29. Discontinued Operations

On 10 July 2013, the Group announced its intention to dispose of the Services businesses. However, the Group was committed to a plan to sell the businesses prior to 30 June 2013, therefore the assets have been classified as held for sale. The disposal is consistent with the Group's long term policy to focus its activities on the manufacture and marketing of pharmaceutical products.

The Services businesses constitutes a reporting segment in accordance with IFRS 8.

The divestment was completed on 16 August 2013 for sale proceeds of £87.5 million. The costs to sell are £1.5 million (with an associated tax deduction of £0.1 million). Tax on the profit on disposal is expected to be £0.4 million. The completion accounts are yet to be finalised.

The Group has not recognised any impairment losses in respect of the Services businesses, neither when the assets and liabilities of the operation were reclassified to held for sale nor at the end of the reporting period.

The results of the discontinued operations included in the profit for the year are set out below. The Segment was not a discontinued operation or classified as held for sale at 30 June 2012. The comparative consolidated income statement has been represented to show the discontinued operation separately from continuing operations.

Profit for the Year from Discontinued Operations

2013
£'000
2012
£'000
Revenue333,244315,672
Cost of sales(303,389)(287,523)
Gross profit29,85528,149
Distribution costs(12,540)(11,853)
Administrative expenses(6,203)(5,240)
Non-underlying expenses*(38)(438)
Operating profit11,07410,618
Net finance (expense)/income(5)90
Profit before taxation from operating activities11,06910,708
Income tax expenses(2,649)(2,864)
Profit for the year8,4207,844
Expenses related to disposal(1,467)
Tax on expenses related to disposal110
Profit for the year from discontinued operations7,0637,844

* Non-underlying items comprise amortisation of acquired intangibles and rationalisation costs.

See note 10 for the Earnings per ordinary share split between continued and discontinued operations.

Cash Flows from Discontinued Operations

2013
£'000
2012
£'000
Net cash inflows from operating activities1,3054,510
Net cash inflows from investing activities(810)(534)
Net cash outflows from financing activities (including repayment of intercompany funding)(508)(30,603)

Assets Held For Sale

The major classes of assets and liabilities of the Services businesses at the end of the reporting period are set out below:

2013
£'000
Goodwill2,621
Intangible assets1,092
Property, plant and equipment1,656
Inventories28,269
Trade and other receivables56,146
Assets of Services businesses classified as held for sale89,784
Trade and other payables(53,961)
Liabilities of Services businesses classified as held for sale(53,961)
Net assets of Services businesses classified as held for sale35,823