BUSF_A01.qxd

Problems

Balance sheet as at 30 September last year

£m

Tangible non-current assets 21.1

Current assets 15.2

Total assets 36.3

Equity

Called up ordinary shares of £0.50 each 2.4

Reserves 15.0

17.4

Non-current liabilities (see below) 5.5

Current liabilities 13.4

Total equity and liabilities 36.3

Cash flow statement for the year ended 30 September last year

£m

Cash flows from operating activities 2.0

Cash flows from investing activities (2.3)

Cash flows from financing activities –

Net decrease in cash and cash equivalents (0.3)

These results are fairly typical of Opus’s performance over recent years, when
adjusted for inflation.
The non-current liabilities consist of loan notes due for redemption in five years’
time. These are owned as follows:

£m

GNB 2.0

Heritage 1.5

Anchorage Brewery plc 2.0

The average figures for the Food Producers sector of the FTSE Actuaries Index are:

Price/earnings ratio 18.38

Dividend cover 1.84

(a) Estimate a value per ordinary share in Opus using threemethods. Explain your
calculations, the logic of each method, and any assumptions that you have needed
to make.
(b) Discuss the suitability of each of your estimations, in the context of the particular
circumstances, as the basis of the price per share to be agreed between GNB and
Heritage.

(c) Explain any factors that you believe will influence the final price to be agreed
between GNB and Heritage.