REG - Livermore Inv. Group - Interim Results <Origin Href="QuoteRef">AUIV.L</Origin> - Part 2
27/09/2017 07:06
- Part 2: For the preceding part double click ID:nRSa8946Ra
10 "Consolidated Financial
Statements".
In accordance with IFRS 10, 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.
In Livermore's situation, none of its subsidiaries provides such services.
Given the above, these financial statements consolidate the Company's
subsidiaries up to 28 October 2016. As of that date, the subsidiaries have
been de-consolidated, and recognised as Investments in subsidiaries at their
fair value as at 28 October 2016.
4. Financial assets at fair value through profit or loss
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
US $000 US $000 US $000
Non-current assets
Fixed income investments (CLO Income Notes) 94,165 78,876 81,769
Real estate entities - 1,288 -
------ ------ ------
94,165 80,164 81,769
------ ------ ------
Current assets
Fixed income investments 31,673 7,165 18,368
Public equity investments 1,895 2,831 1,950
------ ------ ------
33,568 9,996 20,318
------ ------ ------
For description of each of the above categories, refer to note 6.
The above investments represent financial assets that are mandatorily measured
at fair value through profit or loss.
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.
5. Financial assets at fair value through other comprehensive income
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
US $000 US $000 US $000
Non-current assets
Private equities 7,835 12,477 5,634
------ ------ ------
Current assets
Hedge funds 1,064 1,024 1,039
------ ------ ------
For description of each of the above categories, refer to note 6.
The above investments are non-trading equity investments that have been
designated at fair value through other comprehensive income.
6. Financial assets at fair value
The Company 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, and
investments in open warehouse facilities.
· Private equities 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. Main investments under this category
are in the fields of real estate.
· Hedge funds relate to equity 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
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 Company 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.
· 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.
· Investments in subsidiaries are valued at fair value as determined on
an adjusted net asset valuation basis.
Financial assets and financial liabilities measured at fair value in the
statement of financial position are grouped into the fair value hierarchy as
follows:
30 June 2017 UnauditedUS$000 UnauditedUS$000 Unaudited US$000 Unaudited US $000
Level 1 Level 2 Level 3 Total
Assets
Fixed income investments 1,126 94,165 30,547 125,838
Private equities - - 7,835 7,835
Public equity investments 1,895 - - 1,895
Hedge funds - 1,064 - 1,064
Investments in subsidiaries - - 6,425 6,425
------ ------ ------ ------
3,021 95,229 44,807 143,057
------ ------ ------ ------
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 - - 12,477 12,477
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
------ ------ ------ ------
31 December 2016 AuditedUS$000 AuditedUS$000 Audited US$000 Audited US $000
Level 1 Level 2 Level 3 Total
Assets
Fixed income investments 1,117 81,769 17,251 100,137
Private equities - - 5,634 5,634
Public equity investments 1,951 - - 1,951
Hedge funds - 1,038 - 1,038
Investments in subsidiaries - - 5,252 5,252
------ ------ ------ ------
3,068 82,807 28,137 114,012
------ ------ ------ ------
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,
except from a certain equity instrument that was delisted and therefore
transferred from Level 1 to Level 3 in 2016.
Financial assets within level 3 can be reconciled from beginning to ending
balances as follows:
At fair value through OCI At fair value through profit or loss Investments in subsidiaries
Private equities Fixed Incomeinvestments Total
US $000 US $000 US $000 US $000
As at 1 January 2017 5,634 17,251 5,252 28,137
Purchases - 48,500 1,200 49,700
Settlement - (35,500) - (35,500)
Gains / (losses) recognised in:
-Profit or loss - 296 (27) 269
-Other comprehensive income 2,201 - - 2,201
------ ------ ------ ------
As at 30 June 2017 7,835 30,547 6,425 44,807
------ ------ ------ ------
At fair value through OCI Available-for-sale At fair value through profit or loss
Private equities 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 - 12,518 1,203 330 5,021 19,072
Transfer on initial application of IFRS 9 (note 1.1) 12,848 (12,518) - (330) - -
Losses recognised in:
-Profit or loss - - 85 - 1,041 1,126
-Other comprehensive income (371) - - - - (371)
------ ------ ------ ------ ------ ------
As at 30 June 2016 12,477 - 1,288 - 6,062 19,827
------ ------ ------ ------ ------ ------
At fair value through OCI Available-for-sale At fair value through profit or loss Investments in subsidiaries
Private equities Privateequities Real estate Private equities Fixed Incomeinvestments Total
US $000 US $000 US $000 US $000 US $000 US $000 US $000
As at 1 January 2016 - 12,518 1,203 330 5,021 - 19,072
Transfer on initial application of IFRS 9 (note 1.1) 12,848 (12,518) - (330) - - -
Change in investment entity status (note 3.1) - - (1,288) - - 5,567 4,279
Transfer from Level 1 369 - - - 369
Purchases - - - - 17,000 17,000
Settlement (3,308) - - - (6,062) - (9,370)
Gains / (losses) recognised in:
-Profit or loss - - 85 - 1,292 (315) 1,062
-Other comprehensive income (4,275) - - - - - (4,275)
------ ------ ------ ------ ------ ------ ------
As at 31 December 2016 5,634 - - - 17,251 5,252 28,137
------ ------ ------ ------ ------ ------ ------
The above recognised gains / (losses) are allocated as follows:
At fair value through OCI At fair value through profit or loss Investments in subsidiaries
Private equities Fixed Incomeinvestments Total
Six months ended 30 June 2017 US $000 US $000 US $000 US $000
Profit or loss
-Financial assets held at period-end - 296 (27) 269
------ ------ ------ ------
- 296 (27) 269
------ ------ ------ ------
Other comprehensive income
-Financial assets held at period-end 2,201 - - 2,201
------ ------ ------ ------
2,201 - - 2,201
------ ------ ------ ------
Total gains / (losses) for period 2,201 296 (27) 2,470
------ ------ ------ ------
At fair value through OCI At fair value through profit or loss
Private equities Real estate Private equities Fixed Incomeinvestments Total
Six months ended 30 June 2016 US $000 US $000 US $000 US $000 US $000
Profit or loss
-Financial assets held at period-end - 85 - 1,041 1,126
------ ------ ------ ------ ------
- 85 - 1,041 1,126
------ ------ ------ ------ ------
Other comprehensive income
-Financial assets held at period-end (371) - - - (371)
------ ------ ------ ------ ------
(371) - - - (371)
------ ------ ------ ------ ------
Total (losses) / gains for period (371) 85 - 1,041 755
------ ------ ------ ------ ------
At fair value through OCI At fair value through profit or loss Investments in subsidiaries
Private equities Real estate Private equities Fixed Incomeinvestments Total
Year ended 31 December 2016 US $000 US $000 US $000 US $000 US $000
Profit or loss
-Financial assets held at year-end - 85 - 1,292 (315) 1,062
------ ------ ------ ------ ------ ------
- 85 - 1,292 (315) 1,062
------ ------ ------ ------ ------ ------
Other comprehensive income
-Financial assets held at year -end (4,275) - - - - (4,275)
------ ------ ------ ------ ------ ------
(4,275) - - - - (4,275)
------ ------ ------ ------ ------ ------
Total (losses ) / gains for year (4,275) 85 - 1,292 (315) (3,213)
------ ------ ------ ------ ------ ------
The Company 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 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
US $000 US $000 US $000
Valuation as at 1 January - 123,324 123,324
Fair value (loss) / gain - recognised in profit or loss - (102) (102)
Additions - 102 102
Exchange differences - 2,861 1,439
Disposal of subsidiary (note 3.1) - - (124,763)
------ ------ ------
As at 30 June / 31 December - 126,185 -
------ ------ ------
The investment property relates to Wyler Park property in Bern, Switzerland,
which was used for earning rental income.
9. Investment in joint venture
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
US $000 US $000 US $000
As at 30 June / 31 December - - -
------ ------ ------
Details of the Company's joint venture are as follows:
Name of investee Type of investment Place of incorporation Proportion of voting rights held Principal activity
Silvermore Ltd Joint venture Cayman Islands 50% Investment Holding (dormant)
10. Investment in subsidiaries
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
US $000 US $000 US $000
Valuation as at 1 January 5,252 - -
Additions 1,200 - 5,567
Fair value losses (27) - (315)
------ ------ ------
As at 30 June / 31 December 6,425 - 5,252
------ ------ ------
Additions in 2016 relate to the initial recognition of subsidiaries, following
the change into investment entity status of the Company (note 3.1).
Additions in 2017 relate to the fair value of receivable amounts from two of
the company's subsidiaries, that have been waived by the Company. The nominal
amount of these balances was a total of USD 4.143m (Livermore Properties Ltd:
USD 3.103m, and Sandhirst Ltd: USD 1.040m).
Details of the investments in which the Company 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
Livermore Israel Investments Ltd Israel Ordinary shares 100% Holding of investments
Livermore Capital AG Switzerland Ordinary shares 100% Administration services
Livermore Investments Cyprus Limited Cyprus Ordinary shares 100% Administration services
Sandhirst Ltd Cyprus Ordinary shares 100% Holding of investments
11. Trade and other receivables
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
US $000 US $000 US $000
Financial items
Accrued interest and dividend income 3 64 65
Amounts due by related parties (note 25) 5,532 2,527 9,634
Other receivables - 349 -
Allowance for impairment - - (2,940)
------ ------ ------
5,535 2,940 6,759
Non-Financial items
Other assets (note 25) 564 1,692 1,128
Prepayments 53 133 53
------ ------ ------
6,152 4,765 7,940
------ ------ ------
Allocated as:
Current assets 3,620 4,201 5,427
Non-current assets (note 25(2) and 25(3)) 2,532 564 2,513
------ ------ ------
6,152 4,765 7,940
------ ------ ------
Allowance for impairment
The allowance relates to amounts due by subsidiaries (note 25), which are
regarded as credit-impaired and have been assessed on an individual basis.
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
US $000 US $000 US $000
As at 1 January 2,940 - -
Additions - - 2,818
Charge for the year - - 122
Reversal (2,940) - -
------ ------ ------
As at 30 June / 31 December - - 2,940
------ ------ ------
For the remaining receivables of financial nature, there are no lifetime
expected losses. Therefore no corresponding allowance for impairment has been
recognised.
No receivable amounts have been written-off during either 2017 or 2016.
12. Cash and cash equivalents
Cash and cash equivalents included in the cash flow statement comprise the
following at the reporting date:
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
US $000 US $000 US $000
Cash at bank 23,158 13,201 60,383
Bank overdraft used for cash management purposes - (14,247) (1,160)
------ ------ ------
Cash and cash equivalents 23,158 (1,046) 59,223
------ ------ ------
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 did not repurchase any additional shares for the period. As at 30
June 2017 the Company had 129,306,403 ordinary shares held in treasury.
In the statement of financial position the amount included comprises of:
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
US $000 US $000 US $000
Share premium 215,499 215,499 215,499
Treasury shares (46,312) (46,312) (46,312)
------ ------ ------
169,187 169,187 169,187
------ ------ ------
In August 2017 at the Annual General Meeting of the Company, a resolution was
passed to cancel 129,306,403 treasury shares registered in the name of the
Company, as a capital reduction.
14. Share options
The Company has 500,000 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 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
No. of Options No. of Options No. of Options
Outstanding options
At 1 January 500,000 10,650,000 10,650,000
Options expired - - (10,150,000)
--------- --------- ---------
At 30 June / 31 December 500,000 10,650,000 500,000
--------- --------- ---------
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
No. of Options No. of Options No. of Options
Exercisable options
At 1 January 500,000 10,650,000 10,650,000
Options expired - - (10,150,000)
--------- --------- ---------
At 30 June / 31 December 500,000 10,650,000 500,000
--------- --------- ---------
15. Bank loans
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
US $000 US $000 US $000
As at 1 January - 76,410 76,410
Interest charge - 529 923
Repayments of principal - (768) (1,138)
Repayments of interest - (529) (923)
Exchange differences - 1,770 936
Amortization of refinancing fees - 48 79
Disposal of subsidiary (note 3.1) - - (76,287)
------ ------ ------
As at 30 June / 31 December - 77,460 -
------ ------ ------
Allocated as:
Current bank loans - 1,504 -
Non-current bank loans - 75,956 -
------ ------ ------
- 77,460 -
------ ------ ------
16. Trade and other payables
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
US $000 US $000 US $000
Financial items
Trade payables 22 396 6
Amounts due to related parties (note 25) 3,895 190 3,233
Accrued expenses 516 277 2,327
------ ------ ------
4,433 863 5,566
Non-financial items
Employee benefits accrued - - 3,050
VAT payable - 74 -
------ ------ ------
4,433 937 8,616
------ ------ ------
17. Net asset value per share
30 June2017Unaudited 30 June2016Unaudited 31 December2016Audited
Net assets attributable to ordinary shareholders (USD 000) 167,934 150,234 157,174
------------- ------------- -------------
Closing number of ordinary share in issue 174,813,998 174,813,998 174,813,998
------------- ------------- -------------
Basic net asset value per share (USD) 0.96 0.86 0.90
------------- ------------- -------------
Net assets attributable to ordinary shareholders (USD 000) 167,934 150,234 157,174
Dilutive share options - exercise amount 195 199 185
------------- ------------- -------------
Net assets attributable to ordinary shareholders including the effect of potentially diluted shares (USD 000) 168,129 150,433 157,359
------------- ------------- -------------
Closing number of ordinary shares in issue 174,813,998 174,813,998 174,813,998
Dilutive share options 500,000 500,000 500,000
------------- ------------- -------------
Closing number of ordinary shares including the effect of potentially diluted shares 175,313,998 175,313,998 175,313,998
------------- ------------- -------------
Diluted net asset value per share (USD) 0.96 0.86 0.90
------------- ------------- -------------
Number of Shares
Ordinary shares 304,120,401 304,120,401 304,120,401
Treasury shares (129,306,403) (129,306,403) (129,306,403)
------------- ------------- -------------
Closing number of ordinary shares in issue 174,813,998 174,813,998 174,813,998
------------- ------------- -------------
The Share options granted on 13 May 2008 have a dilutive effect on the net
asset value per share, given that their exercise price is lower than the net
asset value per Company's share at 30 June 2017, 30 June 2016 and 31 December
2016. All other share options do not impact the diluted net asset value per
share at 30 June 2016 (expired in second half of 2016) as their exercise
price was higher than the net asset value per share at 30 June 2016.
Repurchase of own shares
During the period, the Company did not repurchase any additional shares to be
held in treasury.
18. Segment reporting
The Company's monitoring and strategic decision making process in relation to
its investments, was separated into two activity lines, which were also
identified as the Company's operating segments. Following the discontinuance
of the investment property activities in 2016 (note 3.1) the Company has a
single operating segment.
Segment information can be analysed as follows:
Six months ended 30 June 2016 - Unaudited Equity and debtinstrumentsinvestmentactivities Investmentpropertyactivities Total perfinancialstatements
Segment results
US $000 US $000 US $000
Investment income
Interest and dividend income 12,930 - 12,930
Investment property income - 2,580 2,580
Loss on investments (3,602) (102) (3,704)
------ ------ ------
Gross profit 9,328 2,478 11,806
Administrative expenses (1,677) (327) (2,004)
------ ------ ------
Operating profit 7,651 2,151 9,802
Finance costs (124) (582) (706)
Finance income 1,143 - 1,143
------ ------ ------
Profit before taxation 8,670 1,569 10,239
Taxation charge (5) (395) (400)
------ ------ ------
Profit for the period 8,665 1,174 9,839
------ ------ ------
Segment assets 121,235 126,604 247,839
------ ------ ------
Segment liabilities 15,298 82,307 97,605
------ ------ ------
Year ended 31 December 2016 - Audited Equity and debtinstrumentsinvestmentactivities Investmentpropertyactivities Total perfinancialstatements
Segment results
US $000 US $000 US $000
Investment income
Interest and dividend income 26,334 - 26,334
Investment property income - 4,036 4,036
Gain / (loss) on investments 1,695 (102) 1,593
------ ------ ------
Gross profit 28,029 3,934 31,963
Administrative expenses (7,692) (478) (8,170)
------ ------ ------
Operating profit 20,337 3,456 23,793
Finance costs (212) (1,008) (1,220)
------ ------ ------
Profit before taxation 20,125 2,448 22,573
Taxation charge (5) 3,844 3,839
------ ------ ------
Profit for the year 20,120 6,292 26,412
------ ------ ------
Segment assets 182,335 - 182,335
------ ------ ------
Segment liabilities 25,161 - 25,161
------ ------ ------
The Company's investment income and its investments are divided into the
following geographical areas:
Six months ended 30 June 2017 - Unaudited
US $000
Investment Income
Switzerland -
Other European countries 38
United States 9,876
India (48)
Asia (120)
------
9,746
------
Investments
Switzerland 726
Other European countries 3,291
United States 127,271
India 2,113
Asia 9,656
------
143,057
------
Six months ended 30 June 2016 - Unaudited Equity and debtinstrumentsinvestmentactivities Investmentpropertyactivities Total perfinancialstatements
US $000 US $000 US $000
- More to follow, for following part double click ID:nRSa8946RcRecent 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