BCA Regulatory News (BCA)

THIS ANNOUNCEMENT DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND NEITHER THIS ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY OFFER TO PURCHASE OR SUBSCRIBE FOR ANY SHARES OR OTHER SECURITIES IN THE COMPANY NOR SHALL IT FORM THE BASIS FOR ANY CONTRACT OR COMMITMENT WHATSOEVER.

15 September 2017

BCA Marketplace plc

Notification of Transfer to a Premium Listing

BCA Marketplace plc (the "Company" or "BCAM") announces that it is proposing to transfer the listing category of its ordinary shares (the "Ordinary Shares") from a standard listing (shares) to a premium listing (commercial company) on the Official List of the UK Listing Authority ("Official List") in accordance with Rule 5.4A of the Listing Rules (the "Transfer").

The provision of 20 business days' notice (which period commenced by way of today's announcement) is required to effect the Transfer. No shareholder approval is required in connection with the transfer. It is anticipated that the Transfer will take effect at 8.00 a.m. on 16 October 2017, conditional on the approval of the UK Listing Authority ("UKLA").

1. Background to and reasons for the Transfer

Since the formation of the Company (as Haversham Holdings plc) in October 2014, the Company's board of directors ("Board") has sought to maintain the most appropriate listing and trading facility for the Company's Ordinary Shares. The Company's Ordinary Shares were admitted to trading on AIM in November 2014 with the objective of creating value through an acquisition-led growth strategy. Upon the acquisition of the BCA Trading Group of companies ("BCA Trading Group") in April 2015, the Company's shares were admitted to the standard listing segment of the Official List and to trading on the Main Market for listed securities of the London Stock Exchange.

Since that time, the flexibility afforded by the standard listing has enabled the Company to move quickly to take advantage of opportunities to grow by acquisition and equip its business to accommodate the rapid growth in transaction volumes that BCA has achieved in the past two years. The Company remains ambitious and growth-focussed but the Board considers that there is no longer the same requirement for flexibility and that this is the appropriate time for the Company to seek a listing on the premium listing segment of the Official List under Rule 5.4A of the Listing Rules.

The Company has therefore requested that the UKLA approve the Transfer with effect from 8.00 a.m. on 16 October 2017. As at 15 September 2017, the Company had 780,247,192 Ordinary Shares in issue.

2. Effect of the Transfer

No changes to the Company's business have been or are proposed to be made in connection with the Transfer.

The Board believes that the Transfer will bring with it a number of benefits to the Company and its investors and does not consider there to be any particular risk associated with the Transfer:

· increased protection for investors under the Listing Rules as a result of the higher standards placed on premium listed companies, including in relation to significant and related party transactions;

· the potential for increased trading liquidity of the Company's shares as a result of potential FTSE inclusion; and

· an enhanced Company profile associated with a premium listing and as a result of potential FTSE inclusion.

Following the Transfer certain additional provisions of the Listing Rules will formally apply to the Company. These provisions, set out under Chapters 6 to 13 (inclusive) of the Listing Rules, relate to the following matters:

· the application of certain requirements that are specific to companies with a premium listing (Chapter 6);

· the application of the Premium Listing Principles set out in Listing Rule 7.2.1AR (Chapter 7);

· the requirement to appoint a sponsor in certain circumstances (Chapter 8);

· the requirement to comply with various continuing obligations, including compliance with all relevant provisions of the UK Corporate Governance Code (or provide an explanation for any non-compliance, if applicable, in its annual financial report) (Chapter 9);

· the requirement to announce, or obtain shareholder approval for, certain transactions (depending on their size and nature) and for certain transactions with 'related parties' of the Company (Chapters 10 and 11);

· certain restrictions in relation to the Company dealing in its own securities and treasury shares (Chapter 12); and

· various specific contents requirements that will apply to circulars issued by the Company to its shareholders (Chapter 13).

3. Working capital

In the opinion of the Company, the Company and its subsidiary undertakings (the "Group") have sufficient working capital available for the Group's requirements for at least the next 12 months from the date of this announcement.

4. Corporate Governance

The Board is committed to the highest standards of corporate governance. The Company expects to be in compliance with the recommendations set out in the April 2016 UK Corporate Governance Code immediately prior to the Transfer, save for Avril Palmer-Baunack's role as Executive Chairman. The Annual Report and Accounts for the year ended 1 April 2018 will report on compliance and provide reasons for non-compliance with the UK Corporate Governance Code.

The UK Corporate Governance Code, under section A2.1, recommends that the role of Chairman and Chief Executive should not be exercised by the same individual. Avril Palmer-Baunack continues to hold the role of Executive Chairman. Avril has significant and unique expertise, knowledge and industry relationships in the UK and Europe which continues to contribute to the successful acquisition and management of businesses by the Company in accordance with its stated strategy to develop a range of automotive service solutions that enable the Group to add value along the vehicle supply chain. In light of this proven expertise the Board continues to believe, with support from major shareholders, that combining the roles of Chairman and Chief Executive remains the right approach at this stage in the Group's development.

Since completion of the acquisition of the BCA Trading Group, the Company has appointed four additional independent non-executive directors, Stephen Gutteridge (who also acts as the senior independent non-executive director), Jon Kamaluddin, Piet Coelewij and David Lis. As a result, half of the Board consists of independent non-executive directors which the Board believes provides a sufficiently robust level of independence to act as a safeguard and mitigate any governance-related concerns that may arise from the combined Executive Chairman role.

5. UK Takeover Code

As the Company has its registered office in the UK and its Ordinary Shares are admitted to trading on the Main Market of the London Stock Exchange, it is subject to the UK Takeover Code, with which the Company complies.

6. Appointment of Sponsor

The Company has appointed Cenkos Securities plc ("Cenkos") to act as its Sponsor in relation to the Transfer. Cenkos is currently joint corporate broker to the Company.

7. Financial information incorporated by reference

The financial information listed below is incorporated by reference into this announcement and can be found in the annual report and accounts of BCAM for the year ended 2 April 2017 which can be found on the Company's website via the link www.bcamarketplaceplc.com. The non-incorporated parts of the annual report and accounts of BCAM for the year ended 2017 are not relevant for the purposes of this announcement.

8. Further financial information on the Group

In order to provide a three year track record of the Group, as required by Chapter 6 of the Listing Rules, historical financial information for the Group, along with the independent accountant's report thereon, are set out below. This historical track record has been prepared in accordance with the basis of preparation which applies predecessor and successor accounting as described in Annexure paras 56-57 of SIR 2000 (Investment Reporting Standard applicable to public reporting engagements on historical financial information) issued by the UK Auditing Practices Board. Consequently the historical financial information reflects the consolidated financial results for the BCA Trading Group up to its acquisition on 2 April 2015 and thereafter reflects the consolidated financial results of the BCA Trading Group and it's new parent company BCA Marketplace plc.

In order to align this historical financial information with previously reported periods this is presented as historical financial information for the year to 31 December 2014 and the 15 months to 3 April 2016.

For the 15 month period ended 3 April 2016 the presentation of this historical financial information differs from the audited Annual Report and Accounts 2016, which also represents the 15 month period ended 3 April 2016, as the Annual Report and Accounts 2016 only included the BCA Trading Group for a 12 month period from its date of acquisition on 2 April 2015.

9. FTSE eligibility and qualification

FTSE's Europe, Middle East and Africa (EMEA) Committee meets on a quarterly basis to review the constituents of the FTSE UK index series, incorporating the FTSE 100, FTSE 250 and FTSE SmallCap. It is anticipated that, subject to the Transfer becoming effective and other conditions being met, the Company will be considered for inclusion into the FTSE UK Index Series and such inclusion would become effective on 18 December 2017.

10. Consents

Cenkos has given and has not withdrawn its written consent to the inclusion of the reference to its name in the form and context in which it is included in this announcement.

PricewaterhouseCoopers LLP has given and not withdrawn its consent to the inclusion of its accountant's report on the combined and consolidated financial information for BCA Trading Group and BCAM for the 15 month period ended 3 April 2016 and the references to it in the form and context in which they are included in this announcement.

Enquiries

For further information:

Media enquiries:

IMPORTANT NOTICE:

The contents of this announcement have been prepared by and are the sole responsibility of the Company. The Company is not offering any Ordinary Shares or other securities in connection with the proposals described in this announcement. This announcement does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities in the Company or securities in any other entity, in any jurisdiction, nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction. This announcement does not constitute a recommendation regarding any securities.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates", "targets", "aims", "continues", "projects", "assumes", "expects", "intends", "may", "will", "would" or "should", or in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Group's result of operations, financial condition, prospects, growth strategies and the industries in which the Group operates. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements, including without limitation: conditions in the markets, market position, the Company's earnings, financial position, return on capital, anticipated investments and capital expenditures, changing business or other market conditions and general economic conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this announcement based on past trends or activities should not be taken as a representation that such trends or activities will continue in the future.

Subject to the Company's regulatory obligations, including under the Listing Rules, the Disclosure Guidance and Transparency Rules, the EU Market Abuse Regulation and the Financial Services and Markets Act 2000 ("FSMA"), neither the Company nor Cenkos Securities plc undertakes any obligation to update publicly or revise any forward looking-statement whether as a result of new information, future events or otherwise. None of the statements made in this announcement in any way obviates the requirements of the Company to comply with its regulatory obligations.

The contents of the Company's website do not form part of this announcement.

Cenkos Securities plc, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting for the Company and for no one else in connection with the Transfer and will not be responsible to any person other than the Company for providing the protections afforded to clients of Cenkos Securities plc, nor for providing advice in relation to the Transfer, the content of this announcement or any matter referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Cenkos Securities plc by the FSMA or the regulatory regime established thereunder, neither Cenkos Securities plc nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Cenkos Securities plc in connection with this announcement, any statement contained herein or otherwise, nor makes any representation or warranty, express or implied, in relation to, the contents of this announcement, including its accuracy, completeness or verification or for any other statement purported to be made by Cenkos Securities plc, or on behalf of Cenkos Securities plc in connection with the Company or the Transfer. Cenkos Securities plc accordingly disclaims to the fullest extent permitted by law all and any responsibility or liability to any person who is not a client of Cenkos Securities plc, whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have in respect of this announcement or any such statement.

SECTION A - ACCOUNTANT'S REPORT ON THE HISTORICAL FINANCIAL INFORMATION FOR THE 15 MONTHS ENDED 3 APRIL 2016 AND THE YEAR ENDED 31 DECEMBER 2014

The Directors

BCA Marketplace plc

20 Buckingham Street

London

WC2N 6EF

Cenkos Securities plc (the "Sponsor")

6 - 8 Tokenhouse Yard

London

EC2R 7AS

15 September 2017

Dear Ladies and Gentlemen,

BCA Marketplace plc (the "Company")

We report on the combined and consolidated financial information of the Group (being prior to 2 April 2015, the BCA Trading Group and its consolidated subsidiaries and undertakings, and, thereafter the Company and its consolidated subsidiaries and undertakings) for the 15 months ended 3 April 2016 and the year ended 31 December 2014 set out in section B below (the "Financial Information Table"). The Financial Information Table has been prepared for inclusion in the notification of transfer to a premium listing dated 15 September 2017 (the "Announcement") of the Company on the basis of the accounting policies set out in note 2 to the Financial Information Table. This report is required for the purposes of complying with item 6.1.3(1) of the Listing Rules of the United Kingdom Listing Authority (the "Listing Rules") and for no other purpose.

Responsibilities

The Directors of the Company are responsible for preparing the Financial Information Table in accordance with the basis of preparation set out in note 2 to the Financial Information Table.

It is our responsibility to form an opinion as to whether the Financial Information Table gives a true and fair view, for the purposes of the Announcement and to report our opinion to you.

Save for any responsibility which we may have to those persons to whom this report is expressly addressed, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with item 6.1.3(1) of the Listing Rules.

Basis of opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. It also included an assessment of significant estimates and judgments made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to the Group's circumstances, consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement whether caused by fraud or other irregularity or error.

Opinion

In our opinion, the Financial Information Table gives, for the purposes of the Announcement dated 15 September 2017, a true and fair view of the state of affairs of the Group as at the dates stated and of its losses, cash flows and changes in equity for the periods then ended in accordance with the basis of preparation set out in note 2 to the Financial Information Table.

Yours faithfully

PricewaterhouseCoopers LLP

Chartered Accountants

PricewaterhouseCoopers LLP, 1 Embankment Place, London, WC2N 6RH

T: +44 (0) 2075 835 000, F: +44 (0) 2072 124 652, www.pwc.co.uk

PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Conduct Authority for designated investment business.

SECTION B - HISTORICAL FINANCIAL INFORMATION FOR THE 15 MONTHS ENDED 3 APRIL 2016 AND THE YEAR ENDED 31 DECEMBER 2014

COMBINED AND CONSOLIDATED INCOME STATEMENT

COMBINED AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

COMBINED AND CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

The table above reflects the consolidated statement of changes in equity of the BCA Trading Group, the predecessor, for the year ended 31 December 2014 and the period to acquisition by BCAM on 2 April 2015.

The table that follows reflects the combined and consolidated statement of changes in equity of BCAM, the successor, starting with BCA Trading Group position as at 2 April 2015 and showing movements in equity for the remainder of the period to 3 April 2016.

COMBINED AND CONSOLIDATED STATEMENT OF CHANGES IN EQUITY continued

COMBINED AND CONSOLIDATED BALANCE SHEET

COMBINED AND CONSOLIDATED CASH FLOW STATEMENT

* Cash and cash equivalents of the BCA Trading Group at 1 January 2015 plus cash flow movements to 2 April 2015, incorporated in the above, gave the BCA Trading Group cash when acquired by BCAM of £73.9m. The BCA Trading Group cash on acquisition figure is also included within Acquisition of subsidiary undertakings, net of cash acquired above. In order to avoid double counting this figure is therefore removed.

NOTES TO THE COMBINED AND CONSOLIDATED HISTORICAL FINANCIAL INFORMATION

1. GENERAL INFORMATION

BCA Marketplace plc ('BCAM' or the 'Company'), is a public limited company, listed on the London Stock Exchange and incorporated and domiciled in the UK with the registered number 09019615. The address of the Company's registered office is BCA Bedford, Coronation Business Park, Kempston Hardwick, Bedford, MK43 9PR.

On 2 April 2015, BCAM acquired BCA Osprey I Limited and its subsidiary undertakings ('BCA Trading Group'), thereafter constituting the main operating business of the Company. This was followed by the acquisitions of SMA Vehicle Remarketing Limited ('SMA') on 1 June 2015, Stobart Automotive Limited ('BCA Automotive') on 25 August 2015 and Ambrosetti (U.K.) Limited ('Ambrosetti') on 4 February 2016.

For the purposes of this historical financial information, the term 'Group' means prior to 2 April 2015, BCA Trading Group and its consolidated subsidiaries and undertakings, and, thereafter BCAM and its consolidated subsidiaries and undertakings.

2. ACCOUNTING POLICIES

(a) Basis of preparation

The combined and consolidated historical financial information presents the financial track record of the Group for the year ended 31 December 2014 and the 15 month period ended 3 April 2016, incorporating the additional acquired entities from the respective dates of acquisition.

Following the acquisition of the BCA Trading Group by BCA Marketplace plc, the Company changed its accounting reference date from 31 December to 31 March, and prepares its financial statements to a Sunday within seven days of 31 March, in order to present its financial position in the most meaningful way. The Directors have taken advantage of the option within section 390 of the Companies Act 2006 to make the historical financial information up to a date seven days either side of the company's accounting reference date. This historical financial information has been prepared for the purposes of inclusion in this Announcement for the purposes of admission to the premium segment of the Official List maintained by the Financial Conduct Authority for trading on the main market for Listed Securities operated by the London Stock Exchange. This historical financial information has been prepared in accordance with the requirements of the Listing Rules, in accordance with International Financial Reporting Standards as adopted by the European Union ('IFRS') except as noted below, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

Due to the change in the capital structure of the Group that occurred on 2 April 2015 as a result of the acquisition of the BCA Trading Group by the Company as set out in note 1 above, certain accounting conventions commonly used for the preparation of historical financial information for inclusion in investment circulars, as described in the Annexure to SIR 2000 (Investment Reporting Standard applicable to public reporting engagements on historical financial information) issued by the UK Auditing Practices Board, have been applied. The application of these conventions results in the following material departures from IFRS in the year ended 31 December 2014 and the 15 month period ended 3 April 2016. In all other respects IFRS has been applied:

- the preparation of the financial information on a combined and consolidated basis, as IFRS does not provide for such preparation.

- the calculation of earnings per share as set out in note 11 as a result of the change in capital structure of the business on 2 April 2015.

Due to changes in the capital structure of the Group, this historical financial information has been combined and consolidated on the following basis:

Year ended 31 December 2014

The historical financial information is the consolidated financial information of the BCA Trading Group.

15 month period ended 3 April 2016

The historical financial information is a combination of:

- the consolidated financial information for the BCA Trading Group for the period from 1 January 2015 to 1 April 2015 (the predecessor); and

- the consolidated financial information of of the BCA Trading Group and its new parent company BCA Marketplace plc (the successor) for the period from 2 April 2015 to 3 April 2016.

2. ACCOUNTING POLICIES continued

(a) Basis of preparation continued

The historical financial information has been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivatives) at fair value through profit or loss. The historical financial information and the notes to the historical financial information are presented in millions of pounds sterling ('£m') except where otherwise indicated.  

The principal accounting policies adopted in the preparation of the historical financial information are set out below. The policies have been consistently applied to all periods presented, unless otherwise stated.

Judgements made by the Directors in the application of the accounting policies that have a significant effect on the historical financial information and estimates with a significant risk of material adjustment in the next year are discussed in note 3.

(b) Going concern

The Group maintains a mixture of medium-term debt, committed credit facilities, finance lease arrangements and cash reserves, which together are designed to ensure that the Group has sufficient available funds to finance its operations. The Board reviews forecasts of the Group's liquidity requirements based on a range of scenarios to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its committed borrowing facilities at all times, so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

After making appropriate enquiries and having considered the business activities and the Group's principal risks and uncertainties, the Directors are satisfied that the Company and the Group as a whole have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the historical financial information has been prepared on a going concern basis.

(c) Basis of consolidation

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

Losses applicable to non-controlling interests are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Intragroup balances, and any gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the combined and consolidated historical financial information. Gains arising from transactions with jointly controlled entities are eliminated to the extent of the Group's interest in the entity. Losses are eliminated in the same way as gains, but only to the extent that there is no evidence of impairment.

(d) New standards, amendments and interpretations

Standards, amendments and interpretations effective and adopted by the Group

IFRSs applicable to the annual financial statements of the Group for the period ended 2 April 2017 have been applied.

Standards and interpretations issued but not yet effective

IFRSs that have been issued but are not yet effective and have not been early adopted by the Group are listed below:

· IFRS 9 Financial instruments addresses the classification, measurement and recognition of financial assets and financial liabilities and replaces IAS 39. IFRS 9 will become effective for the accounting periods starting on or after 1 January 2018, subject to EU endorsement. The impact of the standard is currently being assessed by management but is not expected to have a material impact on the Group.

· IFRS 15 Revenue from contracts with customers will become effective for accounting periods starting on or after 1 January 2018, subject to EU endorsement. The impact of the standard is currently being assessed by management, which requires a thorough review of existing contractual arrangements. Given the proximity between the timing of performance obligations being met and revenue being recognised, management's initial assessment is that the impact of this standard is limited.

2. ACCOUNTING POLICIES continued 

(d) New standards, amendments and interpretations continued

· IFRS 16 Leases establishes principles for the recognition, measurement, presentation and disclosure of leases and replaces IAS17. IFRS 16 will become effective for accounting periods starting on or after 1 January 2019, subject to EU endorsement. The impact of the standard is currently being assessed by management but will result in the recognition of a lease liability and corresponding asset on the Group's balance sheet in respect of the majority of leases, which predominantly represent buildings and vehicle transporters, and are currently classified as operating leases.

(e) Foreign currency translation

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within finance income or costs. All other foreign exchange gains and losses are presented in the income statement within other income or other operating costs.

Consolidation of Group companies 

The results and financial position of all Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

· assets and liabilities including goodwill, intangible assets arising on acquisition and fair value adjustments arising on consolidation for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

· income and expenses for each income statement presented are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

· all resulting exchange differences are recognised in other comprehensive income and are accumulated in the foreign exchange translation reserve or non-controlling interest.

On disposal of a foreign subsidiary the cumulative amount of the exchange differences recognised in other comprehensive income and accumulated in the foreign exchange translation reserve shall be recognised in the income statement when the gain or loss on disposal is recognised.

(f) Property, plant and equipment

Owned assets

Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. When parts of an item of property, plant and equipment have different useful lives, those components are accounted for as separate items of property, plant and equipment. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and when the cost of the item can be measured reliably. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the income statement.

Assets under construction

The costs of assets that are being constructed are capitalised as described in the Owned assets paragraph above. Assets under construction are not depreciated until the asset is deemed to be available for use. For the asset to be available for use it has to be in the location and condition necessary for it to be capable of operating in the intended manner. Once the asset is available for use it is no longer classified as an asset under construction and is instead depreciated like any other item of property, plant and equipment.

Leased assets

Leases under which the Group assumes substantially all the risks and rewards of ownership of an asset are classified as finance leases. Property, plant and equipment acquired under a finance lease is recorded at fair value or, if lower, the present value of minimum lease payments at inception of the lease, less depreciation and any impairment. Each lease payment is allocated between the liability and finance charges. The corresponding rental

2. ACCOUNTING POLICIES continued 

(f) Property, plant and equipment continued

obligations, net of finance charges, are included in the other short-term or long-term payables as appropriate. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Assets leased under operating leases are not recorded on the balance sheet. Rental payments are charged directly to the income statement on a straight-line basis over the period of the lease. Lease incentives received are recognised as a reduction of rental expense over the lease term, on a straight line basis.

Depreciation

Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Any property, plant and equipment acquired under a finance lease is depreciated over the shorter of the useful life of the asset and the lease term. Freehold land and assets under construction are not depreciated. The rates of depreciation are as follows:

Land and buildings 50 years, or the unexpired lease period if shorter

Fixture, fittings and equipment 2 - 10 years

Plant, machinery and motor vehicles 3 - 25 years

Assets acquired through business combinations are depreciated over the remaining useful life at acquisition. The residual values and useful lives are reviewed and adjusted if appropriate, at each balance sheet date. For the Group's impairment policy on non-financial assets see (i) Impairment of non-financial assets.

(g) Intangible assets

Intangible assets comprise internally generated software, acquired computer software, and intangible assets such as customer relationships and brand arising as part of the assessment of assets on the acquisition of a business. These are carried at cost less accumulated amortisation and any recognised impairment loss.

Costs relating to the development of computer software for internal use are capitalised once all the development phase recognition criteria of IAS 38 are met. Costs incurred before this point are expensed as incurred and are not recognised as an asset in a subsequent period. The assessment identifies unique software products that are controlled by the Group and that will probably generate economic benefits exceeding costs beyond one year. Salary and related employment costs that are directly attributable to the development of the software are then capitalised. When the software is available for its intended use, these costs are amortised in equal annual amounts over the estimated useful life of the software.

Amortisation and impairment are charged to operating costs in the period in which they arise. Amortisation is calculated on a straight-line basis from the date on which the assets are brought into use, with useful lives as indicated below:

Customer relationships 12 - 20 years

Brand 15 - 25 years

Software - Internally generated 3 - 10 years

Software - Acquired 3 - 7 years, or the licence term if shorter

Assets acquired through business combinations are amortised over the remaining useful life at acquisition.

Amortisation periods and methods are reviewed annually and adjusted if appropriate. For the Group's impairment policy on non-financial assets see (i) Impairment of non-financial assets.

(h) Goodwill

Goodwill arises on the acquisition of subsidiaries and is recognised initially as the excess of the consideration transferred, over the Group's interest in fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree. Goodwill is stated at cost less accumulated impairment losses. Goodwill is allocated to cash-generating units, which are no higher than an operating segment prior to aggregation, and is not amortised but is tested annually for impairment.

2. ACCOUNTING POLICIES continued 

(h) Goodwill continued

An impairment charge is recognised in the income statement for any amount by which the carrying value of goodwill exceeds its recoverable amount. Goodwill that is not denominated in Sterling is retranslated at each balance sheet date.

(i) Impairment of non-financial assets

Goodwill has an indefinite useful life and is not subject to amortisation. As a result it is tested annually for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired. Other assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows ('cash-generating units'), which are largely independent of the cash inflows from other assets or group of assets. Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

(j) Financial assets

Classification

The Group classifies its financial assets as loans and receivables. Management determines the classification of its financial assets at initial recognition.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that arise principally through the provision of services to customers. They are initially recognised at fair value, and are subsequently stated at amortised cost using the effective interest method, where the impact is material. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. Loans and receivables comprise trade and other receivables and cash and cash equivalents in the balance sheet.

Impairment of financial assets

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty, default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms of the receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable discounted at the assets' original effective interest rate.

For trade receivables, which are reported net of any provisions, such provisions are recorded in a separate provision account with the loss being recognised within operating costs in the income statement. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

(k) Inventories

Inventories primarily represent vehicles acquired by the Group that have not yet been sold and where the Group has the risk and reward of ownership of such vehicles. Other inventories include vehicle spares. All inventories are stated at the lower of purchase cost and net realisable value. Cost represents expenses incurred in bringing each product to its present location and condition. In the Vehicle Remarketing divisions, in the course of achieving a successful sale on behalf of a vendor, it can be necessary to take legal title of a vehicle before selling it to the end customer. This occurs with 1% to 2% of volume and the net gain or loss is included within cost of sales. In the Vehicle Buying division the vehicle cost is net of any administration fees paid to the Group by the seller of the vehicle. Net realisable value is based on estimated normal selling price, less further costs expected to be incurred on completion of the sale and disposal.

(l) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the cash flow statement.

2. ACCOUNTING POLICIES continued 

(m) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet only when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(n) Trade and other payables

Trade and other payables are initially stated at fair value and subsequently measured at amortised cost using the effective interest method.

(o) Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the expected utilisation of the facility to which it relates.

There is a choice, when determining if a new facility is substantially different from an existing facility, between making a decision solely on quantitative factors or also using qualitative factors. Management have taken the decision to apply qualitative factors when making this assessment. Where the assessment indicates that the new facility is substantially different from the old facility, the impact of this is to derecognise the old facility and the associated arrangement fees.

(p) Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, that can be measured reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the liability. The increase in the provision due to the passage of time is recognised in finance costs.

Property leases and dilapidations

Provisions for onerous leases on property are recognised when it is probable that future obligations under the lease will exceed earnings achievable from the property, taking into account the Directors' estimation of likely income from the subletting of vacant property. The amounts of such net outflows are discounted at the risk-appropriate rate, and are stated net of any anticipated sub-lease income.

Provisions for dilapidations are made in respect of property leases on a lease by lease basis and are based on the Group's best estimate of the likely committed cash outflow. Where relevant, these estimated outflows are discounted to net present value.

(q) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in share premium as a deduction from the proceeds.

(r) Revenue

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods and services supplied, stated net of discounts, returns and value added taxes. The Group recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Group's activities, as described below.

2. ACCOUNTING POLICIES continued 

(r) Revenue continued

Outsourced vehicle auction revenue represents the vehicle sale proceeds obtained when the vehicle is sold and is recognised on the date of sale. It is the intention for the Group to take legal title of certain vehicles based on contractual agreements with Corporates before the vehicle is sold to the end customer through the various remarketing channels.

Vehicle auction revenue represents vendor and buyer fees for vehicles sold by the Group together with fees for related services including transportation, inspection, valeting and mechanical checks. Revenue is recognised at the time the service is provided, which is predominantly at the point the vehicle is sold at auction. Revenue represents the fees for the auction service not the value of the vehicle sold, as the Group does not incur the significant risks and rewards of ownership as part of the transaction.

Interest and loan origination fees earned in respect of the provision of Partner Finance loans are recognised over the term of the funding and are included within revenue. Fees charged by Partner Finance are recognised evenly over the period that the relevant service is provided.

Vehicle buying revenue represents the vehicle sale proceeds obtained when the vehicle is sold and is recognised on the date of sale. Transaction fees charged to vendors of vehicles are recognised on the purchase invoice date and treated as a reduction in the cost of inventory and therefore in the cost of sales.

Revenue for other services, including logistics and automotive services, is recognised once the contracted service has been provided. For transportation or delivery services, this is deemed to be when the customer has received the vehicle; for storage services this is deemed to be once an activity has been completed, such as receiving and parking a vehicle, and generally on a daily basis for storage charges; for vehicle repair and vehicle enhancement work this is deemed to be when work has been completed to a stage that can be invoiced to the customer; and for fleet services management this is deemed to be over the period the service is provided.

(s) Advertising and marketing costs

The Group carries out a variety of advertising and marketing activities. These include advertising activities which correlate to the number of vehicles that are acquired by the Group through the Vehicle Buying division and for subsequent sale through the Group's auctions for which revenue is recognised. These direct advertising costs are therefore recognised as a cost of sale. All other indirect advertising and marketing costs are recognised within operating costs. 

The cost of advertising design is expensed as incurred and the expense of advertising campaigns is expensed in the income statement in the period in which the advertising space or air time is utilised.

(t) Net finance costs

Finance costs

Finance costs comprise interest payable on borrowings, direct transaction costs, unwinding of the discount on provisions, net interest cost of defined benefit pension arrangements and foreign exchange losses on finance balances. Transaction costs are amortised over the life of the debt using the effective interest method.

Finance income

Finance income comprises interest receivable on funds invested and foreign exchange gains on finance balances. Interest income is recognised in the income statement as it accrues using the effective interest method.

(u) Income tax

Income tax for the periods presented comprises current and deferred tax. Income tax is recognised in income or other comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to taxes payable in respect of previous periods. Current tax assets and liabilities are offset only if certain criteria are met.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

2. ACCOUNTING POLICIES continued 

(u) Income tax continued

The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of other assets or liabilities that affect neither accounting nor taxable profit other than in a business combination and differences relating to investments in subsidiaries to the extent that they are unlikely to reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend.

(v) Employee benefits

Pension obligations

The Group operates defined contribution and defined benefit plans.

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

The defined benefit plans operated by the Group in the United Kingdom are closed to new members. The costs of providing benefits under the plans are determined using the projected unit credit actuarial valuation method.

The current service cost is included in operating costs in the combined and consolidated income statement. Past service costs are similarly included where the benefits have vested, otherwise they are amortised on a straight line basis over the vesting period. Administrative scheme expenses associated with the plans are recorded within operating costs when incurred in line with IAS 19. Net interest income or interest cost relating to the funded defined benefit pension plans is included within finance income or finance costs as relevant in the combined and consolidated income statement. 

Changes to the retirement benefit obligation or asset due to experience and changes in actuarial assumptions are included in the combined and consolidated statement of comprehensive income, presented as remeasurements of the defined benefit scheme in full in the period in which they arise.

Where scheme assets exceed the defined benefit obligation the net asset is only recognised to the extent that an economic benefit is available to the Group in accordance with the terms of the scheme and where consistent with relevant statutory requirements.

2. ACCOUNTING POLICIES continued 

(v) Employee benefits continued

Share based payment transactions

The Group operates equity-settled, share-based plans. The fair value of the employee services received in exchange for the grant of the awards is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the compensation as determined by independent valuations. Non-market vesting conditions are included in assumptions about the number of awards that are expected to vest.

The cost of equity-settled transactions are recognised, together with a corresponding increase in equity, over the period which the performance conditions are fulfilled, ending on the date on which the relevant employees are expected to become fully entitled to the award (vesting date).

At each reporting date, the cumulative expense recognised for equity-settled transactions reflects, in the opinion of the Directors, the number of awards that will vest and the proportion of the period to vesting that has expired. Directors' estimates are based on the best available information at that date.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting, irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.

3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the Group's combined and consolidated historical financial information under Adopted IFRS requires the Directors and management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. Accounting policies are reviewed annually for appropriateness. Estimates and judgements are evaluated continually and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates, with any changes arising being recognised in the period in which the change in estimate is made or the final result determined.

Certain of the Group's significant accounting policies are considered by the Directors to be critical because of the level of complexity, judgement or estimation involved in their application and their impact on the combined and consolidated historical financial information. These are discussed below:

Judgements

The principal judgements made in the period are as follows:

Acquisition accounting

As described in note 5, BCA Marketplace plc legally acquired the BCA Trading Group in April 2015. Management were required to apply judgement as to whether this should be treated as an accounting acquisition or reverse acquisition. Having considered all the factors in IFRS 3 Business combinations, it was determined that this transaction should be accounted for as an acquisition.

Estimates

The Directors consider that the following estimates and assumptions are likely to have the most significant effect on the amounts recognised in the combined and consolidated historical financial information:

Acquisition accounting

For all acquisitions in the period, management are required to apply judgement and make estimates in relation to the identification and valuation of separable assets and liabilities arising on these acquisitions. In determining the period over which the asset is to be amortised, management must also assess the likely economic life of the asset. 

Management have estimated the fair value of contingent consideration likely to arise on the acquisition of subsidiary undertakings by taking account of financial and market targets over the relevant period of time. The time value of money was estimated using an appropriate discount rate.

Impairment of goodwill and intangible assets

An impairment review has been performed of all goodwill and intangible assets held by the Group. The impairment review is performed on a value in use basis, which requires estimation of future net operating cash flows, the time period over which they will occur, an appropriate discount rate and an appropriate growth rate. Specifically, the future cash flows are sensitive to the assumptions made about the revenue growth, EBITDA margin and the long-term growth rate of the relevant market. Given the degree of subjectivity involved, actual outcomes could vary significantly from these estimates. The detailed assumptions used and associated sensitivity analysis is discussed further in note 13.

Taxation

Accruals for current tax and amounts payable under local indirect taxes such as sales taxes and VAT are based on management's interpretation of country-specific tax law, and require judgements about the likelihood that tax positions taken will be sustained. Management estimates the amount of taxes payable based upon their analysis and determines whether provision should be made for potential settlement of disputed positions through negotiation. All such provisions are included in current liabilities. Any estimated exposure to interest on tax liabilities is provided for in the related tax charge.

Deferred tax assets and liabilities represent management's best estimate in determining the amounts to be recognised. When assessing the extent to which deferred tax assets should be recognised, consideration is given to the timing and level of future taxable income.

3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES continued

Provisions for onerous leases

When the present value of the future cash flows receivable from the operation of leased assets is less than the present value of the rental payments to which the Group is committed, the Group provides for any further onerous element of the contract. Determining the amount of such a provision requires estimating the future net cash flows receivable in respect of these assets, and in the particular case where the leased properties are vacant this requires assessing the likely period for which the property will remain vacant, the cost of any works required to enhance its marketability and the rental income receivable when the property is sublet.

Share based payments

The Group's shared based payments have been valued by independent valuation experts. The key estimates used in calculating the fair value of the options are the fair value of the Company's shares at the grant date, the expected share price volatility, the risk-free interest rate, the expected life of the instrument and the number of shares expected to vest.

Pensions

The Group's net retirement benefit obligation, which is assessed by independent actuaries each period, is based on key assumptions including discount rates, inflation, future salary increases and pension costs. These assumptions may be different to the actual outcome.

4. SEGMENTAL REPORTING

Key Performance Indicator - adjusted EBITDA

Management uses an adjusted profit measure to monitor the ongoing profitability of the Group, which is defined as Earnings before interest, taxation, depreciation and amortisation ('EBITDA') adjusted for significant and non-recurring items. The significant and non-recurring items that are excluded from EBITDA to calculate adjusted EBITDA are as follows:

· acquisition expenses and gains and losses on business combinations, disposals and changes in ownership;

· income and expenses that are significant and non-recurring or non-trading in nature, including business closure costs, restructuring costs and onerous lease provisions;

· impairment charges and accelerated depreciation and amortisation on property, plant and equipment, intangibles and goodwill; and

· amortisation of intangible assets arising on acquisition of businesses.

The Directors primarily use the adjusted EBITDA measure when making decisions about the Group's activities as it is the most reliable and relevant profit measure across all segments. As this is a non-GAAP measure, adjusted EBITDA measures used by other entities may not be calculated in the same way and hence are not directly comparable.

Management has determined the operating segments based on the operating reports reviewed by the Board of Directors that are used both to assess performance and make strategic decisions. Management has identified that the Board of Directors is the chief operating decision maker in accordance with the requirements of IFRS 8 'Operating Segments'.

The Board of Directors consider the business to be split into the four main divisions generating revenue: Vehicle Remarketing UK, Vehicle Remarketing International, Vehicle Buying and Automotive Services. Group Costs comprise central head office functions and any costs not directly attributable to the segments.

Information on segment assets and liabilities is not routinely reported to the Board of Directors and is therefore not disclosed.

4. SEGMENTAL REPORTING continued

Acquisition costs of £32.4m relate to the acquisition of the BCA Trading Group (£25.6m), SMA (£4.7m including the loss on the sale of Newcastle of £2.5m), BCA Automotive (£0.7m), Ambrosetti (£0.4m) and further due diligence costs of transactions not completed (£1.0m), which have been charged to operating costs.

Employee benefit trust and share based payment settlement costs were incurred as a result of the acquisition of the BCA Trading Group by BCA Marketplace plc causing the share options to vest.

4. SEGMENTAL REPORTING continued

Revenue with external customers in the UK and Ireland represents £1.3bn (2014: £0.8bn) of the Group's revenue, with the other £0.1bn (2014: £0.1bn) being generated within Europe. Revenue by type is shown below:

 5. ACQUISITIONS

The following acquisitions have been made by the Group in the 15 month period to 3 April 2016:

BCA Trading Group (acquired 2 April 2015)

On 2 April 2015 the Group acquired 100% of the Ordinary shares of the BCA Trading Group for £815.5m satisfied by £711.2m in cash and £104.3m by the issue of 69,535,522 Ordinary shares. The fair value of the Ordinary shares issued was based on the placing share price of the Company at 2 April 2015 of £1.50 per share. The BCA Trading Group is the number one vehicle remarketing business in the UK and Europe, as well as owning WeBuyAnyCar, the market leading vehicle buying business in the UK. This acquisition is the first in the Group's strategy of acquiring and developing substantial businesses in the automotive sector.

Goodwill has arisen on the acquisition due to the unique position that the BCA Trading Group has in the automotive sector. The BCA Trading Group has created a marketplace and a proposition with an assembled workforce, significant barriers to entry and geographical presence generating a value that cannot be defined and measured as an intangible asset. As such the excess over the identified net assets has been recognised as goodwill.

SMA (acquired 1 June 2015)

SMA operates within the vehicle remarketing sector of the automotive industry and therefore complements the acquisition of the BCA Trading Group. Goodwill represents the assembled workforce and geographic coverage which are not identified as intangible assets in their own right.

BCA Automotive (acquired 25 August 2015)

BCA Automotive operates vehicle transporters in the UK and therefore complements the acquisition of the BCA Trading Group and SMA through its additional logistics expertise and geographical coverage. Goodwill arising on the acquisition represents the assembled workforce, logistics capabilities and buyer synergies arising from the combining of the operations of BCA Automotive with the logistics businesses within the BCA Trading Group and SMA.

Ambrosetti (acquired 4 February 2016)

Ambrosetti specialises in vehicle preparation, refurbishment and de-fleet services as well as logistics services from its storage facilities in Northamptonshire and Kent. The acquisition therefore adds to the Group's capability to provide services along the automotive value chain, from factory gates or port with technical and logistics services for new vehicles to refurbishment and logistics services for used vehicles and the core remarketing and auction operation. Goodwill represents the assembled workforce and geographic coverage which are not identified as intangible assets in their own right.

Impact of acquisitions

Had all the acquisitions occurred on 1 January 2015, it is estimated that Group revenue and profit before tax for the 15 months to 3 April 2016 would have been £1,540.8m and £11.8m respsectively. In determining these amounts management has assumed that the fair value adjustments that arose on the date of acquisition and all costs of acquisition would have been the same if the acquisitions had occurred on 1 January 2015.

5. ACQUISITIONS continued

The fair value of acquired assets and liabilities are as follows:

The following acquisitions were made in the year ended 31 December 2014:

On 19 May 2014 the Group acquired 25% of Fleet Control Monitor GmbH (FCM), a company providing fleet management solutions, increasing the ownership percentage from 51% to 76%. The additional shares in the company were purchased for cash consideration of £0.1m.

On 16 July 2014 the Group acquired 51% of Tradeouts Limited for cash consideration of £1.2m, with deferred cash consideration of £0.8m. There is a Put and a Call option over the remaining 49% of the shares in Tradeouts Limited. Both the financial asset and financial liability that results from these options have been valued by management at £0.8m, which is therefore also the value attributed to the deferred consideration. Tradeouts Limited have established an online dealer to dealer platform and the acquisition was made in furtherance of the Group's strategy of developing businesses complementary to its auction operations in the United Kingdom. Of the total consideration of £2.0m, £1.8m was attributed to goodwill and £0.2m was for their customer list.

On 9 August 2014 the Group acquired 51% of Life On Show Limited for cash consideration of £2.0m, with deferred cash consideration of £0.5m. There is a Put and a Call option over the remaining 49% of the shares in Life on Show Limited. Both the financial asset and financial liability that results from these options have been valued by management at £0.5m, which is therefore also the value attributed to the deferred consideration. Life on Show Limited provides photographic software to the automotive industry and the acquisition was made in furtherance of the Group's strategy of developing businesses complementary to its auction operations in the United Kingdom. Of the total consideration of £2.5m, £1.8m was attributed to goodwill and £0.7m was for their patent and customer list.

6. CASH GENERATED FROM OPERATIONS

7. OPERATING COSTS

8. EMPLOYEES AND DIRECTORS

Staff costs for the Group during the period/year:

Average monthly number of people employed (including Executive Directors) by reportable segment:

The employee numbers reflect the average employee numbers, or where applicable the average number of employees since acquisition. For the 15 month period ended 3 April 2016 the total includes the average number of people employed by the BCA Trading Group for the 15 month period ended 3 April 2016, by SMA for the ten month period, BCA Automotive for the seven month period and Ambrosetti the two month period. The average number of employees for the 15 month period would otherwise be 4,415 people, which is not reflective of the ongoing number of employees within the Group. The year ended 31 December 2014 reflects the average number of employee across the year within the BCA Trading Group.

Retirement benefits

The Group offers membership to defined contribution schemes in the UK and Europe. The pensions cost in the period to 3 April 2016 was £2.8m (2014: £2.1m).

In addition the Group operates the BCA Pension Plan and the Automotive Plan. The BCA Pension Plan and the Automotive Plan are defined benefit schemes closed to new members. Further information is set out in note 22.

8. EMPLOYEES AND DIRECTORS continued

Directors' emoluments

* Avril Palmer-Baunack's service agreement contains a bonus arrangement which was dependent on the completion of the first acquisition of a trading business or company by the Group. Once this condition was satisfied Avril was entitled to an amount equal to 0.5% of the enterprise value of the transaction and as such, as a consequence of the acquisition of the BCA Trading Group, Avril was entitled to a completion bonus of £6,044,000.

9. FINANCE COSTS

10. AUDITOR'S REMUNERATION

During the period/year the Group (including its overseas subsidiaries) obtained the following services from the Group auditor at costs as detailed below:

11. LOSS PER SHARE

Basic loss per share amounts are calculated by dividing net loss for the period attributable to ordinary shareholders by the weighted average number of Ordinary shares outstanding during the period.

At 3 April 2016 there were 13.0m (2014: nil) incremental shares in respect of employee share schemes that have not been included in the calculation of diluted loss per share as they are antidilutive, which may become dilutive in future periods.

12. INCOME TAX

12. INCOME TAX continued

The tax credit for the period/year differs from the standard rate of corporation tax in the UK of 20.2% (2014: 21.5%). The differences are explained below: