REG - Livermore Inv. Group - Interim Results <Origin Href="QuoteRef">AUIV.L</Origin> - Part 2
28/09/2016 07:06
- Part 2: For the preceding part double click ID:nRSb0053La
- 72,430 78,610
Repayment of bank loans (768) (84,520) (79,751)
Interest paid (717) (870) (1,731)
Dividends paid - (4,999) (4,999)
------ ------ ------
Net cash from financing activities (9,351) (17,959) (9,415)
------ ------ ------
Net (decrease) / increase in cash and cash equivalents (14,189) 223 19,252
Cash and cash equivalents at the beginning of the period / year 12,562 (6,548) (6,548)
Exchange differences on cash and cash equivalents 564 (181) (124)
Translation differences on foreign operations' cash and cash equivalents 17 29 (18)
------ ------ ------
Cash and cash equivalents at the end of the period / year 12 (1,046) (6,477) 12,562
------ ------ ------
Cash and cash equivalents at the end of the period / year
12
(1,046)
(6,477)
12,562
------
------
------
Notes to the Financial Statements
1. Accounting policies
The interim condensed consolidated financial statements of Livermore have been prepared on the basis of the accounting
policies and basis of consolidation stated in the 2015 Annual Report, available on www.livermore-inv.com. The application
of the IFRS pronouncements that became effective as of 1 January 2016 has no significant impact on the Group's consolidated
financial statements.
2. Critical accounting judgements and estimation uncertainty
When preparing the interim condensed consolidated financial statements, management undertakes a number of judgements,
estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results
may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.
The judgements, estimates and assumptions applied in the interim condensed consolidated financial statements, including the
key sources of estimation uncertainty were the same as those applied in the Group's last annual consolidated financial
statements for the year ended 31 December 2015. The only exception is the estimate of the provision for income taxes which
is determined in the interim financial statements using the estimated average annual effective income tax rate applied to
the pre-tax income of the interim period.
3. Basis of preparation
These unaudited interim condensed consolidated financial statements are for the six months ended 30 June 2016. They have
been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union. They do not include
all of the information required for full annual consolidated financial statements, and should be read in conjunction with
the consolidated financial statements of the Group for the year ended 31 December 2015.
The financial information for the year ended 31 December 2015 is extracted from the Company's consolidated financial
statements for the year ended 31 December 2015 which contained an unqualified audit report.
4. Available-for-sale financial assets
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
Non-current assets
Fixed income investments 78,876 73,914 65,946
Private equities 6,220 6,187 5,295
Financial and minority holdings 5,927 9,266 7,223
------ ------ ------
91,023 89,367 78,464
------ ------ ------
Current assets
Public equities investments 1,191 1,156 1,619
Hedge funds 1,024 1,091 1,064
------ ------ ------
2,215 2,247 2,683
------ ------ ------
For description of each of the above categories, refer to note 6.
The Group treats its investments in the loan market through CLOs as non-current investments as the Group generally intends
to hold such investments over a longer period.
During the six months ended 30 June 2016, due to market conditions, management considered the impairment of certain
available-for-sale financial assets. Impairment testing indicated that for those financial assets their carrying amount may
not be recoverable.
The related impairment charges for the six months ended 30 June 2016, of USD 7.626m (June 2015: USD 10.828m, December 2015:
USD 31.726m), are included within loss on investments (note 22), and represent impairment losses arising due to:
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
Significant fall in value 2,406 2,175 11,119
Prolonged fall in value - 3,560 1,490
Significant and prolonged fall in value 5,220 5,093 19,117
------ ------ ------
7,626 10,828 31,726
------ ------ ------
5. Financial assets at fair value through profit or loss
30 June2016Unaudited 30 June2015Unaudited 31 December2014Audited
US $000 US $000 US $000
Non-current assets
Private equities 330 330 330
Real estate entities 1,288 1,188 1,203
------ ------ ------
1,618 1,518 1,533
------ ------ ------
Current assets
Fixed income investments 7,165 1,649 6,655
Public equity investments 1,640 2,080 1,613
Hedge funds - 43 -
------ ------ ------
8,805 3,772 8,268
------ ------ ------
For description of each of the above categories, refer to note 6.
6. Financial assets at fair value
The Group allocates its non-derivative financial assets at fair value (notes 4 and 5) as follows:
· Fixed income investments relate to fixed and floating rate bonds, perpetual bank debt, and investments in the loan
market through CLOs.
· Private equities relate to investments in both high growth opportunities in emerging markets and deep value
opportunities in mature markets. The company generally invests directly in prospects where it can exert significant
influence.
· Financial and minority holdings relate to significant investments (of over USD 5m) which are strategic for the
Company and are done in the form of equity purchases or convertible loans. Main investments under this category are in the
fields of real estate.
· Hedge funds relate to investments in funds managed by sophisticated investment managers that pursue investment
strategies with the goal of generating absolute returns.
· Public equity investments relate to investments in shares of companies listed on public stock exchanges.
· Real estate entities relate to investments in real estate projects.
7. Fair value measurements of financial assets and liabilities
The following table presents financial assets measured at fair value in the consolidated statement of financial position in
accordance with the fair value hierarchy. This hierarchy groups financial assets and liabilities into three levels based
on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value
hierarchy has the following levels:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date;
- Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly; and
- Level 3: unobservable inputs for the asset or liability.
Valuation of financial assets and liabilities
· Fixed Income Investments, and Public Equity Investments are valued per their closing market prices on quoted
exchanges, or as quoted by market maker. Investments in open warehouse facilities that have not yet been converted to CLOs,
are valued based on an adjusted net asset valuation.
The Group values the CLOs based on the valuation reports provided by market makers. CLOs are typically valued by market
makers using discounted cash flow models. The key assumptions for cash flow projections include default and recovery rates,
prepayment rates and reinvestment assumptions on the underlying portfolios (typically senior secured loans) of the CLOs.
Default and recovery rates: The amount and timing of defaults in the underlying collateral and the amount and timing of
recovery upon a default affect are key to the future cash flows a CLO will distribute to the CLO equity tranche. All else
equal, higher default rates and lower recovery rates typically lead to lower cash flows. Conversely, lower default rates
and higher recoveries lead to higher cash flows.
Prepayment rates: Senior loans can be pre-paid by borrowers. CLOs that are within their reinvestment period may, subject to
certain conditions, reinvest such prepayments into other loans which may have different spreads and maturities. CLOs that
are beyond their reinvestment period typically pay down their senior liabilities from proceeds of such pre-payments.
Therefore the rate at which the underlying collateral prepays impacts the future cash flows that the CLO may generate.
Reinvestment assumptions: A CLO within its reinvestment period may reinvest proceeds from loan maturities, prepayments, and
recoveries into purchasing additional loans. The reinvestment assumptions define the characteristics of the loans that a
CLO may reinvest in. These assumptions include the spreads, maturities, and prices of such loans. Reinvestment into loans
with higher spreads and lower prices will lead to higher cash flows. Reinvestment into loans with lower spreads will
typically lead to lower cash flows.
Discount rate: The discount rate indicates the yield that market participants expect to receive and is used to discount the
projected future cash flows. Higher yield expectations or discount rates lead to lower prices and lower discount rates lead
to higher prices for CLOs.
· Private Equities are valued using market valuation techniques as determined by the Directors, mainly on the basis of
discounted cash flow techniques or valuations reported by third-party managers of such investments.
· Financial and Minority holdings are valued using market valuation techniques as determined by the Directors, mainly
on the basis of discounted cash flow techniques or valuations reported by third-party managers of such investments.
· Hedge Funds are valued per reports provided by the funds on a periodic basis, and if traded, per their closing bid
market prices on quoted exchanges, or as quoted by market maker.
· Real Estates entities are valued by independent qualified property valuers with substantial relevant experience on
such investments. Underlying property values are determined based on their estimated market values.
· Derivative instruments are valued at fair value as provided by counter parties (banks) of the derivative agreement.
Financial assets and financial liabilities measured at fair value in the consolidated statement of financial position are
grouped into the fair value hierarchy as follows:
30 June 2016 UnauditedUS$000 UnauditedUS$000 Unaudited US$000 Unaudited US $000
Level 1 Level 2 Level 3 Total
Assets
Fixed income investments 1,103 78,876 6,062 86,041
Private equities - - 6,550 6,550
Financial and minority holdings - - 5,927 5,927
Public equity investments 2,831 - - 2,831
Hedge funds - 1,024 - 1,024
Real estate entities - - 1,288 1,288
------ ------ ------ ------
3,934 79,900 19,827 103,661
------ ------ ------ ------
Liabilities
Forward contract - 168 - 168
------ ------ ------ ------
- 168 - 168
------ ------ ------ ------
30 June 2015 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
Investment in associate 3,750 3,750
------ ------ ------ ------
4,884 78,990 16,972 100,846
------ ------ ------ ------
31 December 2015 AuditedUS$000 AuditedUS$000 Audited US$000 Audited US $000
Level 1 Level 2 Level 3 Total
Assets
Fixed income investments 1,634 65,946 5,021 72,601
Private equities - - 5,625 5,625
Financial and minority holdings - - 7,223 7,223
Public equity investments 3,232 - - 3,232
Hedge funds - 1,064 - 1,064
Real estate entities - - 1,203 1,203
------ ------ ------ ------
4,866 67,010 19,072 90,948
------ ------ ------ ------
Liabilities
Forward contract - 217 - 217
------ ------ ------ ------
- 217 - 217
------ ------ ------ ------
The methods and valuation techniques used for the purpose of measuring fair value are unchanged compared to the previous
reporting period.
No financial assets or liabilities have been transferred between levels.
Financial assets within level 3 can be reconciled from beginning to ending balances as follows:
Available-for-sale At fair value through profit or loss
Financial and minority holdings Private equities Real estate Private equities Fixed Incomeinvestments Total
US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January 2016 7,223 5,295 1,203 330 5,021 19,072
Transfer - 369 - - - 369
Gains recognised in:
-Profit or loss (1,296) (79) - - 1,041 (334)
-Other comprehensive income - 635 - - - 635
Exchange difference - - 85 - - 85
------ ------ ------ ------ ------ ------
As at 30 June 2016 5,927 6,220 1,288 330 6,062 19,827
------ ------ ------ ------ ------ ------
Available-for-sale At fair value through profit or loss Derivative financial instruments
Financial and minority holdings Private equities Real estate Private equities Total return swap Total
US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January 2015 9,266 7,891 1,476 330 1,125 20,088
Purchases - - - - - -
Settlement - - - - (1,332) (1,332)
(Losses) / gains recognised in:
-Profit or loss (890) 207 (683)
-Other comprehensive income - (814) - - - (814)
Exchange difference - - (287) - - (287)
------ ------ ------ ------ ------ ------
As at 30 June 2015 9,266 6,187 1,189 330 - 16,972
------ ------ ------ ------ ------ ------
Available-for-sale At fair value through profit or loss Derivative financial instruments
Financial and minority holdings Private equities Real estate Private equities Fixed Incomeinvestments Total return swap Total
US $000 US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January 2015 9,266 7,891 1,476 330 - 1,125 20,088
Purchases - - - - 5,000 - 5,000
Settlement (59) - - - (1,332) (1,391)
(Losses) / gains recognised in:
-Profit or loss (2,043) (2,134) 104 - 21 207 (3,845)
-Other comprehensive income - (403) - - - - (403)
Exchange difference - - (377) - - - (377)
------ ------ ------ ------ ------ ------ ------
As at 31 December 2015 7,223 5,295 1,203 330 5,021 - 19,072
------ ------ ------ ------ ------ ------ ------
The above recognised gains / (losses) are allocated as follows:
Available-for-sale At fair value through profit or loss
Financial and minority holdings Private equities Real estate Private equities Fixed Incomeinvestments Total
Six month ended 30 June 2016 US $000 US $000 US $000 US $000 US $000 US $000
Profit or loss
-Financial assets held at period-end (1,296) (79) - - 1,041 (334)
------ ------ ------ ------ ------ ------
(1,296) (79) - - 1,041 (334)
------ ------ ------ ------ ------ ------
Other comprehensive income
-Financial assets held at period-end - 635 - - - 635
------ ------ ------ ------ ------ ------
- 635 - - - 635
------ ------ ------ ------ ------ ------
Total gains for period (1,296) 556 - - 1,041 301
------ ------ ------ ------ ------ ------
Available-for-sale At fair value through profit or loss Derivative financial instruments
Financial and minority holdings Private equities Real estate Private equities Total return swap Total
Six month ended 30 June 2015 US $000 US $000 US $000 US $000 US $000 US $000
Profit or loss
-Financial assets held at period-end - (890) - - 207 (683)
------ ------ ------ ------ ------ ------
- (890) - - 207 (683)
------ ------ ------ ------ ------ ------
Other comprehensive income
-Financial assets held at period-end - (814) - - - (814)
------ ------ ------ ------ ------ ------
- (814) - - - (814)
------ ------ ------ ------ ------ ------
Total (losses) / gains for period - (1,704) - - 207 (1,497)
------ ------ ------ ------ ------ ------
Available-for-sale At fair value through profit or loss Derivative financial instruments
Financial and minority holdings Private equities Real estate Private equities Fixed Incomeinvestments Total return swap Total
Year ended 31 December 2015 US $000 US $000 US $000 US $000 US $000 US $000 US $000
Profit or loss
-Financial assets held at period-end (2,043) (2,134) 104 - 21 - (4,052)
-Financial assets not held at period-end - - - - - 207 207
------ ------ ------ ------ ------ ------ ------
(2,043) (2,134) 104 - 21 207 (3,845)
------ ------ ------ ------ ------ ------ ------
Other comprehensive income
-Financial assets held at period-end - (403) - - - - (403)
------ ------ ------ ------ ------ ------ ------
- (403) - - - - (403)
------ ------ ------ ------ ------ ------ ------
Total gains / (losses) for year (2,043) (2,537) 104 - 21 207 (4,248)
------ ------ ------ ------ ------ ------ ------
The Group has not developed any quantitative unobservable inputs for measuring the fair value of its level 3 financial
assets at the reporting date. Instead the Group used prices from third - party pricing information without adjustment.
A reasonable change in any individual significant input used in the level 3 valuations is not anticipated to have a
significant change in fair values as above.
8. Investment property
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
Valuation as at 1 January 123,324 116,609 116,609
Fair value (loss) / gain - recognised in profit or loss (102) - 7,819
Additions 102 - -
Exchange differences 2,861 7,203 (1,104)
------ ------ ------
As at 30 June / 31 December 126,185 123,812 123,324
------ ------ ------
The investment property relates to Wyler Park property in Bern, Switzerland, which is used for earning rental income. The
Group has no restrictions on the realisability of the property or the remittance of income and any proceeds of disposals.
The investment property which is revalued at each year-end was last valued by Wuest & Partners as at 31 December 2015 on
the basis of open market value (as disclosed in the 2015 annual report) in accordance with the appraisal and valuation
guidelines of the Royal Institute of Certified Surveyors, and the European Group of Valuers' Associations.
The Wyler Park property bank loan (note 16) is secured on the property itself.
9. Investments in associate and joint venture
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
As at 1 January - - -
Additions - 3,750 7,500
Capital return - - (8,183)
Fair value gain - - 683
------ ------ ------
As at 30 June / 31 December - 3,750 -
------ ------ ------
Fair value
Name of investee Type of investment Place of incorporation Principal activity Proportion of voting rights held 30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
Silvermore Ltd Joint venture Cayman Islands Investment holding (dormant) 50% - - -
Highbridge Associate Cayman Islands Investment holding 25% - 3,750 -
----- ----- -----
- 3,750 -
------ ------ ------
During the year 2015, the Group invested in a 25% interest in Highbridge Loan Management Warehouse 7-2015 Ltd (a company
incorporated in Cayman Islands), through its subsidiary Mountview Holdings Ltd, until Highbridge was converted into a CLO.
After the conversion into a CLO the entity ceased to be an associate of the Group.
10. Details of subsidiaries
Details of the investments in which the Group has a controlling interest are as follows:
Name of Subsidiary Place of incorporation Holding Proportion of voting rights and shares held Principal activity
Livermore Properties Limited British Virgin Islands Ordinary shares 100% Holding of investments
Mountview Holdings Limited British Virgin Islands Ordinary shares 100% Investment vehicle
Sycamore Loan Strategies Ltd Cayman Islands Ordinary shares 100% Investment vehicle
Sycamore Loan Funding Ltd Cayman Islands Ordinary shares 100% Investment vehicle
Livermore Israel Investments Ltd Israel Ordinary shares 100% Holding of investments
Livermore Capital AG Switzerland Ordinary shares 100% Administration services
Livermore Investments AG* Switzerland Ordinary shares 100% Real Estate owner and management
Enaxor S.a.r.l Luxembourg Ordinary shares 100% Holding of investment
Livermore Investments Cyprus Limited Cyprus Ordinary shares 100% Administration services
Sandhirst Ltd* Cyprus Ordinary shares 100% Holding of investments
* Held by Enaxor S.a.r.l.
Silvermore 2 Ltd was dissolved during the period.
11. Trade and other receivables
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
Financial items
Accrued interest and dividend income 64 735 304
Amounts due by related parties (note 27) 2,527 2,512 2,514
Other receivables 349 8,340 272
------ ------ ------
2,940 11,587 3,090
Non-Financial items
Other assets (note 27) 1,692 2,820 2,256
Prepayments 133 108 272
------ ------ ------
4,765 14,515 5,618
------ ------ ------
Allocated as:
Current assets 4,201 12,823 4,490
Non-current assets (other assets - note 27) 564 1,692 1,128
------ ------ ------
4,765 14,515 5,618
------ ------ ------
12. Cash and cash equivalents
Cash and cash equivalents included in the cash flow statement comprise the following at the reporting date:
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
Cash at bank 13,201 12,340 25,770
Bank overdraft used for cash management purposes (14,247) (18,817) (13,208)
------ ------ ------
Cash and cash equivalents for the purposes of the consolidated statement of cash flows (1,046) (6,477) 12,562
------ ------ ------
13. Share capital, share premium and treasury shares
Livermore Investments Group Limited (the "Company") is an investment company incorporated under the laws of the British
Virgin Islands. The Company has an issued share capital of 304,120,401 ordinary shares with no par value.
The Company purchased an additional 17,475,585 ordinary shares at an average price of USD 0.45 (£0.34) per share to be held
in treasury during the period. As at 30 June 2016 the Company had 129,306,403 ordinary shares held in treasury.
In the consolidated statement of financial position the amount included comprises of:
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
Share premium 215,499 215,499 215,499
Treasury shares (46,312) (36,902) (38,446)
------ ------ ------
169,187 178,597 177,053
------ ------ ------
14. Share options
The Company has 10,650,000 outstanding share options at the end of the period. There have been no changes to the term of
the options in issue during the period. No options have been exercised during the period.
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
Outstanding options
At 1 January 10,650,000 11,340,000 11,340,000
Options expired - - (690,000)
--------- --------- ---------
At 30 June / 31 December 10,650,000 11,340,000 10,650,000
--------- --------- ---------
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
Exercisable options
At 1 January 10,650,000 11,340,000 11,340,000
Options expired - - (690,000)
--------- --------- ---------
At 30 June / 31 December 10,650,000 11,340,000 10,650,000
--------- --------- ---------
15. Derivative financial instruments
Six monthsended 30 June2016Unaudited Six monthsended 30 June2015Unaudited Year ended31 December2015Audited
US $000 US $000 US $000
Current assets
Forward contract - 192 -
------ ------ ------
Current liabilities
Forward contract 168 - 217
------ ------ ------
16. Bank loans
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
As at 1 January 76,410 78,092 78,092
Additions - 72,724 78,822
Interest charge 529 694 1,278
Repayments of principal (768) (84,520) (79,751)
Repayments of interest (529) (694) (1,278)
Exchange differences 1,770 4,824 (541)
Refinancing fees - (294) (212)
Amortization of refinancing fees 48 - -
------ ------ ------
As at 30 June / 31 December 77,460 70,826 76,410
------ ------ ------
Allocated as:
Current bank loans 1,504 3,315 1,407
Non-current bank loans 75,956 67,511 75,003
------ ------ ------
77,460 70,826 76,410
------ ------ ------
The bank loan relates to Wyler Park investment property purchase (note 8) and is secured on this property.
The principal amount of the loan facility as of 30 June 2016 is CHF 75.85 million. The facility is committed until at least
30 June 2019. The loan facility maybe extended up to 30 June 2029, unless terminated by either party.
The loan bears interest at 3-Month CHF Libor (with a floor rate at zero) plus 1.40% margin. The effective Interest rate of
the loan as at 30 June 2016 is 1.40%.
17. Trade and other payables
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
US $000 US $000 US $000
Financial items
Trade payables 396 500 444
Amounts due to related parties (note 27) 190 565 1,377
Accrued expenses 277 394 386
------ ------ ------
863 1,459 2,207
Non-Financial items
Prepayment from tenants - - 510
VAT payable 74 85 53
------ ------ ------
937 1,544 2,770
------ ------ ------
18. Net asset value per share
30 June2016Unaudited 30 June2015Unaudited 31 December2015Audited
Net assets attributable to ordinary shareholders (USD 000) 150,234 157,837 148,637
------------- ------------- -------------
Closing number of ordinary share in issue 174,813,998 195,289,583 192,289,583
------------- ------------- -------------
Basic net asset value per share (USD) 0.86 0.81 0.77
------------- ------------- -------------
Net assets attributable to ordinary shareholders (USD 000) 150,234 157,837 148,637
Dilutive share options - exercise amount 199 230 221
------------- ------------- -------------
Net assets attributable to ordinary shareholders including the effect of potentially diluted shares (USD 000) 150,433 158,067 148,858
------------- ------------- -------------
Closing number of ordinary shares in issue 174,813,998 195,289,583 192,289,583
Dilutive share options 500,000 500,000 500,000
------------- ------------- -------------
Closing number of ordinary shares including the effect of potentially diluted shares 175,313,998 195,789,583 192,789,583
------------- ------------- -------------
Diluted net asset value per share (USD) 0.86
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