Year ended 31 July 2006
31. Acquisitions
A list of businesses acquired during the year and the month of acquisition, is set out in Acquisitions completed during the year section. All these businesses are engaged in the distribution of building materials. In all these acquisitions, the Group acquired 100% of the issued share capital and has accounted for the transaction by the purchase method of accounting.
| All acquisitions | Book values
acquired £m |
Fair
value alignments £m |
Provisional
fair value acquired £m |
|---|---|---|---|
| Intangible fixed assets | |||
| - Customer relationships | - | 220 | 220 |
| - Trade names and brands | - | 26 | 26 |
| - Other | 13 | (8) | 5 |
| Property, plant and equipment | 68 | 31 | 99 |
| Inventories | 155 | (7) | 148 |
| Receivables | 310 | (3) | 307 |
| Cash, cash equivalents and bank overdrafts | 5 | - | 5 |
| Borrowings | (76) | - | (76) |
| Payables | (205) | (6) | (211) |
| Deferred tax | (1) | (50) | (51) |
| Retirement benefit obligations | - | (11) | (11) |
| Provisions | (2) | (3) | (5) |
| Total | 267 | 189 | 456 |
| Goodwill arising | 387 | ||
| Consideration | 843 |
| All acquisitions | |||
|---|---|---|---|
| Satisfied by: | |||
| Cash | 799 | ||
| Deferred consideration | 35 | ||
| Contingent consideration | 2 | ||
| Directly attributable costs | 7 | ||
| Total consideration | 843 |
The fair value adjustments shown above for the year ended 31 July 2006 are provisional figures, being the best estimates currently available. Further adjustments to goodwill may be necessary when additional information is available concerning some of the judgemental areas.
The goodwill arising on these acquisitions is attributable to the anticipated profitability of the new markets and product ranges to which the Group has gained access and to additional profitability and operating efficiencies in respect of existing markets.
The acquisitions contributed £862 million to revenue, £60 million to trading profit and £33 million to the Group's operating profit for the period between the date of acquisition and the balance sheet date.
If each acquisition had been completed on the first day of the financial year, Group revenue would have been £14,940 million and Group trading profit would have been £934 million.
