12. Going concern

The Board has reviewed the future profit and cash flow projections in conjunction with the current economic climate as well as banking facilities in place to support all the operations, in order to express an opinion on the adequacy of working capital and the ability to continue as a going concern for the foreseeable future. These projections covered future financial performance, solvency and liquidity for a period of 12 months from the date of the release of these results.

The Group achieved a strong operational performance in the six-month period ended 31 August 2021 as it continued to benefit from remote working, increased cloud usage and secured networking trends. All divisions achieved strong revenue and profit growth.

Solvency

The Board has determined that the Group is solvent with net assets at 31 August 2021 of US$582.1 million (H1 FY21: US$572.6 million; FY21: US$583.2 million) and tangible net assets of US$256.1 million (H1 FY21: US$275.5 million; FY21: US$268.7 million). The Group is expected to remain solvent over the next 12 months.

Liquidity

The Group continues to closely monitor the outlook for liquidity in its divisions to ensure that sufficient cash will continue to be generated to settle liabilities as they fall due.

Logicalis is supported by a corporate facility of US$155.0 million, covering all operations outside of Latin America, comprising a rolling credit facility to fund working capital requirements and an acquisition facility. The Latin America region is supported separately via a number of uncommitted overdraft facilities and short-term lending arrangements.

Westcon International has an invoice assignment facility of EUR275.0 million for its European subsidiaries and a securitisation facility of US$80.0 million for its Asia-Pacific subsidiaries. In addition, Westcon International utilises accounts receivable facilities in the Middle East (US$15.0 million) and Indonesia (US$11.0 million) as well as overdraft facilities in Europe (GBP3.6 million) and Africa (US$1.0 million), a securitisation facility in South Africa (ZAR50.0 million) and a line of credit in Singapore (US$1.2 million) to finance the business.

Analysys Mason continues to have access to an overdraft supporting its working capital requirements.

The Group has performed covenant projections to confirm that banking covenants are unlikely to be breached for the next 12 months.

Trade receivables and inventory are of a sound quality and adequate expected credit losses have been recorded.

Conclusion

The Board has concluded that the Group will continue to be a going concern for the foreseeable future and therefore the results have been prepared on a going concern basis.