 2016

Industry: healthcare

9. NET RESULT FROM DISCONTINUED OPERATIONS, DISPOSAL AND ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

Profit from discontinued operations after tax included in the Group Income Statement is summarised in the table below:

The profit for the year from discontinued operations is fully attributable to the equity holders of the company.

On 18 September 2015 the Group announced the proposed disposal of United Drug Supply Chain Services, United Drug Sangers, TCP Group and MASTA for an aggregate cash consideration of €407.5 million before adjustments in respect of working capital, taxation and costs. The disposal was approved by shareholders at an EGM on 13 October 2015 and on 1 April 2016 the Group completed the disposal of these businesses. The Group has treated these operations as discontinued operations in accordance with IFRS 5. The following table details the results of these discontinued operations included in the Group Income Statement:

In accordance with IFRS 5, depreciation of property, plant and equipment and amortisation of intangibles has not been charged on the assets disposed of during the year. If the assets had continued to be depreciated and amortised, the respective pre-tax charges for the year would have been €3,526,000 and €720,000.

(b)

The following table summarises the consideration received, the profit on disposal of discontinued operations and the net cash flow arising on the disposal of these businesses:

(c)

The Group has also treated the joint venture arrangement with Magir Limited as a discontinued operation and asset held for sale in accordance with IFRS 5 as the business is no longer a strategic asset following our exit from the Pharma Wholesaling segment of the market and given the decision by management to dispose of the shareholding as it is non-core. The comparative Group Income Statement, Group Statement of Comprehensive Income and the Group Cash Flow Statement to 30 September 2015 have been restated to show the discontinued operation separately from continuing operations.

The following table details the results of discontinued operations included in the Group Income Statement:

The following table details the assets and liabilities classified as held for sale in the Group Balance Sheet:

11. EARNINGS PER ORDINARY SHARE

Non-GAAP information

The Group reports certain financial measures that are not required under International Financial Reporting Standards (IFRS) which represent the generally accepted accounting principles (GAAP) under which the Group reports. The Group believes that the presentation of these non-GAAP measures provides useful supplemental information which, when viewed in conjunction with our IFRS financial information, provides investors with a more meaningful understanding of the underlying financial and operating performance of the Group and its divisions. These measures are also used internally to evaluate the historical and planned future performance of the Group’s operations and to measure executive management’s performance based remuneration.

The Group has treated the joint venture arrangement with Magir Limited as a discontinued operation and asset held for sale in accordance with IFRS 5. The comparative Group Income Statement, Group Statement of Comprehensive Income and Group Cash Flow to 30 September 2015 have been restated to reflect this change and as such the 2015 earnings per share calculations have been adjusted.

1. Adjusted profit attributable to owners of the parent from continuing operations is stated before the amortisation of acquired intangible assets and transaction costs.
2. Adjusted profit attributable to owners of the parent from discontinued operations is stated after deducting the profit on disposal of the discontinued operations (€132.1m, net of tax), and adding back the impairment of the investment in Magir Limited, an asset held for sale (€17.0m, net of tax).

Treasury shares have been excluded from the weighted average number of shares in issue used in the calculation of earnings per share. 310,671 (2015: 1,832,921) anti-dilutive share options have been excluded from the calculation of diluted earnings per share.

The average market value of the Company’s shares for the purposes of calculating the dilutive effect of share options was based on quoted market prices for the year.