Interim Results
28 September, 2016
LIVERMORE INVESTMENTS GROUP LIMITED
UNAUDITED INTERIM RESULTS FOR SIX MONTHS ENDED 30 JUNE 2016
Livermore Investments Group Limited (the "Company" or "Livermore") today announces its interim results for the six months ended 30 June 2016.
For further investor information please go to www.livermore-inv.com.
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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 2016.
During the first half of 2016, the Group generated net income of USD 6.18m (30 June 2015: USD 1.96m), which represents earnings per share of USD 0.03 (30 June 2014: USD 0.01). The NAV of the Group as of 30 June 2016 was USD 0.86 per share. 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.
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.
Financial Review
The NAV of the Group as at 30 June 2016 was USD 150.2m (30 June 2015: 157.8m). The profit after tax for the first half of 2016 was USD 6.18m, which represents earnings per share of USD 0.03. The performance relates largely to the CLO portfolio and net income from Wyler Park offset by write downs on certain investments.
|
30 June 2016 |
30 June 2015 |
31 December 2015 |
|||
|
US $m |
US $m |
US $m |
|||
|
Shareholders' funds at beginning of period |
148.6 |
160.0 |
160.0 |
||
|
___________ |
___________ |
___________ |
|||
|
Income from investments |
15.5 |
14.6 |
30.9 |
||
|
Other income |
- |
- |
0.1 |
||
|
Realised losses on investments |
(0.7) |
(0.5) |
(2.4) |
||
|
Loss on impairment on investments |
(7.6) |
(10.8) |
(31.7) |
||
|
Unrealised gains on investments |
3.9 |
0.7 |
8.5 |
||
|
Unrealised exchange gains / (losses) |
0.4 |
0.5 |
(0.4) |
||
|
Administration costs |
(2.0) |
(1.9) |
(5.2) |
||
|
Net finance costs |
0.4 |
0.4 |
(2.5) |
||
|
Tax charge |
(0.4) |
(0.2) |
(1.9) |
||
|
___________ |
___________ |
___________ |
|||
|
Increase / (decrease) in net assets from operations |
9.5 |
2.8 |
(4.6) |
||
|
Purchase of own shares |
(7.9) |
- |
(1.5) |
||
|
Dividends paid |
- |
(5.0) |
(5.0) |
||
|
Adjustments for share option expiry |
- |
- |
(0.3) |
||
|
___________ |
___________ |
___________ |
|||
|
Shareholders' funds at end of period |
150.2 |
157.8 |
148.6 |
||
|
------ |
------ |
------ |
|||
|
Net Asset Value per share |
US $0.86 |
US $0.81 |
US $0.77 |
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.
The remaining portfolio is focused on Switzerland and Asia with investments primarily in real estate and selected private equity opportunities. Investments are focused on sectors that Management believes will provide robust growth over the mid to long term with strong current cash flows.
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 2015 and 30 June 2016, the Company repurchased 17,475,585 shares at an average price of USD 0.45 (£0.34) per share. On 30 June 2016, the Company held 129,306,403 shares in treasury. No additional shares were purchased between 30 June 2016 and before the beginning of the interim closed period.
Dividends
No dividends are declared for the period ended 30 June 2016.
The Board of Directors will decide on the Company's dividend policy for 2016 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 |
27 September 2016
Review of Activities
Economic & Investment Environment
Global economic growth at the beginning of 2016 was weaker than expected. Global trade and manufacturing remained sluggish contributing to a further drop in oil prices. Contrary to expectations, low oil prices so far provided only a modest stimulus to household consumer spending in most countries. Growth prospects worsened in oil producing countries, including the US. Financial markets experienced significant volatility and risky assets declined in value as investors weighed probability of an economic downturn at the same time as the US Federal Reserve indicated raising interest rates. The turbulence in financial markets subsided in late February as central banks in developed economies pledged additional monetary easing and the US Federal Reserve dialled back interest rate increase expectations. While still anaemic, global economic activity eventually stabilized and continued to grow moderately in the second quarter of 2016. Financial markets recovered significantly and risk-premia compressed as the European Central Bank (ECB) announced its corporate sector purchase programme.
US GDP increased at an annual rate of 1.1% in the second quarter after a growth of 0.8% in the first quarter. Private consumption temporarily slowed, despite higher levels of disposable income. Investment in fixed assets receded and further investment cuts in the energy sector due to the low oil price had a particularly dampening effect. Labour market conditions in the US, however, continued to improve with the unemployment rate at 4.9% as of June 2016, although the pace of improvement has declined as the economy reaches closer to full employment. While labour compensation has shown some tentative signs of acceleration, wage inflation continues to stay low given lacklustre productivity growth and some remaining slack in the labour market. Overall inflation also stayed low on account of higher US Dollar and low commodity prices.
The economic recovery in the euro area continued, driven by domestic demand, while foreign demand growth remained weak. Domestic demand was supported by monetary policy measures. Their favourable impact on financing conditions, together with improvements in corporate profitability, benefitted investment. Inflation in the euro area remained low with little wage pressures and low oil and commodity prices. Despite the accommodative monetary policy stance, economic recovery in the euro area is still dampened by ongoing balance sheet adjustments in a number of sectors, the insufficient pace of implementation of structural reforms in some countries and subdued growth prospects in emerging markets. The risks to the euro area growth outlook remain tilted to the downside, especially after the UK's decision to leave the euro zone.
Global financial markets experienced significant volatility and price declines at the beginning of the year as they digested the first US interest rate increase since the financial crisis and guidance of another four increases in 2016 in parallel with growing concerns about the global economy, The S&P 500 Index fell 10.5% and the EuroStoxx 50 Index declined by 18% from the start of the year to mid-February. US high yield markets continued to widen out as defaults from the energy sector increased with falling oil prices and fears of a spill-over in the other sectors took hold. Global central banks pledged additional monetary policy easing to stabilize financial markets with the European Central Bank's corporate sector purchase programme leading the way. The US Federal Reserve also ratcheted back their rate increase expectations and several developed market central banks delved further into negative interest rate territory. The financial markets recovered subsequently with the S&P 500 Index rising over 14% and the EuroStoxx 50 Index increasing by 6.8% by the end of June 2016. US credit markets also recovered sharply as fixed income investors facing over 10 trillion dollars of negative interest rate sovereign bonds were forced to look for yield elsewhere. Oil and other commodity prices also increased on the back of stable data from China and the positive sentiment in financial markets.
High yield and leveraged loans markets continued to experience high volatility as the spectre of higher US interest rates and exposure to energy and commodity issuers dampened investor sentiment. From the start of the year to the trough, the S&P/LSTA Leveraged Loan Index was down 1.5% but recovered sharply as global downturn fears subsided and risk-adjusted returns became quite attractive. From the trough to the end of June, the S&P/LSTA Leveraged Loan Index returned 6.1%. During the first six months of the year, new issue US leveraged loan volume decreased to USD 128.1 billion from USD 141.2 billion a year earlier. Collateralized Loan Obligations (CLOs) issuance was markedly muted in the first half of the year with total issuance of USD 26.2 billion versus USD 59.9 billion for the same period last year.
Sources: Swiss National Bank (SNB), European Central Bank (ECB), US Federal Reserve, Bloomberg, JP Morgan
Review of Significant Investments
|
Name |
Book Value US $m |
|
Wyler Park* |
48.7 |
|
SRS Charminar |
5.8 |
|
Other Real Estate Assets |
1.3 |
|
Total |
55.8 |
* 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 until 2029 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 4.43m).
The entire residential property remains fully rented. The annual rental income expected from the residential area is CHF 1.04m (USD 1.06m).
The property generated rent of CHF 2.70m (USD 2.74m) during the first half of 2016.
Livermore is the sole owner of Wyler Park through its wholly owned Swiss subsidiary, Livermore Investments AG. The outstanding principal of the loan facility is CHF 75.9m (USD 77.6m). The facility is committed until at least 30 June 2019. 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. In 2015, Livermore received the first tranche in the amount of USD 2.9m and the second tranche is expected later in 2016. While the third and fourth tranches are scheduled to be paid in 2019, it is anticipated to be rescheduled given delays in the project underlying the third tranche.
The carrying amount of the investment is based on discounted expected cash flows and as of period-end was USD 5.8m (December 2015: USD 7.1m).
Financial Portfolio and trading activity
The Group manages a financial portfolio valued at USD 91.1m (net of leverage) as at 30 June 2016, which is invested mainly in US credit and fixed income securities.
The following is a table summarizing the financial portfolio as at 30 June 2016
|
Name |
30 June 2016 Book Value US $m |
30 June 2015 Book Value US $m |
31 December 2015 Book Value US $m |
|
Investment in the loan market through CLOs |
78.9 |
73.9 |
66.0 |
|
Fixed income investment |
6.1 |
- |
5.0 |
|
Babylon |
1.1 |
1.0 |
0.9 |
|
Corporate Bonds |
1.1 |
1.7 |
1.8 |
|
Hedge Funds |
1.1 |
1.1 |
1.0 |
|
Other Public Equities |
1.7 |
1.8 |
2.0 |
|
Total |
90.0 |
79.5 |
76.7 |
|
Total net of leverage |
91.1* |
90.4** |
90.3* |
*this figure includes USD 6m (December 2015: USD 5m) which 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.
** 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.
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.
Continuing from late last year, the high yield and leveraged loan market declined further in the first few weeks of the year but recovered sharply with the S&P/LSTA Leveraged Loan Index generating a total return of 4.5% for the first half of the year. As at the end of June 2016, the US loan market twelve month rolling default rate by principal amount was 1.97%. Default rates are expected to stay below average in the near future with the exception of the commodity related sector.
After very high levels of US CLO new issue volume in 2015, issuance was muted in the first quarter but picked up a steady state in the second quarter as cost of debt tranches declined with the rally in credit and equity markets. In line with broader markets, CLO equity tranche prices also declined further in the first quarter but rebounded significantly as new funds were raised to capture the price dislocation and investors reassessed the credit environment in the US. Despite the mark-to-market volatility on CLO equity tranches, cash flows to the equity tranche have remained strong.
During the reporting period the Group's US CLO portfolio performed well as cash flows remained strong and the Group took advantage of low prices for strongly performing CLO equity and added positions from the secondary market. In addition, the Group converted its warehouse into a CLO and generated a 23% cash return during the 10 month warehousing period. During the period, the CLO portfolio generated USD 12.9m in cash distributions, as well as earning USD 1.06m on warehousing facilities. Cash payments to CLO equity remained strong and CLO managers used volatility in the loan market to increase portfolio spreads. As at 30 June 2016, over 85% of the Group's CLO portfolio is invested in post-crisis CLOs.
As few loans mature in the near term and the US economy continues to grow, corporate defaults are expected to remain below average with the exception of certain energy related companies. Management believes that the environment should remain attractive for investments in CLO equity. In the first half of 2016, Livermore priced one new issue cash-flow CLO 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 as well as headwinds relating to the potential monetary tightening in the US, weak commodity markets and geopolitical risks.
The Group's CLO portfolio is divided into the following geographical areas:
|
|
30 June 2016 Amount |
Percentage |
31 June 2015 Amount |
Percentage |
|
|
US $000 |
|
US $000 |
|
|
US CLOs |
74,752 |
94.7% |
63,556 |
86.0% |
|
Global Credit CLOs |
3,436 |
4.4% |
9,124 |
12.3% |
|
European CLOs |
688 |
0.9% |
1,234 |
1.7% |
|
|
------ |
------ |
------ |
------ |
|
|
78,876 |
100% |
73,914 |
100% |
|
|
------ |
------ |
------ |
------ |
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 emerging economies. The investments of these funds into their portfolio companies were mostly done in 2008 and 2009. Overall, during the first half of 2016 the investment environment relating to most funds was challenging and the Group expects that exits of portfolio companies should materialize between 2017 and 2020.
The following summarizes the book value of the private equity funds as at 30 June 2016:
|
Name |
Book Value US $m |
|
Evolution Venture (Israel) |
1.9 |
|
SRS Private (India) |
1.6 |
|
Elephant Capital (India) |
0.7 |
|
India Blue Mountains (India) |
0.7 |
|
Panda Capital (China) |
0.3 |
|
Da Vinci (Russia) |
0.3 |
|
Blue Ridge (China) |
- |
|
Other investments |
1.0 |
|
Total |
6.5 |
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 is not doing well and needs additional capital which the fund will not be able to provide. The language enhancements product company and the virtualization technology company have been performing well.
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 0.22m to Livermore. Further distributions are expected in 2017 from two of its investments. Remaining proceeds from the partial sale of their IT project in Mumbai is expected to be delayed due to financial condition of the buyer.
Elephant Capital: India-focused private equity fund, which is AIM quoted (Ticker: ECAP). During the period, the fund delisted from the LSE/AIM market in order to reduce costs given the small size of the remaining fund. Livermore owns 9.9% of the delisted fund. As of 28 February 2016, the fund reported an unaudited NAV of 34 pence per share.
India Blue Mountains: India Blue Mountains was a hotel and hospitality development fund that has been reorganized into three separate companies each holding a hotel development in India in Mumbai, Pune and Goa. Once developed, 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.
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 2016.
The following table reconciles the review of activities to the Group's financial assets and investment property as at 30 June 2016.
|
Name |
30 June 2016 Book Value US $m |
|
Significant investments |
55.8 |
|
Financial portfolio |
90.0 |
|
Private Equity Funds |
6.5 |
|
Total |
152.3 |
|
Available-for sale financial assets (note 4) |
93.2 |
|
Financial assets at fair value through profit or loss (note 5) |
10.4 |
|
Net Investment property (notes 8/16) |
48.7 |
|
Total |
152.3 |
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 2016
|
|
Note |
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
|
US $000 |
US $000 |
US $000 |
|
Assets |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
23 |
37 |
26 |
|
Available-for-sale financial assets |
4 |
91,023 |
89,367 |
78,464 |
|
Financial assets at fair value through profit or loss |
5 |
1,618 |
1,518 |
1,533 |
|
Investment property |
8 |
126,185 |
123,812 |
123,324 |
|
Investments in associate and joint venture |
9 |
- |
3,750 |
- |
|
Other assets |
11 |
564 |
1,692 |
1,128 |
|
|
|
-------- |
-------- |
-------- |
|
|
|
219,413 |
220,176 |
204,475 |
|
|
|
-------- |
-------- |
-------- |
|
Current assets |
|
|
|
|
|
Trade and other receivables |
11 |
4,201 |
12,823 |
4,490 |
|
Available-for-sale financial assets |
4 |
2,215 |
2,247 |
2,683 |
|
Financial assets at fair value through profit or loss |
5 |
8,805 |
3,772 |
8,268 |
|
Current tax asset |
|
4 |
9 |
6 |
|
Derivative financial instruments |
15 |
- |
192 |
- |
|
Cash at bank |
12 |
13,201 |
12,340 |
25,770 |
|
|
|
-------- |
-------- |
-------- |
|
|
|
28,426 |
31,383 |
41,217 |
|
|
|
-------- |
-------- |
-------- |
|
Total assets |
|
247,839 |
251,559 |
245,692 |
|
|
|
-------- |
-------- |
-------- |
|
Equity |
|
|
|
|
|
Share capital |
13 |
- |
- |
- |
|
Share premium and treasury shares |
13 |
169,187 |
178,597 |
177,053 |
|
Other reserves |
|
5,911 |
3,839 |
2,631 |
|
Retained earnings |
|
(24,864) |
(24,599) |
(31,047) |
|
|
|
-------- |
-------- |
-------- |
|
Total equity |
|
150,234 |
157,837 |
148,637 |
|
|
|
-------- |
-------- |
-------- |
|
Liabilities |
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Bank loans |
16 |
75,956 |
67,511 |
75,003 |
|
Deferred tax |
|
4,408 |
2,535 |
3,937 |
|
Provisions |
|
- |
- |
385 |
|
|
|
-------- |
-------- |
-------- |
|
|
|
80,364 |
70,046 |
79,325 |
|
|
|
-------- |
-------- |
-------- |
|
Current liabilities |
|
|
|
|
|
Bank loans |
16 |
1,504 |
3,315 |
1,407 |
|
Bank overdrafts |
12 |
14,247 |
18,817 |
13,208 |
|
Trade and other payables |
17 |
937 |
1,544 |
2,770 |
|
Provisions |
|
385 |
- |
128 |
|
Derivative financial instruments |
15 |
168 |
- |
217 |
|
|
|
-------- |
-------- |
-------- |
|
|
|
17,241 |
23,676 |
17,730 |
|
|
|
-------- |
-------- |
-------- |
|
Total liabilities |
|
97,605 |
93,722 |
97,055 |
|
|
|
-------- |
-------- |
-------- |
|
Total equity and liabilities |
|
247,839 |
251,559 |
245,692 |
|
|
|
-------- |
-------- |
-------- |
|
Net asset valuation per share |
|
|
|
|
|
Basic and diluted net asset valuation per share (US $) |
18 |
0.86 |
0.81 |
0.77 |
|
|
|
-------- |
-------- |
-------- |
|
Livermore Investment Group Limited Condensed Consolidated Statement of Profit or Loss for the six months ended 30 June 2016 |
|
|||
|
|
Note |
Six months ended 30 June 2016 Unaudited |
Six months ended 30 June 2015 Unaudited |
Year ended 31 December 2015 Audited |
|
|
|
US $000 |
US $000 |
US $000 |
|
|
|
|
|
|
|
Investment Income |
|
|
|
|
|
Interest and dividend income |
20 |
12,930 |
11,850 |
25,675 |
|
Investment property income |
21 |
2,580 |
2,738 |
5,227 |
|
Loss on investments |
22 |
(7,360) |
(10,944) |
(26,136) |
|
|
|
------ |
------ |
------ |
|
Gross profit |
|
8,150 |
3,644 |
4,766 |
|
Other income |
|
- |
- |
35 |
|
Administrative expenses |
23 |
(2,004) |
(1,879) |
(5,155) |
|
|
|
------ |
------ |
------ |
|
Operating profit / (loss) |
|
6,146 |
1,765 |
(354) |
|
Finance costs |
24 |
(706) |
(1,276) |
(2,454) |
|
Finance income |
24 |
1,143 |
1,677 |
- |
|
|
|
------ |
------ |
------ |
|
Profit / (loss) before taxation |
|
6,583 |
2,166 |
(2,808) |
|
Taxation charge |
|
(400) |
(206) |
(1,951) |
|
|
|
------ |
------ |
------ |
|
Profit / (loss) for period / year |
|
6,183 |
1,960 |
(4,759) |
|
|
|
------ |
------ |
------ |
|
Earnings per share |
|
|
|
|
|
Basic and diluted earnings per share (US $) |
26 |
0.------03 |
0.------01 |
(0.02) |
|
|
|
------ |
------ |
------ |
Livermore Investment Group Limited
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2016
|
|
|
Six months ended 30 June 2016 Unaudited |
Six months ended 30 June 2015 Unaudited |
Year ended 31 December 2015 Audited |
|
|
|
US $000 |
US $000 |
US $000 |
|
|
|
|
|
|
|
Profit / (loss) for the period / year |
|
6,183 |
1,960 |
(4,759) |
|
|
|
|
|
|
|
Other comprehensive income: |
|
|
|
|
|
Items that will be reclassified subsequently to profit or loss |
|
|
|
|
|
- Available for sale financial assets - fair value losses |
|
(4,749) |
(11,032) |
(34,906) |
|
- Foreign exchange gains / (losses) from translation of subsidiaries |
|
403 |
529 |
(314) |
|
|
|
------ |
------ |
------ |
|
|
|
1,837 |
(8,543) |
(39,979) |
|
|
|
------ |
------ |
------ |
|
Reclassification to profit or loss |
|
|
|
|
|
Available for sale financial assets |
|
|
|
|
|
- Reclassification to profit or loss due to disposals |
|
- |
577 |
3,459 |
|
- Reclassification to profit or loss due to impairment |
|
7,626 |
10.828 |
31,726 |
|
|
|
------ |
------ |
------ |
|
|
|
7,626 |
11,405 |
35,185 |
|
|
|
------ |
------ |
------ |
|
Total comprehensive income / (loss) for the period / year |
|
9,463 |
2,862 |
(4,794) |
|
|
|
------ |
------ |
------ |
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
for the period ended 30 June 2016
|
|
Note |
Share capital |
Share premium |
Treasury Shares |
Share option reserve |
Translation reserve |
Investment revaluation reserve |
Retained earnings |
Total |
|
|
|
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
|
Balance at 1 January 2015 |
|
- |
215,499 |
(36,902) |
5,777 |
(1,414) |
(1,426) |
(21,560) |
159,974 |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|
Purchase of own shares |
|
- |
- |
(1,544) |
- |
- |
- |
- |
(1,544) |
|
Dividends |
|
- |
- |
- |
- |
- |
- |
(4,999) |
(4,999) |
|
Transfer on expiry of options |
|
- |
- |
- |
(271) |
- |
- |
271 |
- |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|
Transactions with owners |
|
- |
- |
(1,544) |
(271) |
- |
- |
(4,728) |
(6,543) |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|
Loss for the year |
|
- |
- |
|
- |
- |
- |
(4,759) |
(4,759) |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets |
|
|
|
|
|
|
|
|
|
|
- Fair value losses |
|
- |
- |
- |
- |
- |
(34,906) |
- |
(34,906) |
|
- Reclassification to profit or loss due to disposals |
|
- |
- |
- |
- |
- |
3,459 |
- |
3,459 |
|
- Reclassification to profit or loss due to impairment |
|
- |
- |
- |
- |
- |
31,726 |
- |
31,726 |
|
Foreign exchange loss arising from translation of subsidiaries |
|
- |
- |
- |
- |
(314) |
- |
- |
(314) |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
----- |
|
Total comprehensive income for the year |
|
- |
- |
- |
- |
(314) |
279 |
(4,759) |
(4,794) |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|
Balance at 31 December 2015 |
|
- |
215,499 |
(38,446) |
5,506 |
(1,728) |
(1,147) |
(31,047) |
148,637 |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|
Purchase of own shares |
|
- |
- |
(7,866) |
- |
- |
- |
- |
(7,866) |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|
Transactions with owners |
|
- |
- |
(7,866) |
- |
- |
- |
- |
(7,866) |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|
Profit for the period |
|
- |
- |
- |
- |
- |
- |
6,183 |
6,183 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets |
|
|
|
|
|
|
|
|
|
|
- Fair value losses |
|
- |
- |
- |
- |
- |
(4,749) |
- |
(4,749) |
|
- Reclassification to profit or loss due to impairment |
|
- |
- |
- |
- |
- |
7,626 |
- |
7,626 |
|
Foreign exchange gain arising from translation of subsidiaries |
|
- |
- |
- |
- |
403 |
- |
- |
403 |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|
Total comprehensive income for the period |
|
- |
- |
- |
- |
403 |
2,877 |
6,183 |
9,463 |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|
Balance at 30 June 2016 |
|
- |
215,499 |
(46,312) |
5,506 |
(1,325) |
1,730 |
(24,864) |
150,234 |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|
Comparative period |
Note
|
Share capital |
Share premium |
Treasury Shares |
Share option reserve |
Translation reserve |
Investment revaluation reserve |
Retained earnings |
Total |
|
|
|
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
|
Balance at 1 January 2015 |
|
- |
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 disposal |
|
- |
- |
- |
- |
- |
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 |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
------ |
Livermore Investments Group Limited
Condensed Consolidated Statement of Cash Flows
for the period ended 30 June 2016
|
|
Note |
Six months ended 30 June 2016 Unaudited |
Six months ended 30 June 2015 Unaudited |
Year ended 31 December 2015 Audited |
|
|
|
US $000 |
US $000 |
US $000 |
|
Cash flows from operating activities |
|
|
|
|
|
Profit / (loss) before tax |
|
6,583 |
2,166 |
(2,808) |
|
|
|
|
|
|
|
Adjustments for: |
|
|
|
|
|
Depreciation expense |
23 |
3 |
4 |
16 |
|
Provision charge |
|
- |
- |
513 |
|
Interest expense |
24 |
706 |
808 |
1,607 |
|
Interest and dividend income |
20 |
(12,930) |
(11,850) |
(25,675) |
|
Loss on investments |
22 |
7,360 |
10,944 |
26,136 |
|
Exchange differences |
|
(1,143) |
(1,390) |
723 |
|
|
|
------ |
------ |
------ |
|
|
|
579 |
682 |
512 |
|
|
|
|
|
|
|
Changes in working capital |
|
|
|
|
|
Decrease in trade and other receivables |
|
583 |
9,271 |
17,164 |
|
Decrease in trade and other payables |
|
(1,839) |
(162) |
959 |
|
|
|
------ |
------ |
------ |
|
Cash flows from operations |
|
(677) |
9,791 |
18,635 |
|
Interest and dividend received |
|
13,169 |
11,197 |
25,969 |
|
Settlement of litigation |
|
(128) |
- |
- |
|
Tax paid |
|
(16) |
(13) |
(216) |
|
|
|
------ |
------ |
------ |
|
Net cash generated from operating activities |
|
12,348 |
20,975 |
44,388 |
|
|
|
------ |
------ |
------ |
|
Cash flows from investing activities |
|
|
|
|
|
Acquisition of investments |
|
(16,841) |
(11,118) |
(32,415) |
|
Addition to investment property |
|
(102) |
- |
- |
|
Proceeds from sale of investments |
|
500 |
10,743 |
13,679 |
|
Settlement of derivative |
|
(743) |
1,332 |
2,332 |
|
Acquisition of associate |
9 |
- |
(3,750) |
(7,500) |
|
Capital return of associate |
|
- |
- |
8,183 |
|
|
|
------ |
------ |
------ |
|
Net cash from investing activities |
|
(17,186) |
(2,793) |
(15,721) |
|
|
|
------ |
------ |
------ |
|
Cash flows from financing activities |
|
|
|
|
|
Purchases of own shares |
|
(7,866) |
- |
(1,544) |
|
Proceeds from bank loans |
|
- |
72,430 |
78,610 |
|
Repayment of bank loans |
|
(768) |
(84,520) |
(79,751) |
|
Interest paid |
|
(717) |
(870) |
(1,731) |
|
Dividends paid |
|
- |
(4,999) |
(4,999) |
|
|
|
------ |
------ |
------ |
|
Net cash from financing activities |
|
(9,351) |
(17,959) |
(9,415) |
|
|
|
------ |
------ |
------ |
|
Net (decrease) / increase in cash and cash equivalents |
|
(14,189) |
223 |
19,252 |
|
Cash and cash equivalents at the beginning of the period / year |
|
12,562 |
(6,548) |
(6,548) |
|
Exchange differences on cash and cash equivalents |
|
564 |
(181) |
(124) |
|
Translation differences on foreign operations' cash and cash equivalents |
|
17 |
29 |
(18) |
|
|
|
------ |
------ |
------ |
|
Cash and cash equivalents at the end of the period / year |
12 |
(1,046) |
(6,477) |
12,562 |
|
|
|
------ |
------ |
------ |
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 2015 Annual Report, available on www.livermore-inv.com. The application of the IFRS pronouncements that became effective as of 1 January 2016 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 2015. 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 2016. 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 2015.
The financial information for the year ended 31 December 2015 is extracted from the Company's consolidated financial statements for the year ended 31 December 2015 which contained an unqualified audit report.
4. Available-for-sale financial assets
|
|
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Non-current assets |
|
|
|
|
Fixed income investments |
78,876 |
73,914 |
65,946 |
|
Private equities |
6,220 |
6,187 |
5,295 |
|
Financial and minority holdings |
5,927 |
9,266 |
7,223 |
|
|
------ |
------ |
------ |
|
|
91,023 |
89,367 |
78,464 |
|
|
------ |
------ |
------ |
|
Current assets |
|
|
|
|
Public equities investments |
1,191 |
1,156 |
1,619 |
|
Hedge funds |
1,024 |
1,091 |
1,064 |
|
|
------ |
------ |
------ |
|
|
2,215 |
2,247 |
2,683 |
|
|
------ |
------ |
------ |
For description of each of the above categories, refer to note 6.
The Group treats its investments in the loan market through CLOs as non-current investments as the Group generally intends to hold such investments over a longer period.
During the six months ended 30 June 2016, 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 2016, of USD 7.626m (June 2015: USD 10.828m, December 2015: USD 31.726m), are included within loss on investments (note 22), and represent impairment losses arising due to:
|
|
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Significant fall in value |
2,406 |
2,175 |
11,119 |
|
Prolonged fall in value |
- |
3,560 |
1,490 |
|
Significant and prolonged fall in value |
5,220 |
5,093 |
19,117 |
|
|
------ |
------ |
------ |
|
|
7,626 |
10,828 |
31,726 |
|
|
------ |
------ |
------ |
5. Financial assets at fair value through profit or loss
|
|
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2014 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Non-current assets |
|
|
|
|
Private equities |
330 |
330 |
330 |
|
Real estate entities |
1,288 |
1,188 |
1,203 |
|
|
------ |
------ |
------ |
|
|
1,618 |
1,518 |
1,533 |
|
|
------ |
------ |
------ |
|
|
|
|
|
|
Current assets |
|
|
|
|
Fixed income investments |
7,165 |
1,649 |
6,655 |
|
Public equity investments |
1,640 |
2,080 |
1,613 |
|
Hedge funds |
- |
43 |
- |
|
|
------ |
------ |
------ |
|
|
8,805 |
3,772 |
8,268 |
|
|
------ |
------ |
------ |
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.
· 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.
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
· 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 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.
· 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.
· Financial and Minority holdings 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.
· Derivative instruments are valued at fair value as provided by counter parties (banks) of the derivative agreement.
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 2016 |
Unaudited US $000 |
Unaudited US $000 |
Unaudited US $000 |
Unaudited US $000 |
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
Assets |
|
|
|
|
|
Fixed income investments |
1,103 |
78,876 |
6,062 |
86,041 |
|
Private equities |
- |
- |
6,550 |
6,550 |
|
Financial and minority holdings |
- |
- |
5,927 |
5,927 |
|
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 |
|
|
------ |
------ |
------ |
------ |
|
30 June 2015 |
Unaudited US $000 |
Unaudited US $000 |
Unaudited US $000 |
Unaudited US $000 |
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
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 |
|
Investment in associate |
|
3,750 |
|
3,750 |
|
|
------ |
------ |
------ |
------ |
|
|
4,884 |
78,990 |
16,972 |
100,846 |
|
|
------ |
------ |
------ |
------ |
|
|
|
|
|
|
|
31 December 2015 |
Audited US $000 |
Audited US $000 |
Audited US $000 |
Audited US $000 |
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
Assets |
|
|
|
|
|
Fixed income investments |
1,634 |
65,946 |
5,021 |
72,601 |
|
Private equities |
- |
- |
5,625 |
5,625 |
|
Financial and minority holdings |
- |
- |
7,223 |
7,223 |
|
Public equity investments |
3,232 |
- |
- |
3,232 |
|
Hedge funds |
- |
1,064 |
- |
1,064 |
|
Real estate entities |
- |
- |
1,203 |
1,203 |
|
|
------ |
------ |
------ |
------ |
|
|
4,866 |
67,010 |
19,072 |
90,948 |
|
|
------ |
------ |
------ |
------ |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Forward contract |
- |
217 |
- |
217 |
|
|
------ |
------ |
------ |
------ |
|
|
- |
217 |
- |
217 |
|
|
------ |
------ |
------ |
------ |
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 through profit or loss |
|
|||
|
|
Financial and minority holdings |
Private equities |
Real estate |
Private equities |
Fixed Income investments |
Total |
|
|
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
|
As at 1 January 2016 |
7,223 |
5,295 |
1,203 |
330 |
5,021 |
19,072 |
|
Transfer |
- |
369 |
- |
- |
- |
369 |
|
Gains recognised in: |
|
|
|
|
|
|
|
-Profit or loss |
(1,296) |
(79) |
- |
- |
1,041 |
(334) |
|
-Other comprehensive income |
- |
635 |
- |
- |
- |
635 |
|
Exchange difference |
- |
- |
85 |
- |
- |
85 |
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
As at 30 June 2016 |
5,927 |
6,220 |
1,288 |
330 |
6,062 |
19,827 |
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
|
Available-for-sale |
At fair value through profit or loss |
Derivative financial instruments |
|
|||
|
|
Financial and minority holdings |
Private equities |
Real estate |
Private equities |
Total return swap |
Total |
|
|
|
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) / gains recognised in: |
|
|
|
|
|
|
|
|
-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 through profit or loss |
Derivative financial instruments |
|
||||||
|
|
Financial and minority holdings |
Private equities |
Real estate |
Private equities |
Fixed Income investments |
Total return 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 |
- |
- |
- |
- |
5,000 |
- |
5,000 |
|||
|
Settlement |
|
(59) |
- |
- |
- |
(1,332) |
(1,391) |
|||
|
(Losses) / gains recognised in: |
|
|
|
|
|
|
|
|||
|
-Profit or loss |
(2,043) |
(2,134) |
104 |
- |
21 |
207 |
(3,845) |
|||
|
-Other comprehensive income |
- |
(403) |
- |
- |
- |
- |
(403) |
|||
|
Exchange difference |
- |
- |
(377) |
- |
- |
- |
(377) |
|||
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|||
|
As at 31 December 2015 |
7,223 |
5,295 |
1,203 |
330 |
5,021 |
- |
19,072 |
|||
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
|||
The above recognised gains / (losses) are allocated as follows:
|
|
Available-for-sale |
At fair value through profit or loss |
|
|
|||
|
|
Financial and minority holdings |
Private equities |
Real estate |
Private equities |
Fixed Income investments |
Total |
|
|
Six month ended 30 June 2016 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
|
|
Profit or loss |
|
|
|
|
|
|
|
|
-Financial assets held at period-end |
(1,296) |
(79) |
- |
- |
1,041 |
(334) |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
|
|
(1,296) |
(79) |
- |
- |
1,041 |
(334) |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
-Financial assets held at period-end |
- |
635 |
- |
- |
- |
635 |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
|
|
- |
635 |
- |
- |
- |
635 |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
|
Total gains for period |
(1,296) |
556 |
- |
- |
1,041 |
301 |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale |
At fair value through profit or loss |
Derivative financial instruments |
|
|||
|
|
Financial and minority holdings |
Private equities |
Real estate |
Private equities |
Total return swap |
Total |
|
|
Six month ended 30 June 2015 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
|
|
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) |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
|
Total (losses) / gains for period |
- |
(1,704) |
- |
- |
207 |
(1,497) |
|
|
|
------ |
------ |
------ |
------ |
------ |
------ |
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale |
At fair value through profit or loss |
Derivative financial instruments |
|
|||||
|
|
Financial and minority holdings |
Private equities |
Real estate |
Private equities |
Fixed Income investments |
Total return swap |
Total |
||
|
Year ended 31 December 2015 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
US $000 |
||
|
Profit or loss |
|
|
|
|
|
|
|
||
|
-Financial assets held at period-end |
(2,043) |
(2,134) |
104 |
- |
21 |
- |
(4,052) |
||
|
-Financial assets not held at period-end |
- |
- |
- |
- |
- |
207 |
207 |
||
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
||
|
|
(2,043) |
(2,134) |
104 |
- |
21 |
207 |
(3,845) |
||
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
||
|
Other comprehensive income |
|
|
|
|
|
|
|
||
|
-Financial assets held at period-end |
- |
(403) |
- |
- |
- |
- |
(403) |
||
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
||
|
|
- |
(403) |
- |
- |
- |
- |
(403) |
||
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
||
|
Total gains / (losses) for year |
(2,043) |
(2,537) |
104 |
- |
21 |
207 |
(4,248) |
||
|
|
------ |
------ |
------ |
------ |
------ |
------ |
------ |
||
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.
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 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Valuation as at 1 January |
123,324 |
116,609 |
116,609 |
|
Fair value (loss) / gain - recognised in profit or loss |
(102) |
- |
7,819 |
|
Additions |
102 |
- |
- |
|
Exchange differences |
2,861 |
7,203 |
(1,104) |
|
|
------ |
------ |
------ |
|
As at 30 June / 31 December |
126,185 |
123,812 |
123,324 |
|
|
------ |
------ |
------ |
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 2015 on the basis of open market value (as disclosed in the 2015 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 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
As at 1 January |
- |
- |
- |
|
Additions |
- |
3,750 |
7,500 |
|
Capital return |
- |
- |
(8,183) |
|
Fair value gain |
- |
- |
683 |
|
|
------ |
------ |
------ |
|
As at 30 June / 31 December |
- |
3,750 |
- |
|
|
------ |
------ |
------ |
|
|
|
|
|
|
Fair value |
||
|
Name of investee |
Type of investment |
Place of incorporation |
Principal activity |
Proportion of voting rights held |
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
|
|
|
|
US $000 |
US $000 |
US $000 |
|
Silvermore Ltd |
Joint venture |
Cayman Islands |
Investment holding (dormant) |
50% |
- |
- |
- |
|
Highbridge
|
Associate |
Cayman Islands |
Investment holding |
25% |
- |
3,750 |
- |
|
|
|
|
|
|
----- |
----- |
----- |
|
|
|
|
|
|
- |
3,750 |
- |
|
|
|
|
|
|
------ |
------ |
------ |
During the year 2015, the Group invested in a 25% interest in Highbridge Loan Management Warehouse 7-2015 Ltd (a company incorporated in Cayman Islands), through its subsidiary Mountview Holdings Ltd, until Highbridge was converted into a CLO. After the conversion into a CLO the entity ceased to be an associate of the Group.
10. Details of subsidiaries
Details of the investments in which the Group has a controlling interest are as follows:
|
Name of Subsidiary |
Place of incorporation |
Holding |
Proportion of voting rights and shares held |
Principal activity |
|
Livermore Properties Limited |
British Virgin Islands |
Ordinary shares |
100% |
Holding of investments |
|
Mountview Holdings Limited |
British Virgin Islands |
Ordinary shares |
100% |
Investment vehicle |
|
Sycamore Loan Strategies Ltd |
Cayman Islands |
Ordinary shares |
100% |
Investment vehicle |
|
Sycamore Loan Funding Ltd |
Cayman Islands |
Ordinary shares |
100% |
Investment vehicle |
|
Livermore Israel Investments Ltd |
Israel |
Ordinary shares |
100% |
Holding of investments |
|
Livermore Capital AG |
Switzerland |
Ordinary shares |
100% |
Administration services |
|
Livermore Investments AG* |
Switzerland |
Ordinary shares |
100% |
Real Estate owner and management |
|
Enaxor S.a.r.l |
Luxembourg |
Ordinary shares |
100% |
Holding of investment |
|
Livermore Investments Cyprus Limited |
Cyprus |
Ordinary shares |
100% |
Administration services |
|
Sandhirst Ltd* |
Cyprus |
Ordinary shares |
100% |
Holding of investments |
* Held by Enaxor S.a.r.l.
Silvermore 2 Ltd was dissolved during the period.
11. Trade and other receivables
|
|
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Financial items |
|
|
|
|
Accrued interest and dividend income |
64 |
735 |
304 |
|
Amounts due by related parties (note 27) |
2,527 |
2,512 |
2,514 |
|
Other receivables |
349 |
8,340 |
272 |
|
|
------ |
------ |
------ |
|
|
2,940 |
11,587 |
3,090 |
|
Non-Financial items |
|
|
|
|
Other assets (note 27) |
1,692 |
2,820 |
2,256 |
|
Prepayments |
133 |
108 |
272 |
|
|
------ |
------ |
------ |
|
|
4,765 |
14,515 |
5,618 |
|
|
------ |
------ |
------ |
|
|
|
|
|
|
Allocated as: |
|
|
|
|
Current assets |
4,201 |
12,823 |
4,490 |
|
Non-current assets (other assets - note 27) |
564 |
1,692 |
1,128 |
|
|
------ |
------ |
------ |
|
|
4,765 |
14,515 |
5,618 |
|
|
------ |
------ |
------ |
12. Cash and cash equivalents
Cash and cash equivalents included in the cash flow statement comprise the following at the reporting date:
|
|
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Cash at bank |
13,201 |
12,340 |
25,770 |
|
Bank overdraft used for cash management purposes |
(14,247) |
(18,817) |
(13,208) |
|
|
------ |
------ |
------ |
|
Cash and cash equivalents for the purposes of the consolidated statement of cash flows |
(1,046) |
(6,477) |
12,562 |
|
|
------ |
------ |
------ |
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 purchased an additional 17,475,585 ordinary shares at an average price of USD 0.45 (£0.34) per share to be held in treasury during the period. As at 30 June 2016 the Company had 129,306,403 ordinary shares held in treasury.
In the consolidated statement of financial position the amount included comprises of:
|
|
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Share premium |
215,499 |
215,499 |
215,499 |
|
Treasury shares |
(46,312) |
(36,902) |
(38,446) |
|
|
------ |
------ |
------ |
|
|
169,187 |
178,597 |
177,053 |
|
|
------ |
------ |
------ |
14. Share options
The Company has 10,650,000 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 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Outstanding options |
|
|
|
|
|
|
|
|
|
At 1 January |
10,650,000 |
11,340,000 |
11,340,000 |
|
Options expired |
- |
- |
(690,000) |
|
|
--------- |
--------- |
--------- |
|
At 30 June / 31 December |
10,650,000 |
11,340,000 |
10,650,000 |
|
|
--------- |
--------- |
--------- |
|
|
|
|
|
|
|
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Exercisable options |
|
|
|
|
|
|
|
|
|
At 1 January |
10,650,000 |
11,340,000 |
11,340,000 |
|
Options expired |
- |
- |
(690,000) |
|
|
--------- |
--------- |
--------- |
|
At 30 June / 31 December |
10,650,000 |
11,340,000 |
10,650,000 |
|
|
--------- |
--------- |
--------- |
15. Derivative financial instruments
|
|
Six months ended 30 June 2016 Unaudited |
Six months ended 30 June 2015 Unaudited |
Year ended 31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Current assets |
|
|
|
|
Forward contract |
- |
192 |
- |
|
|
------ |
------ |
------ |
|
Current liabilities |
|
|
|
|
Forward contract |
168 |
- |
217 |
|
|
------ |
------ |
------ |
16. Bank loans
|
|
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
As at 1 January |
76,410 |
78,092 |
78,092 |
|
Additions |
- |
72,724 |
78,822 |
|
Interest charge |
529 |
694 |
1,278 |
|
Repayments of principal |
(768) |
(84,520) |
(79,751) |
|
Repayments of interest |
(529) |
(694) |
(1,278) |
|
Exchange differences |
1,770 |
4,824 |
(541) |
|
Refinancing fees |
- |
(294) |
(212) |
|
Amortization of refinancing fees |
48 |
- |
- |
|
|
------ |
------ |
------ |
|
As at 30 June / 31 December |
77,460 |
70,826 |
76,410 |
|
|
------ |
------ |
------ |
|
|
|
|
|
|
Allocated as: |
|
|
|
|
Current bank loans |
1,504 |
3,315 |
1,407 |
|
Non-current bank loans |
75,956 |
67,511 |
75,003 |
|
|
------ |
------ |
------ |
|
|
77,460 |
70,826 |
76,410 |
|
|
------ |
------ |
------ |
The bank loan relates to Wyler Park investment property purchase (note 8) and is secured on this property.
The principal amount of the loan facility as of 30 June 2016 is CHF 75.85 million. The facility is committed until at least 30 June 2019. The loan facility maybe extended up to 30 June 2029, unless terminated by either party.
The loan bears interest at 3-Month CHF Libor (with a floor rate at zero) plus 1.40% margin. The effective Interest rate of the loan as at 30 June 2016 is 1.40%.
17. Trade and other payables
|
|
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Financial items |
|
|
|
|
Trade payables |
396 |
500 |
444 |
|
Amounts due to related parties (note 27) |
190 |
565 |
1,377 |
|
Accrued expenses |
277 |
394 |
386 |
|
|
------ |
------ |
------ |
|
|
863 |
1,459 |
2,207 |
|
Non-Financial items |
|
|
|
|
Prepayment from tenants |
- |
- |
510 |
|
VAT payable |
74 |
85 |
53 |
|
|
------ |
------ |
------ |
|
|
937 |
1,544 |
2,770 |
|
|
------ |
------ |
------ |
18. Net asset value per share
|
|
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
Net assets attributable to ordinary shareholders (USD 000) |
150,234 |
157,837 |
148,637 |
|
|
------------- |
------------- |
------------- |
|
Closing number of ordinary share in issue |
174,813,998 |
195,289,583 |
192,289,583 |
|
|
------------- |
------------- |
------------- |
|
Basic net asset value per share (USD) |
0.86 |
0.81 |
0.77 |
|
|
------------- |
------------- |
------------- |
|
Net assets attributable to ordinary shareholders (USD 000) |
150,234 |
157,837 |
148,637 |
|
Dilutive share options - exercise amount |
199 |
230 |
221 |
|
|
------------- |
------------- |
------------- |
|
Net assets attributable to ordinary shareholders including the effect of potentially diluted shares (USD 000) |
150,433 |
158,067 |
148,858 |
|
|
------------- |
------------- |
------------- |
|
Closing number of ordinary shares in issue |
174,813,998 |
195,289,583 |
192,289,583 |
|
Dilutive share options |
500,000 |
500,000 |
500,000 |
|
|
------------- |
------------- |
------------- |
|
Closing number of ordinary shares including the effect of potentially diluted shares |
175,313,998 |
195,789,583 |
192,789,583 |
|
|
------------- |
------------- |
------------- |
|
Diluted net asset value per share (USD) |
0.86 |
0.81 |
0.77 |
|
|
------------- |
------------- |
------------- |
|
|
|
|
|
|
Number of Shares |
|
|
|
|
Ordinary shares |
304,120,401 |
304,120,401 |
304,120,401 |
|
Treasury shares |
(129,306,403) |
(108,830,818) |
(111,830,818) |
|
|
------------- |
------------- |
------------- |
|
Closing number of ordinary shares in issue |
174,813,998 |
195,289,583 |
192,289,583 |
|
|
------------- |
------------- |
------------- |
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 2016, 30 June 2015 and 31 December 2015. All other share options do not impact the diluted net asset value per share at 30 June 2016, 30 June 2015 and 31 December 2015 as their exercise price at these dates was higher than the net asset value per Company's share.
Repurchase of own shares
The Board believes that the ability of the Company to re-purchase its own Ordinary shares in the market may potentially benefit equity shareholders of the Company. The repurchase of Ordinary shares at a discount to the underlying net asset value enhances the net asset value per share of the remaining equity shares.
During the period, the Company bought an additional 17,475,585 ordinary shares at an average price of USD 0.45 per share.
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 2016 - Unaudited |
Equity and debt instruments investment activities |
Investment property activities
|
Total per financial statements
|
|
Segment results |
2016 |
2016 |
2016 |
|
|
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 |
(7,258) |
(102) |
(7,360) |
|
|
------ |
------ |
------ |
|
Gross profit |
5,672 |
2,478 |
8,150 |
|
Administrative expenses |
(1,677) |
(327) |
(2,004) |
|
|
------ |
------ |
------ |
|
Operating profit |
3,995 |
2,151 |
6,146 |
|
Finance costs |
(124) |
(582) |
(706) |
|
Finance income |
1,143 |
- |
1,143 |
|
|
------ |
------ |
------ |
|
Profit before taxation |
5,014 |
1,569 |
6,583 |
|
Taxation charge |
(5) |
(395) |
(400) |
|
|
------ |
------ |
------ |
|
Profit for the period |
5,009 |
1,174 |
6,183 |
|
|
------ |
------ |
------ |
|
Segment assets |
121,235 |
126,604 |
247,839 |
|
|
------ |
------ |
------ |
|
Segment liabilities |
15,298 |
82,307 |
97,605 |
|
|
------ |
------ |
------ |
|
Six months ended 30 June 2015 - Unaudited |
Equity and debt instruments investment activities |
Investment property activities
|
Total per financial 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 (loss) / 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 |
|
|
------ |
------ |
------ |
|
Year ended 31 December 2015 - Audited
|
Equity and debt instruments investment activities |
Investment property activities
|
Total per financial statements
|
|
Segment results |
2015 |
2015 |
2015 |
|
|
US $000 |
US $000 |
US $000 |
|
Investment income |
|
|
|
|
Interest and dividend income |
25,675 |
- |
25,675 |
|
Investment property income |
- |
5,227 |
5,227 |
|
(Loss) / gain on investments |
(33,955) |
7,819 |
(26,136) |
|
|
------ |
------ |
------ |
|
Gross (loss) / profit |
(8,280) |
13,046 |
4,766 |
|
Other income |
35 |
- |
35 |
|
Administrative expenses |
(4,510) |
(645) |
(5,155) |
|
|
------ |
------ |
------ |
|
Operating (loss) / profit |
(12,755) |
12,401 |
(354) |
|
Finance costs |
(1,109) |
(1,345) |
(2,454) |
|
|
------ |
------ |
------ |
|
(Loss) / profit before taxation |
(13,864) |
11,056 |
(2,808) |
|
Taxation charge |
- |
(1,951) |
(1,951) |
|
|
------ |
------ |
------ |
|
(Loss) / profit for the year |
(13,864) |
9,105 |
(4,759) |
|
|
------ |
------ |
------ |
|
Segment assets |
121,104 |
124,588 |
245,692 |
|
|
------ |
------ |
------ |
|
Segment liabilities |
15,681 |
81,374 |
97,055 |
|
|
------ |
------ |
------ |
The Group's investment income and its investments are divided into the following geographical areas:
|
Six months ended 30 June 2016 - Unaudited |
Equity and debt instruments investment activities |
Investment property activities
|
Total per financial statements
|
|
|
2016 |
2016 |
2016 |
|
|
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 |
(1,199) |
- |
(1,199) |
|
Asia |
47 |
- |
47 |
|
|
------ |
------ |
------ |
|
|
5,672 |
2,478 |
8,150 |
|
|
------ |
------ |
------ |
|
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 |
|
|
------ |
------ |
------ |
|
Six months ended 30 June 2015 - Unaudited |
Equity and debt instruments investment activities |
Investment property activities
|
Total per financial statements
|
|
|
2015 |
2015 |
2015 |
|
|
US $000 |
US $000 |
US $000 |
|
Investment Income |
|
|
|
|
Switzerland |
- |
2,738 |
2,738 |
|
Other European countries |
(52) |
- |
(52) |
|
United States |
1,360 |
- |
1,360 |
|
India |
(820) |
- |
(820) |
|
Asia |
418 |
- |
418 |
|
|
------ |
------ |
------ |
|
|
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 |
|
Asia |
4,686 |
- |
4,686 |
|
|
------ |
------ |
------ |
|
|
97,096 |
123,812 |
220,908 |
|
|
------ |
------ |
------ |
|
Year ended 31 December 2015 - Audited |
Equity and debt instruments investment activities |
Investment property activities
|
Total per financial statements
|
|
|
2015 |
2015 |
2015 |
|
|
US $000 |
US $000 |
US $000 |
|
Investment Income |
|
|
|
|
Switzerland |
- |
13,046 |
13,046 |
|
Other European countries |
(22) |
- |
(22) |
|
United States |
(5,950) |
- |
(5,950) |
|
India |
(2,235) |
- |
(2,235) |
|
Asia |
(73) |
|
(73) |
|
|
------ |
------ |
------ |
|
|
(8,280) |
13,046 |
4,766 |
|
|
------ |
------ |
------ |
|
Investments |
|
|
|
|
Switzerland |
- |
123,324 |
123,324 |
|
Other European countries |
5,089 |
- |
5,089 |
|
United States |
72,030 |
- |
72,030 |
|
India |
10,004 |
- |
10,004 |
|
Asia |
3,825 |
- |
3,825 |
|
|
------ |
------ |
------ |
|
|
90,948 |
123,324 |
214,272 |
|
|
------ |
------ |
------ |
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, 82% 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 2015: 89%, December 2015: 81.9%).
20. Interest and dividend income
|
|
Six months ended 30 June 2016 Unaudited |
Six months ended 30 June 2015 Unaudited |
Year ended 31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Interest from investments |
63 |
63 |
127 |
|
Dividend income |
12,867 |
11,787 |
25,548 |
|
|
------ |
------ |
------ |
|
|
12,930 |
11,850 |
25,675 |
|
|
------ |
------ |
------ |
21. Investment property income
|
|
Six months ended 30 June 2016 Unaudited |
Six months ended 30 June 2015 Unaudited |
Year ended 31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Gross rental income |
2,728 |
2,862 |
5,634 |
|
Direct expenses |
(148) |
(124) |
(407) |
|
|
------ |
------ |
------ |
|
|
2,580 |
2,738 |
5,227 |
|
|
------ |
------ |
------ |
All direct expenses relate to the generation of rental income.
22. Loss on investments
|
|
Six months ended 30 June 2016 Unaudited |
Six months ended 30 June 2015 Unaudited |
Year ended 31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Gain / (loss) on sale of investments |
- |
(577) |
(3,459) |
|
Investment property revaluation |
(102) |
- |
7,819 |
|
Loss due to impairment of available-for-sale financial assets |
(7,626) |
(10,828) |
(31,726) |
|
Fair value gains / (losses) on financial assets through profit or loss |
1,121 |
124 |
(320) |
|
Fair value gain on associate |
- |
- |
683 |
|
Fair value (losses) / gains on derivative instruments |
(694) |
399 |
991 |
|
Bank custody fees |
(59) |
(62) |
(124) |
|
|
------ |
------ |
------ |
|
|
(7,360) |
(10,944) |
(26,136) |
|
|
------ |
------ |
------ |
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 ended 30 June 2016 Unaudited |
Six months ended 30 June 2015 Unaudited |
Year ended 31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Available-for-sale |
- |
(822) |
(5,723) |
|
At fair value through profit or loss |
46 |
(87) |
(303) |
|
|
------ |
------ |
------ |
|
|
46 |
(909) |
(6,026) |
|
|
------ |
------ |
------ |
23. Administrative expenses
|
|
Six months ended 30 June 2016 Unaudited |
Six months ended 30 June 2015 Unaudited |
Year ended 31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Legal expenses |
61 |
55 |
188 |
|
Directors' fees and expenses |
993 |
996 |
2,414 |
|
Professional and consulting fees |
429 |
299 |
872 |
|
Other salaries and expenses |
113 |
124 |
213 |
|
Office cost |
167 |
153 |
358 |
|
Depreciation |
3 |
4 |
16 |
|
Other operating expenses |
206 |
213 |
447 |
|
Provision charge |
- |
- |
513 |
|
Audit fees |
32 |
35 |
134 |
|
|
------ |
------ |
------ |
|
|
2,004 |
1,879 |
5,155 |
|
|
------ |
------ |
------ |
24. Finance costs and income
|
|
Six months ended 30 June 2016 Unaudited |
Six months ended 30 June 2015 Unaudited |
Year ended 31 December 2015 Audited |
|
|
US $000 |
US $000 |
US $000 |
|
Finance costs |
|
|
|
|
Bank interest on investment property loan |
577 |
694 |
1,340 |
|
Other bank interest |
129 |
114 |
267 |
|
Foreign exchange loss |
- |
468 |
847 |
|
|
------ |
------ |
------ |
|
|
706 |
1,276 |
2,454 |
|
Finance income |
|
|
|
|
Foreign exchange gain |
1,143 |
1,677 |
- |
|
|
------ |
------ |
------ |
|
Net Finance (income) / costs |
(437) |
(401) |
2,454 |
|
|
------ |
------ |
------ |
25. Dividends
No dividends are declared for the period ended 30 June 2016.
The Board of Directors will decide on the Company's dividend policy for 2016 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 ended 30 June 2016 Unaudited |
Six months ended 30 June 2015 Unaudited |
Year ended 31 December 2015 Audited |
|
Profit / (loss) for the period / year attributable to ordinary shareholders of the parent (USD 000) |
6,183 |
1,960 |
(4,759) |
|
|
--------- |
--------- |
--------- |
|
Weighted average number of ordinary shares outstanding |
186,255,695 |
195,289,583 |
194,599,172 |
|
|
--------- |
--------- |
--------- |
|
Basic earnings per share (USD) |
0.03 |
0.01 |
(0.02) |
|
|
--------- |
--------- |
--------- |
|
Weighted average number of ordinary shares outstanding |
186,255,695 |
195,289,583 |
194,599,172 |
|
Dilutive effect of share options |
- |
73,318 |
59,005 |
|
|
--------- |
--------- |
--------- |
|
Weighted average number of ordinary shares including the effect of potentially dilutive shares |
186,255,695 |
195,362,901 |
194,658,177 |
|
|
--------- |
--------- |
--------- |
|
Diluted earnings per share (USD) |
0.03 |
0.01 |
(0.02) |
|
|
--------- |
--------- |
--------- |
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 2016, 30 June 2015 and the year ended 31 December 2015. All other share options do not impact the diluted earnings per share for the period ended 30 June 2016, 30 June 2015 and the year ended 31 December 2015 as their exercise price was higher than the average market price of the Company's shares during the corresponding periods.
27. Related party transactions
The Group is controlled by Groverton Management Ltd, an entity owned by Noam Lanir, which
at 30 June 2016 held 76.6% of the Company's effective voting rights.
|
|
30 June 2016 Unaudited |
30 June 2015 Unaudited |
31 December 2015 Audited |
|
|
|
US $000 |
US $000 |
US $000 |
|
|
Amounts receivable from key management |
|
|
|
|
|
Other assets |
1,692 |
2,820 |
2,256 |
(1) |
|
Directors' current accounts |
2,527 |
2,512 |
2,514 |
|
|
|
------- |
------- |
------- |
|
|
|
4,219 |
5,332 |
4,770 |
|
|
|
------- |
------- |
------- |
|
|
|
|
|
|
|
|
Amounts payable to other related party |
|
|
|
|
|
Loan payable |
(149) |
(499) |
(499) |
(2) |
|
|
------- |
------- |
------- |
|
|
|
(149) |
(499) |
(499) |
|
|
|
|
|
|
|
|
Amounts payable to key management |
|
|
|
|
|
Directors' current accounts |
(41) |
(66) |
(35) |
|
|
Other key management personnel |
- |
- |
(843) |
|
|
|
------- |
------- |
------- |
|
|
|
(190) |
(565) |
(1,377) |
|
|
|
------- |
------- |
------- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key management compensation |
|
|
|
|
|
|
|
|
|
|
|
Short term benefits |
|
|
|
|
|
Executive directors' fees |
398 |
398 |
795 |
(3) |
|
Executive directors' reward payments |
564 |
564 |
1,528 |
|
|
Non-executive directors' fees |
32 |
34 |
69 |
|
|
Non-executive directors' reward payments |
- |
- |
22 |
|
|
Other key management fees |
146 |
- |
383 |
|
|
|
------- |
------- |
------- |
|
|
|
1,140 |
996 |
2,797 |
|
|
|
------- |
------- |
------- |
|
(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 2016 of USD 0.149m (June 2015: USD 0.499m, December 2015: USD 0.499m) has been received from related company Chanpak Ltd. The loan is free of interest, unsecured and repayable on demand. This loan is included within trade and other payables (note 17).
(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 2016 or 2015.
Noam Lanir, through an Israeli partnership, is the major shareholder of Babylon Limited, an Israel based Internet Services Company. The Group as of 30 June 2016 held a total of 1.941m shares at a value of USD 1.092m (June 2015: 1.941m shares at a value of USD 0.997m, December 2015: 1.941m shares at a value of USD 0.931m) which represents 4.0% of its effective voting rights. The investment in Babylon Ltd is included within public equity investments under financial assets at fair value through profit or loss (note 5).
During the period the Group received administrative services of USD 0.028m (June 2015: USD 0.021m, December 2015: USD 0.039m) in connection with investments from related company Mash Medical Life Tree Marketing Ltd.
During the period, the Company bought 17,475,585 of its ordinary shares (treasury shares - note 13) at an average price of USD 0.45 per share from Groverton Management Ltd.
28. Litigation
Fairfield Sentry Ltd vs custodian bank and beneficial owners
No further information is provided on the above case as the Directors consider it could prejudice its outcome.
Ex employee vs Empire Online Ltd
29. Commitments
As part of the lease extension agreement with SBB in 2015, the Group will invest up to a maximum of CHF 3.95m (USD 4.04m) and SBB is expected to invest up to CHF 9m (USD 9.2m) to upgrade the property and allow for additional workspaces.
30. Events after the reporting date
In August 2016 loans of USD 2.5m were made to a key management employee. Interest is accrued on these loans at 6 month US LIBOR plus 0.25% per annum. The loans are secured by shares of the Company of an equal market value as at the date of grant, and (principal plus accumulated interest) are repayable on the earlier of the employee leaving the Company or 15 August 2019.
31. Preparation of interim financial statements
Interim condensed consolidated financial statements are unaudited. Consolidated financial statements for Livermore Investments Group Limited for the year ended 31 December 2015, 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.
Report by the Independent Auditors on Review of Condensed Interim Consolidated Financial Statements to the Board of Directors of Livermore Investments Group Limited
Independent Review Report on the Interim Condensed Consolidated Financial Statements
We have reviewed the accompanying interim condensed consolidated financial statements of Livermore Investments Group Limited (the ''Company'') and its subsidiaries (the ''Group'') on pages 9 to 36, which comprise the condensed consolidated statement of financial position as at 30 June 2016 and the condensed consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the six months then ended, and other explanatory notes.
Board of Directors' Responsibility for the Interim Condensed Consolidated Financial Statements
The Company's Board of Directors is responsible for the preparation and fair presentation of these interim condensed consolidated financial statements in accordance with International Accounting Standard 34 ''Interim Financial Reporting'' as adopted by the European Union.
Accountant's Responsibility
Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review. We conducted our review in accordance with International Standard on Auditing 2410 ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity''. This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the interim condensed consolidated financial statements are free of material misstatement.
A review of interim financial information is limited primarily to making inquiries of Company personnel and applying analytical and other review procedures to financial data. 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 consolidated financial statements do not present fairly, in all material respects, the financial position of Livermore Investments Group Limited and its subsidiaries as at 30 June 2016 and of its financial performance and its cash flows for the six month period then ended in accordance with International Accounting Standard 34 ''Interim Financial Reporting'' as adopted by the European Union.
Other Matter
This report, including the conclusion, has been prepared for and only for the Company's members 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
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Limassol, 27 September 2016 |
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