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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Livermore Investments Group Limited | LSE:LIV | London | Ordinary Share | VGG550931015 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 29.00 | 28.00 | 30.00 | 0.00 | 16:28:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Finance Services | -20.93M | -24.36M | -0.1473 | -1.97 | 47.95M |
From May 2019 to May 2024
TIDMLIV
RNS Number : 8946R
Livermore Investments Group Limited
27 September 2017
26 September, 2017
LIVERMORE INVESTMENTS GROUP LIMITED
UNAUDITED INTERIM RESULTS FOR SIX MONTHSED 30 JUNE 2017
Livermore Investments Group Limited (the "Company" or "Livermore") today announces its interim results for the six months ended 30 June 2017.
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
Chairman's and Chief Executive's Review
Introduction
We are pleased to announce the interim financial results for Livermore Investments Group Limited (the "Company" or "Livermore") for the six months ended 30 June 2017.
During the first half of 2017, the Company generated net income of USD 8.33m (30 June 2016: USD 9.84m), which represents earnings per share of USD 0.04 (30 June 2016: USD 0.06). The NAV of the Company as of 30 June 2017 was USD 0.96 per share. During the reporting period, management continued to actively manage the financial portfolio and optimized exposure to US credit markets.
Financial Review
The NAV of the Company as at 30 June 2017 was USD 167.9m (30 June 2016: 150.2m). The profit after tax for the first half of 2017 was USD 8.33m, which represents earnings per share of USD 0.04. The performance relates largely to the CLO portfolio and exposure to leveraged loans.
Hot Features
Premium
30 June 2017 30 June 2016 31 December 2016
----------------------------------------------------- ------------- ------------- -----------------
US $m US $m US $m
----------------------------------------------------- ------------- ------------- -----------------
Shareholders' funds at beginning of period 157.2 148.6 148.6
----------------------------------------------------- ------------- ------------- -----------------
___________ ___________ ___________
----------------------------------------------------- ------------- ------------- -----------------
Income from investments 12.3 15.5 30.4
----------------------------------------------------- ------------- ------------- -----------------
Disposal Of Wyler Park - - 7.6
----------------------------------------------------- ------------- ------------- -----------------
Other income - - -
----------------------------------------------------- ------------- ------------- -----------------
Realised losses on investments (0.1) (0.7) 0.3
----------------------------------------------------- ------------- ------------- -----------------
Loss on impairment on investments - (7.6) -
----------------------------------------------------- ------------- ------------- -----------------
Unrealised (losses) / gains on investments (0.1) 3.9 (2.9)
----------------------------------------------------- ------------- ------------- -----------------
Unrealised exchange profit - 0.4 1.7
----------------------------------------------------- ------------- ------------- -----------------
Administration costs (1.9) (2.0) (8.2)
----------------------------------------------------- ------------- ------------- -----------------
Net finance income / (costs) 0.5 0.4 (1.2)
----------------------------------------------------- ------------- ------------- -----------------
Tax (charge) / credit - (0.4) 3.8
----------------------------------------------------- ------------- ------------- -----------------
___________ ___________ ___________
----------------------------------------------------- ------------- ------------- -----------------
Increase / (decrease) in net assets from operations 10.7 9.5 31.5
----------------------------------------------------- ------------- ------------- -----------------
Purchase of own shares (7.9) (7.9)
----------------------------------------------------- ------------- ------------- -----------------
Dividends paid - (15.0)
----------------------------------------------------- ------------- ------------- -----------------
___________ ___________ ___________
----------------------------------------------------- ------------- ------------- -----------------
Shareholders' funds at end of period 167.9 150.2 157.2
----------------------------------------------------- ------------- ------------- -----------------
------ ------ ------
----------------------------------------------------- ------------- ------------- -----------------
Net Asset Value per share US $0.96 US $0.86 US $0.90
----------------------------------------------------- ------------- ------------- -----------------
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. This part of the portfolio is geographically focused on the US.
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 2016 and 30 June 2017, the Company did not repurchase any additional shares. On 30 June 2017, the Company held 129,306,403 shares in treasury. No additional shares were purchased between 30 June 2017 and before the beginning of the interim closed period.
Dividends
No dividends are declared for the period ended 30 June 2017.
The Board of Directors will decide on the Company's dividend policy for 2017 based on profitability, liquidity requirements, portfolio performance, market conditions, and the share price of the Company relative to its NAV.
Richard Rosenberg Noam Lanir Chairman Chief Executive
26 September 2017
Review of Activities
Economic & Investment Environment
Global growth and macro-financial conditions continued to improve in the first half of 2017. Economic growth was more robust than previous quarters, due in large part to an upturn in emerging economies and a firmer recovery in the euro area. Favourable financing conditions alongside more synchronized regional growth dynamics across the world supported the recovery in global growth.
US GDP recorded growth of 1.4% in the first quarter and expanded at the rate of 3% in the second quarter. Labor conditions have continued to improve and there has been general optimism about tax reform from the new government to kick-start higher levels of growth. Inflation, however, has continued to stay at low levels. Against this backdrop, the US Federal Reserve continued to gradually increase interest rates from very low levels.
The euro area economic recovery continued to firm up. Domestic demand supported by the highly accommodative monetary policy continue to drive economic growth. The recovery in investment has been promoted by favorable financing conditions and improvements in corporate profitability, while sustained employment gains provided support to households' real disposable income and thus private consumption. Further, euro area export growth was better on the back of a gradual improvement in global trade.
Labor market conditions continued to improve in line with GDP growth with US, Japan, UK and Germany close to full employment. Employment conditions improved in most European Union member states as well. Inflation, however, has remained below central bank target levels in most advanced economies.
As synchronized economic growth across the world takes hold, the key risks emanate from central bank policy actions in advanced economies as they attempt to dial back the highly accommodative and new policy tools.
More robust economic growth, optimism over US fiscal policy, and still highly accommodative monetary policies helped ease financial conditions across most advanced economies in the first half of 2017. The S&P 500 Index recorded a total return of 9.34% during this period whereas EuroStoxx 50 Index gained 6.7%. The Indian NIFTY Index was up 16.3% and the respective main stock market indices in Japan and China also recorded gains. Government bond yields in the euro area increased on better growth dynamics as well as spillover future growth optimism in the US post the US election. The strength in the US Dollar witnessed post the presidential elections in the US, however, has reversed as the market dialed back the probability and degree of tax reform that the new US administration may be able to deliver.
Spreads in Investment Grade and High Yield markets continued to tighten as investors assessed better growth prospects and limited investment options. The Leveraged Loan market saw significant inflows as expectations of higher interest rates attracted investors into floating rate assets. The high interest in the asset class along with robust CLO issuance created favorable financing conditions and borrowers refinanced to lower spreads as well as extended their loan maturities. Default activity remained at low levels and it expected to stay low in 2018 as strong liquidity and few maturities reduce default risk. High yield bonds returned 4.9% in the first half of the year as measured by Bloomberg Barclays High Yield Total Return Index whereas the Credit Suisse Leveraged Loans Index was up 1.96% during the same period.
Sources: Swiss National Bank (SNB), European Central Bank (ECB), US Federal Reserve, Bloomberg, JP Morgan
Financial Portfolio and trading activity
The Company manages a financial portfolio valued at USD 152.0m as at 30 June 2017, which is invested mainly in fixed income and credit related securities.
The following is a table summarizing the financial portfolio as at 30 June 2017
Name 30 June 30 June 31 December 2016
2017 2016 Book Value US
Book Value Book Value $m
US $m US $m
---------------------------- ------------- ----------- ----------------
Investment in the
loan market through
CLOs 94.2 78.9 81.8
---------------------------- ------------- ----------- ----------------
Open Warehouse facilities 30.5 6.1 17.3
---------------------------- ------------- ----------- ----------------
Hedge Funds 1.1 1.1 1.0
---------------------------- ------------- ----------- ----------------
Corporate Bonds 1.1 1.1 1.2
---------------------------- ------------- ----------- ----------------
Other Public Equities 1.9 2.8 2.0
---------------------------- ------------- ----------- ----------------
Invested Total 128.8 90.0 103.3
---------------------------- ------------- ----------- ----------------
Cash 23.2 13.2 60.4
---------------------------- ------------- ----------- ----------------
Total 152.0 103.2 163.7
---------------------------- ------------- ----------- ----------------
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.
Following a strong 2016, the leveraged loan market remained relatively stable with the Credit Suisse Leveraged Loan Index recording a total return of 1.96% in the first half of the year. The stability, however, does not reflect the tremendous amount of refinancing activity in the market as a large percentage of borrowers took advantage of the seemingly insatiable demand for floating rate assets and reduced the spread they pay on their loans. While lower spreads provide for lower returns, these favourable financing conditions also allowed borrowers to address near term maturities and reduce the risk of default in the near term. During the reporting period, default rates continued to stay below average levels (1.54% for the S&P/LSTA Leverage Loan Index as at the end of June 2017) and the near-mid term outlook remains benign.
CLO equity market was relatively stable during the first half of 2017 on the back of stable credit markets. As anticipated, CLO equity distributions reduced as the loan spreads tightened and the libor floor benefit was completely erased due to rate hikes. At the same time, however, CLO debt demand increased significantly. Management has been proactively working on utilizing its option to refinance the cost of CLO liabilities lower where possible, or extend the reinvestment period of its CLO positions, or both. The reduced financing costs should help offset some of the loan spread reduction and provide optionality of higher and longer cash flows from our CLO equity positions. Management continues to follow problem credits and focus on Retail industry exposure due to the expected decline in fundamentals.
During the reporting period the Company's US CLO portfolio performed well despite lower cash flows as the value of optionality embedded within CLO equity increased. Management has been proactively working on benefitting from this optionality to lower financing costs or increasing the length of cash flows or both. Further, management converted all three of its open warehouses in new issue CLOs with the lowest cost of financing since the 2007 crisis. The warehouses generated strong returns and the Company received net income of USD 1.5m from the warehouses. As of the end of the reporting period, management had negotiated 3 new attractive warehouses with long tenures and non-mark-to-market financings. Two of these warehouses have already been converted to a CLO and the Company received USD 1.2m from them in the third quarter of the year. As at 30 June 2017, over 93.8% of the Company's CLO portfolio is invested in post-crisis CLOs.
Although 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 as well as headwinds relating to the potential monetary tightening in advanced economies, weak commodity markets and geopolitical risks.
The Company's CLO portfolio is divided into the following geographical areas:
30 Percentage 30 June Percentage
June 2016
2017 Amount
Amount
US US $000
$000
US CLOs 93,446 99.2% 74,752 94.7%
European
CLOs 594 0.6% 688 0.9%
Global Credit
CLOs 124 0.2% 3,436 4.4%
------ ------ ------ ------
94,164 100% 78,876 100%
------ ------ ------ ------
Private Equity Funds
The other private equity investments held by the Company are incorporated in the form of Managed Funds (mostly closed end funds) mainly in emerging economies. The investments of these funds into their portfolio companies were mostly done in 2008 and 2009. Overall, during the first half of 2017 the investment environment relating to most funds was challenging and the Company expects that exits of portfolio companies should materialize between 2018 and 2020.
The following summarizes the book value of the private equity funds as at 30 June 2017:
Name Book Value
US $m
---------------------- ------------
Evolution Venture
(Israel) 4.0
---------------------- ------------
SRS Private (India) 1.3
---------------------- ------------
Other investments 2.4
---------------------- ------------
Total 7.7
---------------------- ------------
Evolution Venture: Evolution is an Israel focused venture capital fund. It invests in early stage technology companies. Its investments include 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 virtualization technology company recently raised new capital at much higher levels than the funds'.
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. In the last twelve months, the fund has distributed USD 0.2m to Livermore. Further distributions are expected in 2017 - 18 from two of its investments. Remaining proceeds from the partial sale of their IT project in Mumbai is delayed due to financial condition of the buyer.
The following table reconciles the review of activities to the Group's financial assets as at 30 June 2017.
Name 30 June
2017
Book Value
US $m
------------------------- -------------
Financial portfolio 128.8
------------------------- -------------
Private Equity Funds 7.7
------------------------- -------------
Total 136.5
------------------------- -------------
Financial assets
at fair value through
profit or loss (note
4) 127.7
------------------------- -------------
Financial assets
at fair value through
other comprehensive
income (note 5) 8.8
------------------------- -------------
Total 136.5
------------------------- -------------
Events after the reporting date
Events after the reporting date are described in note 28 to the interim financial statements.
Litigation
Information is provided in note 26 to the interim condensed financial statements.
Livermore Investments Group Limited
Condensed Statement of Financial Position
as at 30 June 2017
30 June 30 June 31 December
2017 2016 2016
Note Unaudited Unaudited Audited
Assets US $000 US $000 US $000
Non-current assets
Property, plant and equipment - 23 -
Financial assets at fair value through profit or loss 4 94,165 80,164 81,769
Financial assets at fair value through other
comprehensive income 5 7,835 12,477 5,634
Investment property 8 - 126,185 -
Investments in subsidiaries 10 6,425 - 5,252
Trade and other receivables 11 2,532 564 2,513
-------- -------- --------
110,957 219,413 95,168
-------- -------- --------
Current assets
Trade and other receivables 11 3,620 4,201 5,427
Financial assets at fair value through profit or loss 4 33,568 9,996 20,318
Financial assets at fair value through other
comprehensive income 5 1,064 1,024 1,039
Current tax asset - 4 -
Cash at bank 12 23,158 13,201 60,383
-------- -------- --------
61,410 28,426 87,167
-------- -------- --------
Total assets 172,367 247,839 182,335
-------- -------- --------
Equity
Share capital 13 - - -
Share premium and treasury shares 13 169,187 169,187 169,187
Other reserves (37,415) (32,216) (39,842)
Retained earnings 36,162 13,263 27,829
-------- -------- --------
Total equity 167,934 150,234 157,174
-------- -------- --------
Liabilities
Non-current liabilities
Bank loans 15 - 75,956 -
Deferred tax - 4,408 -
-------- -------- --------
- 80,364 -
-------- -------- --------
Current liabilities
Bank loans 15 - 1,504 -
Bank overdrafts 12 - 14,247 1,160
Trade and other payables 16 4,433 937 8,616
Provisions - 385 385
Dividend payable - - 15,000
Derivative financial instruments - 168 -
-------- -------- --------
4,433 17,241 25,161
-------- -------- --------
Total liabilities 4,433 97,605 25,161
-------- -------- --------
Total equity and liabilities 172,367 247,839 182,335
-------- -------- --------
Net asset valuation per share
Basic and diluted net asset valuation per share (US $) 17 0.96 0.86 0.90
-------- -------- --------
Livermore Investments Group Limited
Condensed Statement of Profit or Loss
for the six months ended 30 June 2017
------------------------------------------------------ -------------------------------------------
Note Six months Six months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Continuing operations
Investment Income
Interest and dividend income 19 12,345 12,930 26,334
(Loss) / gain on investments 20 (2,599) (3,602) 1,695
------ ------ ------
Gross profit 9,746 9,328 28,029
Administrative expenses 21 (1,882) (1,812) (7,888)
------ ------ ------
Operating profit 7,864 7,516 20,141
Finance costs 22 (46) (129) (218)
Finance income 22 515 1,143 -
------ ------ ------
Profit before taxation 8,333 8,530 19,923
Taxation charge - (18) (38)
------ ------ ------
Profit for period / year from continuing operations 8,333 8,512 19,885
Discontinued operations
Profit for period / year from discontinued operations - 1,327 14,091
------ ------ ------
Profit for period / year 8,333 9,839 33,976
------ ------ ------
Earnings per share
Basic and diluted earnings per share (US $)
* From continuing operations 24 0.04 0.05 0.11
* On discontinued operations 24 - 0.01 0.08
------ ------ ------
0.04 0.06 0.19
------ ------ ------
Livermore Investments Group Limited
Condensed Statement of Comprehensive Income
for the six months ended 30 June 2017
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Profit for the period / year 8,333 9,839 33,976
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss
Foreign exchange gains from translation of subsidiaries - 403 190
------ ------ ------
8,333 10,242 34,166
------ ------ ------
Items that are not reclassified subsequently to profit or loss
Financial assets designated at fair value through other comprehensive income -
fair value
gains / (losses) 2,427 (779) (4,301)
------ ------ ------
Reclassification to profit or loss
Foreign exchange losses reclassified on disposal of subsidiary - - 1,538
------ ------ ------
Total comprehensive income for the period / year 10,760 9,463 31,403
------ ------ ------
Livermore Investments Group Limited
Condensed Statement of Changes in Equity
for the period ended 30 June 2017
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
2016 - 215,499 (38,446) 5,506 (1,728) (1,147) (31,047) 148,637
Adjustment on initial
application of IFRS
9 - - - - - (34,471) 34,471 -
------ ------ ------ ------ ------ ------ ------ ------
As restated - 215,499 (38,446) 5,506 (1,728) (35,618) 3,424 148,637
------ ------ ------ ------ ------ ------ ------ ------
Purchase of own
shares - - (7,866) - - - - (7,866)
Dividends - - - - - - (15,000) (15,000)
Transfer on expiry of
options - - - (5,429) - - 5,429 -
------ ------ ------ ------ ------ ------ ------ ------
Transactions with
owners - - (7,866) (5,429) - - (9,571) (22,866)
------ ------ ------ ------ ------ ------ ------ ------
Profit for the year - - - - - 33,976 33,976
Other
comprehensive
income:
Financial assets at
fair value through
OCI- Fair value
losses - - - - - (4,301) - (4,301)
Foreign exchange gain
arising from
translation of
subsidiaries - - - - 190 - - 190
Foreign exchange
losses reclassified
on disposal of
subsidiary - - - - 1,538 - - 1,538
------ ------ ------ ------ ------ ------ ------ -----
Total comprehensive
income for the year - - - - 1,728 (4,301) 33,976 31,403
------ ------ ------ ------ ------ ------ ------ ------
Balance at 31
December 2016 - 215,499 (46,312) 77 - (39,919) 27,829 157,174
------ ------ ------ ------ ------ ------ ------ ------
Profit for the period - - - - - - 8,333 8,333
Other
comprehensive
income:
Financial assets at
fair value through
OCI- Fair value
gains - - - - - 2,427 - 2,427
------ ------ ------ ------ ------ ------ ------ ------
Total comprehensive
income for the
period - - - - - 2,427 8,333 10,760
------ ------ ------ ------ ------ ------ ------ ------
Balance at 30 June
2017 - 215,499 (46,312) 77 - (37,492) 36,162 167,934
------ ------ ------ ------ ------ ------ ------ ------
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
2016 - 215,499 (38,446) 5,506 (1,728) (1,147) (31,047) 148,637
Adjustment on initial
application of IFRS
9 - - - - - (34,471) 34,471 -
------ ------ ------ ------ ------ ------ ------ ------
As restated - 215,499 (38,446) 5,506 (1,728) (35,618) 3,424 148,637
------ ------ ------ ------ ------ ------ ------ ------
Purchase of own
shares - - (7,866) - - - - (7,866)
------ ------ ------ ------ ------ ------ ------ ------
Transactions with
owners - - (7,866) - - - - (7,866)
------ ------ ------ ------ ------ ------ ------ ------
Profit for the period - - - - - - 9,839 9,839
Other
comprehensive
income:
Financial assets at
fair value through
OCI- Fair value
losses - - - - - (779) - (779)
Foreign exchange gain
arising from
translation of
subsidiaries - - - - 403 - - 403
------ ------ ------ ------ ------ ------ ------ ------
Total comprehensive
income for the
period - - - - 403 (779) 9,839 9,463
------ ------ ------ ------ ------ ------ ------ ------
Balance at 30 June
2016 - 215,499 (46,312) 5,506 (1,325) (36,397) 13,263 150,234
------ ------ ------ ------ ------ ------ ------ ------
Livermore Investments Group Limited
Condensed Statement of Cash Flows
for the period ended 30 June 2017
Note Six months Six months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Cash flows from operating activities
Profit before tax 8,333 8,530 19,923
Adjustments for:
Depreciation expense 21 - 3 7
Interest expense 22 7 129 216
Interest and dividend income 19 (12,345) (12,930) (26,334)
Loss / (gains) on investments 20 2,599 3,602 (1,695)
Exchange differences (430) (304) (243)
------ ------ ------
(1,836) (970) (8,126)
Changes in working capital
Decrease in trade and other receivables 1,741 543 24,486
(Decrease) / increase in trade and other payables (4,183) (1,257) 4,251
------ ------ ------
Cash flows from operations (4,278) (1,684) 20,611
Interest and dividend received 12,554 13,169 26,561
Settlement of litigation (385) (128) (128)
Tax paid - (16) (39)
------ ------ ------
Net cash generated from operating activities 7,891 11,341 47,005
------ ------ ------
Cash flows from investing activities
Proceeds from disposal of subsidiary - net of cash and cash equivalents
disposed - - 31,752
Acquisition of investments (68,075) (16,841) (37,039)
Proceeds from sale of investments 38,716 500 14,462
Settlement of derivative - (743) (148)
------ ------ ------
Net cash from investing activities (29,359) (17,084) 9,027
------ ------ ------
Cash flows from financing activities
Purchases of own shares - (7,866) (7,866)
Interest paid (66) (140) (331)
Dividends paid (15,000) - -
------ ------ ------
Net cash from financing activities (15,066) (8,006) (8,197)
------ ------ ------
Net (decrease) / increase in cash and cash equivalents
- from continuing operations (36,534) (13,749) 47,835
- of discontinued operations - (423) 826
Cash and cash equivalents at the beginning of the period / year 59,223 12,562 12,562
Exchange differences on cash and cash equivalents 469 564 (245)
Cash and cash equivalent of subsidiaries, removed on change in investment
entity status - - (1,755)
------ ------ ------
Cash and cash equivalents at the end of the period / year 12 23,158 (1,046) 59,223
------ ------ ------
Notes to the Financial Statements
1. Accounting policies
The interim condensed financial statements of Livermore have been prepared on the basis of the accounting policies stated in the 2016 Annual Report, available on www.livermore-inv.com. The application of the IFRS pronouncements that became effective as of 1 January 2017 has no significant impact on the Company's financial statements.
1.1 Adoption of IFRS 9
The Company elected in 2016 to apply IFRS 9 "Financial Instruments" as issued in July 2014, earlier than its effective date. The date of the initial application of IFRS 9 was 1 January 2016. As a result of the adoption of IFRS 9, the comparative figures for the six months ended 30 June 2016 have been restated.
The most significant impact of the adoption of IFRS 9, was on the classification and measurement of the Company's financial assets.
The impact of the adoption of IFRS 9 on the financial information for the six months ended 30 June 2016, is summarized as follows:
30 June 1 January
2016 2016
US $000 US $000
Reclassification out of Available-for-sale
financial assets (93,238) (81,147)
Reclassification to Financial
assets at fair value through
profit or loss 79,737 67,196
Designated as Financial assets
at fair value through other comprehensive
income 13,501 13,951
------ ------
Net assets impact - -
------ ------
Adjustment to Retained earnings 38,128 34,471
Adjustment to Investments revaluation
reserve (38,128) (34,471)
------ ------
Equity impact - -
------ ------
Also, the profit or loss for the six months ended 30 June 2016 is higher by USD 3.655m (representing an increase of USD 0.02 on basic and diluted earnings per share for the period) due to the adoption of IFRS 9. This is mostly attributable to the fact that the additional fair value losses recognised in profit or loss are less than the impairment losses on available-for-sale financial assets that would have been recognised based on IAS 39.
The adoption of IFRS 9 did not have any significant impact on the Company's financial liabilities.
2. Critical accounting judgements and estimation uncertainty
When preparing the interim condensed 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 financial statements, including the key sources of estimation uncertainty were the same as those applied in the Company's last annual financial statements for the year ended 31 December 2016.
3. Basis of preparation
These unaudited interim condensed financial statements are for the six months ended 30 June 2017. 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 financial statements, and should be read in conjunction with the consolidated financial statements of the Company for the year ended 31 December 2016.
The financial information for the year ended 31 December 2016 is extracted from the Company's consolidated financial statements for the year ended 31 December 2016 which contained an unqualified audit report.
3.1 Investment entity status
On 28 October 2016, Livermore disposed to a third party the 100% of the shares of its subsidiary Livermore Investments AG in Switzerland, and as a result discontinued its investment property activities that constituted an operating segment of the Group. The Directors determined that since the discontinuance of its investment property activities, Livermore meets the definition of an investment entity, as this is defined in IFRS 10 "Consolidated Financial Statements".
In accordance with IFRS 10, an investment entity is exempted from consolidating its subsidiaries, unless any subsidiary which is not itself an investment entity mainly provides services that relate to the investment entity's investment activities.
In Livermore's situation, none of its subsidiaries provides such services.
Given the above, these financial statements consolidate the Company's subsidiaries up to 28 October 2016. As of that date, the subsidiaries have been de-consolidated, and recognised as Investments in subsidiaries at their fair value as at 28 October 2016.
4. Financial assets at fair value through profit or loss
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Non-current assets
Fixed income investments (CLO Income Notes) 94,165 78,876 81,769
Real estate entities - 1,288 -
------ ------ ------
94,165 80,164 81,769
------ ------ ------
Current assets
Fixed income investments 31,673 7,165 18,368
Public equity investments 1,895 2,831 1,950
------ ------ ------
33,568 9,996 20,318
------ ------ ------
For description of each of the above categories, refer to note 6.
The above investments represent financial assets that are mandatorily measured at fair value through profit or loss.
The Company treats its investments in the loan market through CLOs as non-current investments as the Company generally intends to hold such investments over a period longer than twelve months.
5. Financial assets at fair value through other comprehensive income
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Non-current assets
Private equities 7,835 12,477 5,634
------ ------ ------
Current assets
Hedge funds 1,064 1,024 1,039
------ ------ ------
For description of each of the above categories, refer to note 6.
The above investments are non-trading equity investments that have been designated at fair value through other comprehensive income.
6. Financial assets at fair value
The Company 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, and investments in open warehouse facilities.
-- Private equities relate to investments in the form of equity purchases 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 influence. Main investments under this category are in the fields of real estate.
-- Hedge funds relate to equity 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. 7. Fair value measurements of financial assets and liabilities
The following table presents financial assets measured at fair value in the 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
-- Fixed Income Investments and Public Equity Investments are valued per their closing market prices on quoted exchanges, or as quoted by market maker. Investments in open warehouse facilities that have not yet been converted to CLOs, are valued based on an adjusted net asset valuation.
The Company 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.
-- Private Equities 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.
-- Hedge 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.
-- Real Estates entities are valued by independent qualified property valuers with substantial relevant experience on such investments. Underlying property values are determined based on their estimated market values.
-- Investments in subsidiaries are valued at fair value as determined on an adjusted net asset valuation basis.
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into the fair value hierarchy as follows:
30 June 2017 Unaudited Unaudited Unaudited Unaudited
US $000 US $000 US $000 US $000
Level Level Level Total
1 2 3
Assets
Fixed income investments 1,126 94,165 30,547 125,838
Private equities - - 7,835 7,835
Public equity investments 1,895 - - 1,895
Hedge funds - 1,064 - 1,064
Investments in subsidiaries - - 6,425 6,425
------ ------ ------ ------
3,021 95,229 44,807 143,057
------ ------ ------ ------
30 June 2016 Unaudited Unaudited Unaudited Unaudited
US $000 US $000 US $000 US $000
Level Level Level Total
1 2 3
Assets
Fixed income investments 1,103 78,876 6,062 86,041
Private equities - - 12,477 12,477
Public equity investments 2,831 - - 2,831
Hedge funds - 1,024 - 1,024
Real estate entities - - 1,288 1,288
------ ------ ------ ------
3,934 79,900 19,827 103,661
------ ------ ------ ------
Liabilities
Forward contract - 168 - 168
------ ------ ------ ------
- 168 - 168
------ ------ ------ ------
31 December 2016 Audited Audited Audited Audited
US $000 US $000 US $000 US
$000
Level Level Level Total
1 2 3
Assets
Fixed income investments 1,117 81,769 17,251 100,137
Private equities - - 5,634 5,634
Public equity investments 1,951 - - 1,951
Hedge funds - 1,038 - 1,038
Investments in subsidiaries - - 5,252 5,252
------ ------ ------ ------
3,068 82,807 28,137 114,012
------ ------ ------ ------
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, except from a certain equity instrument that was delisted and therefore transferred from Level 1 to Level 3 in 2016.
Financial assets within level 3 can be reconciled from beginning to ending balances as follows:
At fair At fair
value value through
through profit Investments
OCI or loss in subsidiaries
Private Fixed Income
equities investments Total
US $000 US $000 US $000 US $000
As at 1 January
2017 5,634 17,251 5,252 28,137
Purchases - 48,500 1,200 49,700
Settlement - (35,500) - (35,500)
Gains / (losses)
recognised in:
-Profit or loss - 296 (27) 269
-Other comprehensive
income 2,201 - - 2,201
------ ------ ------ ------
As at 30 June
2017 7,835 30,547 6,425 44,807
------ ------ ------ ------
At fair Available-for-sale At fair value through
value profit or loss
through
OCI
Private Private Real Private Fixed
equities equities estate equities Income
investments Total
US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January
2016 - 12,518 1,203 330 5,021 19,072
Transfer on initial
application of
IFRS 9 (note
1.1) 12,848 (12,518) - (330) - -
Losses recognised
in:
-Profit or loss - - 85 - 1,041 1,126
-Other comprehensive
income (371) - - - - (371)
------ ------ ------ ------ ------ ------
As at 30 June
2016 12,477 - 1,288 - 6,062 19,827
------ ------ ------ ------ ------ ------
At fair Available- At fair value through Investments
value for-sale profit or loss in subsidiaries
through
OCI
Private Private Real Private Fixed
equities equities estate equities Income
investments Total
US $000 US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January
2016 - 12,518 1,203 330 5,021 - 19,072
Transfer on initial
application of
IFRS 9 (note 1.1) 12,848 (12,518) - (330) - - -
Change in investment
entity status
(note 3.1) - - (1,288) - - 5,567 4,279
Transfer from
Level 1 369 - - - 369
Purchases - - - - 17,000 17,000
Settlement (3,308) - - - (6,062) - (9,370)
Gains / (losses)
recognised in:
-Profit or loss - - 85 - 1,292 (315) 1,062
-Other comprehensive
income (4,275) - - - - - (4,275)
------ ------ ------ ------ ------ ------ ------
As at 31 December
2016 5,634 - - - 17,251 5,252 28,137
------ ------ ------ ------ ------ ------ ------
The above recognised gains / (losses) are allocated as follows:
At fair At fair Investments
value value through in subsidiaries
through profit
OCI or loss
Private Fixed Income
equities investments Total
Six months ended US $000 US $000 US $000 US $000
30 June 2017
Profit or loss
-Financial assets
held at period-end - 296 (27) 269
------ ------ ------ ------
- 296 (27) 269
------ ------ ------ ------
Other comprehensive
income
-Financial assets
held at period-end 2,201 - - 2,201
------ ------ ------ ------
2,201 - - 2,201
------ ------ ------ ------
Total gains /
(losses) for
period 2,201 296 (27) 2,470
------ ------ ------ ------
At fair At fair value through
value profit or loss
through
OCI
Private Real Private Fixed
equities estate equities Income
investments Total
Six months ended US $000 US $000 US $000 US $000 US $000
30 June 2016
Profit or loss
-Financial assets
held at period-end - 85 - 1,041 1,126
------ ------ ------ ------ ------
- 85 - 1,041 1,126
------ ------ ------ ------ ------
Other comprehensive
income
-Financial assets
held at period-end (371) - - - (371)
------ ------ ------ ------ ------
(371) - - - (371)
------ ------ ------ ------ ------
Total (losses)
/ gains for period (371) 85 - 1,041 755
------ ------ ------ ------ ------
At fair At fair value through Investments
value through profit or loss in subsidiaries
OCI
Private Real Private Fixed
equities estate equities Income
investments Total
Year ended 31 December US $000 US $000 US $000 US $000 US $000
2016
Profit or loss
-Financial assets
held at year-end - 85 - 1,292 (315) 1,062
------ ------ ------ ------ ------ ------
- 85 - 1,292 (315) 1,062
------ ------ ------ ------ ------ ------
Other comprehensive
income
-Financial assets
held at year -end (4,275) - - - - (4,275)
------ ------ ------ ------ ------ ------
(4,275) - - - - (4,275)
------ ------ ------ ------ ------ ------
Total (losses )
/ gains for year (4,275) 85 - 1,292 (315) (3,213)
------ ------ ------ ------ ------ ------
The Company 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.
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
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Valuation as at 1 January - 123,324 123,324
Fair value (loss) / gain - recognised in profit or loss - (102) (102)
Additions - 102 102
Exchange differences - 2,861 1,439
Disposal of subsidiary (note 3.1) - - (124,763)
------ ------ ------
As at 30 June / 31 December - 126,185 -
------ ------ ------
The investment property relates to Wyler Park property in Bern, Switzerland, which was used for earning rental income.
9. Investment in joint venture
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
As at 30 June / 31 December - - -
------ ------ ------
Details of the Company's joint venture are as follows:
Name of Type of Place of Proportion Principal
investee investment incorporation of voting activity
rights
held
Silvermore Joint venture Cayman Islands 50% Investment
Ltd Holding
(dormant)
10. Investment in subsidiaries
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Valuation as at 1 January 5,252 - -
Additions 1,200 - 5,567
Fair value losses (27) - (315)
------ ------ ------
As at 30 June / 31 December 6,425 - 5,252
------ ------ ------
Additions in 2016 relate to the initial recognition of subsidiaries, following the change into investment entity status of the Company (note 3.1).
Additions in 2017 relate to the fair value of receivable amounts from two of the company's subsidiaries, that have been waived by the Company. The nominal amount of these balances was a total of USD 4.143m (Livermore Properties Ltd: USD 3.103m, and Sandhirst Ltd: USD 1.040m).
Details of the investments in which the Company 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
Sycamore Loan Cayman Ordinary 100% Investment vehicle
Strategies Ltd Islands shares
Livermore Israel Israel Ordinary 100% Holding of investments
Investments shares
Ltd
Livermore Capital Switzerland Ordinary 100% Administration
AG shares services
Livermore Investments Cyprus Ordinary 100% Administration
Cyprus Limited shares services
Sandhirst Ltd Cyprus Ordinary 100% Holding of investments
shares
11. Trade and other receivables
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Financial items
Accrued interest and dividend income 3 64 65
Amounts due by related parties (note 25) 5,532 2,527 9,634
Other receivables - 349 -
Allowance for impairment - - (2,940)
------ ------ ------
5,535 2,940 6,759
Non-Financial items
Other assets (note 25) 564 1,692 1,128
Prepayments 53 133 53
------ ------ ------
6,152 4,765 7,940
------ ------ ------
Allocated as:
Current assets 3,620 4,201 5,427
Non-current assets (note 25(2) and 25(3)) 2,532 564 2,513
------ ------ ------
6,152 4,765 7,940
------ ------ ------
Allowance for impairment
The allowance relates to amounts due by subsidiaries (note 25), which are regarded as credit-impaired and have been assessed on an individual basis.
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
As at 1 January 2,940 - -
Additions - - 2,818
Charge for the year - - 122
Reversal (2,940) - -
------ ------ ------
As at 30 June / 31 December - - 2,940
------ ------ ------
For the remaining receivables of financial nature, there are no lifetime expected losses. Therefore no corresponding allowance for impairment has been recognised.
No receivable amounts have been written-off during either 2017 or 2016.
12. Cash and cash equivalents
Cash and cash equivalents included in the cash flow statement comprise the following at the reporting date:
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Cash at bank 23,158 13,201 60,383
Bank overdraft used for cash management purposes - (14,247) (1,160)
------ ------ ------
Cash and cash equivalents 23,158 (1,046) 59,223
------ ------ ------
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.
The Company did not repurchase any additional shares for the period. As at 30 June 2017 the Company had 129,306,403 ordinary shares held in treasury.
In the statement of financial position the amount included comprises of:
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Share premium 215,499 215,499 215,499
Treasury shares (46,312) (46,312) (46,312)
------ ------ ------
169,187 169,187 169,187
------ ------ ------
In August 2017 at the Annual General Meeting of the Company, a resolution was passed to cancel 129,306,403 treasury shares registered in the name of the Company, as a capital reduction.
14. Share options
The Company has 500,000 outstanding share options at the end of the period. 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
2017 2016 2016
Unaudited Unaudited Audited
No. of Options No. of Options No. of Options
Outstanding options
At 1 January 500,000 10,650,000 10,650,000
Options expired - - (10,150,000)
--------- --------- ---------
At 30 June / 31 December 500,000 10,650,000 500,000
--------- --------- ---------
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
No. of Options No. of Options No. of Options
Exercisable options
At 1 January 500,000 10,650,000 10,650,000
Options expired - - (10,150,000)
--------- --------- ---------
At 30 June / 31 December 500,000 10,650,000 500,000
--------- --------- ---------
15. Bank loans
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
As at 1 January - 76,410 76,410
Interest charge - 529 923
Repayments of principal - (768) (1,138)
Repayments of interest - (529) (923)
Exchange differences - 1,770 936
Amortization of refinancing fees - 48 79
Disposal of subsidiary (note 3.1) - - (76,287)
------ ------ ------
As at 30 June / 31 December - 77,460 -
------ ------ ------
Allocated as:
Current bank loans - 1,504 -
Non-current bank loans - 75,956 -
------ ------ ------
- 77,460 -
------ ------ ------
16. Trade and other payables
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Financial items
Trade payables 22 396 6
Amounts due to related parties (note 25) 3,895 190 3,233
Accrued expenses 516 277 2,327
------ ------ ------
4,433 863 5,566
Non-financial items
Employee benefits accrued - - 3,050
VAT payable - 74 -
------ ------ ------
4,433 937 8,616
------ ------ ------
17. Net asset value per share
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
Net assets attributable to ordinary shareholders (USD 000) 167,934 150,234 157,174
------------- ------------- -------------
Closing number of ordinary share in issue 174,813,998 174,813,998 174,813,998
------------- ------------- -------------
Basic net asset value per share (USD) 0.96 0.86 0.90
------------- ------------- -------------
Net assets attributable to ordinary shareholders (USD 000) 167,934 150,234 157,174
Dilutive share options - exercise amount 195 199 185
------------- ------------- -------------
Net assets attributable to ordinary shareholders including the effect of
potentially diluted
shares (USD 000) 168,129 150,433 157,359
------------- ------------- -------------
Closing number of ordinary shares in issue 174,813,998 174,813,998 174,813,998
Dilutive share options 500,000 500,000 500,000
------------- ------------- -------------
Closing number of ordinary shares including the effect of potentially
diluted shares 175,313,998 175,313,998 175,313,998
------------- ------------- -------------
Diluted net asset value per share (USD) 0.96 0.86 0.90
------------- ------------- -------------
Number of Shares
Ordinary shares 304,120,401 304,120,401 304,120,401
Treasury shares (129,306,403) (129,306,403) (129,306,403)
------------- ------------- -------------
Closing number of ordinary shares in issue 174,813,998 174,813,998 174,813,998
------------- ------------- -------------
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 2017, 30 June 2016 and 31 December 2016. All other share options do not impact the diluted net asset value per share at 30 June 2016 (expired in second half of 2016) as their exercise price was higher than the net asset value per share at 30 June 2016.
Repurchase of own shares
During the period, the Company did not repurchase any additional shares to be held in treasury.
18. Segment reporting
The Company's monitoring and strategic decision making process in relation to its investments, was separated into two activity lines, which were also identified as the Company's operating segments. Following the discontinuance of the investment property activities in 2016 (note 3.1) the Company has a single operating segment.
Segment information can be analysed as follows:
Six months ended 30 June 2016 - Unaudited Equity and debt Investment Total per
instruments property financial
investment activities statements
activities
Segment results
US $000 US $000 US $000
Investment income
Interest and dividend income 12,930 - 12,930
Investment property income - 2,580 2,580
Loss on investments (3,602) (102) (3,704)
------ ------ ------
Gross profit 9,328 2,478 11,806
Administrative expenses (1,677) (327) (2,004)
------ ------ ------
Operating profit 7,651 2,151 9,802
Finance costs (124) (582) (706)
Finance income 1,143 - 1,143
------ ------ ------
Profit before taxation 8,670 1,569 10,239
Taxation charge (5) (395) (400)
------ ------ ------
Profit for the period 8,665 1,174 9,839
------ ------ ------
Segment assets 121,235 126,604 247,839
------ ------ ------
Segment liabilities 15,298 82,307 97,605
------ ------ ------
Year ended 31 December 2016 - Audited Equity and debt Investment Total per
instruments property financial
investment activities statements
activities
Segment results
US $000 US $000 US $000
Investment income
Interest and dividend income 26,334 - 26,334
Investment property income - 4,036 4,036
Gain / (loss) on investments 1,695 (102) 1,593
------ ------ ------
Gross profit 28,029 3,934 31,963
Administrative expenses (7,692) (478) (8,170)
------ ------ ------
Operating profit 20,337 3,456 23,793
Finance costs (212) (1,008) (1,220)
------ ------ ------
Profit before taxation 20,125 2,448 22,573
Taxation charge (5) 3,844 3,839
------ ------ ------
Profit for the year 20,120 6,292 26,412
------ ------ ------
Segment assets 182,335 - 182,335
------ ------ ------
Segment liabilities 25,161 - 25,161
------ ------ ------
The Company's investment income and its investments are divided into the following geographical areas:
Six months ended 30 June 2017 - Unaudited
US $000
Investment Income
Switzerland -
Other European countries 38
United States 9,876
India (48)
Asia (120)
------
9,746
------
Investments
Switzerland 726
Other European countries 3,291
United States 127,271
India 2,113
Asia 9,656
------
143,057
------
Six months ended 30 June 2016 - Unaudited Equity and debt Investment Total per
instruments property financial
investment activities statements
activities
US $000 US $000 US $000
Investment Income
Switzerland - 2,478 2,478
Other European countries 192 - 192
United States 6,632 - 6,632
India 2,457 - 2,457
Asia 47 - 47
------ ------ ------
9,328 2,478 11,806
------ ------ ------
Investments
Switzerland - 126,185 126,185
Other European countries 4,535 - 4,535
United States 85,896 - 85,896
India 8,912 - 8,912
Asia 4,318 - 4,318
------ ------ ------
103,661 126,185 229,846
------ ------ ------
Year ended 31 December 2016 - Audited Equity and debt Investment Total per
instruments property financial
investment activities statements
activities
US $000 US $000 US $000
Investment Income
Switzerland - 3,884 3,884
Other European countries 330 - 330
United States 27,850 - 27,850
India 102 - 102
Asia (203) (203)
------ ------ ------
28,079 3,884 31,963
------ ------ ------
Investments
Switzerland 726 - 726
Other European countries 3,341 - 3,341
United States 100,399 - 100,399
India 2,022 - 2,022
Asia 7,524 - 7,524
------ ------ ------
114,012 - 114,012
------ ------ ------
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.
19. Interest and dividend income
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Interest from investments 57 63 114
Dividend income 12,288 12,867 26,220
------ ------ ------
12,345 12,930 26,334
------ ------ ------
20. (Loss) / gain on investments
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Fair value (losses) / gains on financial assets through profit or loss (2,513) (2,849) 2,056
Fair value loss on investment in subsidiaries (27) - (315)
Fair value (losses) / gains on derivative instruments - (694) 69
Bank custody fees (59) (59) (115)
------ ------ ------
(2,599) (3,602) 1,695
------ ------ ------
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
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
At fair value through profit or loss (3,358) 46 (3,540)
------ ------ ------
(3,358) 46 (3,540)
------ ------ ------
21. Administrative expenses
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Legal expenses 1 16 19
Directors' fees and expenses 990 993 5,033
Other salaries and expenses - 92 149
Professional and consulting fees 307 376 1,879
Management fees 339 - -
Office cost 5 113 172
Depreciation - 5 7
Other operating expenses 238 194 388
Audit fees 18 23 119
Audit fees - prior years (16) - -
Impairment charge on receivables - - 122
------ ------ ------
1,882 1,812 7,888
------ ------ ------
22. Finance costs and income
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Finance costs
Bank interest 7 129 216
Foreign exchange loss 39 - 2
------ ------ ------
46 129 218
Finance income
Foreign exchange gain 468 1,143 -
Bank interest income 47 - -
------ ------ ------
Net Finance (income) / costs (469) (1,014) 218
------ ------ ------
23. Dividends
No dividends are declared for the period ended 30 June 2017.
The Board of Directors will decide on the Company's dividend policy for 2017 based on profitability, liquidity requirements, portfolio performance, market conditions, and the share price of the Company relative to its net asset value.
24. Earnings per share
Basic profit per share has been calculated by dividing the net profit attributable to ordinary shareholders of the Company by the weighted average number of shares in issue of the Company 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
2017 2016 2016
Unaudited Unaudited Audited
Continuing operations
Profit / (loss) for the period / year attributable to ordinary
shareholders of the parent
(USD 000) 8,333 8,512 19,885
--------- --------- ---------
Weighted average number of ordinary shares outstanding 186,255,695 186,255,695 186,255,696
--------- --------- ---------
Basic earnings per share (USD) 0.04 0.05 0.11
--------- --------- ---------
Weighted average number of ordinary shares outstanding 186,255,696 186,255,695 186,255,696
Dilutive effect of share options 171,377 - 24,715
--------- --------- ---------
Weighted average number of ordinary shares including the effect of
potentially dilutive shares 186,427,073 186,255,695 186,280,411
--------- --------- ---------
Diluted earnings per share (USD) 0.04 0.05 0.11
--------- --------- ---------
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
Discontinued operations
Profit / (loss) for the period / year attributable to ordinary
shareholders of the parent
(USD 000) - 1,327 14,091
--------- --------- ---------
Weighted average number of ordinary shares outstanding 186,255,695 186,255,695 186,255,696
--------- --------- ---------
Basic earnings per share (USD) - 0.01 0.08
--------- --------- ---------
Weighted average number of ordinary shares outstanding 186,255,695 186,255,695 186,255,696
Dilutive effect of share options - - 24,715
--------- --------- ---------
Weighted average number of ordinary shares including the effect of
potentially dilutive shares 186,255,695 186,255,695 186,280,411
--------- --------- ---------
Diluted earnings per share (USD) - 0.01 0.08
--------- --------- ---------
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 2017 and the year ended 31 December 2016 (but higher than the average market price during the period ended 30 June 2016). All other share options do not impact the diluted earnings per share for the period ended 30 June 2016 (expired in the second half of 2016) as their exercise price was higher than the average market price of the Company's shares during the corresponding period.
25. Related party transactions
The Company is controlled by Groverton Management Ltd, an entity owned by Noam Lanir, which
at 30 June 2017 held 76.6% of the Company's effective voting rights.
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
US $000 US $000 US $000
Amounts receivable from subsidiaries
Livermore Properties Limited - - 3,103 (1)
Sandhirst Limited - - 1,018 (1)
Allowance for impairment - - (2,940) (1)
------ ------ ------
- - 1,181
------- ------- -------
Amounts receivable from key management
Directors' current accounts 3,000 2,527 3,000 (1)
Other assets 564 1,692 1,128 (2)
Loan receivable 2,532 - 2,513 (3)
------- ------- -------
6,096 4,219 6,641
------- ------- -------
Amounts payable to subsidiaries
Livermore Investments Cyprus Limited (179) - (169) (4)
Livermore Capital AG (752) - (687) (4)
Livermore Israel Investments Ltd (2,603) - (2,210) (4)
------- ------- -------
(3,534) - (3,066)
------- ------- -------
Amounts payable to other related party
Loan payable (149) (149) (149) (5)
------- ------- -------
(149) (149) (149)
------- ------- -------
Amounts payable to key management
Directors' current accounts (205) (41) (13) (4)
Other key management personnel (7) - (5) (6)
------- ------- -------
(212) (41) (18)
------- ------- -------
Key management compensation
Short term benefits
Executive directors' fees 398 398 795 (7)
Executive directors' reward payments 564 564 4,128
Non-executive directors' fees 28 32 60
Non-executive directors' reward payments - - 50
Other key management fees 146 146 1,092
------- ------- -------
1,136 1,140 6,125
------- ------- -------
(1) The amounts receivable from subsidiaries and the Director's current accounts with debit balances are interest free, unsecured, and have no stated repayment date.
(2) 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).
(3) A loan of USD 2.500m was made to a key management employee for the acquisition of shares in the Company. Interest is payable on the loan at 6 month US LIBOR plus 0.25% per annum and the loan is secured on the shares acquired. The loan is repayable on the earlier of the employee leaving the Company or April 2020. The loan is included within trade and other receivables (note 11).
(4) The amounts payable to subsidiaries and Director's current accounts with credit balances are interest free, unsecured, and have no stated repayment date.
(5) A loan with a balance at 30 June 2017 of USD 0.149m has been received from a related company (under common control) Chanpak Ltd. The loan is free of interest, unsecured and repayable on demand. This loan is included within trade and other payables (note 16).
(6) The amount payable to other key management personnel relates to a payment made on behalf of the Company for investment purposes and accrued consultancy fees.
(7) 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 2017 or 2016.
Noam Lanir, through an Israeli partnership, is the major shareholder of Babylon Limited, an Israel based Internet Services Company. The Company as of 30 June 2017 held a total of 1.941m shares at a value of USD 1.020m which represents 4% of its effective voting rights. The investment in Babylon Ltd is held through the subsidiary Livermore Israel Investments Ltd.
As at the reporting date Livermore had 335,816 shares of Wanaka Capital Partners Mid-Tech Opportunity Fund registered in its name but held for the absolute benefit of a related company (under common control). These shares are not included in the financial assets on the statement of financial position.
During the period ended 30 June 2016 the Company received administrative services of USD 0.028m (December 2016: USD 0.048m), in connection with investments, from its related company (under common control) Mash Medical Life Tree Marketing Ltd. For the period ended 30 June 2017 the Company has not received any relevant services.
26. Litigation
Fairfield Sentry Ltd vs custodian bank and beneficial owners
One of the custodian banks that the Company uses faces a contingent claim up to USD 2.1m, and any interest as will be decided by a US court and related legal fees, with regard to the redemption of shares in Fairfield Sentry Ltd, which were bought in 2008 at the request of Livermore and on its behalf. The same case was also filed in BVI where the Privy Council ruled against the plaintiffs.
As a result of the surrounding uncertainties over the existence of any obligation for Livermore, as well as for the potential amount of exposure, the Directors cannot form an estimate of the outcome for this case and therefore no provision has been made.
No further information is provided on the above case as the Directors consider it could prejudice its outcome.
27. Commitments
The Company has expressed its intention to provide financial support to its subsidiaries, where necessary to enable them to meet their obligations as they fall due.
Other than the above, the Company has no capital or other commitments as at 30 June 2017.
28. Events after the reporting date
Two out of the three warehouse facilities that the Company invested in, during 2017, were converted to CLOs in August 2017. For these two warehouses, with a carrying amount as at 30 June 2017 of USD 25.5m, Livermore's investment amount plus net carry amounting to USD 26.193m became receivable as of the end of August 2017. For the other one, with a carrying amount as at 30 June 2017 of USD 5m, the Company invested an additional amount of USD 10m after the reporting date. The amount to be received for that warehouse has not yet been determined, however it is expected that it will exceed Livermore's investment amount.
In August 2017 at the Annual General Meeting of the Company, a resolution was passed to cancel 129,306,403 treasury shares registered in the name of the Company, as a capital reduction.
There were no other material events after the reporting date, which have a bearing on the understanding of these interim condensed financial statements.
29. Preparation of interim financial statements
Interim condensed financial statements are unaudited. Financial statements for Livermore Investments Group Limited for the year ended 31 December 2016, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, on which the auditors gave an unqualified audit report are available from the Company's website www.livermore-inv.com.
Review Report to Livermore Investments Group Limited
Report on the Review of the Interim Condensed Financial Statements
Introduction
We have reviewed the accompanying interim condensed financial statements of Livermore Investments Group Limited (the "Company"), which are presented in pages 7 to 34 and comprise the condensed statement of financial position as at 30 June 2017 and the condensed statements of profit or loss, comprehensive income, changes in equity and cash flows for the period from 1 January to 30 June 2017, and other explanatory information.
The Board of Directors is responsible for the preparation and fair presentation of these interim condensed financial statements in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union (EU). Our responsibility is to express a conclusion on these interim condensed financial statements based on our review.
Scope of Review
We conducted our review in accordance with the International Standard on Review Engagement 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed financial statements do not give a true and fair view, in all material respects, of the financial position of Livermore Investments Group Limited as at 30 June 2017 and of its financial performance and its cash flows for the period from 1 January to 30 June 2017 in accordance with the International Accounting Standard 34 "Interim Financial Reporting" as adopted by the EU.
Other Matter
This report, including the conclusion, has been prepared for and only for the Company and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.
Nicos Mouzouris
Certified Public Accountant and Registered Auditor
for and on behalf of
Grant Thornton (Cyprus) Ltd
Certified Public Accountants and Registered Auditors
Limassol, 26 September 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QQLFLDKFZBBE
(END) Dow Jones Newswires
September 27, 2017 02:00 ET (06:00 GMT)
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