4.16
Acquisitions and disposals
4.16.1 Discontinued operations
In August 2019, Accell Group completed the strategic review of its North American operations, which resulted in the sale and transfer of the loss-making US business including the worldwide registrations (excluding the Canadian brand registrations) of the Diamondback, Redline and IZIP brands to the Alta Cycling Group LLC, a portfolio company of Regent LP. Taking into consideration the sale and transfer of the Canadian brand registrations of Raleigh, Diamondback, Redline and IZIP to the Canadian Tire Corporation Limited ('CTC') in July 2019, this meant the North American operations were substantially liquidated as per that date. Subsequently, the closely linked Beeline operations were sold and transferred to a group of investors led by the StrataFusion Group in October 2019.
As required by IFRS, the North American operations were presented as discontinued operations in the 2019 financial statements. Accell North America was liquidated on 27 October 2020. The benefits and costs incurred between 1 January 2020 through the liquidation date totalled a gain of € 2.9 million before taxes and is included in continuing operations. The gain primarily relates to the currency translation adjustment (net finance cost) and the release of a bad debt provision.
| Discontinued operations | |
| 2019 | |
| € x 1,000 | |
| Net turnover | 37,542 |
| Allocated corporate general overhead expenses | -2,252 |
| Operational result (normalised, refer to items below) | -14,357 |
|
Operational result excluding corporate general overhead
|
-12,105
|
| Gain on sale of the Canadian brand registrations | 3,021 |
| Net transaction result on the sale of discontinued operations and sale Diamondback | -39,672 |
| Closing and restructuring costs | -7,754 |
| Income tax expense | 15 |
|
Net profit (loss) from discontinued operations
|
-56,495
|
| Earnings per share (in euro) | |
| Basic earnings per share from discontinued operations | -2.11 |
| Diluted earnings per share from discontinued operations | -2.11 |
Accounting policy
Discontinued operations comprise those activities that were disposed of during the period (or that were classified as held for sale at the end of the period), and represent a separate major line of business or geographical area that can be clearly distinguished for operational and financial reporting purposes. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. The income and expenses from discontinued operations are presented in the income statement as profit or loss from discontinued operations below the profit or loss from continuing operations. Corresponding disposal gains or losses are contained in the profit or loss from discontinued operations. The prior-year figures in the income statement are adjusted accordingly and net cash flows attributable to the operating, investing and financing activities of discontinued operations are disclosed separately in the cash flow statement.