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Assets held for sale and discontinued operations | 12 Months Ended
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Dec. 31, 2019
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Assets held for sale and discontinued operations | 12. Assets held for sale and discontinued operations In July 2019, the Group announced the proposed sale of its Kantar business to Bain Capital. On 5 December 2019 the first stage of the transaction completed, consisting of approximately 90% of the Kantar group, with consideration of £2,140.2 million after tax and disposal costs. The sale involved the Group disposing of the Kantar business and holding a 40% equity stakes post-transaction which are treated as an associate. This generated a pre-tax gain of £73.8 million, tax charge of £157.4 million and goodwill impairment of £94.5 million for the Group. The remaining stages of the transaction are expected to complete in 2020 with further consideration expected to be approximately £200 million after tax and disposal costs. As outlined in the accounting policies, the criterion of a highly probable sale was met on 9 July 2019, following Board approval of the disposal of Kantar to Bain Capital, representing the date at which the appropriate level of management was committed to a plan to sell the disposal group. The Kantar disposal group therefore became held for sale on this date. The Kantar group (both the portion that has been disposed of by year end and the portion that is expected to be disposed of in 2020) is classified as a discontinued operation in 2019 under IFRS 5 as it forms a separate major line of business and there was a single co-ordinated plan to dispose of it. Kantar represents materially all of the Data Investment Management segment of the Group. As at 31 December 2019 the remaining portion of the company not yet sold is disclosed as held for sale. Results of the discontinued operations, which have been included in profit for the year, were as follows:
|  | 2019 £m |  |  | 2018 £m |  |  | 2017 £m |
Revenue |  |  | 2,387.5 |  |  |  | 2,555.7 |  |  |  | 2,657.8 |
Costs of services |  |  | (1,951.5 | ) |  |  | (2,104.4 | ) |  |  | (2,147.4 | )
Gross profit |  |  | 436.0 |  |  |  | 451.3 |  |  |  | 510.4 |
General and administrative costs |  |  | (151.7 | ) |  |  | (257.8 | ) |  |  | (180.1 | )
Operating profit |  |  | 284.3 |  |  |  | 193.5 |  |  |  | 330.3 |
Share of results of associates |  |  | 6.5 |  |  |  | 13.0 |  |  |  | 15.5 |
Profit before interest and taxation |  |  | 290.8 |  |  |  | 206.5 |  |  |  | 345.8 |
Finance income |  |  | 3.6 |  |  |  | 5.4 |  |  |  | 6.2 |
Finance costs |  |  | (17.3 | ) |  |  | (9.7 | ) |  |  | (7.9 | )
Revaluation of financial instruments |  |  | (9.4 | ) |  |  | 3.5 |  |  |  | 18.3 |
Profit before taxation |  |  | 267.7 |  |  |  | 205.7 |  |  |  | 362.4 |
Attributable tax expense |  |  | (78.8 | ) |  |  | (67.9 | ) |  |  | (114.0 | )
Profit after taxation |  |  | 188.9 |  |  |  | 137.8 |  |  |  | 248.4 |
Goodwill impairment on classification as held for sale 1 |  |  | (94.5 | ) |  |  | – |  |  |  | – |
Gain on sale of discontinued operations |  |  | 73.8 |  |  |  | – |  |  |  | – |
Attributable tax expense on sale of discontinued operations |  |  | (157.4 | ) |  |  | – |  |  |  | – |
Net gain attributable to discontinued operations |  |  | 10.8 |  |  |  | 137.8 |  |  |  | 248.4 |
Attributable to |  |  |  |  |  |  |  |  |  |  |  |
Equity holders of the parent |  |  | (3.8 | ) |  |  | 126.4 |  |  |  | 237.1 |
Non-controlling interests |  |  | 14.6 |  |  |  | 11.4 |  |  |  | 11.3 |
|  |  | 10.8 |  |  |  | 137.8 |  |  |  | 248.4 |
Note
1 |  | Goodwill impairment of £94.5 million arose from the assessment of fair value less costs to sell under IFRS 5.
For the year ended 31 December 2019, the Kantar group contributed £322.9 million (2018: £292.5 million, 2017: £378.4 million) to the Group’s net operating cash flows, paid £53.2 million (2018: £59.5 million, 2017: £67.8 million) in respect of investing activities and paid £27.2 million (2018: £7.9 million, 2017: £9.1 million) in respect of financing activities. The gain on sale of discontinued operations disposed by 31 December 2019 is calculated as follows:
|  | 2019 £m |
Intangible assets (including goodwill) |  |  | 2,410.0 |
Property, plant and equipment |  |  | 115.7 |
Right-of-use assets |  |  | 103.5 |
Interests in associates and joint ventures |  |  | 92.3 |
Other investments |  |  | 11.5 |
Deferred tax assets |  |  | 44.1 |
Corporate income tax recoverable |  |  | 49.8 |
Trade and other receivables |  |  | 748.8 |
Cash and cash equivalents |  |  | 324.9 |
Trade and other payables |  |  | (839.8 | )
Corporate income tax payable |  |  | (48.2 | )
Lease liabilities |  |  | (106.3 | )
Deferred tax liabilities |  |  | (98.6 | )
Provisions for post-employment benefits |  |  | (26.7 | )
Provisions for liabilities and charges |  |  | (22.4 | )
Net assets |  |  | 2,758.6 |
Non-controlling interests |  |  | (19.1 | )
Net assets excluding non-controlling interests |  |  | 2,739.5 |
Consideration received in cash and cash equivalents |  |  | 2,352.1 |
Re-investment in equity stake 1 |  |  | 231.7 |
Transaction costs |  |  | (56.1 | )
Deferred consideration 2 |  |  | 1.6 |
Total consideration received |  |  | 2,529.3 |
Loss on sale before exchange adjustments |  |  | (210.2 | )
Exchange adjustments recycled to the income statement |  |  | 284.0 |
Gain on sale of discontinued operation |  |  | 73.8 |
Notes |  |
1 |  | Re-investment in equity stake represents the value of the Group’s 40% stake in the new Kantar group as part of the disposal.
2 |  | Deferred consideration is made up of £79.6 million expected to be received in future periods on the satisfaction of certain conditions and the deferral of £78.0 million consideration against services the Group will supply to Kantar on favourable terms in the future. The conditions expected to be met in the future include the settlement of ongoing legal cases, realisation of the value of certain investments and the utilisation of certain tax losses and allowances. There was uncertainty at the date of disposal in regard to the ultimate resolution of these items and estimates of amounts due to be received were required to be made; there were no individually material estimates. Future services provided by the Group to Kantar arose through the negotiation of Transition Service Arrangements, as is customary for a disposal of this magnitude. The Group will support Kantar for a period of up to 4 years, primarily in the area of IT, on terms which are favourable to the disposal group. As such, an element of consideration has been deferred and will be recognised as the services are provided.
The major classes of assets and liabilities comprising the operations classified as held for sale at 31 December 2019 are as follows:
|  | 2019 £m |
Non-current assets |  |  |  |
Intangible assets: |  |  |  |
Goodwill |  |  | 155.4 |
Other |  |  | 5.9 |
Property, plant and equipment |  |  | 12.8 |
Right-of-use assets |  |  | 25.7 |
Interests in associates and joint ventures |  |  | 4.6 |
Other investments |  |  | 0.6 |
Deferred tax assets |  |  | 5.9 |
Trade and other receivables |  |  | 2.6 |
|  |  | 213.5 |
Current assets |  |  |  |
Corporate income tax recoverable |  |  | 15.9 |
Trade and other receivables |  |  | 189.4 |
Cash and short-term deposits |  |  | 66.5 |
|  |  | 271.8 |
Total assets classified as held for sale |  |  | 485.3 |
Current liabilities |  |  |  |
Trade and other payables |  |  | (130.4 | )
Corporate income tax payable |  |  | (3.8 | )
Bank overdrafts |  |  | (0.2 | )
Short-term lease liabilities |  |  | (3.9 | )
|  |  | (138.3 | )
Non-current liabilities |  |  |  |
Trade and other payables |  |  | (1.3 | )
Deferred tax liabilities |  |  | (1.2 | )
Provisions for post-employment benefits |  |  | (8.5 | )
Provisions for liabilities and charges |  |  | (0.6 | )
Long-term lease liabilities |  |  | (20.5 | )
|  |  | (32.1 | )
Total liabilities associated with assets classified as held for sale |  |  | (170.4 | )
Net assets of disposal group |  |  | 314.9 |
On 27 February 2020, the second stage of the Kantar transaction completed, consisting of approximately 4% of the Kantar g roup, with cash consideration received of £136.7 million. The remaining stages of the transaction are expected to complete in 2020.

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- Definition The entire disclosure for non-current assets held for sale and discontinued operations. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 5 -IssueDate 2019-01-01 -Section Presentation and disclosure -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IFRS&num=5&code=ifrs-tx-2019-en-r&doctype=Standard&dita_xref=IFRS05_g30-42_TI -URIDate 2019-03-27 + Details
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