REG - Livermore Inv. Group - Final Results
23/05/2025 07:00
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RNS Number : 8792J Livermore Investments Group Limited 23 May 2025
Highlights
· Net Profit for the year was USD 6.6m (2023: net profit of USD
13.9m).
· Net Asset Value per share increased by 2.5% to USD 0.84 (2023:
USD 0.82) after paying USD 7.0m dividend implying a net return of about 7.0%
for the year
· The Company is conservatively positioned with over USD 44.2m of
cash deposits and Government bonds.
· On 30 September 2024, the Company announced an interim dividend
of USD 7.0m (USD 0.0423 per share) to members on the register on 18 October
2024. The dividend was paid on 15 November 2024.
· Collateralized Loan Obligations (CLO) portfolio generated USD 22m
in cash distributions and a total net return of USD 10.3m in 2024 in addition
to the USD 0.92m generated from the cash and bond portfolio.
Chairman's and Chief Executive's Review
Introduction
We are pleased to announce the financial results for Livermore Investments
Group Limited ("Livermore" or "the Company") for the year ended 31 December
2024. References to the Company hereinafter also include its consolidated
subsidiary (note 9). References to financial statements hereinafter are to the
Company's consolidated financial statements.
The global investment environment in 2024 was shaped by moderate growth,
declining inflation, and cautious monetary policy easing. The U.S. led with
robust economic performance, while the euro area and China faced challenges,
and Japan saw modest recovery. Equity markets thrived on technology and
renewable energy optimism, while fixed-income markets navigated elevated
yields. The US Dollar appreciated against most developed world currencies.
Long duration US Treasuries had middling performance but floating rate
investments generated strong returns to investors driven by higher-for-longer"
rates expectations. The leveraged loan and CLO markets performed strongly,
supported by low default rates, robust refinancing, and better than expected
earnings.
Our net profit for the year was USD 6.6m (2023 net profit: USD 13.9m) and the
year-end NAV was USD 0.84 per share (2023 NAV: USD 0.82 per share) after
paying a dividend payment of USD 7.0m (USD 0.0423 per share).
Our investment in Fetcherr continues to perform well. Fetcherr is a dynamic,
high-frequency, generative pricing engine focused on the airline industry. It
has received several awards and has been steadily gaining larger airline
clients demonstrating its effectiveness in revenue enhancement for their
clients. During the year, Fetcherr raised USD 25m from Battery Ventures. The
Company was able to participate in a secondary round and invested an
additional USD 9.9m to maintain and even somewhat improve its percentage
holding in Fetcher. We expect Fetcherr to continue to successfully execute on
its large and growing pipeline. CLOs and US senior secured loans performed
well in 2024. High carry provided by these floating rate investments was
attractive for yield oriented investors. Our CLO and warehouse portfolio
performed well generating USD 22m in cashflow and USD 10.3m in net gains
during the year. Management had good success trading CLO BB and B rated
tranches during the year. The Company also opened two warehouses in the first
half of 2024 with Blackstone and MJX and converted them into new issue CLOs.
Furthermore, the Company opened one warehouse with PGIM and another with
Blackstone in the second half of 2024 at very attractive terms.
As of the end of the year, the Company had USD 44.2m in cash, deposits, and
Government bonds after a USD 7.0m dividend and a USD 9.9m investment in
Fetcherr.
Financial Review
The NAV of the Company on 31 December 2024 was USD 139.1m (2023: USD 135.8m).
Net profit, during the year was USD 6.6m, which represents profit per share of
USD 0.04. Operating expenses were USD 5.6m (2023: USD 3.3m).
The overall change in the NAV is primarily attributed to the following:
31 December 2024 31 December 2023
US $m US $m
Shareholders' funds at beginning of year 135.8 127.7
___________ ___________
Income from investments 22.5 24.1
Other income - 0.3
Unrealised losses on investments (5.9) (7.5)
Operating expenses (5.6) (3.3)
Other expenses - (0.3)
Net finance costs (0.5) (0.1)
Tax charge (0.2) (0.2)
___________ ___________
Increase in net assets from operations 10.3 13.0
Dividends paid (7.0) (4.9)
___________ ___________
Shareholders' funds at end of year 139.1 135.8
------ ------
Net Asset Value per share US $0.84 US $0.82
Dividend
On 30 September 2024, the Company announced an interim dividend of USD 7.0m
(USD 0.0423 per share) to members on the register as at 18 October 2024. The
dividend was paid on 15 November 2024.
The Board of Directors will decide future dividends based on profitability,
liquidity requirements, portfolio performance, market conditions, and the
share price of the Company relative to its NAV.
Richard B
Rosenberg
Noam Lanir
Chairman
Chief Executive Officer
22 May 2025
Review of Activities
Introduction and Overview
Overall, the Company continues to remain conservatively positioned, more so in
light of growing geopolitical uncertainties and high equity and credit
valuations especially in the US. Conflict in and around Israel escalated in
2024 while the Russia-Ukraine war has continued since 2022. In the US, the new
Trump administration seeks to rewrite global trade norms.
Our exposure has been primarily towards short duration floating rate debt and
front-end money-market instruments as well as treasury bills. Higher rates
have afforded the Company the luxury of getting paid to wait while excessive
valuations and unviable business are corrected over time.
Despite the gloom, 2024 was a good year for returns. US equity and credit
markets posted solid gains with S&P 500 Index up by 24% and the UBS
Leveraged Loan Index generating over 9% returns. The US Dollar also
appreciated meaningfully against its developed economy counterparts. Long
duration US Government bonds, however, had a middling outing in 2024 as higher
government deficits and still continuing inflation kept rates higher for
longer. Innovation in Artificial Intelligence (AI) continued at breathtaking
pace igniting optimism for future productivity gains across industries and
functions.
CLO equity and mezzanine bonds had good performance in 2024 as investors
chased the high current yield offered by such floating rate instruments.
Capital markets were open and both the Senior Secured Loan market and CLO
market had record years. Borrowers refinanced their cost of debt lower and
extended maturities on the back of still decent earnings and strong demand.
Default rates continued to stay much lower than historical averages. Still,
there were several credit issues and while the default rates were lower than
projected, the recovery rates were much lower as well. Thus, actual credit
losses incurred through credit events or through trading did materially affect
CLO structures, especially older vintages that had already borne credit
stresses from 2020 and 2022. New vintage CLO structures weathered the issues
much better. The Company opened two warehouses in the first half of 2024 and
converted them into CLOs. Another two warehouses were opened in the second
half. Both these warehouses are lightly ramped given limited value in the very
tight credit spreads offered towards the end of 2024. Older vintage CLOs have
largely amortized through their distributions. Distributions from the CLO
portfolio were in line with expectations generating over USD 22m in cashflow
and USD 10.3m in net gains.
Fetcherr was another bright spot in the Company's portfolio. The AI driven
real-time generative pricing engine for Airlines found several significant
customers as well as marquee investors. Fetcherr raised capital from Battery
Ventures while additional well regarded investors bought shares of Fetcherr in
a secondary offering. The Company also participated in the secondary offering
and purchased additional shares to offset dilution and maintain its percentage
holding in Fetcherr. Overall, the Company invested an additional USD 9.9m in
Fetcherr shares in 2024.
For the 2024 year-end, the Company reported a NAV/share of USD 0.84 after a
dividend payment of USD 7.0m (USD 0.0423 per share) and net profit of USD
6.6m. Interest and distribution income amounted to USD 22.5m, of which, USD
22m was generated from the CLO portfolio. The net gain of the CLO and
warehousing portfolio was USD 10.3m as valuations of older vintage CLO
declined in line with their paydowns.
Operating expenses amounted to USD 5.6m. The Company ended the year with over
USD 44.2m of cash, deposits, and Government bonds after paying an interim
dividend of USD 7.0m in November 2024.
The Company does not have an external management company structure and thus
does not bear the burden of external management and performance fees.
Furthermore, the interests of Livermore's management are aligned with those of
its shareholders as management has a large ownership interest in Livermore
shares.
Considering the strong liquidity positions of Livermore, together with its
strong foothold in the US CLO markets, management believes that the Company is
well positioned to navigate and benefit from current conditions.
Global Investment Environment
In 2024, the global economy navigated a complex landscape with moderate
growth, characterized by regional disparities, easing inflationary pressures,
and evolving monetary policies. The U.S. economy thrived, driven by robust
consumer spending, productivity gains, and high immigration, while the euro
area faced subdued momentum due to restrictive fiscal and monetary policies.
China's growth remained steady but was constrained by a deepening property
sector crisis and weak consumer confidence. Japan achieved modest expansion,
supported by export growth in automotive and electronics, though domestic
demand remained fragile.
Financial conditions eased as central banks lowered policy rates in response
to declining inflation, though monetary policies remained restrictive in many
regions. The U.S. Dollar appreciated due to widening yield spreads with other
countries' government bonds, while the euro and the Japanese Yen weakened.
Global manufacturing momentum was muted, with declines in the euro area, but
Japan and India saw modest and robust manufacturing growth, respectively. The
services sector, particularly India's IT and financial services, was a key
growth driver across many economies.
United States: The U.S. economy exhibited resilience in 2024, with real GDP
growth estimated at 2.8%, aligning closely with 2023's 2.9%. Private
consumption, fuelled by robust income growth, was the primary driver,
supported by solid productivity gains and high immigration. Investment gained
some momentum, though it did fluctuate. Consumer price inflation eased to 2.9%
in December (from 3.4% in 2023), with core inflation remaining elevated at
2.6% (PCE deflator). The Federal Reserve left its policy rate unchanged at
5.25%-5.5% in the first half, then cut it to 4.25%-4.5% by year-end,
signalling further reductions. The Fed reduced its balance sheet by
approximately USD 670 billion (9% of total holdings). The unemployment rate
rose slightly to 4.1%, reflecting slower employment growth, but labour market
conditions remained robust, with production capacity utilization near normal.
Euro Area: The euro area recorded weak GDP growth of 0.7% in 2024, up from
0.5% in 2023, hampered by restrictive fiscal policies and prior monetary
tightening. Production capacity utilization remained below average, with
private consumption rising modestly despite robust income growth, investment
contracting, and exports sluggish. Inflation fell to 2.4% in December (from
2.9% in 2023), nearing the ECB's 2% target, though services inflation remained
elevated. The ECB held its deposit facility rate at 4% early in 2024, then
lowered it to 3% by year-end, signalling further cuts. The ECB reduced its
asset portfolio through partial reinvestment of maturing securities. The
unemployment rate stabilized at 6.3%, historically low, with real wage growth
supporting a resilient labor market.
China: China's GDP growth moderated to 5.0% in 2024 (from 5.4% in 2023), due
to a property sector crisis and subdued domestic demand. Capacity utilization
remained below average, with weak consumer and business sentiment. Buoyant
goods exports, aided by lower prices, supported growth. Inflation averaged at
0.5%, prompting the People's Bank of China to maintain accommodative policies
with selective rate cuts, liquidity injections, and measures to stabilize the
property market. The government also eased monetary and fiscal policy to meet
growth targets.
Japan: Japan's economy grew by 1.2% in 2024, up from 1.0% in 2023, driven by
export growth in automotive and electronics. Domestic demand was weak due to
cautious consumer spending and stagnant real wages. Inflation stabilized at 2%
in December (from 2.3% in 2023), aligning with the BoJ's target. The BoJ ended
negative interest rates in March, raising the short-term rate to 0.1%, then to
0.25% by year-end, while scaling back bond purchases. The unemployment rate
remained low at 2.5%, though labour shortages persisted.
In 2024, financial markets sustained their recovery from 2023, driven by
optimism in key growth sectors. The S&P 500 surged by 24%, while the MSCI
All Country World Index rose by 15.7%. Technology, renewable energy, and
healthcare sectors led the rally, with companies in artificial intelligence
and clean energy driving significant gains. Despite periodic volatility from
geopolitical tensions, the resilience of the U.S. economy bolstered the global
outlook. Small-cap stocks continued to underperform large-cap stocks, and
high-profitability companies outperformed low-profitability ones in both
developed and emerging markets.
Long duration U.S. Treasuries faced challenges, with 10-year yield starting
around 3.9% and closing at 4.5%, reflecting expectations of sustained monetary
tightening and economic growth. Corporate bond yields moderated, with spreads
narrowing significantly, particularly for high-yield bonds, as investor
confidence improved.
In 2024, the leveraged loan market delivered robust performance, with the
S&P UBS Leveraged Loan Index recording a total return of 9.05%, marking
its third-best performance over the past decade. The trailing 12-month average
default rate improved to 0.91%, down from 1.53% in 2023 and well below the
long-term average of 2.61%. Strong demand from CLOs and retail investors
fuelled a record $760 billion in loan repricing, compressing spreads sharply
and borrowers took advantage of the loan demand to extend their maturities. As
a result, only about 4% of the loan market is set to mature before 2027,
alleviating concerns about the "maturity wall."
The collateralized loan obligation (CLO) market saw unprecedented activity,
with a record $202 billion in new gross CLO issuance, surpassing the previous
record in 2021. Net issuance, however, was much more moderate at around $70
billion as high loan prepayments rates drove significant CLO debt
amortizations. The first half of 2024 experienced net negative issuance, a
rare occurrence, while the second half saw positive net issuance driven by
strong CLO debt demand, which tightened spreads and made new issue equity
appear attractive compared to secondary equity. Overall, both CLO debt and
equity delivered strong returns in 2024.
Sources: Swiss National Bank, Bloomberg, Board of Governors of the Federal
Reserve System, European Central Bank (ECB), Morningstar, JP Morgan, Credit
Suisse
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.
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.
Financial Portfolio
The Company manages a financial portfolio valued at USD 112.1m as of 31
December 2024, which is composed mainly of cash and investments in fixed
income and credit related securities.
The following is a table summarizing the financial portfolio as of year-end
2024.
2024 2023
Name US $m US $m
Investment in the loan market through CLOs 56.0 68.3
Open Warehouse facilities 4.8 -
Public equities 2.5 2.0
Short term government bonds 6.4 28.5
Long term government bonds 4.0 4.2
Corporate bonds 4.6 4.0
Invested total 78.3 107.0
Cash 33.8 20.2
Total 112.1 127.2
Senior Secured Loans and Collateralized Loan Obligations (CLO):
US senior secured loans are 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.
2024 was a year of near constant credit spread compression in the senior
secured loan market as higher-for-longer interest rate expectations drove
demand for floating rate investments. In 2024, the loan market delivered
robust performance, with the S&P UBS Leveraged Loan Index recording a
total return of 9.05%. Average loan prices increased from 95.32 at the start
of the year to 96.37 by year-end, reflecting the improved market sentiment.
The trailing 12-month average default rate improved to 0.91%, down from 1.53%
in 2023 and well below the long-term average of 2.61%. Both loans and CLO
markets experienced significant inflows and a majority of the loan market
traded above par. Borrowers took advantage of this demand and refinanced their
cost of debt and extended their maturities aggressively. As a result, only
about 4% of the loan market is set to mature before 2027, alleviating concerns
about the "maturity wall."
The collateralized loan obligation (CLO) market also experienced unprecedented
activity, with a record USD 202 billion in new gross CLO issuance. However,
due to substantial repayments, net issuance remained moderate at USD 70
billion. Tightening CLO debt spreads on the back of high floating rate demand
and low net new issuance improved CLO equity returns, albeit those returns
were moderated by lower spreads on the assets (Loans). CLO refinancing and
reset volumes were robust after a poor environment for such transactions in
2022 and 2023.
While the supply of CLO debt in the primary market kept pace with strong
demand, there were spots where debt came in weaker than expected and the
Company was able to deploy capital in such situations. This technical
dislocation gave us an opportunity to add BB, B and equity tranches at
attractive levels in the first half of 2024. In the second half, however, we
started to reduce exposure as spreads tightened and the market started to
price for perfection. The CLO and warehouse portfolio generated USD 22m of
cash flow in 2024 and net gains were USD 10.3m. As the Company did not invest
materially in 2022 and 2023, a significant part of the CLO equity portfolio is
now amortized and payments from these positions are expected to be smaller
than in previous years. In January 2024, management invested in a warehouse
managed by Blackstone. This warehouse was converted to a CLO in September
2024. In March 2024, the Company invested in a warehouse managed by MJX and
converted it to a CLO in June 2024. The warehouse carry from these two
investments totalled USD 1.66m. In August 2024, we opened a new warehouse with
PGIM and in December 2024 another warehouse was started with Blackstone. While
both these warehouses are lightly ramped as there was limited value in the
loan primary and secondary markets, they may provide immense optionality if
the loan market experiences sharp dislocation in 2025.
The Company is again lightly positioned as credit spreads are too tight on a
historical basis. We expect volatility in 2025, especially in light of the
current US administration's focus on tariffs and reshaping the world trade
order. Our strong cash position and lightly ramped warehouses (10% - 15% of
deal size) should position us to capture opportunities if and when credit
spreads widen.
The Company's CLO portfolio is divided into the following geographical areas:
2024 Amount Percentage 2023 Amount Percentage
US $000 US $000
US CLOs 56,000 100% 68,284 100%
------- ------ ------ ------
Private Equity Investments
The private equity investments held by the Company are mainly direct
investments in private companies and also some fund investments incorporated
in the form of Managed Funds (mostly closed end funds) in Israel and the
emerging economies.
The following summarizes the book value of the private equity investments at
31 December 2024.
Name US $m
Fetcherr Ltd 15.0
Phytech 2.6
Other investments 3.1
Total 20.7
Fetcherr Ltd: Fetcherr is an Israeli start-up that has developed proprietary
large market AI models for dynamic pricing systems. Fetcherr is disrupting
traditional revenue systems in the airline industry and has signed-up airlines
such as Virgin Airlines, Azul Air, etc. The Company invested USD 2m in 2021
and another USD 0.695m in a secondary transaction in 2023 at about a USD 67m
valuation. Around the same time in 2023, Fetcherr raised capital in the form
of a SAFE (convertible debt instrument) at a maximum valuation of USD 100m. In
May 2024, Fetcherr raised USD 25m from Battery Ventures at a USD 250m
valuation. Livermore invested USD 6.5m in May 2024 in a secondary offering
parallel to the abovementioned capital raise. In July 2024, Livermore invested
an additional USD 3.43m and as at 31 December 2024 the company owned 11.51% of
Fetcherr issued share capital.
Phytech: Phytech is an agriculture-technology company in Israel providing
end-to-end solutions for achieving higher yields on crops and tree data.
Livermore continues to hold 12.2% in Phytech Global Advisors Ltd, which in
turns now holds 11.95% on a fully diluted basis in Phytech Ltd.
The following table reconciles the review of activities to the Company's
financial assets at 31 December 2024:
Name US $m
Financial portfolio 78.3
Private equity investments 20.7
Total 99.0
Financial assets at fair value through profit or loss (note 5) 78.3
Financial assets at fair value through other comprehensive income (note 6) 20.7
Total 99.0
Investments in Subsidiaries
The subsidiaries include investments in the fields of real estate and
receivables from the Company itself as well as third parties. The resulting
fair value changes are mainly attributed to changes in the subsidiaries' net
assets including the value of the underlying investments.
Events after the reporting date
Details of material events after the reporting date are disclosed in note 29
to the financial statements.
Litigation
During 2024, there was no litigation that the Company was involved in.
However, in January 2024 the Company settled an older litigation. Further
information is provided in note 25 to the financial statements. --
Report of the Directors
The Directors submit their annual report and audited financial statements of
the Company for the year ended 31 December 2024.
This report has been prepared on a voluntary basis and it does not contain all
of the information that would have been required had it been prepared in
accordance with the UK Companies Act 2006 guidance.
The Board's objectives
The Board's primary objectives are to supervise and control the management
activities, business development, and the establishment of a strong franchise
in the Company's business lines. Measures aimed at increasing shareholders'
value over the medium to long-term, such as an increase in NAV are used to
monitor performance.
The Board of Directors
Richard Barry Rosenberg (age 69) independent, Non-Executive Director, Chairman
of the Board
Richard joined the Company in December 2004. He became Non-Executive Chairman
on 31 October 2006. He qualified as a chartered accountant in 1980 and in
1988 co-founded the accountancy practice SRLV. He has considerable experience
in giving professional advice to clients in the leisure and entertainment
sector. Richard is a director of a large number of companies operating in a
variety of business segments.
Noam Lanir (age 58), Founder and Chief Executive Officer
Noam founded the Company in July 1998, to develop a specialist online
marketing operation. Noam has led the growth and development of the Company's
operations over the last twenty years which culminated in its IPO in June 2005
on AIM. Prior to 1998, Noam was involved in a variety of businesses mainly
within the online marketing sector. He is also a major benefactor of a number
of charitable organisations.
Ron Baron (age 57), Executive Director and Chief Investment Officer
Ron was appointed as Executive Director and Chief Investment Officer in August
2007. Ron has led the establishment and development of Livermore's investment
platform as a leading specialized house in the credit space. Ron also has wide
investment and M&A experience. From 2001 to 2006 Ron served as a member of
the management at Bank Leumi, Switzerland and was responsible for investment
activity. Prior to this, he spent five years as a commercial lawyer advising
banks and large corporations on corporate transactions, including buyouts and
privatisations. Ron has over 18 years of experience as an investment manager
with particular focus on the US credit market and CLOs. He holds an MBA from
INSEAD Fontainebleau and an LLB (LAW) and BA in Economics from Tel Aviv
University. Ron is also the founder and owner of the Israel Cycling Academy a
non-profit professional cycling team.
After the year-end, Ron ceased to act as an Executive Director and remained as
a Non-Executive Director.
Augoustinos Papathomas (age 62) independent, Non-Executive Director
Augoustinos joined the Board in February 2019. He is a trained and qualified
UK Chartered Accountant. He is a Partner of FRP Advisory Cyprus and of APP
Audit in Cyprus with over 30 years of experience in assurance, taxation and
advisory for local and international clients. He is also an insolvency
practitioner with experience in many liquidations and receiverships.
Augoustinos has served as a director in various bodies and organisations.
Directors' responsibilities in relation to the financial statements
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and International
Financial Reporting Standards as adopted by the European Union.
The Directors are required to prepare financial statements for each financial
year which give a true and fair view of the financial position of the Company,
and its financial performance and cash flows for that period. In preparing
these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgments and estimates that are reasonable and prudent;
· state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the financial
statements; and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping proper accounting records that are
sufficient to show and explain the Company's transactions, and at any time
enable the financial position of the Company to be determined with reasonable
accuracy and enable them to ensure that the financial statements comply with
the applicable law and International Financial Reporting Standards as adopted
by the European Union. They are also responsible for safeguarding the assets
of the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the British Virgin Islands governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
Disclosure of information to the Auditor
In so far as the Directors are aware:
· there is no relevant audit information of which the Company's
auditor is unaware; and
· the Directors have taken all steps that they ought to have taken
to make themselves aware of any relevant audit information and to establish
that the auditor is aware of that information.
Substantial Shareholdings
As at 10 May 2025, the Directors are aware of the following interests in 3 per
cent or more of the Company's issued ordinary share capital:
Number of Ordinary Shares Percentage of issued ordinary share capital Percentage of voting rights*
Groverton Management Ltd 123,048,011 70.39% 74.41%
Livermore Management Limited 25,456,903 14.56% 15.40%
* after consideration of the treasury shares.
Save as disclosed in this report and in the remuneration report, the Company
is not aware of any other person or entity that is interested directly or
indirectly in 3% or more of the issued share capital of the Company or could,
directly or indirectly, jointly or severally, exercise control over the
Company.
Details of transactions with Directors are disclosed in note 24 to the
financial statements.
Corporate Governance Statement
Introduction
The Company recognises the importance of the principles of good Corporate
Governance and the Board is pleased to accept its commitment to such high
standards throughout the year.
The Board Constitution and Procedures
The Company is controlled through the Board of Directors, which at 31 December
2024 comprises of two independent Non-Executive Directors (one of which is the
Board's Chairman) and two Executive Directors. The Chief Executive's
responsibility is to focus on co-ordinating the company's business and
implementing Company strategy.
A formal schedule of matters is reserved for consideration by the Board, which
meets approximately four times each year. The Board is responsible for
implementation of the investing strategy as described in the circular to
shareholders dated 29 December 2006 and adopted pursuant to shareholder
approval at the Company's EGM on 17 January 2007. It reviews the strategic
direction of the Company, its codes of conduct, its annual budgets, its
progress towards achievement of these budgets and any capital expenditure
programmes. In addition, the Directors have access to advice and services of
the Company Secretary and all Directors are able to take independent
professional advice if relevant to their duties. The Directors receive
training and advice on their responsibilities as necessary. All Directors
submit themselves to re-election at least once every three years.
Board Committees
The Board delegates clearly defined powers to its Audit and Remuneration
Committees. The minutes of each Committee are circulated by the Board.
Remuneration Committee
The Remuneration Committee comprises of the Non-Executive Chairman of the
Board and a Non-Executive Director. The Remuneration Committee considers the
terms of employment and overall remuneration of the Executive Directors and
key members of Executive management regarding share options, salaries,
incentive payments and performance related pay. The remuneration of
Non-Executive Directors is determined by the Board.
Audit Committee
The Audit Committee comprises of the Non-Executive Chairman of the Board and a
Non-Executive Director and is chaired by the Chairman of the Board. The
duties of the Committee include monitoring the auditor's performance and
reviewing accounting policies and financial reporting procedures.
The Audit Committee's key objectives are the provision of effective governance
over the appropriateness of the Group's financial reporting, including the
adequacy of related disclosures, the performance of external audit function,
and the management of the Group's systems of internal control and business
risks.
The primary roles and responsibilities delegated to, and discharged by, the
Committee include:
• monitoring and challenging the effectiveness of internal control
and associated functions;
• approving and amending Group accounting policies;
• reviewing, monitoring, and ensuring the integrity of interim and
annual financial statements, and any formal announcements relating to the
Company's financial performance;
• providing advice (where requested by the Board) on whether the
Annual Report and Accounts, taken, is fair, balanced, and understandable, and
provides the information necessary for shareholders to assess the Company's
position and performance;
• reviewing and monitoring the external auditor's independence,
objectivity, and effectiveness of the audit services; and
• monitoring and approving the scope and costs of audit.
Communication with Investors
The Directors are available to meet with shareholders throughout the year.
In particular the Executive Directors prepare a general presentation for
analysts and institutional shareholders following the interim and preliminary
results announcements of the Company. The chairman, Richard Rosenberg, is
available for meetings with shareholders throughout the year. The Board
endeavours to answer all queries raised by shareholders promptly.
Shareholders are encouraged to participate in the Annual General Meeting at
which the Chairman will present the key highlights of the Company's
performance. The Board will be available at the Annual General Meeting to
answer questions from shareholders.
Internal Control
The Board is responsible for ensuring that the Company has in place a system
of internal controls and for reviewing its effectiveness. In this context,
control is defined in the policies and processes established to ensure that
business objectives are achieved cost effectively, assets and shareholder
value safeguarded, and that laws and regulations are complied with. Controls
can provide reasonable but not absolute assurance that risks are identified
and adequately managed to achieve business objectives and to minimise material
errors, frauds and losses or breaches of laws and regulations.
The Company operates a sound system of internal control, which is designed to
ensure that the risk of misstatement or loss is kept to a minimum.
Given the Company's size and the nature of its business, the Board does not
consider that it is necessary to have an internal audit function. An internal
audit function will be established as and when the Company is of an
appropriate size.
The Board undertakes a review of its internal controls on an ongoing basis.
Going Concern
The Directors have reviewed the current and projected financial position of
the Company, making reasonable assumptions about interest and distribution
income, future trading performance, valuation projections and debt
requirements. On the basis of this review, the Directors have a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the Annual Report and accounts.
Independence of Auditor
The Board undertakes a formal assessment of the auditor's independence each
year, which includes:
· a review of non-audit related services provided to the Company
and related fees;
· discussion with the auditor of a written report detailing all
relationships with the Company and any other parties which could affect
independence or the perception of independence;
· a review of the auditor's own procedures for ensuring
independence of the audit firm and partners and staff involved in the audit,
including the rotation of the audit partner;
· obtaining written confirmation from the auditor that it is
independent; and
· a review of fees paid to the auditor in respect of audit and
non-audit services.
The Quoted Company Alliance (QCA) Code
The Directors of Livermore recognize the importance of good corporate
governance in facilitating Livermore to achieve its goals in our
accountability to our stakeholders, and have chosen to apply the Quoted
Companies Alliance Corporate Governance Code (the 'QCA Code').
In the statements that follow, we explain our approach to governance, and how
the Board and its committees operate.
1. Establish a strategy and business model which promote long-term value
for shareholders
Livermore's strategy is focused primarily on investments which generate
regular cash flows and where the team have considerable investment experience
and skills. These investments generally include exposure mainly to senior
secured and usually broadly syndicated US loans through structures such as
Collateralized Loan Obligations.
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. Our experience across several economic
cycles and deep expertise in the areas of investment along with long term
orientation promote long-term value of our shareholders and stakeholders. We
retain key employees and management through strong alignment of interests and
a conducive and collaborative work environment.
Core pillars of our investment strategy are:
• Investing with discipline and patience
• Using data and technology to continuously improve, analyze,
and
• Building strong relationships with its counterparties and
employees.
2. Seek to understand and meet shareholder needs and expectations
Livermore encourages two-way communication with its investors. The Chairman
talks regularly with the Group's major shareholders and ensures that their
views are communicated fully to the Board.
The Board is committed to communicating openly with shareholders to ensure
that its strategy and performance are clearly understood. This is achieved
through the Annual Report and the Interim Statement and through other
regulatory and market announcement.
The Board recognizes the AGM as an important opportunity to meet private
shareholders. The Chairman and key management are available to listen to the
views of shareholders informally immediately following the AGM.
Where voting decisions are not in line with the Company's expectations the
Board will engage with those shareholders to understand and address any
issues. The Company Secretary is the main point of contact for such matters.
The Group also maintains a website (www.livermore-inv.com
(http://www.livermore-inv.com) ) which contains information on the Group's
business, strategy, corporate information and specific disclosures required
under AIM Rules and the QCA code. It contains up-to-date information for
shareholders, which includes the Annual Report and Accounts since its
admission to AIM, share price information, and all RNS announcements. All
relevant contact details are also available on the Group's website. In
addition, there is a designated email address for investor relations,
investors@livermore-inv.com.
3. Take into account wider stakeholder and social responsibilities and
their implications for long-term success
Livermore is committed to sustainably deliver long term success and creating a
win-win environment for all its stakeholders. It does so by fostering strong
relations and a sense of loyalty and integrity in all aspects of our business.
The Directors receive feedback from its major stakeholders:
• Shareholders: Generate strong, consistent returns, encourage
open dialogue and continue reporting on investments and business activities
• Employees: Continue to encourage independent thinking and
development, institute employee engagement feedback to listen and address
issues, and reward competitively and based on performance.
• Investment and Transaction Counterparties: Active engagement
through individual meetings as well as regular calls and conference
attendances.
The Company maintains regular dialogue with its Nominated Advisor to ensure
compliance with appropriate regulations and stay up-to-date with its
responsibilities to market participants and regulators.
4. Embed effective risk management, considering both opportunities and
threats, throughout the organization
Audit, risk and internal control: The Company has an established framework of
internal financial controls, which are designed to ensure that risk of
misstatement or loss is kept to a minimum. The controls are reviewed regularly
by the Executive Management and the Audit Committee, as well as our external
independent auditors. The external auditors include their review of internal
controls in their "Key Issues Memorandum" and report to the Audit Committee.
Given the Company's size and the nature of its business, the Board does not
consider that it is necessary to have an internal audit function.
The Board considers risk to the business at every Board meeting (at least 4
meetings are held each year). Both the Board and senior managers are
responsible for reviewing and evaluating risk. The Executive Directors receive
regular accounts and reports on trading performance, as well as new risks
associated with ongoing trading. In addition to trading risks, the Board
reviews operating risks such as IT, cyber security, and compliance in its
meetings.
"Review of the Business and Risks" section of our Annual Report and Accounts
details risks to the business and how these are mitigated.
5. Maintain the board as a well- functioning, balanced team led by the
chair
Livermore is controlled by the Board of Directors. Richard Rosenberg, the
Non-executive Chairman, is responsible for the running of the Board and Noam
Lanir, the Chief Executive, has executive responsibility for running the
Group's business and implementing Group strategy. Ron Baron, the Chief
Investment Officer, is responsible for the investment implementations and
risks.
All Directors receive regular and timely information of the Group's
operational and financial performance. Relevant information is circulated to
the Directors in advance of meetings. In addition, minutes of the meetings of
the Directors are circulated to the Board of Directors. All Directors have
direct access to the advice and services of the Company Secretary and are able
to take independent professional advice in furtherance of their duties, if
necessary, at the company's expense.
As at 31 December 2024, the Board comprises two Executive Directors and two
Non-Executive Directors. The Board considers that all Non- executive Directors
bring an independent judgement to bear notwithstanding the varying lengths of
service.
The Board is supported by the Audit and Remuneration Committee. The role of
these Committees is detailed in the "Corporate Governance Statement" section
of our Annual Accounts and Reports.
The Group maintains appropriate insurance cover in respect of actions taken
against the Directors because of their roles, as well as against material loss
or claims against the Group. The insured values and type of cover are
comprehensively reviewed on a periodic basis.
6. Ensure that between them the directors have the necessary up-to-date
experience, skills and capabilities
The Board of Directors' biographies are set out on our website and in the
Annual Report.
The Board is satisfied that, between the Directors, it has an effective and
appropriate balance of skills and experience, including in areas of
investment, business management, corporate governance, tax, and accounting.
With two Non-executive Board members and two Executive Board members, the
Board believes it has the desired balance between independence and alignment
of interest.
All of the Directors are subject to election by shareholders at the first
Annual General Meeting following their appointment to the Board. In accordance
with the Company's Articles of Association Directors are required to seek
re-election at least once every three years.
The Board is responsible to the shareholders for the proper management of the
Group and meetings are held on a regular basis to set the overall direction
and strategy of the Group, to review operational and financial performance and
to discuss the investment environment as well as opportunities and risks. The
Board is provided with key information in a timely manner to enable a proper
assessment of all matters requiring a decision or insight. All key operational
and investment decisions are subject to Board approval.
The Board is supported by Audit and Remuneration Committees which are
considered to have the appropriate skills and knowledge to discharge their
duties and responsibilities effectively.
There were 8 Board or Committee meetings held during the year ended 31
December 2024. Directors' attendance at these meetings was a follows:
Number of meetings attended Board Audit Remuneration
Richard Barry Rosenberg 5 of 5 2 of 2 1 of 1
Noam Lanir 5 of 5 - -
Ron Baron 5 of 5 - -
Augoustinos Papathomas 5 of 5 2 of 2 1 of 1
The Company has effective procedures in place to monitor and deal with
conflicts of interest. The Board is aware of the other commitments and
interests of its Directors, and changes to these commitments and interests are
reported to and, where appropriate, agreed with the rest of the Board.
The Board oversees the process and makes recommendations on all new Board
appointments. Where new Board appointments are considered the search for
candidates is conducted, and appointments are made, on merit, against
objective criteria and with due regard for the benefits of diversity on the
Board, including gender.
The Company Secretary and our Nominated Advisors support the Chairman in
addressing the training and development needs of Directors, including:
· AIM rules refresher provided by our Nominated Advisor
· QCA Code updates and handbook
7. Evaluate board performance based on clear and relevant objectives,
seeking continuous improvement
Richard Rosenberg, as Chairman of the Board, has been assessing the individual
contributions of each of the members of the team to ensure that:
• Their contribution is relevant and effective
• That they are committed
• Where relevant, they have maintained their independence.
The performance of board members is currently monitored on an ad-hoc basis and
through individual mentoring and training sessions with the assistance of our
Nominated Adviser. The Company seeks continuous improvement as part of its
considerations for evaluating the performance of the Board and intends to
carry out annual reviews in the future.
8. Promote a corporate culture that is based on ethical values and
behaviors
Livermore is committed to good practice and ethical behaviour and we fully
recognize our responsibilities to all of our stakeholders. The Board firmly
believes that sustained success will best be achieved by adhering to our
corporate culture of treating all our stakeholders fairly and with respect.
Accordingly, in dealing with each of the Company's principal stakeholders, we
encourage our staff to operate in an honest and respectful manner.
Livermore is committed to providing a safe and congenial environment that
promotes accountability, respect, and independent thought for its employees
and consultants. As well, the Company has a whistleblower policy that supports
and encourages ethical behavior.
The Board is committed to maintaining appropriate standards for all the
Company's business activities and ensuring that these standards are set out in
written policies. Key examples of such standards and policies include the
'Market Abuse Regulation Policy" and 'Anti-Bribery and Anti-Corruption Policy"
and our "AIM Rules Compliance Policy".
The Board members of the Company lead by example in their personal lives and
to do what is in the best interest of the Company and the community that they
live in.
Richard Rosenberg, Chairman of the Board, is a trustee of a Teenage Cancer
Trust, and regularly cycles and runs to raise funds for the charities he
supports.
Noam Lanir, the CEO and executive director, has been actively involved in
philanthropic activities including working with the Sh'erit ha-Pletah and the
Foundation for the Welfare of Holocaust survivors in Israel.
Ron Baron, the CIO and executive director, founded the Israel Cycling Academy,
a philanthropic venture for the development of cycling in Israel as well as a
professional Pro-continental cycling team.
The Company tries to embody the ethical values of its Board members and
actively looks to contribute to and engage with institutions and people that
share its ethical values and behaviours
9. Maintain governance structures and processes that are fit for purpose
and support good decision- making by the board
The "Corporate Governance Statement" in our Annual Report & Accounts
details the company's governance structures and why they are appropriate and
suitable for the company to support good decision-making by the Board members.
The Board meets in person at least four times a year and at additional times
via teleconference. At each meeting, the members discuss if the current
corporate governance structures are sufficient and what improvements may be
required to be in line with the needs of the Company and the regulatory
environment.
10. Communicate how the company is governed and is performing by maintaining
a dialogue with shareholders and other relevant stakeholders.
The Company encourages two-way communication with its investors and aims to
respond to queries received in a timely manner. The Chairman is regularly
available to communicate with the Company's major shareholders and ensures
that their views are communicated fully to the Board. There is a designated
email address for investor relations facilitates communication with
shareholders when needed.
The Board recognizes the AGM as an important opportunity to meet private
shareholders. The Directors are available to listen to the views of
shareholders informally immediately following the AGM.
The Company publishes its performance, strategy, and governance through its
Annual Report and Interim Statement, regular and timely RNS announcements as
well as through its website www.livermore-inv.com
(http://www.livermore-inv.com) . The website provides corporate information,
AIM Rules related disclosures and the details on QCA code implementation.
A complete index of the disclosures required by the QCA Code, including those
on the Company's website, can be found at
http://www.livermore-inv.com/CorporateGovernance
(http://www.livermore-inv.com/CorporateGovernance) .
11. The role of the NEDs.
• Challenge the opinions of the Executive Directors, provide
fresh insights in terms of strategic direction and bring their diverse
experience and expertise to the benefit of the leadership of the Group
• Scrutinise the performance of the Executive Directors in terms
of meeting agreed goals and objectives
• Ensure that the governance, financial information, controls
and systems of risk management within the Group are robust and appropriate
• Determine the appropriate levels of remuneration of the
Executive Directors
• Provide a breadth of independent skills and experience to
Board Committees.
Directors' independence
The 2018 Code recommends that the Chair of the Board should be independent.
The Board is compliant with the provisions of the 2018 Code, whereby at least
half the Board comprises Non-Executive Directors who are determined by the
Board to be independent.
Although Richard Rosenberg, the Non-executive Chairman, has had a long tenure
with the Company, he is considered to be independent as:
· Neither Mr. Rosenberg nor his firm have any commercial engagement
with the Company outside of his role as non-executive Chairman
· The shareholding is Mr. Rosenberg in the Company is non-material
· Mr. Rosenberg does not receive any incentive compensation related
to the performance of the Company.
The Non-Executives are paid a base fee with additional amounts paid to reflect
the additional time and responsibility associated with this role. The base fee
has not increased for the year and additional amounts paid as shown in the
remuneration report reflect the time required in carrying out the
responsibilities of this role.
Richard Rosenberg, Non-executive Chairman
Remuneration Report
The remuneration report has been formed in accordance with the requirements of
AIM rule 19 and is not intended to comply with the UK statutory
requirements.
The Directors' emoluments, benefits and shareholdings during the year ended 31
December 2024 were as follows:
Directors' Emoluments
Each of the Directors has a service contract with the Company.
Director Date of Fees Benefits Total emoluments
agreement US $000 US $000
Reward 2024 2023
payments US $000 US $000 US $000
Richard Barry Rosenberg 10 June 2005 57 - 40 97 56
Noam Lanir 10 June 2005 400 45 - 445 445
Ron Baron 1 September 2007 350 - 840 1,190 350
Augoustinos Papathomas 1 February 2019 33 - 25 58 33
Directors' Interests
Interests of Directors in ordinary shares
At 31 December 2024 At 31 December 2023
Number of Ordinary Shares Percentage of ordinary share capital Percentage of voting rights * Number of Ordinary Shares Percentage of ordinary share capital Percentage of voting rights *
Noam Lanir 123,048,011 70.39% 74.41% 123,048,011 70.39% 74.41%
Ron Baron 25,456,903 14.56% 15.40% 25,456,903 14.56% 15.40%
Richard Barry Rosenberg 16,046 0.01% 0.01% 16,046 0.01% 0.01%
* after consideration of the treasury shares
Noam Lanir has his interest in ordinary shares through direct or indirect
ownership of the whole issued share capital of Groverton Management Limited.
Further information is provided in note 24 to the financial statements. -
Ron Baron has his interest in ordinary shares through ownership of the whole
issued share capital of Livermore Management Limited.
Remuneration Policy
The Company's policy has been designed to ensure that the Company has the
ability to attract, retain and motivate executive Directors and other key
management personnel to ensure the success of the organization.
The following key principles guide its policy:
· Policy for the remuneration of executive Directors will be
determined and regularly reviewed independently of executive management and
will set the tone for the remuneration of other senior executives.
· The remuneration structure will support and reflect the Company's
stated purpose to maximize long-term shareholder value.
· The remuneration structure will reflect a just system of rewards
for the participants.
· The overall quantum of all potential remuneration components will
be determined by the exercise of informed judgement of the independent
remuneration committee, taking into account the success of the Company and the
competitive global market.
· A significant personal shareholding will be developed in order to
align executive and shareholder interests.
· The assessment of performance will be quantitative and
qualitative and will include exercise of informed judgement by the
remuneration committee within a framework that takes account of sector
characteristics and is approved by shareholders.
· The committee will be proactive in obtaining an understanding of
shareholder preferences.
· Remuneration policy and practices will be as transparent as
possible, both for participants and shareholders
· The wider scene, including pay and employment conditions
elsewhere in the Company, will be taken into account, especially when
determining annual salary increases.
Review of the Business and Risks
Risks
The Board considers that the risks the Shareholders face can be divided into
external and internal risks.
External risks to shareholders and their returns are those that can severely
influence the investment environment within which the Company operates, and
include economic recession, declining corporate profitability, higher
corporate default rates and lower than historical recoveries, rising inflation
and interest rates and excessive stock-market speculation.
The Company's portfolio is exposed to credit risk, interest rate changes,
liquidity risk and volatility particularly in the US. In addition, the
portfolio is exposed to currency risks as some of the underlying portfolio is
invested in assets denominated in non-US currencies while the Company's
functional currency is USD. Investments in certain emerging markets are
especially exposed to governmental and regulatory risks.
The mitigation of these risks is achieved by following micro and macroeconomic
trends and changes, regular monitoring of underlying assets and price
movements and investment diversification. The Company also engages from time
to time in certain hedging activities to mitigate these risks.
As of the date of this report, although inflation rates seem to have come down
towards central bank targets, they are still too high for comfort and
therefore most developed economies remain in a high interest rate environment.
High interest rates for a longer period of time can create increased credit
risk and lead to higher defaults and potential underperformance of our
investments in Collateralized Loan Obligations in the US. The Company has
mitigated risk by limiting reinvestment and retaining higher amounts of cash
in recent years. The Company continues to be conservatively positioned with
44.2m of cash, deposits, and investments in US treasury bills as of 31
December 2024 and plans to maintain strong liquidity and stay debt free.
Internal risks to shareholders and their returns are related to Portfolio
risks (investment and geography selection and concentration), balance sheet
risk (gearing) and/or investment mismanagement risks. The Company's portfolio
has a significant exposure to senior secured loans of US companies and
therefore has a concentration risk to this asset class.
A periodic internal review is performed to ensure transparency of Company
activities and investments. All service providers to the Company are regularly
reviewed. The mitigation of the risks related to investments is effected by
investment restrictions and guidelines and through reviews at Board Meetings.
As the portfolio of the Company is currently invested in USD denominated
assets, movements in other currencies are expected to have a limited impact on
the business.
On the asset side, the Company's exposure to interest rate risk is limited to
the interest-bearing deposits and portfolio of bonds and loans in which the
Company invests. Currently, the Company is primarily invested in
sub-investment grade corporate loans through CLOs, which exposes the Company
to credit risk (defaults and recovery rates, loan spreads over base rate) as
well as liquidity risks in the CLO market.
Management monitors liquidity to ensure that sufficient liquid resources are
available to the Company. The Company's credit risk is primarily attributable
to its fixed income portfolio, which is exposed to corporate bonds with a
particular exposure to the financial sector and to US senior secured loans.
Further information on financial risk management is provided in note 27 of the
financial statements.
Share Capital
There was no change in the authorised share capital during the year to 31
December 2024. The authorised share capital is 1,000,000,000 ordinary shares
with no par value.
Related party transactions
Details of any transactions of the Company with related parties during the
year to 31 December 2024 are disclosed in note 24 to the financial statements.
By order of the Board of Directors
Chief Executive Officer
22 May 2025
Independent Auditor's Report to the Members of Livermore Investments Group Limited
Opinion
We have audited the consolidated financial statements of Livermore Investments
Group Limited and its subsidiary Livermore Capital AG (the ''Group''), which
are presented in pages 28 to 56 and comprise the Consolidated statement of
financial position as at 31 December 2024, and the consolidated statement of
profit or loss, Consolidated statement of comprehensive income, Consolidated
statement of changes in equity and Consolidated statement of cash flows for
the year then ended, and notes to the consolidated financial statements,
including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements give a true
and fair view of the consolidated financial position of the Group as at 31
December 2024, and of its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European
Union.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing
(ISAs). Our responsibilities under those standards are further described in
the ''Auditor's Responsibilities for the Audit of the Consolidated Financial
Statements'' section of our report. We are independent of the Group in
accordance with the International Ethics Standards Board for Accountants' Code
of Ethics for Professional Accountants (IESBA Code) together with the ethical
requirements that are relevant to our audit of the consolidated financial
statements in Cyprus, and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the IESBA Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the consolidated financial statements of
the current period. These matters were addressed in the context of our audit
of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Investments' valuation Level 3
The key audit matter How the matter was addressed in our audit
As per note 8.2 of the consolidated financial statements, the Group has Our audit work included, but was not restricted to:
financial assets of $35,9m (2023: $12,3m) classified within the fair value
hierarchy at level 3, as disclosed in note 8, where $20.7m relates to private Private equity investments:
equity investments and $10,3m to investments in subsidiaries. The fair value
of level 3 financial assets is generally determined on a basis of either third
party valuations, or when not available, adjusted Net Asset (NAV) calculations
using inputs from third parties. • obtained an understanding of the valuation methodologies applied by the
Board of directors and assessed their appropriateness for each investment.
• obtained third party confirmations indicating either the NAV or fair value
of the financial assets and compared to clients' records and fund's financial
statements.
Due to the use of significant judgments by the Board of Directors, the
existence of unobservable inputs and the significant total value of financial
assets within the level 3 hierarchy, we consider the valuation of these • evaluated the independent professional valuer's competence, capabilities
investments as a key audit matter. and objectivity.
• in cases where the valuations were performed by the Board of Directors,
evaluated the reasonableness of the methodology applied and checked the inputs
used by comparing them to third party sources.
• considered whether the valuation methodologies used are in line with the
Group's accounting policies, and also whether the Group's accounting policies
are in compliance with the IFRSs as adopted by the European Union; and
• and considered the adequacy of consolidated financial statement
disclosures in relation to the valuation methodologies used for each class of
level 3 financial assets.
Investments in Subsidiaries:
• obtained management accounts of the subsidiaries to identify their NAV;
and evaluated any significant change in the fair value of investment.
• assessed the management accounts of the subsidiaries to determine whether
the disclosed NAV is fairly stated by obtaining portfolio statements and land
valuations from independent valuers.
• evaluated and assessed the valuers' competence, capabilities and
objectivity.
• evaluated the methodology used and assessed its adequacy
• considered whether the methodology used is in line with the Group's
accounting policies, and also whether the Group's accounting policies are in
compliance with the IFRSs as adopted by the European Union; and
• considered the adequacy of consolidated financial statement disclosures in
relation to the valuation methodologies used for each class of level 3
financial assets.
Key observations
We concluded that the judgements and estimates used by the management in
determining the fair value of investments were reasonable and the disclosures
made in relation to these matters in the consolidated financial statements
were appropriate.
Other Information
The Board of Directors is responsible for the other information. The other
information comprises the information included in the Highlights, Chairman's
and Chief Executive's Review, Review of Activities, Report of the Directors,
Corporate Governance Statement, Remuneration report, Review of the Business
and Risks, but does not include the consolidated financial statements and our
auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the consolidated
financial statements, or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors for the Consolidated Financial
Statements
The Board of Directors is responsible for the preparation of consolidated
financial statements that give a true and fair view in accordance with
International Financial Reporting Standards as adopted by the European Union,
and for such internal control as the Board of Directors determines is
necessary to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Board of Directors either intends
to liquidate the Group or to cease operations, or has no realistic alternative
but to do so.
Those charged with governance are responsible for overseeing the Group's
financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial
Statements
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with ISAs will
always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with ISAs, we exercise professional judgment
and maintain professional scepticism throughout the audit. We also:
· Identify and assess the risks of material
misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
· Obtain an understanding of internal control
relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group's internal control.
· Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates and related disclosures
made by the Board of Directors.
· Conclude on the appropriateness of the Board of
Directors' use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group's ability to
continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the
related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor's report.
However, future events or conditions may cause the Group to cease to continue
as a going concern.
· Evaluate the overall presentation, structure and
content of the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves a true and fair view.
· Obtain sufficient appropriate audit evidence
regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance
of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the consolidated
financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Other Matter
This report, including the opinion, has been prepared for and only for the
Group's members as a body and for no other purpose. We do not, in giving this
opinion, accept or assume responsibility for any other purpose or to any other
person to whose knowledge this report may come to.
The engagement partner on the audit resulting in this independent auditor's
report is Mr Polyvios Polyviou.
Polyvios Polyviou
Certified Public Accountant and Registered Auditor
for and on behalf of
Grant Thornton (Cyprus) Ltd
Certified Public Accountants and Registered Auditors
Limassol, 22 May 2025
Livermore Investments Group Limited
Consolidated Statement of Financial Position at 31 December 2024
Note 2024 2023
Assets US $000 US $000
Non-current assets
Property, plant and equipment 37 46
Right-of-use assets 4 416 -
Financial assets at fair value through profit or loss 5 56,000 68,284
Financial assets at fair value through other comprehensive income 6 20,721 6,498
Investments in unconsolidated subsidiaries 9 10,251 5,780
--------- ---------
87,425 80,608
Current assets --------- ---------
Trade and other receivables 10 269 102
Financial assets at fair value through profit or loss 5 22,339 38,750
Cash and cash equivalents 11 33,768 20,169
--------- ---------
56,376 59,021
--------- ---------
Total assets 143,801 139,629
--------- ---------
Equity
Share capital 12 - -
Share premium and treasury shares 12 163,130 163,130
Other reserves (18,358) (22,027)
Accumulated losses (5,669) (5,266)
--------- ---------
Total equity 139,103 135,837
--------- ---------
Liabilities
Non-current liabilities
Lease liabilities 14 312 -
--------- ---------
Current liabilities
Trade and other payables 13 4,143 3,629
Lease liabilities - current portion 14 104 -
Current tax payable 139 163
--------- ---------
4,386 3,792
--------- ---------
Total liabilities 4,698 3,792
--------- ---------
Total equity and liabilities 143,801 139,629
--------- ---------
Net asset value per share
Basic and diluted net asset value per share (US $) 16 0.84 0.82
--------- ---------
These financial statements were approved by the Board of Directors on 22 May
2025.
The notes 1 to 29 form part of these consolidated financial statements.
Livermore Investment Group Limited
Consolidated Statement of Profit or Loss for the year ended 31 December 2024
Note
2024 2023
US $000 US $000
Investment income
Interest and distribution income 18 22,520 24,054
Fair value changes of investments 19 (9,612) (6,671)
------ ------
12,908 17,383
Other income - 294
Operating expenses 20 (5,612) (3,369)
Other expenses - (270)
------ ------
Operating profit 7,296 14,038
Finance costs 21 (965) (75)
Finance income 21 453 156
------ ------
Profit before taxation 6,784 14,119
Taxation charge 22 (199) (231)
------ ------
Profit for the year 6,585 13,888
------ ------
Earnings per share
Basic and diluted earnings per share (US $) 23 0.04 0.08
------ ------
The profit for the year is wholly attributable to the owners of the parent.
The notes 1 to 29 form part of these consolidated financial statements.
Livermore Investment Group Limited
Consolidated Statement of Comprehensive Income for the year ended 31 December 2024
Note
2024 2023
US $000 US $000
Profit for the year 6,585 13,888
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss
Foreign exchange (losses) / gains on translation of consolidated subsidiary (80) 59
Items that are not reclassified subsequently to profit or loss
Financial assets designated at fair value through other comprehensive income - 3,749 (875)
fair value gains / (losses)
6
------ ------
Total comprehensive income for the year 10,254 13,072
------ ------
The total comprehensive income for the year is wholly attributable to the
owners of the parent.
The notes 1 to 29 form part of these consolidated financial statements.
Livermore Investment Group Limited
Consolidated Statement of Changes in Equity for the year ended 31 December 2024
Note Share Treasury Shares Translation Investments Retained
premium reserve revaluation earnings Total
reserve
US $000 US $000 US $000 US $000 US $000 US $000
Balance at 1 January 2023 169,187 (6,057) 55 (21,269) (14,191) 127,725
------- ------- ------ ------ ------ -------
Dividends - - - - (4,960) (4,960)
------- ------- ------ ------ ------ -------
Transactions with owners - - - - (4,960) (4,960)
------- ------- ------ ------ ------ -------
Profit for the year - - - - 13,888 13,888
Other comprehensive income:
Financial assets at fair value through other comprehensive income - fair value - - (875) - (875)
losses
6 -
Foreign exchange gains on translation of consolidated subsidiary - 59 - - 59
-
Transfer of realised losses 19 - - - 3 (3) -
------- ------- ------ ------ ------ -------
Total comprehensive loss for the year - - 59 (872) 13,885 13,072
------- ------- ------ ------ ------ -------
Balance at 31 December 2023 169,187 (6,057) 114 (22,141) (5,266) 135,837
------- ------- ------ ------ ------ -------
Dividends 15 - - - - (6,988) (6,988)
------- ------- ------ ------ ------ -------
Transactions with owners - - - - (6,988) (6,988)
------- ------- ------ ------ ------ -------
Profit for the year - - - - 6,585 6,585
Other comprehensive income:
Financial assets at fair value through other comprehensive income - fair value - - 3,749 - 3,749
gains
6 -
Foreign exchange losses on translation of consolidated subsidiary - (80) - - (80)
-
Transfer of realised losses 19 - - - - - -
------- ------- ------ ------ ------ -------
Total comprehensive income for the year - - (80) 3,749 6,585 10,254
------- ------- ------ ------ ------ -------
Balance at 31 December 2024 169,187 (6,057) 34 (18,392) (5,669) 139,103
------- ------- ------ ------ ------ -------
The notes 1 to 29 form part of these consolidated financial statements.
Livermore Investments Group Limited
Consolidated Statement of Cash Flows for the year ended 31 December 2024
Note 2024 2023
US $000 US $000
Cash flows from operating activities
Profit / (loss) before tax 6,784 14,119
Adjustments for
Depreciation 20 124 98
Interest expense 21 33 55
Interest and distribution income 18 (22,520) (24,054)
Bank interest income 21 (453) (156)
Fair value changes of investments 19 9,612 6,671
Exchange differences 21 932 20
---------- ----------
(5,488) (3,247)
Changes in working capital
Increase in trade and other receivables 10 (167) (30)
Increase / (Decrease) in trade and other payables 13 430 (104)
---------- ----------
Cash flows used in operations (5,225) (3,381)
Interest and distributions received 22,973 24,210
Tax paid (223) (201)
---------- ----------
Net cash from operating activities 17,525 20,628
---------- ----------
Cash flows from investing activities
Acquisition of investments 5, 6, 9 (114,359) (55,237)
Proceeds from sale of investments 5, 6 118,497 48,973
---------- ----------
Net cash from / (used) in investing activities 4,138 (6,264)
---------- ----------
Cash flows from financing activities
Lease liability payments (111) (131)
Interest paid (33) (55)
Dividends paid 15 (6,988) (4,960)
---------- ----------
Net cash used in financing activities (7,132) (5,146)
---------- ----------
Net increase in cash and cash equivalents 14,531 9,218
Cash and cash equivalents at the beginning of the year 20,169 10,971
Exchange differences on cash and cash equivalents 21 (932) (20)
---------- ----------
Cash and cash equivalents at the end of the year 11 33,768 20,169
---------- ----------
The notes 1 to 29 form part of these consolidated financial statements.
Notes to the Consolidated Financial Statements
1. General Information
1.1. The Company was incorporated as an international business company and
registered in the British Virgin Islands (BVI) on 2 January 2002 under IBC
Number 475668. The principal legislation under which the Company operates is
the BVI Business Companies Act, 2004. The liability of the members of the
Company is limited.
1.2. The registered office of the Company is located at Trident Chambers,
PO Box 146, Road Town, Tortola, British Virgin Islands.
1.3. The Company is tax resident in the Republic of Cyprus.
1.4. The principal activity of the Company is to carry out investment
activities.
2. Basis of preparation
The consolidated financial statements ("the financial statements") of
Livermore Investments Group Limited have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by the
European Union (EU). The financial statements have been prepared on an
accrual basis (other than for cash flow information) using the significant
accounting policies and measurement bases summarised in note 3, and also on a
going concern basis.
The financial information is presented in US dollars because this is the
currency in which the Company primarily operates (i.e., the Company's
functional currency).
References to the Company hereinafter also include its consolidated subsidiary
(note 9).
The Directors have reviewed the accounting policies used by the Company and
consider them to be the most appropriate.
3. Accounting Policies
The significant accounting policies applied in the preparation of the
financial statements are as follows:
3.1. Adoption of new and revised IFRS
As from 1 January 2024, the Company adopted any applicable new or revised IFRS
and relevant amendments and interpretations which became effective, and also
were endorsed by the EU. This adoption did not have any material impact on the
Company's financial statements.
The following IASB documents were issued by the date of authorisation of these
financial statements but are not yet effective for the year ended 31 December
2024, or have not yet been endorsed by the EU by 31 December 2024:
Endorsed by EU IASB Effective date
· IFRS 19 "Subsidiaries without Public Accountability: Disclosures" No 1 January 2027
· IFRS 18 "Presentation and Disclosure in Financial Statements" No 1 January 2027
· Amendments to IFRS 9 and IFRS 7: "Contracts Referencing No 1 January 2026
Nature-dependent Electricity"
· Annual Improvements Volume 11 No 1 January 2026
· Amendments to IFRS 9 and IFRS 7: "Classification and Measurement of No 1 January 2026
Financial Instruments"
· Amendments to IAS 21: "The Effects of Changes in Foreign Exchange Yes 1 January 2025
Rates: Lack of Exchangeability"
· IFRS 14: "Regulatory Deferral Accounts" No 1 January 2016
IFRS 18 is expected to affect the presentation of the Company's financial
statements when it becomes effective, however the Directors have not yet
assessed the magnitude of its impact. The remaining pronouncements when they
become effective are not expected to have any material effect on the financial
statements.
3.2. Investments in subsidiaries and basis of consolidation
Subsidiaries are entities controlled either directly or indirectly by the
Company.
Control is achieved where the Company is exposed, or has right, to variable
returns from its involvement with a subsidiary and has the ability to affect
those returns through its power over the subsidiary.
The Directors have determined that Livermore meets the definition of an
investment entity, as this is defined in IFRS 10 "Financial Statements". As
per IFRS 10, an investment entity is an entity that:
(a) obtains funds from one or more investors for the purpose of
providing those investors with investment management services;
(b) commits to its investors that its business purpose is to invest
funds solely for returns from capital appreciation, investment income, or
both; and
(c) measures and evaluates the performance of substantially all of its
investments on a fair value basis.
An investment entity is exempted from consolidating its subsidiaries, unless
any subsidiary which is not itself an investment entity mainly provides
services that relate to the investment entity's investment activities.
The financial statements consolidate the Company and one of its subsidiaries
providing such services (note 9 shows further details of the consolidated and
unconsolidated subsidiaries).
Investments in unconsolidated subsidiaries are initially recognised at their
fair value and subsequently measured at fair value through profit or loss.
Subsequently, any gains or losses arising from changes in their fair value are
included in profit or loss for the year.
Dividends and other distributions from unconsolidated subsidiaries are
recognised as income when the Company's right to receive payment has been
established.
A subsidiary that is not an investment entity itself and which provides
services that relate to the Company's investment activities is consolidated
rather than included within the investments in subsidiaries measured at fair
value through profit or loss.
The financial statements of the consolidated subsidiary are prepared using
uniform accounting policies. Where necessary, adjustments are made to the
financial statements of consolidated subsidiary to bring its accounting
policies into line with those used by the Company. The consolidated subsidiary
has a reporting date of 31 December.
All transactions between the Company and its consolidated subsidiary and all
resulting balances, income and expenses are eliminated on consolidation.
The results and cash flows of any consolidated subsidiary acquired or disposed
of during the year are consolidated from the effective date of acquisition or
up to the effective date of disposal.
3.3. Interest and distribution income
· Interest income is recognised based on the effective interest
method.
· Distribution income is recognised on the date that the Company's
right to receive payment is established, which in the case of quoted
securities is the ex-dividend date.
3.4. Foreign currency
The financial statements of the Company are presented in USD, which is the
currency of the primary economic environment in which it operates (its
functional currency).
Transactions in foreign currencies are recorded at the rates of exchange
prevailing on the dates of the transaction. Monetary assets and liabilities
denominated in non-functional currencies are translated into functional
currency using year-end spot foreign exchange rates. Non-monetary assets and
liabilities are translated upon initial recognition using exchange rates
prevailing at the dates of the transactions. Non-monetary assets that are
measured in terms of historical cost in foreign currency are not subsequently
re-translated.
Gains and losses arising on the settlement of monetary items and on the
re-translation of monetary items are included in the profit or loss for the
year. Those that arise on the re-translation of non-monetary items carried at
fair value are included in the profit or loss of the year as part of the fair
value gain or loss except for differences arising on the re-translation of
non-monetary financial assets designated at fair value through other
comprehensive income in respect of which gains and losses are recognised in
other comprehensive income. For such non-monetary items any exchange
component of that gain or loss is also recognised in other comprehensive
income.
The results and financial position of the consolidated subsidiary, which has a
functional currency of Swiss Francs, are translated into the presentation
currency as follows:
(a) assets and liabilities are translated at the closing rate at the
reporting date;
(b) income and expenses and also cash flows are translated at an average
exchange rate (unless this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which
case the items are translated at the rates prevailing at the dates of the
transactions); and
(c) exchange differences arising are recognised in other comprehensive
income within the translation reserve. Such translation exchange differences
are reclassified to profit or loss in the period in which the foreign
operation is disposed of.
3.5. Taxation
Current tax is the tax currently payable based on taxable profit for the year
in accordance with the applicable tax laws.
Current and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of realisation, provided
they are enacted or substantively enacted as at the reporting date.
3.6. Equity instruments
Equity instruments issued by the Company are recorded at proceeds received,
net of direct issue costs.
The share premium account includes any premiums received on the initial
issuing of the share capital. Any transaction costs associated with the
issuing of shares are deducted from the premium received.
Own equity instruments purchased by the Company, or its consolidated
subsidiary are recorded as treasury shares at the consideration paid,
including transaction costs, and they are deducted from total equity until
they are sold or cancelled. Where such shares are subsequently sold, any
consideration received is included in total equity.
3.7. Financial assets
Financial assets are recognised when the Company becomes a party to the
contractual provisions of the financial instrument.
A financial asset is derecognised only where the contractual rights to the
cash flows from the asset expire or the financial asset is transferred, and
that transfer qualifies for derecognition. A financial asset is transferred
if the contractual rights to receive the cash flows of the asset have been
transferred or the Company retains the contractual rights to receive the cash
flows of the asset but assumes a contractual obligation to pay the cash flows
to one or more recipients. A financial asset that is transferred qualifies
for derecognition if the Company transfers substantially all the risks and
rewards of ownership of the asset, or if the Company neither retains nor
transfers substantially all the risks and rewards of ownership but does
transfer control of that asset.
The Company classifies its financial assets in the following measurement
categories:
(a) those to be measured at fair value through profit or loss;
(b) those to be measured at fair value through other comprehensive
income; and
(c) those to be measured at amortised cost.
At initial recognition, the Company measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through profit
or loss, transaction costs that are directly attributable to the acquisition
of the financial asset. Transaction costs of financial assets carried at fair
value through profit or loss are expensed in profit or loss.
Financial assets at fair value through profit or loss
The Company classifies the following financial assets at fair value through
profit or loss:
(a) equity investments that are held for trading;
(b) other equity investments for which the Directors have not elected to
recognise fair value gains and losses through other comprehensive income; and
(c) debt investments that do not qualify for measurement at either
amortised cost or at fair value through other comprehensive income.
All financial assets within this category are measured at their fair value,
with changes in value recognised in the profit or loss when incurred.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income (OCI)
comprise equity investments which are not held for trading, and for which the
Company has made an irrevocable election at initial recognition to recognise
changes in fair value through OCI rather than profit or loss.
Where the Company's management has elected to present fair value gains and
losses on equity investments in other comprehensive income, there is no
subsequent reclassification of fair value gains and losses to profit or loss.
Dividends from such investments continue to be recognised in profit or loss
when the Company's right to receive payments is established.
Financial assets at amortised cost
Assets that are held for collection of contractual cash flows where those cash
flows represent solely payments of principal and interest are measured at
amortised cost. A gain or loss on a financial asset that is measured at
amortised cost is recognised in profit or loss when the asset is derecognised
or impaired. Interest income from these financial assets is recognised based
on the effective interest rate method.
The classification of debt instruments depends on the entity's business model
for managing the financial assets and the contractual terms of the cash flows.
Financial assets with embedded derivatives are considered in their entirety
when determining whether their cash flows are solely payment of principal and
interest.
Impairment
The Company assesses the expected credit losses associated with its assets
carried at amortised cost, on a forward-looking basis. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. For trade and other receivables only, the Company applies the
simplified approach permitted by IFRS 9, which permits expected lifetime
losses to be recognised from initial recognition of the receivables.
Write offs
The Company writes off a financial asset when there is information indicating
that the counterparty is in severe financial difficulty and there is no
realistic prospect of recovery, e.g., when the counterparty has been placed
under liquidation or has entered into bankruptcy proceedings. Financial assets
written off may still be subject to enforcement activities, taking into
account legal advice where appropriate. Any recoveries made are recognised in
profit or loss.
3.8. Financial liabilities
Financial liabilities are recognised when the Company becomes a party to the
contractual provisions of the financial instrument.
A financial liability is derecognised when it is extinguished, discharged,
cancelled or expires.
Financial liabilities at amortised cost
Financial liabilities are measured initially at fair value plus transaction
costs.
After initial recognition financial liabilities are measured at amortised cost
using the effective interest rate method.
3.9. Cash and cash equivalents
Cash comprises cash in hand and on demand deposits with banks. Cash
equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash. They include unrestricted short-term
bank deposits originally purchased with maturities of three months or less.
3.10. Leased assets - The Company as a lessee
At lease commencement date, the Company recognises a right-of-use asset and a
lease liability.
The right-of-use asset is measured at cost, which is made up of the initial
lease liability amount, any initial direct costs, and any lease payments in
advance of the lease commencement date (net of any incentives received). This
is then depreciated on a straight-line basis from the lease commencement date
to the earlier of the end of its useful or the end of the lease term. The
right-of-use asset is assessed for impairment when such indicators exist.
At the commencement date, the Company measures the lease liability at the
present value of the future lease payments (fixed payments and payments for
options reasonably certain to be exercised), discounted using the interest
rate implicit in the lease if that rate is readily available or the Company's
incremental borrowing rate. Subsequent to initial measurement, the liability
is reduced for payments made and increased for interest.
3.11. Segment reporting
In making investment decisions, Management assesses individual investments and
then, in analysing their performance, it receives and uses information for
each investment product separately rather than based on any segmental
information. Given that, Management regards that all the Company's activities
fall under a single operating segment.
3.12. Critical accounting judgments and key sources of estimation uncertainty
The preparation of financial statements in conformity with IFRS requires the
use of accounting estimates and requires management to exercise its judgement
in the process of applying the Company's accounting policies. It also requires
the use of assumptions that affect the reported amounts of assets and
liabilities and disclosures at the reporting date and the reported amounts of
revenues and expenses during the reporting period. Although these estimates
are based on management's best knowledge of current events and actions, actual
results may ultimately differ.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Critical accounting judgement
Classification of financial assets
Management exercises significant judgement in determining the appropriate
classification of the financial assets of the Company. The Directors determine
the appropriate classification of the Company's financial assets based on
Livermore's business model. An entity's business model refers to how an entity
manages its financial assets in order to generate cash flows, considering all
relevant and objective evidence. The factors considered include the
contractual terms and characteristics which are very carefully examined, and
also the Company's intentions and expected needs for realisation of the
financial assets.
All investments (except from certain equity instruments that are designated at
fair value through other comprehensive income) are classified as financial
assets at fair value through profit or loss, because this reflects more fairly
the way these assets are managed by the Company. The Company's business is
investing in financial assets with a view to profiting from their total return
in the form of income and capital growth. This portfolio of financial assets
is managed, and its performance evaluated on a fair value basis, in accordance
with a documented investment strategy, and information about the portfolio is
provided internally on that basis to the Company's Board of Directors and
other key management personnel.
Estimation uncertainty
Management, in preparing these financial statements, has not made any
significant estimates with a risk of material change in value in the next
financial period.
4. Right of use assets
2024 2023
US $000 US $000
At 1 January - 87
Additions 524 -
Depreciation (105) (87)
Exchange differences on the translation of subsidiary (3) -
------ ------
At 31 December 416 -
------ ------
The Company's consolidated subsidiary Livermore Capital AG has entered on 1
January 2024 into a lease contract for its offices rented in Zurich
(Switzerland).
The contract is non-cancellable and expires on 31 December 2028. The Company
has the option at the end of the lease period to extend the lease for another
5 years based on market terms prevailing at that time. This has not been
taken into account in determining the lease term since the option is not
considered reasonably expected to be exercised.
5. Financial assets at fair value through profit or loss
2024 2023
US $000 US $000
Non-current assets
Fixed income investments (CLOs) 56,000 68,284
------ ------
Current assets
Fixed income investments 19,849 36,718
Public equity investments 2,490 2,032
------ ------
22,339 38,750
------ ------
For description of each of the above categories, refer to note 7.
The above investments represent financial assets that are mandatorily measured
at fair value through profit or loss.
There are no open derivatives at 31 December 2024 and 2023.
The Company treats its investments in the loan market through CLOs as
non-current investments as the Company generally intends to hold such
investments over a period longer than twelve months.
The movement in financial assets at fair value through profit or loss during
the year was as follows:
2024 2023
US $000 US $000
At 1 January 107,034 106,376
Purchases 99,805 53,463
Sales (84,247) (46,976)
Settlements (34,250) -
Fair value losses (10,003) (5,829)
------ ------
At 31 December 78,339 107,034
------ ------
6. Financial assets at fair value through other comprehensive
income
2024 2023
US $000 US $000
Non-current assets
Private equity investments 20,721 6,498
------ ------
For description of the above category, refer to note 7.
The above investments are non-trading equity investments that have been
designated at fair value through other comprehensive income.
The movement in financial assets at fair value through other comprehensive
income during the year was as follows:
2024 2023
US $000 US $000
At 1 January 6,498 7,596
Purchases 10,474 1,774
Settlements - (1,997)
Fair value gains / (losses) 3,749 (875)
------ ------
At 31 December 20,721 6,498
------ ------
7. Financial assets at fair value
The Company allocates its non-derivative financial assets at fair value (notes
5 and 6) as follows:
· Fixed income investments relate to investments in the loan market
through CLOs, investments in open warehouse facilities, and also investments
in fixed and floating rate bonds, and perpetual bank debt.
· Public equity investments relate to investments in shares of
companies listed on public stock exchanges.
· Private equity investments relate to investments in the form of
equity purchases in both high growth opportunities in emerging markets and
deep value opportunities in mature markets. The Company generally invests
directly in prospects where it can exert influence.
8. Fair value measurements of financial assets and liabilities
The table in note 8.2 presents financial assets and liabilities 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.
The level within which the financial asset is classified is determined based
on the lowest level of significant input to the fair value measurement.
8.1 Valuation of financial assets
· Fixed Income Investments (other than CLOs) and Public Equity
Investments are valued at their closing market prices on quoted exchanges, or
as quoted by market makers.
· CLOs are valued by third party independent valuation providers and
market makers. CLOs are typically valued based on discounted cash flow
valuation 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 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.
Investments in open warehouse facilities that have not yet been converted to
CLOs, are valued based on an adjusted net asset valuation.
· Private equity investments are valued mainly on the basis of
valuations reported by third-party managers of such investments. Real estate
entities are valued by independent qualified property valuers with substantial
relevant experience on such investments. Underlying property values are
determined based on their estimated market values.
· Investments in subsidiaries are valued at fair value as determined on
a net asset valuation basis. The Company has determined that the reported net
asset value of each subsidiary represents its fair value at the end of the
reporting period.
8.2 Fair value hierarchy
Financial assets measured at fair value are grouped into the fair value
hierarchy as follows:
2024 2024 2024 2024 2023 2023 2023 2023
US $000 US $000 US $000 US $000 US $000 US $000 US $000 US $000
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Fixed income investments 14,957 56,000 4,892 75,849 36,718 68,284 - 105,002
Public equity investments 2,490 - - 2,490 2,032 - - 2,032
Private equity investments - - 20,721 20,721 - - 6,498 6,498
Investments in subsidiaries - - 10,251 10,251 - - 5,780 5,780
------ ------ ------ ------ ------ ------ ------ ------
17,447 56,000 35,864 109,311 38,750 68,284 12,278 119,312
------ ------ ------ ------ ------ ------ ------ ------
The Company has no financial liabilities measured at fair value.
The methods and valuation techniques used for the purpose of measuring fair
value are unchanged compared to the previous reporting year.
No financial assets have been transferred between different levels.
Financial assets within level 3 can be reconciled from beginning to ending
balances as follows:
At fair value At fair value Investments Total
through OCI - Private equity investments through in subsidiaries
profit or loss - Fixed Income
investments
US $000 US $000 US $000 US $000
At 1 January 2023 7,596 - 6,546 14,142
Purchases 1,774 - 76 1,850
Settlement (1,997) - - (1,997)
Losses recognised in:
- Profit or loss - - (842) (842)
- Other comprehensive income (875) - - (875)
------ ------ ------ ------
At 1 January 2024 6,498 - 5,780 12,278
Purchases 10,474 38,917 4,080 53,471
Settlement - (34,250) - (34,250)
Profits recognised in:
- Profit or loss - 225 391 616
- Other comprehensive income 3,749 - - 3,749
------ ------ ------ ------
At 31 December 2024 20,721 4,892 10,251 35,864
------ ------ ------ ------
The above (losses) / profits recognised can be allocated as follows:
At fair value At fair value Investments Total
through OCI - Private equity investments through in subsidiaries
profit or loss - Fixed Income
investments
2023 US $000 US $000 US $000 US $000
Profit or loss
- Financial assets held at year-end - - (842) (842)
Other comprehensive income
- Financial assets held at year-end (875) - - (875)
------ ------ ------ ------
Total losses for 2023 (875) - (842) (1,717)
------ ------ ------ ------
At fair value At fair value Investments Total
through OCI - Private equity investments through in subsidiaries
profit or loss - Fixed Income
investments
2024 US $000 US $000 US $000 US $000
Profit or loss
- Financial assets held at year-end - 225 391 616
Other comprehensive income
- Financial assets held at year-end 3,749 - - 3,749
------ ------ ------ ------
Total profits for 2024 3,749 225 391 4,365
------ ------ ------ ------
The Company has not developed any quantitative unobservable inputs for
measuring the fair value of its level 3 financial assets at 31 December 2024
and 2023. Instead, the Company used prices from third-party pricing
information without adjustment.
Private equity investments within level 3 have been measured based on their
net asset value, which is primarily driven by the fair value of their
underlying investments. In all cases, considering that such investments are
measured at fair value, the carrying amounts of their underlying assets and
liabilities are considered as representative of their fair values.
Investments in subsidiaries have been valued based on their net asset
position. The main assets of the subsidiaries represent investments in the
fields of real estate which are measured at fair value and receivables from
the Company itself as well as third parties. Their net asset value is
considered as a fair approximation of their fair value.
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.
9. Investments in subsidiaries
2024 2023
Unconsolidated subsidiaries - at fair value through profit or loss US $000 US $000
At 1 January 5,780 6,546
Additions 4,080 76
Fair value gains / (losses) 391 (842)
------ ------
At 31 December 10,251 5,780
------ ------
The additions during the year include the Company's capital contribution of
USD 4.004m into PNG Trading Limited. The remaining additions in the year, as
well as the additions in 2023 relate to the fair value of amounts receivable
from the Company's unconsolidated subsidiary Sandhirst Ltd, that were waived
by the Company as a means of capital contribution (note 24).
Details of the investments in which the Company has a controlling interest at
31 December 2024 are as follows:
Name of Subsidiary Place of incorporation Holding Voting rights and shares held Principal activity
Consolidated subsidiary
Livermore Capital AG Switzerland Ordinary shares 100% Administration services
Unconsolidated subsidiaries
Livermore Properties Ltd British Virgin Islands Ordinary shares 100% Holding of investments
Mountview Holdings Ltd British Virgin Islands Ordinary shares 100% Investment vehicle
Sycamore Loan Strategies Ltd Cayman Islands Ordinary shares 100% Investment vehicle
Livermore Israel Investments Ltd Israel Ordinary shares 100% Holding of investments
Sandhirst Ltd Cyprus Ordinary shares 100% Holding of investments
PNG Trading Limited Cyprus Ordinary shares 100% Trading in investments
PNG Trading Limited was established on 11 October 2023 as a wholly owned
subsidiary of the Company. Until 31 December 2023 the subsidiary remained
inactive. It became active in 2024.
10. Trade and other receivables
2024 2023
US $000 US $000
Financial items
Amounts due from related parties (note 24) 75 16
Non-financial items
Prepayments 182 78
VAT receivable 12 8
------ ------
269 102
------ ------
For the Company's receivables of a financial nature, no lifetime expected
credit losses and no corresponding allowance for impairment have been
recognised, as their default rates were determined to be close to 0%.
No receivable amounts have been written-off during either 2024 or 2023.
11. Cash and cash equivalents
Cash and cash equivalents included in the consolidated statement of cash flows
comprise the following at the reporting date:
2024 2023
US $000 US $000
Demand deposits 33,768 20,169
------ ------
Cash at bank 33,768 20,169
------ ------
The Company does not have any bank overdraft balances either at 31 December
2024 or 2023.
12. Share capital
Authorised share capital
The Company has authorised share capital of 1,000,000,000 ordinary shares with
no par value, and no restrictions.
Issued share capital Number of shares Share premium
US $000
Ordinary shares with no par value
At 31 December 2024 and 2023 174,813,998 169,187
---------- ----------
Treasury shares Number of shares
US $000
At 31 December 2024 and 2023 9,458,577 6,057
---------- ----------
In the consolidated statement of financial position, the amount included as
share premium and treasury shares comprises of:
2024 2023
US $000 US $000
Share premium 169,187 169,187
Treasury shares (6,057) (6,057)
-------- --------
163,130 163,130
-------- --------
13. Trade and other payables
2024 2023
US $000 US $000
Financial items
Trade payables 96 229
Amounts due to related parties (note 24) 3,966 3,058
Accrued expenses 81 72
Non-financial items
Legal settlement due (note 25) - 270
------ ------
4,143 3,629
------ ------
14. Lease liabilities
2024 2023
US $000 US $000
At 1 January - 87
Additions 524 -
Finance costs - -
Rentals paid (105) (87)
Exchange differences on the translation of subsidiary (3)
------ ------
At 31 December 416 -
------ ------
Current portion 104 -
Non-current portion 312 -
------ ------
416 -
------ ------
The lease liability relates to the right-of-use asset in note 4.
The rate for discounting the future lease payments into their present value
was determined based on the Swiss lending rates for real estate investment
which were close to zero. As a result, finance costs also approximate zero.
15. Dividend
On 30 September 2024, the Company announced an interim dividend of USD 7.0m
(USD 0.0423 per share) to members on the register as at 18 October 2024. The
dividend was paid on 15 November 2024.
The Board of Directors will decide future dividends based on profitability,
liquidity requirements, portfolio performance, market conditions, and the
share price of the Company relative to its NAV.
16. Net asset value per share
Net asset value per share has been calculated by dividing the net assets
attributable to ordinary shareholders by the closing number of ordinary shares
in issue during the relevant financial periods.
2024 2023
Net assets attributable to ordinary shareholders (USD 000) 139,103 135,837
------------- -------------
Closing number of ordinary shares in issue 165,355,421 165,355,421
------------- -------------
Basic net asset value per share (USD) 0.84 0.82
------------- -------------
Number of Shares
Ordinary shares 174,813,998 174,813,998
Treasury shares (9,458,577) (9,458,577)
------------- -------------
Closing number of ordinary shares in issue 165,355,421 165,355,421
------------- -------------
The diluted net asset value per share equals the basic net asset value per
share since no potentially dilutive shares exist at 31 December 2024 and 2023.
17. Segment reporting
The Company's activities fall under a single operating segment.
The Company's investment income and its investments are divided into the
following geographical areas:
2024 2023
Investment income / (losses) US $000 US $000
Other European countries (23) (132)
United States 13,265 18,423
India (107) (7)
Asia (227) (901)
------- -------
12,908 17,383
------- -------
Investments
Other European countries 10,743 5,989
United States 90,142 105,854
India 1,055 140
Asia 7,371 7,329
------- -------
109,311 119,312
------- -------
Investment income / (losses), comprising interest and distribution income as
well as fair value gains or losses on investments, is allocated on the basis
of the issuer's location. Investments are also allocated based on the issuer's
location.
The Company has no significant dependencies, in respect of its investment
income, on any single issuer.
18. Interest and distribution income
2024 2023
US $000 US $000
Interest from investments 1,539 1,921
Distribution income 20,981 22,133
------ ------
22,520 24,054
------ ------
Interest and distribution income is analysed between different categories of
financial assets, as follows:
2024 2023
Interest Distribution income Total Interest Distribution income Total
US $000 US $000 US $000 US $000 US $000 US $000
Financial assets at fair value
through profit or loss
Fixed income investments 1,539 20,920 22,459 1,921 21,690 23,611
Public equity investments - 61 61 - 443 443
------ ------ ------ ------ ------ ------
1,539 20,981 22,520 1,921 22,133 24,054
------ ------ ------ ------ ------ ------
The Company's distribution income derives from multiple issuers. The Company
does not have concentration to any single issuer.
19. Fair value changes of investments
2024 2023
US $000 US $000
Fair value losses on financial assets through profit or loss (10,033) (5,808)
Fair value gains / (losses) on investments in subsidiaries 391 (842)
Fair value gains / (losses) on derivatives 30 (21)
------ ------
(9,612) (6,671)
------ ------
The investments disposed of had the following cumulative (i.e., from the date
of their acquisition up to the date of their disposal) financial impact in the
Company's net asset position:
Disposed in 2024 Disposed in 2023
Realised (losses)/ gains* Cumulative distribution or interest Total financial impact Realised (losses)/ gains* Cumulative distribution or interest Total financial impact
US $000 US $000 US $000 US $000 US $000 US $000
Financial assets at fair value through profit or loss
Fixed income investments (2,670) 17,761 15,091 513 972 1,485
Public equities - - - 41 - 41
Derivatives 30 - 30 (21) - (21)
------ ------ ------ ------ ------ ------
(2,640) 17,761 15,121 533 972 1,505
------ ------ ------ ------ ------ ------
Financial assets at fair value through OCI
Private equity investments - - - (3) - (3)
------ ------ ------ ------ ------ ------
- - - 530 972 1,502
------ ------ ------ ------ ------ ------
* difference between disposal proceeds and original acquisition cost
20. Operating expenses
2024 2023
US $000 US $000
Directors' fees and expenses 1,790 884
Other salaries and expenses 244 234
Professional fees 2,501 1,156
Legal expenses 7 6
Bank custody fees 125 156
Office costs 225 276
Depreciation 124 98
Other operating expenses 514 479
Audit fees 80 78
Tax fees 2 2
------ ------
5,612 3,369
------ ------
Throughout 2024 the Company employed 4 members of staff (2023: 4). Two of
those members are the Company's executive Directors.
Other salaries and expenses include USD 25,558 of social insurance and similar
contributions (2023: USD 20,034), as well as USD 7,094 of defined
contributions plan costs (2023: USD 5,002).
21. Finance costs and income
2024 2023
US $000 US $000
Finance costs
Bank interest expense 33 55
Foreign exchange losses 932 20
------ ------
965 75
------ ------
Finance income
Bank interest income 453 156
------ ------
22. Taxation
2024 2023
US $000 US $000
Current tax charge 199 231
------ ------
The Company is a tax resident in the Republic of Cyprus and is subject to
taxation under the tax laws and regulations in Cyprus.
The current tax charge relates to the results of the Company for 2024, as
explained above, and the Company's consolidated subsidiary in Switzerland
(note 9).
23. Earnings per share
The basic earnings per share has been calculated by dividing the profit for
the year attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares in issue of the Company during the relevant
financial year.
2024 2023
Profit for the year attributable to ordinary shareholders of the parent (USD 6,585 13,888
000)
------------- -------------
Weighted average number of ordinary shares outstanding 165,355,421 165,355,421
------------- -------------
Basic earnings per share (USD) 0.04 0.08
------------- -------------
The diluted earnings per share equals the basic earnings per share since no
potentially dilutive shares were in existence during 2024 and 2023.
24. Related party transactions
The Company is controlled by Groverton Management Ltd, an entity owned by Noam
Lanir, which at 31 December 2024 held 74.41% (2023: 74.41%) of the Company's
voting rights.
2024 2023
US $000 US $000
Amounts receivable from key management
Directors' current accounts 75 16 (1)
------ ------
Amounts payable to unconsolidated subsidiary
Livermore Israel Investments Ltd (3,046) (3,046) (2)
------ ------
Amounts payable to key management
Directors' current accounts (920) (12) (2)
------ ------
Key management compensation
Short term benefits
Executive Directors' fees 795 795 (3)
Executive Directors' reward payments 840 -
Non-executive Directors' fees 90 89
Non-executive Directors' reward payments 65 -
Other key management fees 1,255 408 (4)
------ ------
3,045 1,292
------ ------
(1) The Directors' current accounts with debit balances are interest free,
unsecured, and have no stated repayment date.
(2) The amounts payable to unconsolidated subsidiary and Directors current
accounts with credit balances are interest free, unsecured, and have no stated
repayment date.
(3) These payments were made directly to companies which are related to
the Directors.
(4) Other key management fees are included within professional fees (note
20).
A loan of USD 0.149m was payable to a related company (under common control)
Chanpak Ltd. During 2023, the right to receive the loan amount was assigned by
Chanpak Ltd to Noam Lanir. At the same time, the Company agreed with Noam
Lanir to transfer the outstanding loan amount to his Director current account.
During 2024, Livermore acquired 463 shares in Fetcherr Ltd for a total
consideration of USD 2.9m, on behalf of key management personnel. Each
individual has fully reimbursed Livermore for the amount paid in relation to
their respective shares. At 31 December 2024, these shares continue to be held
by Livermore in trust on their behalf.
During 2024, the Company waived a receivable amount of USD 0.076m from its
subsidiary Sandhirst Ltd, as a means of capital contribution to the
subsidiary. Similarly in 2023, the Company waived a receivable amount of USD
0.076m, as a means of capital contribution to the subsidiary (note 9).
No social insurance and similar contributions nor any other defined benefit
contributions plan costs were incurred for the Company in relation to its key
management personnel in either 2024 or 2023.
25. Litigation
Fairfield Sentry Ltd vs custodian bank and beneficial owners
One of the custodian banks that the Company used faced a litigation in a US
court with a claim up to USD 2.1m plus interest and related legal fees, with
regards to the redemption of shares in Fairfield Sentry Ltd, which were bought
in 2008 at the request of Livermore and on its behalf. If the claim proved to
be successful, Livermore would have to compensate the custodian bank since the
transaction was carried out on Livermore's behalf. The same case was also
filed in BVI where the Privy Council ruled against the plaintiffs.
In December 2023, Livermore came into an out-of-court settlement agreement for
USD 0.27m, which was fully paid in January 2024.
26. Commitments
The Company has expressed its intention to provide financial support to its
subsidiaries, where necessary, to enable them to meet their obligations as
they fall due.
Other than the above, the Company has no capital or other commitments at 31
December 2024.
27. Financial risk management objectives and policies
Background
The Company's financial instruments comprise financial assets at fair value
through profit or loss, financial assets at fair value through other
comprehensive income, and financial assets and liabilities at amortised cost
that arise directly from its operations. For an analysis of financial assets
and liabilities by category, refer to note 28.
Risk objectives and policies
The objective of the Company is to achieve growth of shareholder value, in
line with reasonable risk, taking into consideration that the protection of
long-term shareholder value is paramount. The policy of the Board is to
provide a framework within which the investment manager can operate and
deliver the objectives of the Company.
Risks associated with financial instruments
Foreign currency risk
Foreign currency risks arise in two distinct areas which affect the valuation
of the investment portfolio:
1) where an investment is denominated and paid for in a foreign currency; and
2) where an investment has substantial exposure to non-US Dollar underlying
assets or cash flows denominated in a foreign currency.
The Company in general does not hedge its currency exposure. The Company
discretionally and partially hedges against foreign currency movements
affecting the value of the investment portfolio based on its view on the
relative strength of certain currencies. Any hedging transactions represent
economic hedges; the Company does not apply hedge accounting in any case.
Management monitors the effect of foreign currency fluctuations through the
pricing of the investments. The Company's exposure to financial instruments
denominated in foreign currencies is the following:
2024 2024 2024 2023 2023 2023
US $000
US $000
US $000
US $000
US $000
US $000
Financial assets Financial Net Financial assets Financial Net value
liabilities value liabilities
British Pounds (GBP) 2,511 - 2,511 2,867 - 2,867
Euro 8,598 (57) 8,541 2,083 (58) 2,025
Israel Shekels (ILS) 4,732 (3,046) 1,686 4,690 (3,046) 1,644
Japanese Yen (JPY) 4,181 - 4,181 4,661 - 4,661
Others 36 (74) (38) 31 (88) (57)
------ ------ ------ ------ ------ ------
Total 20,058 (3,177) 16,881 14,332 (3,192) 11,140
------ ------ ------ ------ ------ ------
Also, some of the USD denominated investments are backed by underlying assets
which are invested in non-USD assets. For instance, investments in certain
emerging market private equity funds are denominated in USD but the funds in
turn have invested in assets denominated in non-USD currencies.
A 10% increase of the following currency rates against the rate of United
States Dollar (USD) at 31 December 2024 would have the following impact. A 10%
decrease of the following currencies against USD would have an approximately
equal but opposite impact.
2024 2024 2024 2023 2023 2023
US $000
US $000
US $000
US $000
US $000
US $000
Profit or loss Other comprehensive income Equity Profit or loss Other comprehensive income Equity
British Pounds (GBP) 119 93 212 194 93 287
Euro 854 - 854 202 - 202
Israel Shekels (ILS) 169 - 169 164 - 164
Japanese Yen (JPY) 418 - 418 466 - 466
------ ------ ------ ------ ------ ------
Total 1,560 93 1,653 1,026 93 1,119
------ ------ ------ ------ ------ ------
The above analysis assumes that all other variables in particular, interest
rates, remain constant.
Interest rate risk
The Company is exposed to interest rate risk on its interest-bearing
instruments which are affected by changes in market interest rates.
At 31 December 2024 and 31 December 2023, the Company had no financial
liabilities that bore an interest rate risk.
Interest rate changes will also impact equity prices. The level and direction
of changes in equity prices are subject to prevailing local and world
economics as well as market sentiment all of which are very difficult to
predict with any certainty.
The Company has fixed and floating rate financial assets including bank
balances that bear interest at rates based on the banks floating interest
rates. In particular, the fair value of the Company's fixed rate financial
assets is likely to be negatively impacted by an increase in interest rates.
The interest income of the Company's floating rate financial assets is likely
to be positively impacted by an increase in interest rates.
The Company has exposure to US bank loans through CLO equity tranches as well
as through warehousing facilities. An investment in the CLO equity tranche or
first loss tranche of a warehouse represents a leveraged investment into such
loans. As these loans (assets of a CLO) and the liabilities of a CLO are
floating rate in nature (typically 3-month LIBOR as the base rate), the
residual income to CLO equity tranches and warehouse first loss tranches is
normally linked to the floating rate benchmark and thus normally do not carry
substantial interest rate risk.
The Company's financial assets affected by interest rate changes are as
follows:
2024 2023
US $000
US $000
Financial assets - subject to fair value changes
-Fixed income investments 14,957 36,718
------ ------
14,957 36,718
------ ------
Financial assets - subject to interest changes
- Cash and cash equivalents 33,768 20,169
------ ------
33,768 20,169
------ ------
Total 48,725 56,887
------ ------
An increase of 1% (100 basis points) in interest rates would have the
following impact in profit or loss. An equivalent decrease would have an
approximately equal but opposite impact. There would be no impact in other
comprehensive income.
2024 2023
US $000
US $000
Profit or loss Profit or loss
Financial assets - subject to:
- fair value changes (436) (533)
- interest changes 338 202
------ ------
Total (98) (331)
------ ------
The above analysis assumes that all other variables, in particular currency
rates, remain constant.
Market price risk
By the nature of its activities, most of the Company's investments are exposed
to market price fluctuations. The Board monitors the portfolio valuation on a
regular basis and consideration is given to hedging or adjusting the portfolio
against large market movements.
The Company had no single major financial instrument that in absolute terms
and as a proportion of the portfolio could result in a significant reduction
in the NAV and share price. Due to the very low exposure of the Company to
public equities, and having no specific correlation to any market, the equity
price risk is low. The portfolio as a whole does not correlate exactly to any
Index.
Management of risks is primarily achieved by having a diversified portfolio to
spread the market price risk. The Company mainly has investments in CLO equity
tranches as well as first loss tranches of warehouse facilities. Investments
in the equity tranche of US CLOs represent a levered exposure to senior
secured corporate loans in the US, and are thus subject to many risks
including but not limited to lack of liquidity, credit or default risk, and
risks related to movements in market prices as well as the variations of risk
premium in the market.
Prices of these CLO investments may be volatile and will generally fluctuate
due to a variety of factors that are inherently difficult to predict,
including but not limited to changes in prevailing credit spreads and yield
expectations, interest rates, underlying portfolio credit quality and market
expectations of default rates on non-investment grade loans, general economic
conditions, financial market conditions, legal and regulatory developments,
domestic and international economic or political events, developments or
trends in any particular industry, and the financial condition of the obligors
that constitute the underlying portfolio.
A 10% uniform change in the value of the Company's portfolio of financial
assets would result in a 7.11% change in the net asset value at 31 December
2024 (2023: 8.35%), and would have the following impact in profit or loss and
other comprehensive income (either positive or negative, depending on the
corresponding sign of the change).
2024 2024 2023 2023
US $000
US $000
US $000
US $000
Profit or loss Other comprehensive income Profit or loss Other comprehensive income
Financial assets at fair value through other comprehensive income
- 2,072 - 650
Financial assets at fair value through profit or loss
7,830 - 10,699 -
------ ------ ------ ------
7,830 2,072 10,699 650
------ ------ ------ ------
Derivatives
The Investment Manager may use derivative instruments in order to mitigate
market risk or to take a directional investment. These provide a limited
degree of protection and would not materially impact the portfolio returns if
a large market movement did occur.
No derivatives were held either at 31 December 2024 or 2023.
Credit risk
The Company invests in a wide range of securities with various credit risk
profiles including investment grade securities and sub investment grade
positions. The investment manager mitigates the credit risk via
diversification across issuers. However, the Company is exposed to a migration
of credit rating, widening of credit spreads and default of any specific
issuer.
The Company only transacts with regulated institutions on normal market terms
which are trade date plus one to three days. The levels of amounts outstanding
from brokers are regularly reviewed by the management. The duration of credit
risk associated with the investment transactions is the period between the
date the transaction took place, the trade date and the date the stock and
cash are transferred, the settlement date. The level of risk during the period
is the difference between the value of the original transaction and its
replacement with a new transaction.
The Company is mainly exposed to credit risk in respect of its fixed income
investments (mainly CLOs) and to a lesser extend in respect of its financial
assets at amortised cost, and other instruments held for trading (perpetual
bonds).
The Company has exposure to US senior secured loans and to a lesser degree
emerging market loans through CLO equity tranches as well as warehouse first
loss tranches. These loans are primarily non-investment grade loans or
interests in non-investment grade loans, which are subject to credit risk
among liquidity, market value, interest rate, reinvestment and certain other
risks. It is anticipated that these non-investment grade loans generally will
be subject to greater risks than investment grade corporate obligations.
A non-investment grade loan or debt obligation or an interest in a
non-investment grade loan is generally considered speculative in nature and
may become a defaulted security for a variety of reasons. A defaulted security
may become subject to either substantial workout negotiations or
restructuring, which may entail, among other things, a substantial reduction
in the interest rate, a substantial write-down of principal, and a substantial
change in the terms, conditions and covenants with respect to such defaulted
security. In addition, such negotiations or restructuring may be quite
extensive and protracted over time, and therefore may result in substantial
uncertainty with respect to the ultimate recovery on such defaulted security.
Bank loans have historically experienced greater default rates than has been
the case for investment grade securities.
The Company has no investment in sovereign debt at 31 December 2024 or 2023.
No collaterals are held by the Company itself in relation to the Company's
financial assets subject to credit risk.
The Company's maximum credit risk exposure at 31 December 2024 and 2023 is as
follows:
2024 US $000 2023 US $000
Financial assets:
At amortised cost:
Trade and other receivables 75 16
Cash at bank 33,768 20,169
At fair value through profit or loss 75,808 104,955
------ ------
109,651 125,140
------- -------
The fair values of the above financial assets at fair value through profit or
loss are also affected by the credit risk of those instruments. However, it is
not practical to provide an analysis of the changes in fair values due to the
credit risk impact for the year or previous periods, nor to provide any
relevant sensitivity analysis.
At 31 December 2024 and 2023 the credit rating distribution of the Company's
asset portfolio subject to credit risk was as follows:
Rating 2024 2023
US $000 Percentage US $000 Percentage
AA+ 10,356 9.4% 32,651 26.1%
AA - - 11,932 9.5%
A+ 19,529 17.7% - -
A 12,181 11.1% 6,266 5.0%
A- 496 0.5% - -
BBB 2,057 1.9% 1,746 1.4%
BBB- 1,219 1.1% 4,999 4.0%
BB+ 850 0.8% 845 0.7%
BB 824 0.8% 2,466 2.0%
BB- 5,863 5.3% 10,402 8.3%
B+ - - 765 0.6%
B - - 3,979 3.2%
B- 797 0.7% - -
CCC+ 1,046 1.0% - -
Not Rated 54,433 49.7% 49,089 39.2%
------- ------ ------- ------
109,651 100% 125,140 100%
------- ------ ------- ------
Included within "not rated" amounts are investments in loan market through
CLOs (equity tranches) of USD 49.466m (2023: CLOs of USD 49.073m).
The modelled internal rates of return on the CLO portfolio as well as the
warehouse first loss tranches are in low teens percentage points.
Liquidity risk
The following table summarizes the contractual cash outflows in relation to
the Company's financial liabilities according to their maturity.
Carrying amount Less than 1 year
31 December 2024
US $000 US $000
Trade and other payables 4,143 4,143
------ ------
Carrying amount Less than 1 year
31 December 2023
US $000 US $000
Trade and other payables 3,629 3,629
------ ------
A small proportion of the Company's portfolio is invested in mid-term private
equity investments with low or no liquidity. The investments of the Company in
publicly traded securities are subject to availability of buyers at any given
time and may be very low or non-existent subject to market conditions.
There is currently no exchange traded market for CLO securities and they are
traded over-the-counter through private negotiations or auctions subject to
market conditions. Currently the CLO market is liquid, but in times of market
distress the realization of the investments in CLOs through sales may be below
fair value.
Management takes into consideration the liquidity of each investment when
purchasing and selling in order to maximise the returns to shareholders by
placing suitable transaction levels into the market.
At 31 December 2024, the Company had liquid investments totalling USD 107.2m,
comprising of USD 33.8m in cash and cash equivalents, USD 56.0m in investments
in loan market through CLOs, USD 14.9m (out of the total of USD 19.8m) in
other fixed income investments, USD 2.5m in public equities. Management
structures and manages the Company's portfolio based on those investments
which are considered to be long term, core investments and those which could
be readily convertible to cash, are expected to be realised within normal
operating cycle and form part of the Company's treasury function.
Capital management
The Company considers its capital to be its total equity (i.e., its share
capital and all of its reserves).
The Company manages its capital to ensure that it will be able to continue as
a going concern while maximising the return to shareholders through the
optimisation of the balance between its net debt and equity. As at 31 December
2024 and 2023 the Company has no borrowings.
Net debt to equity ratio is calculated using the following amounts as included
on the consolidated statement of financial position, for the reporting periods
under review:
2024 2023
US $000 US $000
Borrowings - -
Cash at bank (33,768) (20,169)
------ ------
Net Debt (33,768) (20,169)
------ ------
Total equity 139,103 135,837
------ ------
Net debt to equity ratio (0.24) (0.15)
------- -------
28. Financial assets and liabilities by class
Note 2024 US $000 2023 US $000
Financial assets:
Financial assets at amortised cost 10, 11 33,843 20,185
Financial assets at fair value through profit or loss 5 78,339 107,034
Financial assets designated at fair value through other comprehensive income
6 20,721 6,498
------- -------
132,903 133,717
------- -------
Financial liabilities:
Financial liabilities at amortised cost 13 4,143 3,359
------- -------
The carrying amount of the financial assets and liabilities at amortised cost approximates to their fair value.
29. Events after the reporting date
The following non-adjusting event occurred after 31 December 2024:
· The Company's fixed income investments at 31 December 2024 include
investments in two open warehouse facilities. During 2025, the Company
invested an additional amount of USD 3.6m to those open warehouse facilities.
Both warehouses remain open at the date of approval of these financial
statements.
There were no other material events after the end of the reporting year, which
have a bearing on the understanding of these financial statements.
Shareholder Information
Registrars
All enquiries relating to shares or shareholdings should be addressed to:
Link Asset Services
34 Beckenham Road
Beckenham
Kent BR3 4TU
Telephone: 0871 664 0300
Facsimile: 020 8639 2342
Change of Address
Shareholders can change their address by notifying Link Asset Services in
writing at the above address.
Website
www.livermore-inv.com
The Company's website provides, amongst other things, the latest news and
details of the Company's activities, share price details, share price
information and links to the websites of our brands.
Direct Dividend Payments
Dividends can be paid automatically into shareholders' bank or building
society accounts. Two primary benefits of this service are:
· There is no chance of the dividend cheque going missing in the
post; and
· The dividend payment is received more quickly because the cash
sum is paid directly into the account on the payment date without the need to
pay in the cheque and wait for it to clear.
As an alternative, shareholders can download a dividend mandate and complete
and post to Link Asset Services.
Lost Share Certificate
If your share certificate is lost or stolen, you should immediately contact
Link Asset Services on 0871 664 0300 who will advise on the process for
arranging a replacement.
Duplicate Shareholder Accounts
If, as a shareholder, you receive more than one copy of a communication from
the Company you may have your shares registered in at least two accounts. This
happens when the registration details of separate transactions differ
slightly. If you wish to consolidate such multiple accounts, please call
Link Asset Services on 0871 664 0300.
Please note that the Directors of the Company are not seeking to encourage
shareholders to either buy or sell the Company's shares.
Corporate Directory
Secretary Principal Bankers
Chris Sideras
Banque J. Safra Sarasin (Luxembourg) SA
Registered Office 17 - 21, Boulevard Joseph II L-1840
Trident Chambers Luxembourg
PO Box 146
Road Town CBH Compagnie Bancaire Helvétique SA
Tortola Löwenstrasse 29 Zurich 8021
British Virgin Islands Switzerland
Company Number Credit Suisse AG
475668 Seeefldstrasse 1
Zurich 8070
Registrars Switzerland
Link Asset Services
34 Beckenham Road UBS AG
Beckenham Paradeplatz 6
CH-8098 Zürich
Kent BR3 4TU
Switzerland
England
Auditor Bank Julius Baer & Co. Ltd.
Grant Thornton (Cyprus) Ltd Bahnhofstrasse 36,
41-49, Agiou Nicolaou Street CH-8010 Zurich,
Nemeli Court - Block C Switzerland
2408 Engomi Nicosia
Solicitors
Travers Smith
10 Snow Hill
London
EC1A 2AL
England
Broker
Zeus Capital Limited
125 Old Broad Street
London
EC2N 1AR
England
Nominated And Financial Adviser
Strand Hanson Limited
26 Mount Row
London
W1K 3SQ
England
Enquiries:
Livermore Investments Group Limited
+41 43 344 3200
Gaurav Suri
Strand Hanson Limited (Financial and Nominated Adviser)
+44 (0)20 7409 3494
Richard Johnson / Ritchie Balmer
Zeus Capital Limited (Broker)
+44
(0)20 3829 5000
Louisa Waddell
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