Final Results
Livermore Investments Group Limited
02 April 2007
LIVERMORE INVESTMENTS GROUP LIMITED PRELIMINARY RESULTS FOR YEAR
ENDED 31 DECEMBER 2006
Livermore Investments Group Limited (the 'Company' or 'Livermore') today
announces its preliminary results for the year ended 31 December 2006.
HIGHLIGHTS:
• Change of purpose to Investment Company approved by shareholders on
18 January 2007.
• Sale of remaining operating activities to PartyGaming plc for $48m.
• Final dividend of US3.4cents per Ordinary Share.
• Profit after tax $62.7m (2005 : $41.2m).
• Earnings before Interest, Tax, Depreciation, Amortisation and non recurring
items from discontinued operations $27.1m (2005 : $45.7m).
Commenting on the results, Noam Lanir, CEO of Livermore Investments Group
Limited, said: '2006 was another eventful year for Livermore which culminated
in the exit from our operating activities and the transition to an investment
company. I look forward to developing a company specialising in exploiting niche
opportunities to deliver superior returns to all shareholders.'
For further investor information please go to www.livermore-inv.com.
Enquiries:
Livermore Investments Group Limited + 357 25 847 700
Noam Lanir, Chief Executive Officer
Andrew Burns, Chief Financial Officer
Hudson Sandler +44 (0) 20 7638 9571
Jessica Rouleau
Chairman's and Chief Executive's Review
Introduction
The year to 31 December 2006 has been another period of great change for
Livermore Investments Group Limited*. Following the settlement with PartyGaming
Plc in February 2006 and the exit from its remaining operating business in
January 2007, shareholders unanimously approved the transition to an investment
company at the Extraordinary General Meeting (EGM) held on 17 January 2007.
Livermore's investment policies were set out in the circular sent to
shareholders on 29 December 2006. In summary, Livermore will invest in public
and private equities, real estate and credit products through separate
divisions, which will engage specialist teams that will focus on each investment
category. Livermore's investment strategy will have a global remit with a focus
on value added opportunities in emerging markets. Through this structure
Livermore will aim to achieve superior returns for its shareholders.
Sale of operating business to PartyGaming Plc
On 17 January 2007, shareholders approved the sale by the Company of its
remaining operating business to PartyGaming Plc. The gross consideration was
$48.0m, which included $10m payable to an employee trust. Following the
introduction of the Unlawful Internet Gambling Enforcement Act by the US
government in October 2006 and the Company's immediate withdrawal from the US
market, the operating activity of the Company had become sub-critical and a sale
to a larger operator who could realise synergy benefits from the remaining
operation represented the best value to shareholders.
This transaction was completed on 19 January 2007. See note 5.
Financial Review
As a consequence of the sale to PartyGaming Plc, the Company's operating
activities have been included within discontinued items within the Consolidated
Income Statement. Profit before interest, taxation, amortisation and
non-recurring items for discontinued operations for year ended 31 December 2006
was $26.1m (2005 : $45.0m). The principal reasons for this reduction were; the
disposal of the Empire Poker assets following the settlement agreement reached
with Partygaming Plc in February 2006 and the withdrawal from the US market in
October 2006.
Profit from disposal of discontinued operations is detailed in note 5. In
summary, an exceptional gain of $235.9m was made on the sale of Empire Poker to
PartyGaming Plc and an exceptional loss of $199.2m was incurred on the disposal
of the remaining operating activities to PartyGaming Plc. This loss was after
deducting a write-down of intangible goodwill and other assets to their
realisable value. Other non-recurring and amortisation charges were $11.1m
(2005: $4.6m). These charges relate to intellectual property and share option
amortisation and non-recurring payments made in respect of liabilities not
transferred to PartyGaming Plc. See note 2.
The Company received investment income of $12.2m (2005: $1.2m) on its financial
assets and cash resources held during the year. This excludes unrealised capital
gains of $0.9m (2005: nil) which are not recognised through the Consolidated
Income Statement until realised.
Earnings per share, including discontinued operations, for 2006 were $0.21
(2005: $0.16).
Profit before tax for the year to 31 December 2006 was $62.7m (2005: $41.2m)
At 31 December 2006 the Company held financial assets and cash of $257.2m. This
excludes the consideration due on the sale of the operating assets to
PartyGaming plc.
Dividend
The Board is pleased to recommend a final dividend with respect to 2006 of $10m
or US 3.4 cents (1.8pence) per share. This dividend will be paid on 29 June 2007
to shareholders on the register at 6 June 2007. Together with the interim
dividend of $5m or US1.7cents (0.9pence) per share, this takes the total
dividend for 2006 to US5.1cents per share (2.7pence per share).
RicharD Rosenberg Noam Lanir
Chairman Chief Executive
30 March 2007
* Livermore Investments Group Limited was formerly known as Empire Online
Limited. Shareholders approved a special resolution to change the Company's name
at the EGM held on 28 February 2007.
Livermore Investment Group Limited
Consolidated Income Statement
for the year ended 31 December 2006
Note Discontinued Discontinued
Operations Operations
2006 2006 2005 2005
$000 $000 $000 $000
Net gaming revenue 59,850 - 97,389 -
Investment revenue 4 - 2,301
Cost of sales (30,256) - (49,644) -
------ ------ ------ ------
Gross profit 29,594 2,301 47,745
Amortisation and non 2 (11,054) - (4,581) -
recurring items
Administrative expenses (3,483) (995) (2,705) (466)
------ ------ ------ ------
Operating profit / (loss) 3 15,057 1,306 40,459 (466)
Finance expenditure - (170) - (55)
Finance income - 9,892 1,246 -
------ ------ ------ ------
Profit before taxation 15,057 11,028 41,705 (521)
Taxation (7) - (10) -
------ ------ ------ ------
Profit for the year after
taxation from continuing
operations 11,028 (521)
Profit after taxation from
discontinued operations 15,050 - 41,695 -
Profit from disposal of
discontinued operations 5 36,642 - - -
------ ------
Profit for discontinued
operation 51,692 51,692 41,695 41,695
------ ------
Profit for period 62,720 41,174
====== ======
Earnings per share
Basic earnings per share
($) 6 0.18 0.21 0.16 0.16
====== ====== ====== ======
Diluted earnings per share
($) 6 0.17 0.21 0.16 0.16
====== ====== ====== ======
Dividends
Proposed final dividend
per share ($) $0.034 $0.068
====== ======
Proposed final dividend
($000) 10,000 20,000
====== ======
Dividends paid during the year
per share ($) $0.085 $0.034
====== ======
Dividends paid during the
year ($000) 24,887 49,043
====== ======
Livermore Investments Group Limited
Consolidated Balance Sheet
as at 31 December 2006
Note
2006 2005
$000 $000
Assets
Non-current assets
Property, plant and equipment 49 119
Intangible assets 73 224,628
Financial assets 7 124,491 -
------ ------
124,613 224,747
------ ------
Current assets
Trade and other receivables 50,795 11,431
Cash and cash equivalents 8 137,715 16,297
------ ------
188,510 27,728
------ ------
Total assets 313,123 252,475
====== ======
Equity
Share capital - -
Reserves 212,483 210,084
Retained earnings 61,763 22,297
------ ------
Total equity 274,246 232,381
------ ------
Liabilities
Current liabilities
Bank overdrafts 9 4,960 -
Trade and other payables 33,910 20,088
Current tax payable 7 6
------ ------
Total liabilities 38,877 20,094
------ ------
Total equity and liabilities 313,123 252,475
====== ======
These Financial Statements were approved by the Board of Directors on 30 March
2007.
Livermore Investments Group Limited
Consolidated Statement of Changes in Equity
for the year ended 31 December 2006
Investments
Note Share Share Share revaluation Retained
capital premium option reserve reserve earnings Total
$000 $000 $000 $000 $000 $000
Balance at
1 January
2005 1 604 - - 30,166 30,771
Net profit
for the
year - - - - 41,174 41,174
Issue of
new share
capital (1) 222,601 - - - 222,600
IPO
expenses - (13,398) - - - (13,398)
Share
option
reserve - - 277 - - 277
Dividends
paid - - - - (49,043) (49,043)
------ ------ ------ ------ ------ ------
Balance at
31 December
2005 - 209,807 277 - 22,297 232,381
Net profit
for the
year - - - - 62,720 62,720
Share
option
reserve - - 3,150 - - 3,150
Share
options
forfeited - - (1,633) - 1,633 -
Revaluation
reserve - - - 882 - 882
Dividends
paid - - - - (24,887) (24,887)
------ ------ ------ ------ ------ ------
Balance at
31 December
2006 - 209,807 1,794 882 61,763 274,246
====== ====== ====== ====== ====== ======
Livermore Investments Group Limited
Consolidated Statement of Cash Flows
for the year ended 31 December 2006
Note 2006 2005
$000 $000
Cash flows from operating activities
Profit after tax 62,720 41,174
Adjustments for
Depreciation and amortisation 3,298 2,898
Goodwill fair value adjustment 797 -
Investment revenue 4 (2,301) -
Finance income (9,660) (1,159)
Interest expense 170 55
Equity settled share options 3,150 277
Profit on disposal 5 (36,642) -
------ ------
21,532 43,245
------ ------
Changes in working capital
Decrease in trade and other receivables 8,612 6,900
(Decrease)/ increase in trade and other payables (11,830) 16,910
------ ------
(3,218) 23,810
------ ------
Net cash generated from operating activities 18,314 67,055
------ ------
Cash flows from investing activities
Purchase of property, plant and equipment (113) (131)
Purchase of intangible assets (916) (5,528)
Acquisition of business - (221,192)
Acquisition of investments (123,609) -
Disposal of business assets 5 235,878 -
Interest revenue received 4 2,301 -
Finance income received 9,660 1,159
------ ------
Net cash used in investing activities 123,201 (225,692)
------ ------
Cash flows from financing activities
Dividends paid (24,887) (49,043)
Proceeds from issue of shares - 209,202
Interest paid (170) (55)
------ ------
Net cash from/(used in) financing activities (25,057) 160,104
------ ------
Net increase in cash and cash equivalents 116,458 1,467
Cash and cash equivalents at the beginning of the
year 16,297 14,830
------ ------
Cash and cash equivalents at the end of the year 132,755 16,297
------ ------
Notes to the Financial Statements
1. Basis of preparation
The audited financial statements of Livermore Investments Group Limited have
been prepared in accordance with International Financial Reporting Standards
('IFRS') as adopted by the European Union. The significant accounting policies
applied in the Financial Statements of the Group in the prior years have been
applied consistently in these Financial Statements. The financial information is
presented in US dollars because that is the currency in which the Group
primarily operates.
2. Amortisation and non recurring items
Amortisation and non-recurring items refer to:
2006 2005
$000 $000
Amortisation of intangible assets 2,315 2,266
Amortisation of share options 3,150 277
IPO related expenses - 587
Non recurring expenses 1,144 1,451
Compensation to third parties 4,445 -
------ ------
11,054 4,581
------ ------
3. Operating Profit on continuing operations
2006 2005
$000 $000
Operating profit is stated after charging:
Administration services 800 936
Depreciation - 12
Amortisation - 2,886
Operating leases - 18
Auditors' remuneration 195 90
====== ======
Auditor's remuneration is analysed as:
Audit fees 195 90
====== ======
4. Investment revenue
2006 2005
$000 $000
Interest revenue
Available for sale investments 2,193 -
Gain on sale of shares 108 -
------ ------
2,301 -
====== ======
5. Disposal of business assets
Disposal of
Empire Poker business Total
2006 2006 2006 2005
$000 $000 $000 $000
Disposal proceeds
received 250,000 37,972 287,972 -
Legal and
professional
expenses - (944) (944) -
Compensations to
third parties (14,122) (12,705) (26,827) -
Warranties
provision - (2,000) (2,000)
Assets written
off - (221,559) (221,559) -
------ ------ ------ ------
Profit from
disposal to
PartyGaming Plc 235,878 (199,236) 36,642 -
====== ====== ====== ======
On 14 February 2006 the Group sold certain business assets to PartyGaming Plc
pursuant to a settlement agreement for a total consideration of $250m. Business
assets included in the disposal were certain domain names and brand names. The
consideration represented $250m, which was all in the form of cash.
On 19 January 2007, the Company completed the sale to PartyGaming plc of its
remaining operating business. This agreement was signed on 28 December 2006 and
was subject to certain conditions including approval of the Company's
shareholders at an EGM on 17 January 2007.
Between signing and completion the Company continued to operate the business,
however during this period restrictions were placed on the operation of the
business by PartyGaming plc. Business assets included in the disposal were
certain domain names, players data and brand names. Assets written off,
principally, comprises of acquired intangible goodwill relating to the
acquisition of business of Tradal Limited in May 2005 and the acquisition of
Club Dice casinos in September 2005.
The Group received a consideration for the disposal of the business of
83,325,934 PartyGaming shares representing a gross value of $47.9m. 17,374,637
PartyGaming shares were transferred to agents as compensation resulting in net
disposal proceeds to the Group of $37.9m. The transaction was conditional on a
further payment to marketing service provider of $10m.
6. Earnings per share
Basic earnings per share has been calculated by dividing the net profit
attributable to ordinary shareholders (profit for the year) by the weighted
average number of shares in issue during the relevant financial periods.
Diluted earnings per share is calculated after taking into consideration the
potentially diluted shares in existence as at the year ended 31 December 2006
and the year ended 31 December 2005.
Discontinued
Operations
2006 2006 2005
Net profit attributable to ordinary
shareholders ($000) 51,692 62,720 41,174
=========== =========== ===========
Weighted average number of ordinary
shares in issue 292,777,772 292,777,772 260,689,492
=========== =========== ===========
Basic earnings per share ($) 0.18 0.22 0.16
=========== =========== ===========
Weighted average number of ordinary
shares including the effect of
potentially diluted shares 299,723,327 299,723,327 261,862,570
=========== =========== ===========
Diluted earnings per share ($) 0.17 0.21 0.16
=========== =========== ===========
Number of Shares
Weighted average number of ordinary
shares in issue 292,777,772 292,777,772 260,689,492
Effect of dilutive potential ordinary
shares:
Share options 6,945,555 6,945,555 1,173,078
------ ------ ------
Weighted average number of ordinary
shares including the effect of
potentially diluted shares 299,723,327 299,723,327 261,862,570
=========== =========== ===========
7. Financial assets
2006 2005
$000 $000
Fixed return investments 100,976 -
EEquity investments 23,515 -
------ ------
124,491 -
====== ======
Financial assets relate to investments in bonds and equity classified as
available for sale. Financial assets are held in the balance sheet at the year
end at fair value. Fair value is measured by reference to the market value of
the assets at the balance sheet date as they are openly traded on a public
market.
8. Cash and cash equivalents
Cash and cash equivalents included in the cash flow statement comprise the
following at the balance sheet date:
2006 2005
$000 $000
Short term deposits 136,522 14,607
Cash at bank 1,193 1,690
------ ------
137,715 16,297
====== ======
9. Bank Overdrafts
2006 2005
$000 $000
Short term bank overdrafts 4,960 -
------ ------
4,960 -
====== ======
The financial information of the Group set out above does not constitute
statutory accounts. The results for the year ended 31 December 2006 are based on
the audited annual report and consolidated financial statements of Livermore
Investments Group Limited which have been reported on by the auditors. The
report of the auditors was unqualified.
Copies of the 2006 annual report and accounts will be sent to shareholders in
due course.
Copies of this announcement are available from the Company's website,
www.livermore-inv.com.
This information is provided by RNS
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