(a) Equity accounted investments/financial assets – Group

Summarised financial information for the Group’s investment in joint ventures and associates which are accounted for using the equity method is as follows:

* Included in current assets for Admiral Taverns is cash and cash equivalents of €15.0m (FY2020: €12.9m). Admiral Taverns also had depreciation and amortisation of €10.0m (FY2020: €8.6m), net interest costs of €16.8m (FY2020: €11.2m) and tax credit of €7.5m (FY2020: tax charge €2.3m)

** Net assets of €149.3m by the Group’s share in equity at 28 February 2021 of 48.85% amounts to €72.9m however the percentage ownership of the Group has changed since original investment (including during the current financial year) and therefore the weighted share of net assets attributable to the Group at 28 February 2021 was €71.0m. The Group also booked an impairment charge of €8.9m in the current financial year which results in a carrying value at 28 February 2021 of €62.1m

A listing of the Group’s equity accounted investments is contained in note 29.

Admiral Taverns

On 6 December 2017, the Group entered into a joint venture arrangement for a 49.9% share in Brady P&C Limited (“Admiral Taverns”), a UK incorporate entity with Proprium Capital Partners (50.1%). Brady P&C Limited subsequently incorporated a UK company, Brady Midco Limited where Admiral management acquired 6.5% of the shares. Brady Midco Limited incorporated Brady Bidco Limited which acted as the acquisition vehicle to acquire the entire share capital of AT Brit Holdings Limited (trading as Admiral Taverns) on the 6 December 2017. The equity investment by the Group was £37.4m (€42.4m euro equivalent on date of investment) representing 46.65% of the issued share capital of Admiral Taverns. The Group has 50% representation on the board and no decision can be made without 100% agreement by all Directors. The Group determined that Admiral Taverns was to be accounted for as a joint venture.

In the prior financial year, Admiral management disposed of 2% of their shareholding which in turn increased C&C’s shareholding from 46.65% to 47.7%. In the current financial year, the Group made an equity investment in Admiral Taverns for €6.7m (£6.0m). Also, during the current financial year, Admiral management disposed of 2.4% of their shareholding which in turn increased C&C’s shareholding from 47.7% to 48.85%.

In the current financial year, the share of loss before exceptional items of Admiral Taverns attributable to the Group was €6.0m (FY2020: profit €3.1m). The Group also incurred €8.8m with respect to its share of Admiral’s exceptional items. These included a charge of €7.0m (FY2020: €2.7m) with respect to the Group’s share of the revaluation loss arising from the fair value exercise to value Admiral’s property assets at 28 February 2021. As a result of the same valuation exercise, a loss of €0.4m (FY2020: a gain of €3.7m) with respect to the Group’s share of the revaluation, was recognised in Other Comprehensive Income. The Group also recognised a charge of €1.8m with respect to its share of other exceptional items for the year, including €0.8m with respect to a provision against trade debtors as a consequence of COVID-19, €0.5m with respect to an Asbestos provision with the remaining €0.5m in relation to other charges directly attributable to COVID-19.

The Group also recorded, within exceptional operating costs (note 5), an impairment charge of €8.9m with respect to the carrying value of its investment in Admiral Taverns at 28 February 2021. The hospitality and pub industry in the United Kingdom have been significantly curtailed by lockdowns and trading restrictions since March 2020. The Group assessed the carrying value of its equity accounted investment in Admiral Taverns at 28 February 2021, in light of the underutilisation of their pub assets as a direct consequence of such lockdowns, and recorded an impairment charge of €8.9m in this regard.

Also in the current financial year, the Group recognised the Group’s share of an adjustment to the net asset allocation between the joint venture partners and the minority shareholder of €1.1m resulting from the repurchase of shares from the minority shareholder.

In the prior financial year, the Group invested €10.7m which gave rise to capital duties to be expensed in relation to the acquisition (the Group’s share of this expense was €2.9m). This was offset by recognition of the Group’s share of an adjustment made by the investee to recognise a higher deferred tax asset, in FY2020, in respect of timing differences on fixed assets in respect of prior years (the Group’s share of this gain was €3.2m).

Sensitivity analysis

In determining the recoverable amount of the Group’s investment in Admiral Taverns, the Group utilised a market approach leveraging EBITDA and other relevant information generated by market transactions involving similar businesses. The key sensitivities for the impairment testing are the EBITDA forecast and the multiple assumption in the valuation calculation.

An increase of 2.5% in the EBITDA or EBITDA multiple assumption would lead to an increase of €4.4m in the carrying value of the Admiral investment, whilst a decrease of the same assumptions would lead to a €4.4m decrease of the Admiral carrying amount.

Drygate Brewing Company Limited

In 2015, the Group entered into a joint venture arrangement with Heather Ale Limited, run by the Williams brothers who are recognised as leading family craft brewers in Scotland, to form a new entity Drygate Brewing Company Limited. The joint venture, which is run independently of the joint venture partners existing businesses, operates a craft brewing and retail facility adjacent to Wellpark brewery.

In light of the impact of COVID-19 on the hospitality and pub industry the Group assessed the carrying value of its investment in Drygate Brewing Company Limited at 28 February 2021 and recorded an impairment charge of €0.2m (£0.2m) within exceptional operating costs (note 5).

Canadian Investment

During the prior financial year, the Group disposed of its equity accounted investment in a Canadian company for cash proceeds of €6.1m, realising a profit of €2.6m on disposal.

Whitewater Brewing Company Limited

On 20 December 2016, the Group acquired 25% of the equity share capital of Whitewater Brewing Company Limited, an Irish Craft brewer for £0.3m (€0.3m).

Other

During the current financial year, the Group made a 1% investment in an English entity Bramerton Condiments Limited for €0.1m (£0.1m) and a 50% investment in 3 Counties Spirits Limited for €nil consideration.

On 7 January 2021, the Group also acquired an 8% shareholding in Innis & Gunn Holdings Limited at €nil cost. Share subscription costs of €0.1m (£0.1m) were incurred in this regard.

On 5 March 2019, the Group made a 10% investment in an English registered entity Jubel Limited, a craft beer producer for €0.3m (£0.3m).

In the prior financial year, the Group made an additional investment in CVBA Braxatorium Parcensis of €0.2m following on from a less than €0.1m investment in FY2019. The Group has a 33% investment in the Belgium entity.

The Group also has an equity investment in Shanter Inns Limited, Beck & Scott (Services) Limited (Northern Ireland) and The Irish Brewing Company Limited (Ireland). The value of each of these investments is less than €0.1m in the current and prior financial year.

(b) Financial Assets – Company

The total expense of €0.8m (FY2020: €2.5m) attributable to equity settled awards granted to employees of subsidiary undertakings has been included as a capital contribution in financial assets.

In the opinion of the Directors, the shares in the subsidiary undertakings are worth at least the amounts at which they are stated in the Consolidated Balance Sheet. Details of subsidiary undertakings are set out in note 29.