Extract of financial position

as at 30 June 2020	2020 Rm	2019 Rm	% change

Assets
Goodwill and intangible assets	1 671	1 273	31
Property, plant and equipment	7 784	7 198	8
Right-of-use assets	2 279	–	>100
Investments in associates and joint ventures	232	258	(10)
Vehicles for hire	3 167	3 385	(6)
Investments and other financial assets	445	509	(13)
Net working capital¹	8 515	7 580	12
Other assets	1 355	1 178	15
Assets classified as held-for-sale	146	182	(20)
Core interest-bearing debt	(5 794)	(4 777)	21
Floorplans from financial institutions	(1 648)	(1 841)	(10)
Lease liabilities	(2 658)	–	>100
Contract liabilities	(2 797)	(2 818)	(1)
Other liabilities	(224)	(270)	(17)
Liabilities held-for-sale	(21)	(19)	11
Total shareholders' equity	12 452	11 838	5
Total assets	43 678	38 872	12
Total liabilities	(31 226)	(27 034)	16

¹	Net working capital includes R6 511 million (2019: R5 619 million) floorplan creditors.

Factors impacting the financial position as at 30 June 2020 compared to 30 June 2019

Goodwill and intangibles increased mainly due to the acquisition of the DAF dealerships in the UK (R133 million) and the passenger dealerships in Ballarat Australia (R340 million), coupled with currency adjustments, offset by a decrease in intangibles due to their amortisation and the impairment of goodwill and other intangible assets.

Goodwill and intangible asset impairments relate to:

Intangible assets amounting to R107 million were impaired. This was due to reduced cash flow projections for the foreseeable future relating to the contracting South African vehicle market as a result of COVID-19.
Goodwill amounting to R85 million relating to the Australian operations was impaired. This was due to the unexpected discontinuation of the Holden brand in Australia and reduced future cash flow projections related to the contracting Australian passenger market as a result of COVID-19. A legal claim was instituted against Holden relating to the discontinuation of the Holden brand. We expect the claim to be resolved in the 2021 financial year.
Goodwill amounting to R13 million relating to the Mercedes commercial operations in the UK was impaired. This relates to diesel taxis no longer being sold.
Goodwill amounting to R75 million relating to the UK passenger division was impaired. This was due to reduced future cash flow projections related to the contracting UK passenger market as a result of COVID-19, coupled with the uncertainty around Brexit.

Property, plant and equipment

Property, plant and equipment increased as a result of the acquisition of dealerships in the UK and Australia. Enhanced by currency adjustments, offset by a decrease in property, plant and equipment due to depreciation and impairment.

Properties amounting to R101 million were impaired due to reduced future cash flow projections relating to reduced rental increases and the rightsizing of the operational footprint as a result of COVID-19, offset by profit/(loss) on the disposal of properties.

Right-of-use assets

Right-of-use assets relate to the application of IFRS 16 – Leases.

Vehicles for hire

The decrease in vehicles for hire is primarily due to the accelerated de-fleet of vehicles for hire in the Retail and Rental segment to align to the reduced demand related to local and international tourism, offset by the increase in car rental sales in the Import and Distribution segment.

Net working capital

Net working capital increased primarily due to higher inventory levels carried at the dealerships due to a slowdown of sales of vehicles and parts, accelerated vehicle for hire de-fleets, currency adjustments and acquisitions. Reduced trading activity for the last three months of the financial year also resulted in decreased trade payables and trade receivables.

Assets classified as held-for-sale

The assets held-for-sale relate to the non-strategic properties identified for sale, mainly retail properties in South Africa and Australia.

Core interest-bearing debt

The increase in core interest-bearing debt was primarily due to increased working capital as a result of COVID-19 and funding of acquisitions and operational losses during the lockdown period.

Lease liabilities

Lease liabilities relate to the application of IFRS 16 – Leases.

Contract liabilities

Contract liabilities relates mainly to service and maintenance plans, which were negatively impacted by reduced levels of new business, representative of the current economic conditions.

Shareholders' equity

Shareholders' equity was enhanced through current year attributable profits, favourable hedging reserve adjustments amounting to R671 million, favourable translation reserve adjustment as a result of the weakening of the rand amounting to R570 million and an increase in share-based equity amounting to R98 million.

Shareholders' equity was reduced by the final dividend declared of R490 million relating to June 2019 which was paid in September 2019, the repurchase and cancellation of shares during the year totalling R313 million and the IFRS 16 adoption resulting in an adjustment of R108 million.