Contribution of discontinued operations

On 27 September 2022, Datatec completed the sale of its management consultancy division, Analysys Mason with the disposal of its effective 71.2% shareholding. The sale is in terms of a process initiated by the Board pursuant to its Strategic Review in order to unlock shareholder value. Analysys Mason is disclosed as a disposal group in terms of IFRS 5.

The contribution of discontinued operations included in the Group's results until disposal is as follows:

US$'000		Audited  Analysys  Mason  Year ended  28 February  2023	Audited  Analysys  Mason  Year ended  28 February  2023
Revenue		51 751	90 384
Cost of sales		(30 060)	(49 756)
Gross profit		21 691	40 628
Operating costs		(12 348)	(22 452)
Net impairment of financial assets		22	(48)
Share-based payments		(2 626)	(7 052)
Operating profit before interest, tax, depreciation and amortisation ("EBITDA")		6 739	11 076
Depreciation of property, plant and equipment		(127)	(448)
Depreciation of right-of-use assets		(468)	(2 102)
Amortisation of acquired intangible assets and software		(296)	(1 370)
Operating profit		5 848	7 156
Interest income		16	6
Finance costs		(262)	(265)
Profit on disposal of investment		2 915	–
Profit before taxation		8 517	6 897
Taxation		(1 465)	(1 131)
Profit for the year from discontinued operations		7 052	5 766
Profit attributable to:
Owners of the parent		5 530	4 793
Non-controlling interests		1 522	973
		7 052	5 766

The statement of financial position at the disposal date is as follows:

US$'000		Audited  Period ended  27 September  2022	Audited  Year ended  28 February  2022
Assets
Non-current assets		35 960	37 675
Goodwill		25 566	23 230
Property, plant and equipment		863	899
Right-of-use assets		4 383	5 507
Acquired intangible assets and software		2 573	3 503
Investments		–	1 654
Deferred tax assets		2 575	2 834
Other non-current assets		–	48
Current assets		38 722	53 216
Trade receivables		14 191	20 001
Prepaid expenses and other receivables		3 094	3 351
Contract assets and contract costs		12 627	10 692
Current tax assets		116	144
Cash resources		8 694	19 028
Total assets		74 682	90 891
Equity and liabilities
Equity attributable to equity holders of the parent		34 566	35 253
Non-controlling interests		(469)	2 394
Total equity		34 097	37 647
Non-current liabilities		4 861	15 072
Long-term interest-bearing liabilities		–	7 649
Lease liabilities		2 923	3 901
Liability for share-based payments		–	2 355
Acquisition-related liabilities		831	–
Deferred tax liabilities		839	824
Other liabilities		268	343
Current liabilities		35 724	38 172
Trade and other payables		26 909	28 327
Lease liabilities		1 170	2 087
Deferred revenue		5 065	6 277
Acquisition-related liabilities		831	–
Current tax liabilities		1 749	1 481
Total equity and liabilities		74 682	90 891

Cash flows from discontinued operations

US$'000		Audited  Year ended  28 February  2023	Audited  Year ended  28 February  2022
Net cash inflow from operating activities		3 593	8 700
Net cash outflow from investing activities		(12 943)	(861)
Net cash outflow from financing activities		(9 800)	(5 264)
Net (decrease)/increase in cash and cash equivalents		(19 150)	2 575
Opening cash		19 028	16 453
Translation differences		122	–
Cash and cash equivalents at the end of the year – discontinued operations		–	19 028
Cash and cash equivalents at the end of the year – continuing operations		512 786	396 945
Cash and cash equivalents at the end of the year – combined operations		512 786	415 973

Gain on disposal of subsidiary

US$'000		Audited  Year ended  28 February  2023
Consideration received		137 084
Deferred loan note		7 603
Goodwill derecognised		(25 566)
Other net assets disposed of		(9 000)
Non-controlling interest derecognised		9 444
Release of share-based payment reserve		907
Cumulative loss on disposal group reclassified from equity on loss of control of subsidiary		(5 957)
Transaction-related costs incurred on the disposal		(4 600)
		109 915

US$'000		Audited  Year ended  28 February  2023	Audited  Year ended  28 February  2022
Profit for the year from discontinued operations
Profit for the year – disposal group		7 052	5 766
Gain on disposal of subsidiary		109 915	–
		116 967	5 766

Net cash inflow on disposal of subsidiary

US$'000		Audited  Year ended  28 February  2023
Consideration received in cash		137 084
Less: Cash and cash equivalent balances disposed of		(8 694)
Transaction-related costs incurred on the disposal		(4 600)
Net cash flow on disposal of subsidiary		123 790