NOTES TO THE ACCOUNTS

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17 Business combinations

During the period the group acquired three packages of pubs: eleven pubs were acquired from Punch Taverns on 1 July 2009 for £31.6m, seven from Mitchells & Butlers on 8 December 2009 for £13.4m and a further eight from Punch Taverns for £16.6m on 16 February 2010.

Fair value of assets acquired

Goodwill has arisen primarily due to differences between property portfolio value and fair value-in-use.

The fair value of properties acquired was established following a review that was carried out by qualified surveyors employed by the company.

Properties have been revalued at their existing use value.

The net cash flow impact of the acquisitions was:

From the date of acquisition the sites acquired have contributed £2.7m operating profit to the group's result. Following the integration of the sites within the rest of the group's business it is no longer practical to identify the related cash flows separately.

Prior to acquisition the businesses acquired were part of larger incorporated businesses and therefore pre-acquisition carrying values and trading results are not available.

During the period ended 3 May 2009 there were no business combinations.

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