REG - Livermore Inv. Group - Interim Results <Origin Href="QuoteRef">AUIV.L</Origin> - Part 2
25/09/2015 07:00
- Part 2: For the preceding part double click ID:nRSY1603Aa
------ ------ ------
Net cash from financing activities (17,959) (8,646) (13,214)
------ ------ ------
Net increase / (decrease) in cash and cash equivalents 223 7,783 4,464
Cash and cash equivalents at the beginning of the period / year (6,548) (11,038) (11,038)
Exchange differences on cash and cash equivalents (181) (276) 93
Translation differences on foreign operations' cash and cash equivalents 29 - (67)
------ ------ ------
Cash and cash equivalents at the end of the period / year 12 (6,477) (3,531) (6,548)
------ ------ ------
Cash and cash equivalents at the end of the period / year
12
(6,477)
(3,531)
(6,548)
------
------
------
Notes to the Financial Statements
1. Accounting policies
The interim condensed consolidated financial statements of Livermore have been
prepared on the basis of the accounting policies and basis of consolidation
stated in the 2014 Annual Report, available on www.livermore-inv.com. The
application of the IFRS pronouncements that became effective as of 1 January
2015 has no significant impact on the Group's consolidated financial
statements.
2. Critical accounting judgements and estimation uncertainty
When preparing the interim condensed consolidated financial statements,
management undertakes a number of judgements, estimates and assumptions about
recognition and measurement of assets, liabilities, income and expenses. The
actual results may differ from the judgements, estimates and assumptions made
by management, and will seldom equal the estimated results. The judgements,
estimates and assumptions applied in the interim condensed consolidated
financial statements, including the key sources of estimation uncertainty were
the same as those applied in the Group's last annual consolidated financial
statements for the year ended 31 December 2014. The only exception is the
estimate of the provision for income taxes which is determined in the interim
financial statements using the estimated average annual effective income tax
rate applied to the pre-tax income of the interim period.
3. Basis of preparation
These unaudited interim condensed consolidated financial statements are for
the six months ended 30 June 2015. They have been prepared in accordance with
IAS 34 "Interim Financial Reporting" as adopted by the European Union. They do
not include all of the information required for full annual consolidated
financial statements, and should be read in conjunction with the consolidated
financial statements of the Group for the year ended 31 December 2014.
The financial information for the year ended 31 December 2014 is extracted
from the Company's consolidated financial statements for the year ended 31
December 2014 which contained an unqualified audit report.
4. Available-for-sale financial assets
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
Non-current assets
Fixed income investments 73,914 91,962 82,217
Private equities 6,187 9,114 7,891
Financial and minority holdings 9,266 9,068 9,266
------ ------ ------
89,367 110,144 99,374
------ ------ ------
Current assets
Public equities investments 1,156 1,959 1,491
Hedge funds 1,091 1,057 1,070
Other investments - 2 -
------ ------ ------
2,247 3,018 2,561
------ ------ ------
For description of each of the above categories, refer to note 6.
During the six months ended 30 June 2015, due to market conditions, management
considered the impairment of certain available-for-sale financial assets.
Impairment testing indicated that for those financial assets their carrying
amount may not be recoverable.
The related impairment charges for the six months ended 30 June 2015, of USD
10.828m (June 2014: USD 1.616m, December 2014: USD 8.861m), are included
within loss on investments (note 22), and represent impairment losses arising
due to:
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
Significant fall in value 2,175 1,400 5,693
Prolonged fall in value 3,560 216 1,328
Significant and prolonged fall in value 5,093 - 1,840
------ ------ ------
10,828 1,616 8,861
------ ------ ------
5. Financial assets at fair value through profit or loss
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
Non-current assets
Private equities 330 569 330
Real estate entities 1,188 1,553 1,476
------ ------ ------
1,518 2,122 1,806
------ ------ ------
Current assets
Fixed income investments 1,649 1,645 1,623
Public equity investments 2,080 3,845 1,717
Hedge funds 43 199 65
Other investments - 298 299
------ ------ ------
3,772 5,987 3,704
------ ------ ------
For description of each of the above categories, refer to note 6.
6. Financial assets at fair value
The Group allocates its non-derivative financial assets at fair value (notes 4
and 5) as follows:
· Fixed income investments relate to fixed and floating rate bonds,
perpetual bank debt, and investments in the loan market through CLOs.
· Private equities relate to investments in both high growth opportunities
in emerging markets and deep value opportunities in mature markets. The
company generally invests directly in prospects where it can exert significant
influence.
· Financial and minority holdings relate to significant investments (of over
USD 5m) which are strategic for the Company and are done in the form of equity
purchases or convertible loans. Main investments under this category are in
the fields of real estate.
· Hedge funds relate to investments in funds managed by sophisticated
investment managers that pursue investment strategies with the goal of
generating absolute returns.
· Public equity investments relate to investments in shares of companies
listed on public stock exchanges.
· Real estate entities relate to investments in real estate projects.
· Other investments are investments not otherwise included in the
categories above.
7. Fair value measurements of financial assets and liabilities
The following table presents financial assets measured at fair value in the
consolidated statement of financial position in accordance with the fair value
hierarchy. This hierarchy groups financial assets and liabilities into three
levels based on the significance of inputs used in measuring the fair value of
the financial assets and liabilities. The fair value hierarchy has the
following levels:
- Level 1: quoted prices (unadjusted) in active markets for identical
assets or liabilities that the entity can access at the measurement date;
- Level 2: inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly or indirectly; and
- Level 3: unobservable inputs for the asset or liability.
Valuation of financial assets and liabilities
· Public Equities, and Fixed Income Investments are valued per their
closing bid market prices on quoted exchanges, or as quoted by market maker.
The Group values the CLOs based on the valuation reports provided by market
makers. CLOs are typically valued by market makers using discounted cash flow
models. The key assumptions for cash flow projections include default and
recovery rates, prepayment rates and reinvestment assumptions on the
underlying portfolios (typically senior secured loans) of the CLOs.
Default and recovery rates: The amount and timing of defaults in the
underlying collateral and the amount and timing of recovery upon a default
affect are key to the future cash flows a CLO will distribute to the CLO
equity tranche. All else equal, higher default rates and lower recovery rates
typically lead to lower cash flows. Conversely, lower default rates and higher
recoveries lead to higher cash flows.
Prepayment rates: Senior loans can be pre-paid by borrowers. CLOs that are
within their reinvestment period may, subject to certain conditions, reinvest
such prepayments into other loans which may have different spreads and
maturities. CLOs that are beyond their reinvestment period typically pay down
their senior liabilities from proceeds of such pre-payments. Therefore the
rate at which the underlying collateral prepays impacts the future cash flows
that the CLO may generate.
Reinvestment assumptions: A CLO within its reinvestment period may reinvest
proceeds from loan maturities, prepayments, and recoveries into purchasing
additional loans. The reinvestment assumptions define the characteristics of
the loans that a CLO may reinvest in. These assumptions include the spreads,
maturities, and prices of such loans. Reinvestment into loans with higher
spreads and lower prices will lead to higher cash flows. Reinvestment into
loans with lower spreads will typically lead to lower cash flows.
Discount rate: The discount rate indicates the yield that market participants
expect to receive and is used to discount the projected future cash flows.
Higher yield expectations or discount rates lead to lower prices and lower
discount rates lead to higher prices for CLOs.
· Hedge Funds and Private Equity Funds are valued per reports provided by
the funds on a periodic basis, and if traded, per their closing bid market
prices on quoted exchanges, or as quoted by market maker.
· Private Equities and unlisted investments are valued using market
valuation techniques as determined by the Directors, mainly on the basis of
discounted cash flow techniques or valuations reported by third-party managers
of such investments.
· Derivative instruments are valued at fair value as provided by counter
parties of the derivative agreement.
· The investment in associate is valued based on its underlying credit
agreement. The credit agreement's fair value is provided by counter party
bank.
Financial assets and financial liabilities measured at fair value in the
consolidated statement of financial position are grouped into the fair value
hierarchy as follows:
30 June 2015 UnauditedUS$000 UnauditedUS$000 Unaudited US$000 Unaudited US $000
Level 1 Level 2 Level 3 Total
Assets
Fixed income investments 1,648 73,914 - 75,562
Private equities - - 6,517 6,517
Financial and minority holdings - - 9,266 9,266
Public equity investments 3,236 - - 3,236
Hedge funds - 1,134 - 1,134
Real estate entities - - 1,189 1,189
Forward contract - 192 - 192
------ ------ ------ ------
4,884 75,240 16,972 97,096
------ ------ ------ ------
30 June 2014 UnauditedUS$000 UnauditedUS$000 Unaudited US$000 Unaudited US $000
Level 1 Level 2 Level 3 Total
Assets
Fixed income investments 1,645 91,962 - 93,607
Private equities - - 9,683 9,683
Financial and minority holdings - - 9,068 9,068
Public equity investments 5,804 - - 5,804
Hedge funds - 1,256 - 1,256
Real estate entities - - 1,553 1,553
Other investments 298 - 2 300
------ ------ ------ ------
7,747 93,218 20,306 121,271
------ ------ ------ ------
Liabilities
Interest rate swaps - 378 - 378
------ ------ ------ ------
- 378 - 378
------ ------ ------ ------
31 December 2014 AuditedUS$000 AuditedUS$000 Audited US$000 Audited US $000
Level 1 Level 2 Level 3 Total
Assets
Fixed income investments 1,623 82,217 - 83,840
Private equities - - 8,221 8,221
Financial and minority holdings - - 9,266 9,266
Public equity investments 3,208 - - 3,208
Hedge funds - 1,135 - 1,135
Real estate entities - - 1,476 1,476
Other investments 299 - - 299
Total return swaps - - 1,125 1,125
------ ------ ------ ------
5,130 83,352 20,088 108,570
------ ------ ------ ------
The methods and valuation techniques used for the purpose of measuring fair
value are unchanged compared to the previous reporting period.
No financial assets or liabilities have been transferred between levels.
Financial assets within level 3 can be reconciled from beginning to ending
balances as follows:
Available-for-sale At fair value through profit or loss Derivative financial instruments
Financial and minority holdings Private equities Other investments Real estate Private equities Total return swap Total
US $000 US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January 2015 9,266 7,891 - 1,476 330 1,125 20,088
Purchases - - - - - - -
Settlement - - - - - (1,332) (1,332)
Losses recognised in:
-Profit or loss - (890) - - - 207 (683)
-Other comprehensive income - (814) - - - - (814)
Exchange difference - - - (287) - - (287)
------ ------ ------ ------ ------ ------ ------
As at 30 June 2015 9,266 6,187 - 1,189 330 - 16,972
------ ------ ------ ------ ------ ------ ------
Available-for-sale At fair value through profit or loss Derivative financial instruments
Financial and minority holdings Private equities Other investments Real estate Private equities Total return swap Total
US $000 US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January 2014 9,068 9,081 2 1,588 569 - 20,308
Purchases - 132 - - - - 132
(Losses) / gains recognised in:
-Profit or loss - (217) - - - - (217)
-Other comprehensive income - 118 - - - - 118
Exchange difference - - - (35) - - (35)
------ ------ ------ ------ ------ ------ ------
As at 30 June 2014 9,068 9,114 2 1,553 569 - 20,306
------ ------ ------ ------ ------ ------ ------
Available-for-sale At fair value through profit or loss Derivative financial instruments
Financial and minority holdings Private equities Other investments Real estate Private equities Total return swap Total
US $000 US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January 2014 9,068 9,081 2 1,588 569 - 20,308
Purchases - 323 - - - - 323
(Losses) / gains recognised in:
-Profit or loss - (1,470) - 68 (239) 1,125 (516)
-Other comprehensive income 198 (43) (2) - - - 153
Exchange difference - - - (180) - - (180)
------ ------ ------ ------ ------ ------ ------
As at 31 December 2014 9,266 7,891 - 1,476 330 1,125 20,088
------ ------ ------ ------ ------ ------ ------
The above recognised (losses) / gains can be allocated as follows:
Available-for-sale At fair value through profit or loss Derivative financial instruments
Financial and minority holdings Private equities Other investments Real estate Private equities Total return swap Total
Six month ended 30 June 2015 US $000 US $000 US $000 US $000 US $000 US $000 US $000
Profit or loss
-Financial assets held at period-end - (890) - - - 207 (683)
------ ------ ------ ------ ------ ------ ------
- (890) - - - 207 (683)
------ ------ ------ ------ ------ ------ ------
Other comprehensive income
-Financial assets held at period-end - (814) - - - - (814)
------ ------ ------ ------ ------ ------ ------
- (814) - - - - (814)
------ ------ ------ ------ ------ ------ ------
Net (losses) / gains for period - (1,704) - - - 207 (1,497)
------ ------ ------ ------ ------ ------ ------
Available-for-sale At fair value through profit or loss Derivative financial instruments
Financial and minority holdings Private equities Other investments Real estate Private equities Total return swap Total
Six month ended 30 June 2014 US $000 US $000 US $000 US $000 US $000 US $000 US $000
Profit or loss
-Financial assets held at period-end - (217) - - - - (217)
------ ------ ------ ------ ------ ------ ------
- (217) - - - - (217)
------ ------ ------ ------ ------ ------ ------
Other comprehensive income
-Financial assets held at period-end - 118 - - - - 118
------ ------ ------ ------ ------ ------ ------
- 118 - - - - 118
------ ------ ------ ------ ------ ------ ------
Net losses for period - (99) - - - - (99)
------ ------ ------ ------ ------ ------ ------
Available-for-sale At fair value through profit or loss Derivative financial instruments
Financial and minority holdings Private equities Other investments Real estate Private equities Total return swap Total
Year ended 31 December 2014 US $000 US $000 US $000 US $000 US $000 US $000 US $000
Profit or loss
-Financial assets held at period-end - (1,470) - 68 (239) 1,125 (516)
------ ------ ------ ------ ------ ------ ------
- (1,470) - 68 (239) 1,125 (516)
------ ------ ------ ------ ------ ------ ------
Other comprehensive income
-Financial assets held at period-end 198 (43) (2) - - - 153
------ ------ ------ ------ ------ ------ ------
198 (43) (2) - - - 153
------ ------ ------ ------ ------ ------ ------
Net gains / (losses) for year 198 (1,513) (2) 68 (239) 1,125 (363)
------ ------ ------ ------ ------ ------ ------
The Group has not developed any quantitative unobservable inputs for measuring
the fair value of its level 3 financial assets at the reporting date. Instead
the Group used prices from third - party pricing information without
adjustment.
A reasonable change in any individual significant input used in the level 3
valuations is not anticipated to have a significant change in fair values as
above.
8. Investment property
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
Valuation as at 1 January 116,609 129,916 129,916
Fair value gain - recognised in profit or loss - - 61
Exchange differences 7,203 37 (13,368)
------ ------ ------
As at 30 June / 31 December 123,812 129,953 116,609
------ ------ ------
The investment property relates to Wyler Park property in Bern, Switzerland,
which is used for earning rental income. The Group has no restrictions on the
realisability of the property or the remittance of income and any proceeds of
disposals.
The investment property which is revalued at each year-end was last valued by
Wuest & Partners as at 31 December 2014 on the basis of open market value (as
disclosed in the 2014 annual report) in accordance with the appraisal and
valuation guidelines of the Royal Institute of Certified Surveyors, and the
European Group of Valuers' Associations.
The Wyler Park property bank loan (note 16) is secured on the property
itself.
9. Investments in associate and joint venture
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
As at 1 January - 5,524 5,524
Additions 3,750 - -
Capital return - (5,000) (5,000)
Fair value (loss) / gain - (524) (524)
------ ------ ------
As at 30 June / 31 December 3,750 - -
------ ------ ------
Fair value
Name of investee Type of investment Place of incorporation Principal activity Proportion of voting rights held 30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
Silvermore Ltd Joint venture Cayman Islands Investment holding 50% - - -
Highbridge* Associate Cayman Islands Investment holding 25% 3,750 - -
----- ----- -----
3,750 - -
------ ------ ------
*Highbridge Loan Management Warehouse 7-2015, Ltd is held by the subsidiary
Mountview Holdings Limited.
Silvermore was dissolved in January 2015
The activities of the associate are in line with the Group's activities and
strategy.
The associate (Highbridge) does not prepare any financial information. As at
the period end Highbridge was a contractual party to a credit agreement with
BNP Paribas. As at that date Highbridge had no other assets or liabilities.
10. Details of subsidiaries
Details of the investments in which the Group has a controlling interest are
as follows:
Name of Subsidiary Place of incorporation Holding Proportion of voting rights and shares held Principal activity
Livermore Properties Limited British Virgin Islands Ordinary shares 100% Holding of investments
Mountview Holdings Limited British Virgin Islands Ordinary shares 100% Investment vehicle
Silvermore 2 Ltd Cayman Islands Ordinary shares 100% Investment vehicle
Sycamore Loan Strategies Ltd Cayman Islands Ordinary shares 100% Investment vehicle
Sycamore Loan Funding Ltd Cayman Islands Ordinary shares 100% Investment vehicle
Livermore Israel Investments Ltd Israel Ordinary shares 100% Holding of investments
Blackline Investments Inc. USA Ordinary shares 52.5% Holding of investments (Dormant)
Livermore Capital AG Switzerland Ordinary shares 100% Administration services
Livermore Investments AG* Switzerland Ordinary shares 100% Real Estate owner and management
Enaxor S.a.r.l Luxembourg Ordinary shares 100% Holding of investment
Livermore Investments Cyprus Limited Cyprus Ordinary shares 100% Administration services
Sandhirst Ltd Cyprus Ordinary shares 100% Holding of investments
* Held by Enaxor S.a.r.l.
11. Trade and other receivables
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
Financial items
Accrued interest and dividend income 735 112 514
Amounts due by related parties (note 27) 2,512 500 2,497
Other receivables 8,340 11,334 16,757
------ ------ ------
11,587 11,946 19,768
Non-Financial items
Other assets (note 27) 2,820 3,948 3,384
Prepayments 108 132 276
------ ------ ------
14,515 16,026 23,428
------ ------ ------
Allocated as:
Current assets 12,823 13,065 20,890
Non-current assets 1,692 2,961 2,538
------ ------ ------
14,515 16,026 23,428
------ ------ ------
Other receivables include an amount of USD 7.5m that the Company invested
during the period in the first loss tranche of a warehouse facility for
accumulating loans with the intention to transfer these loans to a CLO which
would be managed by MJX Asset Management LLC. In June 2015, the said CLO was
priced and the loans accumulated in the warehouse were agreed to be
transferred at purchase price to the CLO on 10 July, 2015. Consequently,
Livermore's investment amount plus net carry earned became receivable as of
end of June. On 10 July 2015 Livermore received USD 8.2m.
12. Cash and cash equivalents
Cash and cash equivalents included in the cash flow statement comprise the
following at the reporting date:
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
Cash at bank 12,340 9,996 3,807
Bank overdraft used for cash management purposes (18,817) (13,527) (10,355)
------ ------ ------
Cash and cash equivalents for the purposes of the consolidated statement of cash flows (6,477) (3,531) (6,548)
------ ------ ------
13. Share capital, share premium and treasury shares
Livermore Investments Group Limited (the "Company") is an investment company
incorporated under the laws of the British Virgin Islands. The Company has an
issued share capital of 304,120,401 ordinary shares with no par value.
As at 30 June 2015 the Company had 108,830,818 ordinary shares held in
treasury. The Company did not purchase any additional ordinary shares to be
held in treasury during the period.
In the consolidated statement of financial position the amount included
comprises of:
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
Share premium 215,499 215,499 215,499
Treasury shares (36,902) (36,902) (36,902)
------ ------ ------
178,597 178,597 178,597
------ ------ ------
14. Share options
The Company has 11,340,000 outstanding share options at the end of the period.
Options are normally exercisable in three equal tranches, on the first,
second and third anniversary of the grant. There have been no changes to the
term of the options in issue during the period. No options have been
exercised during the period.
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
Outstanding options
At 1 January 11,340,000 11,340,000 11,340,000
--------- --------- ---------
At 30 June / 31 December 11,340,000 11,340,000 11,340,000
--------- --------- ---------
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
Exercisable options
At 1 January 11,340,000 11,340,000 11,340,000
--------- --------- ---------
At 30 June / 31 December 11,340,000 11,340,000 11,340,000
--------- --------- ---------
15. Derivative financial instruments
Six monthsended 30 June2015Unaudited Six monthsended 30 June2014Unaudited Year ended31 December2014Audited
US $000 US $000 US $000
Current assets
Total return swap - - 1,125
Forward contract 192 - -
------ ------ ------
Current liabilities
Interest rate swaps - 378 -
------ ------ ------
16. Bank loans
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
As at 1 January 78,092 87,974 87,974
Additions 72,724 - -
Repayments (84,520) (364) (830)
Exchange differences 4,824 25 (9,052)
Refinancing fees (294) - -
------ ------ ------
As at 30 June / 31 December 70,826 87,635 78,092
------ ------ ------
Allocated as:
Current bank loans 3,315 87,635 78,092
Non-current bank loans 67,511 - -
------ ------ ------
70,826 87,635 78,092
------ ------ ------
The bank loan relates to Wyler Park investment property purchase (note 8) and
is secured on this property. The loan balance was fully repayable on 12 July
2014. The bank loan was extended for a six month period and became fully
repayable on 31 January 2015. Additionally in January 2015, the Group
successfully refinanced the loan with a new bank loan. The principal amount of
the new loan facility is CHF 68 million (USD 73 million). The facility is
committed until at least 30 June 2019. Following the lease extension agreement
with SBB from 2019 to 2029, an additional CHF 10 million (USD 10.7 million) is
available under this facility.
The weighted average effective Interest of the loan for the period was 1.80%.
17. Trade and other payables
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
US $000 US $000 US $000
Financial items
Trade payables 500 464 727
Amounts due to related parties (note 27) 565 1,247 579
Accrued expenses 394 967 430
------ ------ ------
1,459 2,678 1,736
Non-Financial items
VAT payable 85 74 22
------ ------ ------
1,544 2,752 1,758
------ ------ ------
18. Net asset value per share
30 June2015Unaudited 30 June2014Unaudited 31 December2014Audited
Net assets attributable to ordinary shareholders (USD 000) 157,837 168,174 159,974
--------- --------- ---------
Closing number of ordinary share in issue 195,289,583 195,289,583 195,289,583
--------- --------- ---------
Basic net asset value per share (USD) 0.81 0.86 0.82
--------- --------- ---------
Net assets attributable to ordinary shareholders (USD 000) 157,837 168,174 159,974
Dilutive share options - exercise amount 230 255 234
--------- --------- ---------
Net assets attributable to ordinary shareholders including the effect of potentially diluted shares (USD 000) 158,067 168,429 160,208
------------- ------------- -------------
Closing number of ordinary shares in issue 195,289,583 195,289,583 195,289,583
Dilutive share options
- More to follow, for following part double click ID:nRSY1603AcRecent news on Livermore Investments
See all newsREG - Livermore Inv. Group - Directorate Change
AnnouncementREG - Livermore Inv. Group - Interim dividend exchange rate
AnnouncementREG - Livermore Inv. Group - Interim Dividend
AnnouncementREG - Livermore Inv. Group - Interim Results
AnnouncementREG - Livermore Inv. Group - Result of AGM
Announcement