Lendlease Annual Report 2022

162 Lendlease Annual Report 2022 Notes to Consolidated Financial Statements continued On 25 February 2019, the Group announced that its Engineering and Services businesses are no longer a required part of the Group’s strategy. Management at that time committed to a plan to exit from Non core operations of Engineering and Services. On 19 December 2019, the Group entered into an agreement with Acciona to sell its Engineering business and on 9 September 2020 the Group completed the sale. The agreed purchase price for the sale of the Engineering business was $160 million which was adjusted by $37 million at completion, resulting in total estimated proceeds of $197 million. $163 million has been received by 30 June 2022. Acciona has not paid the balance of the final deferred payment which was due on 30 June 2021, claiming various amounts should be set off against that payment. This is disputed by Lendlease and legal proceedings are ongoing to seek recovery of payments due by Acciona. On 21 July 2021, the Group entered into an agreement with Service Stream to sell the Services business and on 1 November 2021 the Group completed the sale. The agreed purchase price for the sale of the Services business was $310 million which was adjusted by $21 million at completion, resulting in total estimated proceeds of $331 million. $317 million has been received by 30 June 2022. As a result of the sale, the 30 June 2021 results have been re-presented to include the Services business as part of discontinued operations. The discontinued operations represent the Services business sold in the current year and the Engineering business sold in the prior year, excluding the projects retained by the Group. The major classes of assets and liabilities sold are as follows: SERVICES ENGINEERING 1 November 2021 9 September 2020 Assets and Liabilities Sold $m $m Cash and cash equivalents 3 411 Loans and receivables 84 187 Inventories 145 34 Other assets 276 215 Total assets sold 508 847 Trade and other payables 121 610 Other liabilities 97 50 Total liabilities sold 218 660 Net assets and liabilities sold 290 187 Net proceeds from sale 331 197 Transaction and separation costs (25) (10) Gain on sale 16 - The results of the discontinued operations representing the Services and Engineering business for the current and prior period are as follows: SERVICES ENGINEERING TOTAL 1 July to 1 November 2021 12 months June 2021 1 1 July to 9 September 2020 12 months June 2021 1 Results from Discontinued Operations $m $m $m $m Revenue from contracts with customers 351 749 283 1,032 Cost of sales (320) (697) (272) (969) Gross profit 31 52 11 63 Other income - 1 1 2 Gain on sale 16 - - - Other expenses (19) (32) (13) (45) Profit/(Loss) before tax for discontinued operations 28 21 (1) 20 Income tax (expense)/benefit (1) (7) 3 (4) Total profit after tax for discontinued operations as presented in the Income Statement 27 14 2 16 1. June 2021 results have been re-presented for discontinued operations during the period. Section F. Other Notes continued 33. Discontinued Operations continued