TIDMLIV
RNS Number : 1603A
Livermore Investments Group Limited
25 September 2015
24 September 2015
LIVERMORE INVESTMENTS GROUP LIMITED
UNAUDITED INTERIM RESULTS FOR SIX MONTHS ENDED 30 JUNE 2015
Livermore Investments Group Limited (the "Company" or
"Livermore") today announces its interim results for the six months
ended 30 June 2015.
For further investor information please go to
www.livermore-inv.com.
Enquiries:
Livermore Investments Group Limited +41 43 344 3200
Arden Partners plc +44 (0)20 7614 5917
Steve Douglas
Patrick Caulfield
Chairman's and Chief Executive's Review
Introduction
We are pleased to announce the interim consolidated financial
results for Livermore Investments Group Limited (the "Company" or
"Livermore") and its subsidiaries (together the "Group") for the
six months ended 30 June 2015.
During the first half of 2015, the Group generated net income of
USD 1.96m (30 June 2014: USD 10.86m), which represents earnings per
share of USD 0.01 (30 June 2014: USD 0.06). The Group paid an
interim dividend of USD 5m in March 2015 (USD 0.0256 per share).
The NAV of the Group as of 30 June 2015 was USD 0.81 per share
after payment of the interim dividend. During the reporting period,
management continued to actively manage the financial portfolio and
optimized exposure to US credit markets, which continues to provide
attractive risk adjusted returns, albeit at a lower rate than prior
years.
Wyler Park, our investment property in Bern, Switzerland
performed well, generating over CHF 2.7m in rent during the period.
The property is fully rented. Valuation of Wyler Park has remained
stable.
In September 2015, the lease with SBB for the Wyler Park
property was extended from 2019 to 2029. As part of the lease
extension agreement, the owner will invest up to a maximum of CHF
3.95m (USD 4.22m) and SBB is expected to invest up to CHF 9m to
upgrade the property and allow for additional workspaces.
There were no significant developments in the private equity
portfolio during the period.
Financial Review
The NAV of the Group as at 30 June 2015 was approximately USD
157.8m (30 June 2014: 168.2m). The profit after tax for the first
half of 2015 was USD 1.96m, which represents earnings per share of
USD 0.01. The performance relates largely to gains on the credit
portfolio and net income from Wyler Park offset by write downs on
certain investments.
30 June 2015 30 June 2014 31 December 2014
----------------------------------------------------- ------------- ------------- -----------------
US $m US $m US $m
----------------------------------------------------- ------------- ------------- -----------------
Shareholders' funds at beginning of period 160.0 168.4 168.4
----------------------------------------------------- ------------- ------------- -----------------
___________ ___________ ___________
----------------------------------------------------- ------------- ------------- -----------------
Income from investments 14.6 16.8 31.8
----------------------------------------------------- ------------- ------------- -----------------
Other income - 0.5 0.5
----------------------------------------------------- ------------- ------------- -----------------
Realised (losses) / gains on investments (0.5) 1.2 (1.6)
----------------------------------------------------- ------------- ------------- -----------------
Loss on impairment on investments (10.8) (1.6) (8.9)
----------------------------------------------------- ------------- ------------- -----------------
Unrealised gains / (losses) on investments 0.7 (6.4) (9.4)
----------------------------------------------------- ------------- ------------- -----------------
Unrealised exchange gains / (losses) 0.5 - (0.6)
----------------------------------------------------- ------------- ------------- -----------------
Administration costs (1.9) (2.7) (7.2)
----------------------------------------------------- ------------- ------------- -----------------
Net finance costs 0.4 (2.4) (7.2)
----------------------------------------------------- ------------- ------------- -----------------
Tax charge (0.2) (0.6) (0.8)
----------------------------------------------------- ------------- ------------- -----------------
___________ ___________ ___________
----------------------------------------------------- ------------- ------------- -----------------
Increase / (decrease) in net assets from operations 2.8 4.8 (3.4)
----------------------------------------------------- ------------- ------------- -----------------
Purchase of own shares - - -
----------------------------------------------------- ------------- ------------- -----------------
Dividends paid (5.0) (5.0) (5.0)
----------------------------------------------------- ------------- ------------- -----------------
___________ ___________ ___________
----------------------------------------------------- ------------- ------------- -----------------
Shareholders' funds at end of period 157.8 168.2 160.0
----------------------------------------------------- ------------- ------------- -----------------
------ ------ ------
----------------------------------------------------- ------------- ------------- -----------------
Net Asset Value per share US $0.81 US $0.86 US $0.82
----------------------------------------------------- ------------- ------------- -----------------
Livermore's Strategy
The financial portfolio is focused on fixed income instruments
which generate regular cash flows and include exposure mainly to
senior secured and usually broadly syndicated US loans and to a
limited extent emerging market debt through investments in CLOs.
This part of the portfolio is geographically focused on the US with
some exposure to Europe and emerging markets.
The remaining portfolio is focused on Switzerland and Asia with
investments primarily in real estate and select private equity
opportunities. Investments are focused on sectors that Management
believes will provide superior growth over the mid to long term
with relatively low downside risk.
Strong emphasis is given to maintaining sufficient liquidity and
low leverage at the overall portfolio level and to re-invest in
existing and new investments along the economic cycle.
Repurchase of shares
Between 31 December 2014 and 30 June 2015, the Company did not
repurchase any additional shares. On 30 June 2015, the Company held
108,830,818 shares in treasury. Also no additional shares were
purchased between 30 June 2015 and before the beginning of the
interim closed period.
Dividends
In March 2015, the Company announced and paid an interim
dividend of USD 5m (USD 0.0256 per ordinary share).
The Board of Directors will decide on the Company's dividend
policy for 2015 based on profitability, liquidity requirements,
portfolio performance, market conditions, and the share price of
the Group relative to its NAV.
Richard Rosenberg Noam Lanir
Chairman Chief Executive
24 September 2015
Review of Activities
Economic & Investment Environment
Global economic growth was weaker than expected in the first
quarter of 2015. US GDP growth amounted to 0.6% and the Chinese
economic growth continued to cool. In the Euro area, however, the
economy continued to pick up, supported by persistent euro weakness
and improved lending conditions on the back of the European Central
Bank's (ECB) quantitative easing (QE) program. In Japan, too, the
economy gained momentum. In the second quarter, however, US GDP
grew by 3.7% as the West Coast port delays and the unusually harsh
winter subsided. The Euro area grew by 0.5% in the second quarter
whereas Japan GDP declined by 0.3%. Labour conditions continued to
improve in the US with the unemployment rate falling to 5.3% in
June 2015. Labour force participation rate, however, has remained
at historic lows. With continued improvement in labour conditions,
the Federal Reserve has indicated raising interest rates sometime
this year, causing the US Dollar to appreciate versus other
currencies. A stronger US Dollar, slowing economic growth in China,
and excess supply has resulted in steep declines in commodity and
energy prices, which along with modest wage growth is likely to
keep inflation low in the near future.
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In January 2015, the ECB announced an extensive QE program to
purchase EUR 60bn of government bonds each month until at least
September 2016. This resulted in the Euro declining from 1.21
against the US Dollar at the start of the year to 1.05 in March
before recovering to 1.11 at the end of June 2015. By April 2015,
the EuroStoxx 50 Index had shot up 21.5% from its level at the
start of the year. Sovereign bond yields declined significantly
with the German bonds yielding just 7.5bps at its lows. In
anticipation of the QE program from the ECB and the resultant
expected pressure on the Swiss Franc, the Swiss National Bank (SNB)
removed the floor of 1.20 Swiss Francs per Euro in January and
negative rates to deter safe haven flows into the currency. The
Swiss Franc surged higher against most currencies after removal of
the floor and closed at 1.042 Swiss Francs per Euro as at 30 June
2015 and Swiss government bond yields declined to yield negative
rates across almost all maturities up to 10 years. While European
equity markets were generally higher in the first half of the year,
a stronger US Dollar and anticipation of increasing rates in the US
kept the S&P 500 Index range bound.
Oil prices declined further in January with West Texas
Intermediate Crude dropping from USD 58/barrel to USD 51.5/barrel
but recovered to end up at USD 60.10/barrel as of 30 June 2015.
Despite lower oil prices, supply increased as the OPEC nations
produced more oil to retain market share and push leveraged oil
producers out of the market. Concerns of a sharp slowdown in China
further weighed on oil and commodity prices and prices have dropped
further post the reporting period. Lower commodity and energy
prices are expected to give a boost to consumers around the world,
which may help increase economic growth. At the same time, however,
cutbacks in investment spending related to energy and commodity
production will likely limit the positive contribution from lower
prices in the near term.
High yield and leveraged loans experienced higher volatility as
the spectre of higher US interest rates and exposure to energy and
commodity issuers dampened investor sentiment. At the same time,
continued strong issuance of Collateralized Loan Obligations (CLOs)
provided stability to the leveraged loan market. The S&P/LSTA
Leveraged Loan Index generated a total return of 2.82% during the
first half of the year as compared to a total return of 2.5% from
the Bank of America US High Yield Index.
Sources: Swiss National Bank (SNB), European Central Bank (ECB),
US Federal Reserve, Bloomberg
Review of Significant Investments
Name Book Value
US $m
-------------------- ------------
Wyler Park* 53.0
-------------------- ------------
SRS Charminar 9.1
-------------------- ------------
Other Real Estate
Assets 1.2
-------------------- ------------
Total 63.3
-------------------- ------------
* Net of related loan.
Wyler Park - Switzerland
Wyler Park is a top quality mixed-use property located in Bern,
Switzerland. It has over 16,800 square meters of commercial area,
4,100 square meters of residential area, and another 7,100 square
meters available for additional commercial development. The
commercial part is leased entirely to SBB (AAA rated), the Swiss
national train transportation authority wholly owned by the Swiss
Confederation, and serves as the headquarters of their Passenger
Traffic division. The commercial lease is 100% linked to inflation.
The annual rental income from the commercial area of the project is
CHF 4.36m (USD 4.66m).
In September 2015, the lease with SBB for the Wyler Park
property was extended from 2019 to 2029. As part of the lease
extension agreement, the owner will invest up to a maximum of CHF
3.95m (USD 4.22m) and SBB is expected to invest up to CHF 9m (USD
9.62m) to upgrade the property and allow for additional
workspaces.
Following the successful development of 39 residential
apartments, the entire property is now fully rented. The annual
rental income expected from the residential area is CHF 1.04m (USD
1.11m).
The property generated rent of CHF 2.7m (USD 2.9m) during the
first half of 2015.
Livermore is the sole owner of Wyler Park through its wholly
owned Swiss subsidiary, Livermore Investments AG. In January 2015,
management successfully refinanced the previous loan against Wyler
Park with a Swiss bank. The outstanding principal of the new loan
facility is CHF 66.5m (USD 71.1m). The facility is committed until
at least 30 June 2019. Following the lease extension agreement with
SBB from 2019 to 2029, an additional CHF 10m (USD 10.69m) is
available under this facility. The loan is a non-recourse loan to
Livermore Investments AG backed only by this property.
Management continues to evaluate the potential development of
the additional commercial development rights of 7,100 square meters
attached to the property.
SRS Charminar - India
Livermore invested USD 20m in 2008 in a leading Indian Real
Estate company, in association with SRS Private and other investors
as part of a total investment of USD 132.1m. In 2009, the promoters
of the investee company were arrested on charges of criminal
conspiracy, cheating, and misappropriation of funds. Later it was
discovered that the investee company had breached the terms of the
investment agreement resulting in a default. On 13 January 2011 the
Company Law Board ("CLB") passed an order and allowed
Infrastructure Leasing & Financial Services Limited
("IL&FS") to become an 80% shareholder and control the
management of the investee company. SRS Charminar and other
investors have agreed to a settlement with IL&FS wherein the
settlement amount will be paid in four tranches over five
years.
The carrying amount of the investment is based on discounted
expected cash flows and as of period-end was USD 9.1m (December
2014: USD 9.1m).
Private Equity Funds
The other private equity investments held by the Group are
incorporated in the form of Managed Funds (mostly closed end funds)
mainly in the emerging economies of India and China. The
investments of these funds into their portfolio companies were
mostly done in 2008 and 2009. Overall, during 2015 the investment
environment relating to most funds was challenging and the Group
expects that material exits of portfolio companies should
materialize between 2016 and 2018. During the reporting period,
Livermore received a distribution-in-kind from Evolution Fund in
the form of shares of Whitesmoke Software Ltd, a company listed in
Israel. Livermore received USD 0.049m from its investment in Blue
Ridge fund, which is primarily liquidated.
The following summarizes the book value of the private equity
funds as at 30 June 2015:
Name Book Value
US $m
----------------------- ------------
SRS Private (India) 2.7
----------------------- ------------
Evolution Venture
(Israel) 2.6
----------------------- ------------
Elephant Capital
(India) 0.5
----------------------- ------------
Panda Capital
(China) 0.4
----------------------- ------------
Da Vinci (Russia) 0.3
----------------------- ------------
Blue Ridge (China) 0.06
----------------------- ------------
India Blue Mountains -
(India)
----------------------- ------------
Other investments 0.6
----------------------- ------------
Total 7.1
----------------------- ------------
SRS Private: SRS Private is a private equity fund focused on
real estate in India. The fund has invested in residential and
commercial projects as well as directly in certain real estate
companies. The assets are primarily located in and around major
cities of India such as Mumbai and Hyderabad.
Evolution Venture: Evolution is an Israel focused venture
capital fund. It invests in early stage technology companies. Its
investments include a carrier-class Mobile Broadband Wireless (MBW)
Wi-Fi solutions company, Whitesmoke Software Ltd (a Tel-Aviv listed
language enhancement products company), a software company
operating in the digital radio market, a software test tool
developer, and a virtualization technology company. The Wi-Fi
solutions company, language enhancements product company and the
virtualization technology company have been performing well.
Livermore received a distribution-in-kind in the form of shares of
Whitesmoke Software Ltd as a partial exit from the fund's position
in Whitesmoke.
Elephant Capital: India-focused private equity fund, which is
AIM quoted (Ticker: ECAP). During the period, the fund sold its
remaining holdings in Nitco Limited for GBP 0.16m and bought back
5,000,000 shares for GBP 1m.
As of 28 February 2015, the fund reported an audited NAV of 36
pence per share. Additional information about the fund and its
portfolio is available at www.elephantcapital.com.
Panda Capital: Panda Capital is a China-based private equity
fund focused on early-stage industrial operations in China. The
fund's main investment is in a bamboo flooring company in China,
which provides an innovative low cost alternative to hardwood
flooring in shipping containers. The manager is in the process of
building up operational capacity for product manufacturing.
Da Vinci: The fund is primarily focused on Russia and CIS
countries and is primarily invested in the Moscow Exchange and a
Ukrainian coal company. The Moscow Exchange continues to perform
well in local currency terms. The coal company is located in
Western Ukraine. The Group's investment in the fund was valued at
USD 0.3m as of 30 June 2015.
Blue Ridge: Blue Ridge is a China focused private equity fund.
The fund is mostly wound down and distributed USD 0.049m during the
period.
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India Blue Mountains: India Blue Mountains is a hotel and
hospitality development fund that is developing 4 star and 5 star
hotels in India. The fund has acquired land to develop three hotels
in prime areas of Mumbai, Pune and Goa. All hotels will be managed
by the Accor Group (Novotel brands). Accor has also invested equity
and holds a 26% stake in all of the hotels. The Pune hotel is now
operational but occupancy has been lower than expected.
During the reporting period, the fund reorganized itself into
three separate companies holding the individual assets separately
and raised capital to fund operations and interest costs. Livermore
decided not to participate in the capital raise as it believes that
asset values are not likely to be in excess of the debt load.
Financial Investments and Corporate Bond Trading
The Group manages a financial portfolio valued at USD 90.4m (net
of leverage) as at 30 June 2015, which is invested mainly in US
credit and fixed income securities.
Senior Secured Loans and CLOs:
The US senior secured loan market continued to offer good risk
adjusted returns as a floating rate asset class with a senior
secured claim on the borrower and with overall low volatility and
low correlation to the equity market. CLOs are managed portfolios
invested into diversified pools of senior secured loans and
financed with long term financing pre-fixed at the time of
issuance.
The US leveraged loan market performed reasonably well during
the first half of the year with the Credit Suisse Leveraged Loan
Index returning 2.9%, albeit with heightened volatility driven by
broader markets, increased participation of retail and high yield
funds, and a steady deterioration in energy and commodity prices.
As at the end of June 2015, the US loan market twelve month rolling
default rate by number of issuers was 0.81%. Livermore expects
default rates to stay low in the near future although defaults
rates from Oil, Gas and Coal related issuers are likely to
underperform and push the default rate higher.
After a record level of US CLO new issue volume in 2014, CLO
supply has continued to be strong in 2015. Despite mark-to-market
volatility on CLO equity tranches, cash flows to the equity tranche
have remained high and even increased as CLO managers take
advantage of higher spread and lower loan prices available in the
market.
During the first half of 2015 the Group continued to re-invest
distributions from its CLO portfolio into new issue CLO
transactions. The Group also provided first loss investments into
credit facilities to secure and warehouse collateral for its
upcoming CLO transactions.
The Group's US CLO portfolio continued to perform well on
account of low current default rates, a low default outlook and
wider loan spreads. At the end of the reporting period all of our
US CLO investments were passing their coverage tests (thereby
making dividend distributions). During the period, the CLO
portfolio generated USD 11.99m in cash distributions, as well as
earning USD 0.41m on warehousing facilities. Cash payments to CLO
equity increased somewhat as CLO managers used volatility in the
loan market to increase portfolio spreads. The Group has continued
to reduce exposure to CLOs with shorter reinvestment periods and
focus on new issue CLOs. As at 30 June 2015, over 85% of the Group
CLO portfolio is invested in post-crisis CLOs.
Secondary market prices for CLOs fell further in January but
rose higher until May as loan prices recovered along with oil
prices. In June and subsequent months, however, secondary market
prices have declined following a sharp fall in oil and commodity
prices, re-emergence of the Greek debt crisis, a currency
devaluation from China along with concerns around the first rate
hike in the US. While the Group's US CLO portfolio performed better
than market, its global and emerging market credit CLO portfolio
was further impacted by deteriorating conditions in emerging
markets. Management continues to monitor developments in this
portfolio.
As few loans mature in the near term and the US economy
continues to grow, corporate defaults are expected to remain low
with the exception of certain energy related companies. Management
believes that the environment should remain attractive for
investments in CLO income notes. In the first half of 2015,
Livermore launched two new issue cash-flow CLOs as an anchor
investor.
While management maintains a positive view on the CLO portfolio,
mid-long term performance may be negatively impacted by a strong
pull back in the US or European economy or geo-political events
that could result in a spike in defaults. Despite positive
developments in the overall health of the US economy, we
acknowledge the continued below trend growth globally especially in
Europe, China and other emerging markets as well as headwinds
relating to the potential monetary tightening in the US and
geopolitical risks.
30 Percentage 31 Dec Percentage
June 2014
2015 Amount
Amount
US US $000
$000
US CLOs 63,556 86.0% 68,704 83.6%
Global Credit
CLOs 9,124 12.3% 12,008 14.6%
European
CLOs 1,234 1.7% 1,505 1.8%
------ ------ ------ ------
73,914 100% 82,217 100%
------ ------ ------ ------
The following is a table summarizing the financial portfolio as
at 30 June 2015
Name 30 June 30 June 31 December 2014
2015 2014 Book Value US
Book Value Book Value $m
US $m US $m
------------------- ------------- ----------- ----------------
Investment in
the loan market
through CLOs 73.9 92.0 82.2
------------------- ------------- ----------- ----------------
Babylon 1.0 2.8 0.9
------------------- ------------- ----------- ----------------
Corporate Bonds 1.7 1.6 2.0
------------------- ------------- ----------- ----------------
Hedge Funds 1.1 1.3 1.1
------------------- ------------- ----------- ----------------
Other Public
Equities 1.8 2.4 1.9
------------------- ------------- ----------- ----------------
Total 79.5 100.1 88.1
------------------- ------------- ----------- ----------------
Total net of
leverage 90.4* 94.0 99.1
------------------- ------------- ----------- ----------------
* this figure includes USD 11.3m which the Company invested
during the period in the first loss tranche of warehouse facilities
for accumulating loans with the intention to transfer these loans
to a CLO.
The following table reconciles the review of activities to the
Group's financial assets and investment property as at 30 June
2015.
Name 30 June
2015
Book Value
US $m
-------------------------- -------------
Significant investments 63.3
-------------------------- -------------
Private Equity Funds 7.1
-------------------------- -------------
Financial portfolio 79.5
-------------------------- -------------
Total 149.9
-------------------------- -------------
Available-for sale
financial assets
(note 4) 91.6
-------------------------- -------------
Financial assets
at fair value through
profit or loss (note
5) 5.3
-------------------------- -------------
Net Investment property
(notes 8/16) 53.0
-------------------------- -------------
Total 149.9
-------------------------- -------------
Events after the reporting date
Events after the reporting date are described in note 30 to the
interim consolidated financial statements.
Litigation
Information is provided in note 28 to the interim condensed
consolidated financial statements.
Livermore Investments Group Limited
Condensed Consolidated Statement of Financial Position
as at 30 June 2015
30 June 30 June 31 December
2015 2014 2014
Note Unaudited Unaudited Audited
US $000 US $000 US $000
Assets
Non-current assets
Property, plant and equipment 37 23 42
Available-for-sale financial assets 4 89,367 110,144 99,374
Financial assets at fair value through profit or loss 5 1,518 2,122 1,806
Investment property 8 123,812 129,953 116,609
Investments in associate and joint venture 9 3,750 - -
Other assets 11 1,692 2,961 2,538
-------- -------- --------
220,176 245,203 220,369
-------- -------- --------
Current assets
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Trade and other receivables 11 12,823 13,065 20,890
Available-for-sale financial assets 4 2,247 3,018 2,561
Financial assets at fair value through profit or loss 5 3,772 5,987 3,704
Current tax asset 9 - -
Derivative financial instruments 15 192 - 1,125
Cash at bank 12 12,340 9,996 3,807
-------- -------- --------
31,383 32,066 32,087
-------- -------- --------
Total assets 251,559 277,269 252,456
-------- -------- --------
Equity
Share capital 13 - - -
Share premium and treasury shares 13 178,597 178,597 178,597
Other reserves 3,839 7,485 2,937
Retained earnings (24,599) (17,908) (21,560)
-------- -------- --------
Total equity 157,837 168,174 159,974
-------- -------- --------
Liabilities
Non-current liabilities
Bank loans 16 67,511 - -
Deferred tax 2,535 2,413 2,272
-------- -------- --------
70,046 2,413 2,272
-------- -------- --------
Current liabilities
Bank loans 16 3,315 87,635 78,092
Bank overdrafts 12 18,817 13,527 10,355
Short term bank loans - 2,377 -
Trade and other payables 17 1,544 2,752 1,758
Current tax payable - 13 5
Derivative financial instruments 15 - 378 -
-------- -------- --------
23,676 106,682 90,210
-------- -------- --------
Total liabilities 93,722 109,095 92,482
-------- -------- --------
Total equity and liabilities 251,559 277,269 252,456
-------- -------- --------
Net asset valuation per share
Basic and diluted net asset valuation per share (US $) 18 0.81 0.86 0.82
-------- -------- --------
Livermore Investment Group Limited
Condensed Consolidated Statement of Profit or Loss
for the six months ended 30 June 2015
---------------------------------------------------- -------------------------------------------
Note Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Investment Income
Interest and dividend income 20 11,850 14,069 26,619
Investment property income 21 2,738 2,698 5,159
Loss on investments 22 (10,944) (616) (9,885)
------ ------ ------
Gross profit 3,644 16,151 21,893
Other income - 450 462
Administrative expenses 23 (1,879) (2,665) (7,219)
------ ------ ------
Operating profit 1,765 13,936 15,136
Finance costs 24 (1,276) (2,457) (7,286)
Finance income 24 1,677 11 109
------ ------ ------
Profit before taxation 2,166 11,490 7,959
Taxation charge (206) (634) (755)
------ ------ ------
Profit for period / year 1,960 10,856 7,204
------ ------ ------
Earnings per share
Basic and diluted earnings per share (US $) 26 0.------01 0.06 0.04
------ ------ ------
Livermore Investment Group Limited
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2015
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Profit for the period / year 1,960 10,856 7,204
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss
* Available for sale financial assets - fair value
losses (11,032) (5,258) (17,128)
* Foreign exchange gains / (losses) from translation of
subsidiaries 529 (3) (626)
------ ------ ------
(8,543) 5,595 (10,550)
------ ------ ------
Reclassification to profit or loss
Available for sale financial assets
* Reclassification to profit or loss due to disposals 577 (2,409) (1,709)
* Reclassification to profit or loss due to impairment 10.828 1,616 8,861
------ ------ ------
11,405 (793) 7,152
------ ------ ------
Total comprehensive income for the period / year 2,862 4,802 (3,398)
------ ------ ------
The total comprehensive income for the period is wholly
attributable to the owners of the parent company.
Livermore Investments Group Limited
Condensed Consolidated Statement of Changes in Equity
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for the period ended 30 June 2015
Note Share Share Treasury Share Translation Investment Retained Total
capital premium Shares option reserve revaluation earnings
reserve reserve
US $000 US $000 US $000 US $000 US $000 US $000 US $000 US $000
Balance at 1 January 2014 - 215,499 (36,902) 5,777 (788) 8,550 (23,765) 168,371
Dividends - - - - - - (4,999) (4,999)
------ ------ ------ ------ ------ ------ ------ ------
Transactions with owners - - - - - - (4,999) (4,999)
------ ------ ------ ------ ------ ------ ------ ------
Profit for the year - - - - - 7,204 7,204
Other comprehensive income:
Available-for-sale financial assets
* Fair value losses - - - - - (17,128) - (17,128)
* Reclassification to profit or loss due to disposals - - - - - (1,709) - (1,709)
* Reclassification to profit or loss due to impairment - - - - - 8,861 - 8,861
Foreign exchange loss arising from translation of subsidiaries - - - - (626) - - (626)
------ ------ ------ ------ ------ ------ ------ ------
Total comprehensive income for the year - - - - (626) (9,976) 7,204 (3,398)
------ ------ ------ ------ ------ ------ ------ ------
Balance at 31 December 2014 - 215,499 (36,902) 5,777 (1,414) (1,426) (21,560) 159,974
Dividends - - - - - - (4,999) (4,999)
------ ------ ------ ------ ------ ------ ------ ------
Transactions with owners - - - - - - (4,999) (4,999)
------ ------ ------ ------ ------ ------ ------ ------
Profit for the period - - - - - - 1,960 1,960
Other comprehensive income:
Available-for-sale financial assets
* Fair value losses - - - - - (11,032) - (11,032)
* Reclassification to profit or loss due to disposals - - - - - 577 - 577
* Reclassification to profit or loss due to impairment - - - - - 10,828 - 10,828
Foreign exchange gain arising from translation of subsidiaries - - - - 529 - - 529
------ ------ ------ ------ ------ ------ ------ ------
Total comprehensive income for the period - - - - 529 373 1,960 2,862
------ ------ ------ ------ ------ ------ ------ ------
Balance at 30 June 2015 - 215,499 (36,902) 5,777 (885) (1,053) (24,599) 157,837
------ ------ ------ ------ ------ ------ ------ ------
Comparative period Share Share Treasury Share Translation Investment Retained Total
capital premium Shares option reserve revaluation earnings
Note reserve reserve
US $000 US $000 US $000 US $000 US $000 US $000 US $000 US $000
Balance at 1 January 2014 - 215,499 (36,902) 5,777 (788) 8,550 (23,765) 168,371
Dividends - - - - - - (4,999) (4,999)
------ ------ ------ ------ ------ ------ ------ ------
Transactions with owners - - - - - - (4,999) (4,999)
------ ------ ------ ------ ------ ------ ------ ------
Profit for the period - - - - - - 10,856 10,856
Other comprehensive income:
Available-for-sale financial assets
* Fair value losses - - - - - (5,258) - (5,258)
* Reclassification to profit or loss due to disposal - - - - - (2,409) - (2,409)
* Reclassification to profit or loss due to impairment - - - - - 1,616 - 1,616
Foreign exchange loss arising from translation of subsidiaries - - - - (3) - - (3)
------ ------ ------ ------ ------ ------ ------ ------
Total comprehensive income for the period - - - - (3) (6,051) 10,856 4,802
------ ------ ------ ------ ------ ------ ------ ------
Balance at 30 June 2014 - 215,499 (36,902) 5,777 (791) 2,499 (17,908) 168,174
------ ------ ------ ------ ------ ------ ------ ------
Livermore Investments Group Limited
Condensed Consolidated Statement of Cash Flows
for the period ended 30 June 2015
Note Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Cash flows from operating activities
Profit before tax 2,166 11,490 7,959
Adjustments for:
Depreciation expense 23 4 - 13
Interest expense 24 808 2,159 3,780
Interest and dividend income 20 (11,850) (14,069) (26,619)
Loss on investments 22 10,944 616 9,885
Exchange differences (1,390) 298 3,506
------ ------ ------
682 494 (1,476)
Changes in working capital
Decrease / (increase) in trade and other receivables 9,271 (9,422) (16,292)
Decrease in trade and other payables (162) (30) (1,050)
------ ------ ------
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Cash flows from operations 9,791 (8,958) (18,818)
Interest and dividend received 11,197 13,981 25,773
Tax paid (13) (134) (167)
------ ------ ------
Net cash generated from operating activities 20,975 4,889 6,788
------ ------ ------
Cash flows from investing activities
Purchase of property, plant and equipment - - (32)
Acquisition of investments (11,118) (22,498) (27,340)
Proceeds from sale of investments 10,743 29,038 33,262
Settlement of derivative 1,332 - -
Acquisition of associate 9 (3,750) - -
Capital return of joint venture 9 - 5,000 5,000
------ ------ ------
Net cash from investing activities (2,793) 11,540 10,890
------ ------ ------
Cash flows from financing activities
Purchases of own shares - - -
Proceeds from bank loans 72,430 7,242 7,242
Repayment of bank loans (84,520) (8,704) (11,547)
Interest paid (870) (2,159) (3,884)
Settlement of litigation - (26) (26)
Dividends paid (4,999) (4,999) (4,999)
------ ------ ------
Net cash from financing activities (17,959) (8,646) (13,214)
------ ------ ------
Net increase / (decrease) in cash and cash equivalents 223 7,783 4,464
Cash and cash equivalents at the beginning of the period / year (6,548) (11,038) (11,038)
Exchange differences on cash and cash equivalents (181) (276) 93
Translation differences on foreign operations' cash and cash equivalents 29 - (67)
------ ------ ------
Cash and cash equivalents at the end of the period / year 12 (6,477) (3,531) (6,548)
------ ------ ------
Notes to the Financial Statements
1. Accounting policies
The interim condensed consolidated financial statements of
Livermore have been prepared on the basis of the accounting
policies and basis of consolidation stated in the 2014 Annual
Report, available on www.livermore-inv.com. The application of the
IFRS pronouncements that became effective as of 1 January 2015 has
no significant impact on the Group's consolidated financial
statements.
2. Critical accounting judgements and estimation uncertainty
When preparing the interim condensed consolidated financial
statements, management undertakes a number of judgements, estimates
and assumptions about recognition and measurement of assets,
liabilities, income and expenses. The actual results may differ
from the judgements, estimates and assumptions made by management,
and will seldom equal the estimated results. The judgements,
estimates and assumptions applied in the interim condensed
consolidated financial statements, including the key sources of
estimation uncertainty were the same as those applied in the
Group's last annual consolidated financial statements for the year
ended 31 December 2014. The only exception is the estimate of the
provision for income taxes which is determined in the interim
financial statements using the estimated average annual effective
income tax rate applied to the pre-tax income of the interim
period.
3. Basis of preparation
These unaudited interim condensed consolidated financial
statements are for the six months ended 30 June 2015. They have
been prepared in accordance with IAS 34 "Interim Financial
Reporting" as adopted by the European Union. They do not include
all of the information required for full annual consolidated
financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the year ended
31 December 2014.
The financial information for the year ended 31 December 2014 is
extracted from the Company's consolidated financial statements for
the year ended 31 December 2014 which contained an unqualified
audit report.
4. Available-for-sale financial assets
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Non-current assets
Fixed income investments 73,914 91,962 82,217
Private equities 6,187 9,114 7,891
Financial and minority holdings 9,266 9,068 9,266
------ ------ ------
89,367 110,144 99,374
------ ------ ------
Current assets
Public equities investments 1,156 1,959 1,491
Hedge funds 1,091 1,057 1,070
Other investments - 2 -
------ ------ ------
2,247 3,018 2,561
------ ------ ------
For description of each of the above categories, refer to note
6.
During the six months ended 30 June 2015, due to market
conditions, management considered the impairment of certain
available-for-sale financial assets. Impairment testing indicated
that for those financial assets their carrying amount may not be
recoverable.
The related impairment charges for the six months ended 30 June
2015, of USD 10.828m (June 2014: USD 1.616m, December 2014: USD
8.861m), are included within loss on investments (note 22), and
represent impairment losses arising due to:
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Significant fall in value 2,175 1,400 5,693
Prolonged fall in value 3,560 216 1,328
Significant and prolonged fall in value 5,093 - 1,840
------ ------ ------
10,828 1,616 8,861
------ ------ ------
5. Financial assets at fair value through profit or loss
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Non-current assets
Private equities 330 569 330
Real estate entities 1,188 1,553 1,476
------ ------ ------
1,518 2,122 1,806
------ ------ ------
Current assets
Fixed income investments 1,649 1,645 1,623
Public equity investments 2,080 3,845 1,717
Hedge funds 43 199 65
Other investments - 298 299
------ ------ ------
3,772 5,987 3,704
------ ------ ------
For description of each of the above categories, refer to note
6.
6. Financial assets at fair value
The Group allocates its non-derivative financial assets at fair
value (notes 4 and 5) as follows:
-- Fixed income investments relate to fixed and floating rate
bonds, perpetual bank debt, and investments in the loan market
through CLOs.
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-- Private equities relate to investments in both high growth
opportunities in emerging markets and deep value opportunities in
mature markets. The company generally invests directly in prospects
where it can exert significant influence.
-- Financial and minority holdings relate to significant
investments (of over USD 5m) which are strategic for the Company
and are done in the form of equity purchases or convertible loans.
Main investments under this category are in the fields of real
estate.
-- Hedge funds relate to investments in funds managed by
sophisticated investment managers that pursue investment strategies
with the goal of generating absolute returns.
-- Public equity investments relate to investments in shares of
companies listed on public stock exchanges.
-- Real estate entities relate to investments in real estate projects.
-- Other investments are investments not otherwise included in the categories above.
7. Fair value measurements of financial assets and liabilities
The following table presents financial assets measured at fair
value in the consolidated statement of financial position in
accordance with the fair value hierarchy. This hierarchy groups
financial assets and liabilities into three levels based on the
significance of inputs used in measuring the fair value of the
financial assets and liabilities. The fair value hierarchy has the
following levels:
- Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities that the entity can access at the
measurement date;
- Level 2: inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly
or indirectly; and
- Level 3: unobservable inputs for the asset or liability.
Valuation of financial assets and liabilities
-- Public Equities, and Fixed Income Investments are valued per
their closing bid market prices on quoted exchanges, or as quoted
by market maker.
The Group values the CLOs based on the valuation reports
provided by market makers. CLOs are typically valued by market
makers using discounted cash flow models. The key assumptions for
cash flow projections include default and recovery rates,
prepayment rates and reinvestment assumptions on the underlying
portfolios (typically senior secured loans) of the CLOs.
Default and recovery rates: The amount and timing of defaults in
the underlying collateral and the amount and timing of recovery
upon a default affect are key to the future cash flows a CLO will
distribute to the CLO equity tranche. All else equal, higher
default rates and lower recovery rates typically lead to lower cash
flows. Conversely, lower default rates and higher recoveries lead
to higher cash flows.
Prepayment rates: Senior loans can be pre-paid by borrowers.
CLOs that are within their reinvestment period may, subject to
certain conditions, reinvest such prepayments into other loans
which may have different spreads and maturities. CLOs that are
beyond their reinvestment period typically pay down their senior
liabilities from proceeds of such pre-payments. Therefore the rate
at which the underlying collateral prepays impacts the future cash
flows that the CLO may generate.
Reinvestment assumptions: A CLO within its reinvestment period
may reinvest proceeds from loan maturities, prepayments, and
recoveries into purchasing additional loans. The reinvestment
assumptions define the characteristics of the loans that a CLO may
reinvest in. These assumptions include the spreads, maturities, and
prices of such loans. Reinvestment into loans with higher spreads
and lower prices will lead to higher cash flows. Reinvestment into
loans with lower spreads will typically lead to lower cash
flows.
Discount rate: The discount rate indicates the yield that market
participants expect to receive and is used to discount the
projected future cash flows. Higher yield expectations or discount
rates lead to lower prices and lower discount rates lead to higher
prices for CLOs.
-- Hedge Funds and Private Equity Funds are valued per reports
provided by the funds on a periodic basis, and if traded, per their
closing bid market prices on quoted exchanges, or as quoted by
market maker.
-- Private Equities and unlisted investments are valued using
market valuation techniques as determined by the Directors, mainly
on the basis of discounted cash flow techniques or valuations
reported by third-party managers of such investments.
-- Derivative instruments are valued at fair value as provided
by counter parties of the derivative agreement.
-- The investment in associate is valued based on its underlying
credit agreement. The credit agreement's fair value is provided by
counter party bank.
Financial assets and financial liabilities measured at fair
value in the consolidated statement of financial position are
grouped into the fair value hierarchy as follows:
30 June 2015 Unaudited Unaudited Unaudited Unaudited
US $000 US $000 US $000 US $000
Level Level Level Total
1 2 3
Assets
Fixed income investments 1,648 73,914 - 75,562
Private equities - - 6,517 6,517
Financial and minority
holdings - - 9,266 9,266
Public equity investments 3,236 - - 3,236
Hedge funds - 1,134 - 1,134
Real estate entities - - 1,189 1,189
Forward contract - 192 - 192
------ ------ ------ ------
4,884 75,240 16,972 97,096
------ ------ ------ ------
30 June 2014 Unaudited Unaudited Unaudited Unaudited
US $000 US $000 US $000 US $000
Level Level Level Total
1 2 3
Assets
Fixed income investments 1,645 91,962 - 93,607
Private equities - - 9,683 9,683
Financial and minority
holdings - - 9,068 9,068
Public equity investments 5,804 - - 5,804
Hedge funds - 1,256 - 1,256
Real estate entities - - 1,553 1,553
Other investments 298 - 2 300
------ ------ ------ ------
7,747 93,218 20,306 121,271
------ ------ ------ ------
Liabilities
Interest rate swaps - 378 - 378
------ ------ ------ ------
- 378 - 378
------ ------ ------ ------
31 December 2014 Audited Audited Audited Audited
US $000 US $000 US $000 US
$000
Level Level Level Total
1 2 3
Assets
Fixed income investments 1,623 82,217 - 83,840
Private equities - - 8,221 8,221
Financial and minority
holdings - - 9,266 9,266
Public equity investments 3,208 - - 3,208
Hedge funds - 1,135 - 1,135
Real estate entities - - 1,476 1,476
Other investments 299 - - 299
Total return swaps - - 1,125 1,125
------ ------ ------ ------
5,130 83,352 20,088 108,570
------ ------ ------ ------
The methods and valuation techniques used for the purpose of
measuring fair value are unchanged compared to the previous
reporting period.
No financial assets or liabilities have been transferred between
levels.
Financial assets within level 3 can be reconciled from beginning
to ending balances as follows:
Available-for-sale At fair value Derivative
through profit financial
or loss instruments
Financial Private Other Real Private Total
and minority equities investments estate equities return
holdings swap Total
US $000 US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January
2015 9,266 7,891 - 1,476 330 1,125 20,088
Purchases - - - - - - -
Settlement - - - - - (1,332) (1,332)
Losses recognised
in:
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-Profit or loss - (890) - - - 207 (683)
-Other comprehensive
income - (814) - - - - (814)
Exchange difference - - - (287) - - (287)
------ ------ ------ ------ ------ ------ ------
As at 30 June
2015 9,266 6,187 - 1,189 330 - 16,972
------ ------ ------ ------ ------ ------ ------
Available-for-sale At fair value Derivative
through profit financial
or loss instruments
Financial Private Other Real Private Total
and minority equities investments estate equities return
holdings swap Total
US $000 US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January
2014 9,068 9,081 2 1,588 569 - 20,308
Purchases - 132 - - - - 132
(Losses) / gains
recognised in:
-Profit or loss - (217) - - - - (217)
-Other comprehensive
income - 118 - - - - 118
Exchange difference - - - (35) - - (35)
------ ------ ------ ------ ------ ------ ------
As at 30 June
2014 9,068 9,114 2 1,553 569 - 20,306
------ ------ ------ ------ ------ ------ ------
Available-for-sale At fair value Derivative
through profit financial
or loss instruments
Financial Private Other Real Private Total
and minority equities investments estate equities return
holdings swap Total
US $000 US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January
2014 9,068 9,081 2 1,588 569 - 20,308
Purchases - 323 - - - - 323
(Losses) / gains
recognised in:
-Profit or loss - (1,470) - 68 (239) 1,125 (516)
-Other comprehensive
income 198 (43) (2) - - - 153
Exchange difference - - - (180) - - (180)
------ ------ ------ ------ ------ ------ ------
As at 31 December
2014 9,266 7,891 - 1,476 330 1,125 20,088
------ ------ ------ ------ ------ ------ ------
The above recognised (losses) / gains can be allocated as
follows:
Available-for-sale At fair value Derivative
through profit financial
or loss instruments
Financial Private Other Real Private Total
and minority equities investments estate equities return
holdings swap Total
Six month ended US $000 US $000 US $000 US $000 US $000 US $000 US $000
30 June 2015
Profit or loss
-Financial assets
held at period-end - (890) - - - 207 (683)
------ ------ ------ ------ ------ ------ ------
- (890) - - - 207 (683)
------ ------ ------ ------ ------ ------ ------
Other comprehensive
income
-Financial assets
held at period-end - (814) - - - - (814)
------ ------ ------ ------ ------ ------ ------
- (814) - - - - (814)
------ ------ ------ ------ ------ ------ ------
Net (losses)
/ gains for period - (1,704) - - - 207 (1,497)
------ ------ ------ ------ ------ ------ ------
Available-for-sale At fair value Derivative
through profit financial
or loss instruments
Financial Private Other Real Private Total
and minority equities investments estate equities return
holdings swap Total
Six month ended US $000 US $000 US $000 US $000 US $000 US $000 US $000
30 June 2014
Profit or loss
-Financial assets
held at period-end - (217) - - - - (217)
------ ------ ------ ------ ------ ------ ------
- (217) - - - - (217)
------ ------ ------ ------ ------ ------ ------
Other comprehensive
income
-Financial assets
held at period-end - 118 - - - - 118
------ ------ ------ ------ ------ ------ ------
- 118 - - - - 118
------ ------ ------ ------ ------ ------ ------
Net losses for
period - (99) - - - - (99)
------ ------ ------ ------ ------ ------ ------
Available-for-sale At fair value Derivative
through profit financial
or loss instruments
Financial Private Other Real Private Total
and minority equities investments estate equities return
holdings swap Total
Year ended 31 US $000 US $000 US $000 US $000 US $000 US $000 US $000
December 2014
Profit or loss
-Financial assets
held at period-end - (1,470) - 68 (239) 1,125 (516)
------ ------ ------ ------ ------ ------ ------
- (1,470) - 68 (239) 1,125 (516)
------ ------ ------ ------ ------ ------ ------
Other comprehensive
income
-Financial assets
held at period-end 198 (43) (2) - - - 153
------ ------ ------ ------ ------ ------ ------
198 (43) (2) - - - 153
------ ------ ------ ------ ------ ------ ------
Net gains / (losses)
for year 198 (1,513) (2) 68 (239) 1,125 (363)
------ ------ ------ ------ ------ ------ ------
The Group has not developed any quantitative unobservable inputs
for measuring the fair value of its level 3 financial assets at the
reporting date. Instead the Group used prices from third - party
pricing information without adjustment.
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A reasonable change in any individual significant input used in
the level 3 valuations is not anticipated to have a significant
change in fair values as above.
8. Investment property
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Valuation as at 1 January 116,609 129,916 129,916
Fair value gain - recognised in profit or loss - - 61
Exchange differences 7,203 37 (13,368)
------ ------ ------
As at 30 June / 31 December 123,812 129,953 116,609
------ ------ ------
The investment property relates to Wyler Park property in Bern,
Switzerland, which is used for earning rental income. The Group has
no restrictions on the realisability of the property or the
remittance of income and any proceeds of disposals.
The investment property which is revalued at each year-end was
last valued by Wuest & Partners as at 31 December 2014 on the
basis of open market value (as disclosed in the 2014 annual report)
in accordance with the appraisal and valuation guidelines of the
Royal Institute of Certified Surveyors, and the European Group of
Valuers' Associations.
The Wyler Park property bank loan (note 16) is secured on the
property itself.
9. Investments in associate and joint venture
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
As at 1 January - 5,524 5,524
Additions 3,750 - -
Capital return - (5,000) (5,000)
Fair value (loss) / gain - (524) (524)
------ ------ ------
As at 30 June / 31 December 3,750 - -
------ ------ ------
Fair value
Name of Type of Place of Principal Proportion 30 June 30 June 31 December
investee investment incorporation activity of voting 2015 2014 2014
rights held Unaudited Unaudited Audited
US $000 US $000 US $000
Silvermore Joint venture Cayman Islands Investment 50%
Ltd holding - - -
Investment
Highbridge* Associate Cayman Islands holding 25% 3,750 - -
----- ----- -----
3,750 - -
------ ------ ------
*Highbridge Loan Management Warehouse 7-2015, Ltd is held by the
subsidiary Mountview Holdings Limited.
Silvermore was dissolved in January 2015
The activities of the associate are in line with the Group's
activities and strategy.
The associate (Highbridge) does not prepare any financial
information. As at the period end Highbridge was a contractual
party to a credit agreement with BNP Paribas. As at that date
Highbridge had no other assets or liabilities.
10. Details of subsidiaries
Details of the investments in which the Group has a controlling
interest are as follows:
Name of Subsidiary Place Holding Proportion Principal activity
of incorporation of voting
rights
and shares
held
Livermore Properties British Ordinary 100% Holding of investments
Limited Virgin shares
Islands
Mountview Holdings British Ordinary 100% Investment vehicle
Limited Virgin shares
Islands
Silvermore 2 Cayman Ordinary 100% Investment vehicle
Ltd Islands shares
Sycamore Loan Cayman Ordinary 100% Investment vehicle
Strategies Ltd Islands shares
Sycamore Loan Cayman Ordinary 100% Investment vehicle
Funding Ltd Islands shares
Livermore Israel Israel Ordinary 100% Holding of investments
Investments shares
Ltd
Blackline Investments USA Ordinary 52.5% Holding of investments
Inc. shares (Dormant)
Livermore Capital Switzerland Ordinary 100% Administration
AG shares services
Livermore Investments Switzerland Ordinary 100% Real Estate
AG* shares owner and management
Enaxor S.a.r.l Luxembourg Ordinary 100% Holding of investment
shares
Livermore Investments Cyprus Ordinary 100% Administration
Cyprus Limited shares services
Sandhirst Ltd Cyprus Ordinary 100% Holding of investments
shares
* Held by Enaxor S.a.r.l.
11. Trade and other receivables
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Financial items
Accrued interest and dividend income 735 112 514
Amounts due by related parties (note 27) 2,512 500 2,497
Other receivables 8,340 11,334 16,757
------ ------ ------
11,587 11,946 19,768
Non-Financial items
Other assets (note 27) 2,820 3,948 3,384
Prepayments 108 132 276
------ ------ ------
14,515 16,026 23,428
------ ------ ------
Allocated as:
Current assets 12,823 13,065 20,890
Non-current assets 1,692 2,961 2,538
------ ------ ------
14,515 16,026 23,428
------ ------ ------
Other receivables include an amount of USD 7.5m that the Company
invested during the period in the first loss tranche of a warehouse
facility for accumulating loans with the intention to transfer
these loans to a CLO which would be managed by MJX Asset Management
LLC. In June 2015, the said CLO was priced and the loans
accumulated in the warehouse were agreed to be transferred at
purchase price to the CLO on 10 July, 2015. Consequently,
Livermore's investment amount plus net carry earned became
receivable as of end of June. On 10 July 2015 Livermore received
USD 8.2m.
12. Cash and cash equivalents
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Cash and cash equivalents included in the cash flow statement
comprise the following at the reporting date:
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Cash at bank 12,340 9,996 3,807
Bank overdraft used for cash management purposes (18,817) (13,527) (10,355)
------ ------ ------
Cash and cash equivalents for the purposes of the consolidated statement of cash
flows (6,477) (3,531) (6,548)
------ ------ ------
13. Share capital, share premium and treasury shares
Livermore Investments Group Limited (the "Company") is an
investment company incorporated under the laws of the British
Virgin Islands. The Company has an issued share capital of
304,120,401 ordinary shares with no par value.
As at 30 June 2015 the Company had 108,830,818 ordinary shares
held in treasury. The Company did not purchase any additional
ordinary shares to be held in treasury during the period.
In the consolidated statement of financial position the amount
included comprises of:
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Share premium 215,499 215,499 215,499
Treasury shares (36,902) (36,902) (36,902)
------ ------ ------
178,597 178,597 178,597
------ ------ ------
14. Share options
The Company has 11,340,000 outstanding share options at the end
of the period. Options are normally exercisable in three equal
tranches, on the first, second and third anniversary of the grant.
There have been no changes to the term of the options in issue
during the period. No options have been exercised during the
period.
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Outstanding options
At 1 January 11,340,000 11,340,000 11,340,000
--------- --------- ---------
At 30 June / 31 December 11,340,000 11,340,000 11,340,000
--------- --------- ---------
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Exercisable options
At 1 January 11,340,000 11,340,000 11,340,000
--------- --------- ---------
At 30 June / 31 December 11,340,000 11,340,000 11,340,000
--------- --------- ---------
15. Derivative financial instruments
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Current assets
Total return swap - - 1,125
Forward contract 192 - -
------ ------ ------
Current liabilities
Interest rate swaps - 378 -
------ ------ ------
16. Bank loans
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
As at 1 January 78,092 87,974 87,974
Additions 72,724 - -
Repayments (84,520) (364) (830)
Exchange differences 4,824 25 (9,052)
Refinancing fees (294) - -
------ ------ ------
As at 30 June / 31 December 70,826 87,635 78,092
------ ------ ------
Allocated as:
Current bank loans 3,315 87,635 78,092
Non-current bank loans 67,511 - -
------ ------ ------
70,826 87,635 78,092
------ ------ ------
The bank loan relates to Wyler Park investment property purchase
(note 8) and is secured on this property. The loan balance was
fully repayable on 12 July 2014. The bank loan was extended for a
six month period and became fully repayable on 31 January 2015.
Additionally in January 2015, the Group successfully refinanced the
loan with a new bank loan. The principal amount of the new loan
facility is CHF 68 million (USD 73 million). The facility is
committed until at least 30 June 2019. Following the lease
extension agreement with SBB from 2019 to 2029, an additional CHF
10 million (USD 10.7 million) is available under this facility.
The weighted average effective Interest of the loan for the
period was 1.80%.
17. Trade and other payables
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Financial items
Trade payables 500 464 727
Amounts due to related parties (note 27) 565 1,247 579
Accrued expenses 394 967 430
------ ------ ------
1,459 2,678 1,736
Non-Financial items
VAT payable 85 74 22
------ ------ ------
1,544 2,752 1,758
------ ------ ------
18. Net asset value per share
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
Net assets attributable to ordinary shareholders (USD 000) 157,837 168,174 159,974
--------- --------- ---------
Closing number of ordinary share in issue 195,289,583 195,289,583 195,289,583
--------- --------- ---------
Basic net asset value per share (USD) 0.81 0.86 0.82
--------- --------- ---------
Net assets attributable to ordinary shareholders (USD 000) 157,837 168,174 159,974
Dilutive share options - exercise amount 230 255 234
--------- --------- ---------
Net assets attributable to ordinary shareholders including the effect of
potentially diluted
shares (USD 000) 158,067 168,429 160,208
------------- ------------- -------------
Closing number of ordinary shares in issue 195,289,583 195,289,583 195,289,583
Dilutive share options 500,000 500,000 500,000
------------- ------------- -------------
Closing number of ordinary shares including the effect of potentially
diluted shares 195,789,583 195,789,583 195,789,583
Diluted net asset value per share (USD) 0.81 0.86 0.82
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--------- --------- ---------
Number of Shares
Ordinary shares 304,120,401 304,120,401 304,120,401
Treasury shares (108,830,818) (108,830,818) (108,830,818)
--------- --------- ---------
Closing number of ordinary shares in issue 195,289,583 195,289,583 195,289,583
--------- --------- ---------
The Share options granted on 13 May 2008 have a dilutive effect
on the net asset value per share, given that their exercise price
is lower than the net asset value per Company's share at 30 June
2015, 30 June 2014 and 31 December 2014. All other share options do
not impact the diluted net asset value per share for June 2015,
June 2014 and December 2014 as their exercise price was higher than
the net asset value per Company's share at 30 June 2015, 30 June
2014 and 31 December 2014.
19. Segment reporting
The Group's monitoring and strategic decision making process in
relation to its investments, is separated into two activity lines,
which are also identified as the Group's operating segments. These
operating segments are monitored and strategic decisions are made
on the basis of segment operating results.
Segment information can be analysed as follows:
Six months ended 30 June 2015 - Unaudited Equity and debt
instruments Investment Total per
investment property financial
activities activities statements
Segment results 2015 2015 2015
US $000 US $000 US $000
Investment income
Interest and dividend income 11,850 - 11,850
Investment property income - 2,738 2,738
Loss on investments (10,944) - (10,944)
------ ------ ------
Gross profit 906 2,738 3,644
Administrative expenses (1,535) (344) (1,879)
------ ------ ------
Operating profit (629) 2,394 1,765
Finance costs (582) (694) (1,276)
Finance income 1,677 - 1,677
------ ------ ------
Profit before taxation 466 1,700 2,166
Taxation charge - (206) (206)
------ ------ ------
Profit for the period 466 1,494 1,960
------ ------ ------
Segment assets 126,416 125,143 251,559
------ ------ ------
Segment liabilities 19,762 73,960 93,722
------ ------ ------
Six months ended 30 June 2014 - Unaudited Equity and debt Investment Total per
instruments property financial
investment activities statements
activities
Segment results 2014 2014 2014
US $000 US $000 US $000
Investment income
Interest and dividend income 14,069 - 14,069
Investment property income - 2,698 2,698
(Loss) / gain on investments (2,016) 1,400 (616)
------ ------ ------
Gross profit 12,053 4,098 16,151
Other income 450 - 450
Administrative expenses (2,033) (632) (2,665)
------ ------ ------
Operating profit 10,470 3,466 13,936
Finance costs (622) (1,835) (2,457)
Finance income 11 - 11
------ ------ ------
Profit before taxation 9,859 1,631 11,490
Taxation charge - (634) (634)
------ ------ ------
Profit for the period 9,859 997 10,856
------ ------ ------
Segment assets 146,304 130,965 277,269
------ ------ ------
Segment liabilities 17,794 91,301 109,095
------ ------ ------
Year ended 31 December 2014 - Audited Equity and debt Investment Total per
instruments property financial
investment activities statements
activities
Segment results 2014 2014 2014
US $000 US $000 US $000
Investment income
Interest and dividend income 26,619 - 26,619
Investment property income - 5,159 5,159
(Loss) / gain on investments (9,946) 61 (9,885)
------ ------ ------
Gross profit 16,673 5,220 21,893
Other income 462 - 462
Administrative expenses (5,417) (1,802) (7,219)
------ ------ ------
Operating profit 11,718 3,418 15,136
Finance costs (4,254) (3,032) (7,286)
Finance income 109 - 109
------ ------ ------
Profit before taxation 7,573 386 7,959
Taxation charge - (755) (755)
------ ------ ------
Profit for the year 7,573 (369) 7,204
------ ------ ------
Segment assets 134,815 117,641 252,456
------ ------ ------
Segment liabilities 11,278 81,204 92,482
------ ------ ------
The Group's investment income and its investments are divided
into the following geographical areas:
Six months ended 30 June 2015 - Unaudited Equity and debt Investment Total per
instruments property financial
investment activities statements
activities
2015 2015 2015
US $000 US $000 US $000
Investment Income
Switzerland - 2,738 2,738
Other European countries (52) - (185)
United States 1,360 - 1,880
India (820) - (795)
Asia 418 - 6
------ ------ ------
906 2,738 3,644
------ ------ ------
Investments
Switzerland - 123,812 123,812
Other European countries 5,004 - 5,004
United States 74,931 - 74,931
India 12,475 - 12,475
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Asia 4,686 - 4,686
------ ------ ------
97,096 123,812 220,908
------ ------ ------
Six months ended 30 June 2014 - Unaudited Equity and debt Investment Total per
instruments property financial
investment activities statements
activities
2014 2014 2014
US $000 US $000 US $000
Investment Income
Switzerland - 3,045 3,045
Other European countries 116 - 116
United States 13,658 - 13,658
India (311) - (311)
Asia (357) - (357)
------ ------ ------
13,106 3,045 16,151
------ ------ ------
Investments
Switzerland - 129,953 129,953
Other European countries 7,243 - 7,243
United States 92,033 - 92,033
India 15,148 - 15,148
Asia 6,847 - 6,847
------ ------ ------
121,271 129,953 251,224
------ ------ ------
Year ended 31 December 2014 - Audited Equity and debt Investment Total per
instruments property financial
investment activities statements
activities
2014 2014 2014
US $000 US $000 US $000
Investment Income
Switzerland - 6,732 6,732
Other European countries (723) - (723)
United States 18,400 - 18,400
India (1,729) - (1,729)
Asia (787) (787)
------ ------ ------
15,161 6,732 21,893
------ ------ ------
Investments
Switzerland - 116,609 116,609
Other European countries 6,225 - 6,225
United States 83,843 - 83,843
India 14,219 - 14,219
Asia 4,283 - 4,283
------ ------ ------
108,570 116,609 225,179
------ ------ ------
Investment income, comprising interest and dividend income,
gains or losses on investments, and investment property income, is
allocated on the basis of the customer's geographical location in
the case of the investment property activities segment and the
issuer's location in the case of the equity and debt instruments
investment activities segment. Investments are allocated based on
the issuer's location.
During the period, 89% of the investment property rent relates
to rental income from a single customer (SBB - Swiss national
transport authority) in the investment property activities segment
(June 2014: 89%, December 2014: 89%).
20. Interest and dividend income
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Interest from investments 63 64 434
Dividend income 11,787 14,005 26,185
------ ------ ------
11,850 14,069 26,619
------ ------ ------
21. Investment property income
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Gross rental income 2,862 3,039 5,923
Direct expenses (124) (341) (764)
------ ------ ------
2,738 2,698 5,159
------ ------ ------
All direct expenses relate to the generation of rental
income.
22. Loss on investments
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Gain / (loss) on sale of investments (577) 2,409 1,709
Investment property revaluation - - 61
Foreign exchange losses - (22) (232)
Loss due to impairment of available-for-sale financial assets (10,828) (1,616) (8,861)
Fair value gains / (losses) on financial assets through profit or loss 124 (2,398) (5,067)
Fair value loss on investment in joint venture - (524) (524)
Fair value gains on derivative instruments 399 1,575 3,133
Bank custody fees (62) (40) (104)
------ ------ ------
(10,944) (616) (9,885)
------ ------ ------
The investments disposed of during the period resulted in the
following realised gains / (losses) (i.e. in relation to their
original acquisition cost):
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Available-for-sale (822) (1,982) (2,682)
At fair value through profit or loss (87) (534) (2,374)
------ ------ ------
(909) (2,516) (5,056)
------ ------ ------
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23. Administrative expenses
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Legal expenses 55 41 118
Directors' fees and expenses 996 999 3,522
Professional and consulting fees 299 762 1,299
Other salaries and expenses 124 200 1,152
Office cost 153 130 299
Depreciation 4 - 13
Other operating expenses 213 477 657
Audit fees 35 56 159
------ ------ ------
1,879 2,665 7,219
------ ------ ------
24. Finance costs and income
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Finance costs
Bank interest on investment property loan* 694 1,828 3,032
Other swap interest cost - 173 496
Other bank interest 114 158 252
Foreign exchange loss 468 298 3,506
------ ------ ------
1,276 2,457 7,286
Finance income
Foreign exchange gain 1,677 11 109
------ ------ ------
Net Finance costs (401) 2,446 7,177
------ ------ ------
*Includes interest payments on a related interest rate swap
until July 2014.
25. Dividends
In March 2015, the Company announced an interim dividend of USD
5m (USD 0.0256 per ordinary share).
The Board of Directors will decide on the Company's dividend
policy for 2015 based on profitability, liquidity requirements,
portfolio performance, market conditions, and the share price of
the Group relative to its NAV.
26. Earnings per share
Basic profit per share has been calculated by dividing the net
profit attributable to ordinary shareholders of the parent by the
weighted average number of shares in issue of the parent during the
relevant financial periods.
Diluted profit per share is calculated after taking into
consideration other potentially dilutive shares in existence during
the period.
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
Profit for the year attributable to ordinary shareholders of the parent
(USD 000) 1,960 10,856 7,204
--------- --------- ---------
Weighted average number of ordinary shares outstanding 195,289,583 195,289,583 195,289,583
--------- --------- ---------
Basic earnings per share (USD) 0.01 0.06 0.04
--------- --------- ---------
Weighted average number of ordinary shares outstanding 195,289,583 195,289,583 195,289,583
Dilutive effect of share options 77,318 95,687 84,418
--------- --------- ---------
Weighted average number of ordinary shares including the effect of
potentially dilutive shares 195,362,901 195,385,270 195,374,001
--------- --------- ---------
Diluted earnings per share (USD) 0.01 0.06 0.04
--------- --------- ---------
The Share options granted on 13 May 2008 have a dilutive effect
on the weighted average number of ordinary shares only, given that
their exercise price is lower than the average market price of the
Company's shares on the London Stock Exchange (AIM division) during
the period ended 30 June 2015, 30 June 2014 and the year ended 31
December 2014. All other share options do not impact the diluted
earnings per share for June 2015, June 2014 and December 2014 as
their exercise price was higher than the average market price of
the Company's shares during the period ended 30 June 2015, 30 June
2014 and the year ended 31 December 2014.
27. Related party transactions
The Group is controlled by Groverton Management Ltd, an entity
owned by Noam Lanir, which
at 30 June 2015 held 79.06% of the Company's effective voting
rights.
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
US $000 US $000 US $000
Amounts receivable from key management
Other assets 2,820 3,948 3,384 (1)
Directors' current accounts 2,512 500 2,497
------- ------- -------
5,332 4,448 5,881
------- ------- -------
Amounts payable to other related party
Loan payable (499) (1,212) (499) (2)
------- ------- -------
(499) (1,212) (499)
------- ------- -------
Amounts payable to key management
Directors' current accounts (66) (35) (80)
------- ------- -------
(66) (35) (80)
------- ------- -------
Key management compensation
Short term benefits
Executive directors' fees 398 397 795 (3)
Executive directors' reward payments 564 564 2,628
Non-executive directors' fees 34 38 74
Non-executive directors' reward payments - - 25
------- ------- -------
996 999 3.522
------- ------- -------
(1) Loans of USD 5.523m were made to a key management employee
for the acquisition of shares in the Company. Interest was payable
on these loans at 6 month US LIBOR plus 0.25% per annum and the
loans were secured on the shares acquired. The loans were repayable
on the earlier of the employee leaving the Company or April 2013.
In December 2012 the Board decided to renew the outstanding amount
of these loans for a period of another five years. Based on the
Board's decision, the outstanding amount is reduced annually on a
straight line over five years, as long as the key management
employee remains with the Company. The relevant reduction in the
loan amount for the period was USD 0.564m. The loans are classified
as "other assets" and are included under trade and other
receivables (note 11).
(2) A loan with a balance at 30 June 2015 of USD 0.499m (June
2014: USD 1.2m, December 2014: USD 0.499m) has been received from a
related company Chanpak Ltd. The loan is free of interest, it is
unsecured and is repayable on demand. This loan is included within
trade and other payables.
(3) These payments were made directly to companies to which they
are related.
No social insurance and similar contributions nor any other
defined benefit contributions plan costs incurred for the Group in
relation to its key management personnel in either 2015 or
2014.
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