TIDMLIV
RNS Number : 2886A
Livermore Investments Group Limited
28 September 2020
28 September, 2020
LIVERMORE INVESTMENTS GROUP LIMITED
UNAUDITED INTERIM RESULTS FOR SIX MONTHSED 30 JUNE 2020
Livermore Investments Group Limited (the "Company" or
"Livermore") today announces its interim results for the six months
ended 30 June 2020 .
For further investor information please go to
www.livermore-inv.com .
Enquiries:
Livermore Investments Group Limited +41 43 344 3200
Gaurav Suri
Arden Partners plc +44 (0)20 7614 5900
Richard Johnson / Benjamin Cryer
Chairman's and Chief Executive's Review
Introduction
We are pleased to announce the interim financial results for
Livermore Investments Group Limited (the "Company" or "Livermore")
for the six months ended 30 June 2020. References to the Company
hereinafter also include its consolidated subsidiaries (note
8).
The COVID-19 outbreak across the world has triggered tremendous
human and economic hardships. Since February 2020, protective
measures taken to contain spread of COVID-19 (lockdown) have
supressed demand and supply globally, leading to a surge in job
losses and exceptional turbulence in the financial markets. In
light of the extra-ordinary situation, the Company focussed on
protecting its capital, maintaining continuous operations, and
ensuring the well-being of its employees and consultants.
Management cut warehousing risk before the COVID-19 related
market sell-off took hold and maintained a high cash position of
over USD 60m through the end of the first half of the year. This
conservative positioning helped the Company navigate the tremendous
volatility and uncertainty that ensued, and allows the Company to
participate in the recovery phase by deploying capital
opportunistically.
During the first half of 2020, the Company generated a net loss
of USD 21.8m (30 June 2019: profit of USD 9.1m), which represents a
loss of USD 0.12 per share (30 June 2019: gain of USD 0.05 per
share). The NAV of the Company stood at USD 144.8m as of end of
June 2020, representing a USD 28.3m or 16.3% decline from the
beginning of the year. The losses relate largely to mark-to-market
valuations of its CLO portfolio. Although the valuations declined
significantly as risk premiums and default rates increased, the
Company received distributions from almost all of its CLO
positions. During H1 2020, the CLO and warehousing portfolio
generated USD 12.3m in cash. As the recovery takes hold, we
anticipate the distributions to increase over time due to higher
new issues loan spreads and the positive effect of LIBOR floors.
Management continues to actively manage the financial portfolio and
remains in frequent contact with CLO managers with a view to
optimizing exposure to US credit markets.
Financial Review
The NAV of the Company as at 30 June 2020 was USD 144.8m (30
June 2019: 183.0m). The loss after tax for the first half of 2020
was USD 21.8m, which represents loss per share of USD 0.12. The
losses relate largely to the period end valuations of the CLO
portfolio and exposure to leveraged loans.
30 June 202 0 30 June 2019 31 December 2019
US $m US $m US $m
-------------- ------------- -----------------
Shareholders' funds at beginning of period 173.1 174.3 174.3
-------------- ------------- -----------------
___________ ___________ ___________
-------------- ------------- -----------------
Income from investments 1 2.3 1 1.5 29 .0
-------------- ------------- -----------------
Realised losses on investments - - -
-------------- ------------- -----------------
Unrealised p rofits/ ( losses) on investments ( 33.4) 0 .5 (2 5 .5)
-------------- ------------- -----------------
Administration costs ( 1.3) ( 3.5) (5.1)
-------------- ------------- -----------------
Net finance income / (costs) 0 .1 0 .2 0 .5
-------------- ------------- -----------------
Tax (charge) / credit - - ( 0.1)
-------------- ------------- -----------------
___________ ___________ ___________
-------------- ------------- -----------------
Increase in net assets from operations (2 2.3) 8 .7 (1.2 )
-------------- ------------- -----------------
Dividends paid ( 6.0) - -
-------------- ------------- -----------------
___________ ___________ ___________
-------------- ------------- -----------------
Shareholders' funds at end of period 1 44 .8 18 3 .0 173.1
-------------- ------------- -----------------
------ ------ ------
-------------- ------------- -----------------
Net Asset Value per share US $0.83 US $1.05 US $1.00
-------------- ------------- -----------------
Livermore's Strategy
The Company's primary investment objective is to generate high
current income and regular cash flows. The financial portfolio is
constructed around fixed income instruments such as Collateralized
Loan Obligations ("CLOs") and other securities or instruments with
exposure primarily to senior secured and usually broadly syndicated
US loans. The Company has a long-term oriented investment
philosophy and invests primarily with a buy-and-hold mentality,
though from time to time the Company will sell investments to
realize gains or for risk management purposes.
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.
Dividend & Buyback
On 31 December 2019, the Board announced an interim dividend of
USD 6m (USD 0.0343 per share) to members on the register on 24
January 2020. The dividend was paid on 21 February 2020.
The Board of Directors will decide on the Company's dividend
policy for 2020 based on profitability, liquidity requirements,
portfolio performance, market conditions, and the share price of
the Company relative to its NAV.
The Company has no shares in treasury.
Richard Rosenberg Noam Lanir
Chairman Chief Executive
25 September 2020
Review of Activities
Economic & Investment Environment
An already weak global economy on account of trade tensions
between the US and China as well, as the uncertainty over the UK's
exit from the European Union, was plunged sharply into a recession
as the COVID-19 outbreak spread rapidly across the world.
Preventive measures to slow the infection rate shut down several
businesses sectors and disrupted global supply chains. The
resulting jobs losses, especially in the travel, entertainment and
retail sectors, inflicted significant economic damage in addition
to the health crisis.
Thankfully, Central banks across the world acted swiftly to
lower rates substantially and injected unprecedented amounts of
liquidity to ensure orderly functioning of the global markets. In
addition, governments responded quickly to provide stimulus, such
as forgivable business financing, generous unemployment benefits
and short-term work schemes, to blunt the impact of the crisis.
These aggressive measures helped stabilize markets and supported
household spending. Risk assets responded well to these measures
and financial conditions have eased significantly from
February-April levels.
After posting a moderate gain in 2019 in the US, real gross
domestic product (GDP) fell at an annual rate of 5.0% in the first
quarter and 31.7% in the second quarter of 2020. Unemployment rose
rapidly and stood at 13.3% in May, compared to 3.6% at the
beginning of the year. Subsequent easing of the lockdown in several
US states and easy monetary and fiscal policies are supporting a
sharp recovery in the employment market, although a return to
pre-COVID levels is expected to take a long time. Annual inflation
declined to lower levels and it is further threatened by low oil
and commodity prices. Although market based inflation compensation
measures declined substantially, longer term expectations remain
stable for now.
In the Euro area, GDP fell by 3.7% in the first quarter and
11.8% in the second quarter. The drop in GDP was particularly
pronounced in France and Italy, where COVID-19 containment measures
were introduced early on and were very strict. As expected,
unemployment rates increased but were substantially lower than in
the US due to short-term work schemes implemented in several member
states. Headline inflation declined as the effect of lower oil
prices also fed through the economy.
After a strong start to the year, risk assets declined sharply
in a short period of time as the COVID-19 outbreak spread rapidly.
From its peak in February, the S&P 500 declined 34% to its
trough in March. The unprecedented speed of decline and tremendous
volatility shook the financial markets. Credit markets widened and
financial conditions tightened significantly. Yields of developed
market government bonds declined to near or sub-zero levels. With
the duration of protective measures in question, rating agencies
took aggressive downgrade actions and further tightened financial
conditions for most businesses. However, risk markets across the
world have responded favourably to the stimulus from global central
banks as well as governments and have recovered sharply to
pre-COVID-19 levels in anticipation of economic recovery and
expectation of approval of COVID-19 vaccines currently in
development. US technology firms benefitted the most as
work-from-home, online retail, and distance learning trends
accelerated.
In light of the business shutdowns for several weeks to months
and the high unemployment rates, expectations for defaults in the
high yield and leveraged loan market increased. In addition,
aggressive and rapid downgrades by credit rating agencies further
exacerbated the situation leading to significant price declines.
The LSTA/S&P leveraged loan index declined by 21.7% from its
highs and liquidity remained at very low levels. Although neither
the US government Payment Protection Plan (PPP) nor the US Federal
Reserve's financing facilities directly assisted most of the
borrowers in the high yield and leveraged loan market, the
trickle-down effect of rising markets and near-zero yields
elsewhere helped these markets recover too. As of the end of the
reporting period, the returns from Merrill Lynch High Yield Master
II Index and the Credit Suisse Leveraged Loan Index (CSSLI) were
down -4.78% and -4.76% respectively.
Sources: Swiss National Bank (SNB), European Central Bank (ECB),
US Federal Reserve, Bloomberg, JP Morgan, S&P Capital IQ
Financial Portfolio and trading activity
The Company manages a financial portfolio valued at USD 129.5m
as at 30 June 2020, which is invested mainly in fixed income and
credit related securities.
The following is a table summarizing the financial portfolio as
at 30 June 2020
Name 30 June 2020 30 June 2019 31 December
Book Value Book Value 2019
US $m US $m Book Value
US $m
-------------------------------- -------------- ------------ -----------
Investment in the loan market
through CLOs 66.4 106.1 98.4
-------------------------------- -------------- ------------ -----------
Open Warehouse facilities - 41.2 -
-------------------------------- -------------- ------------ -----------
Hedge Funds - - -
-------------------------------- -------------- ------------ -----------
Perpetual Bonds 1.1 1.1 1.1
-------------------------------- -------------- ------------ -----------
Other Public Equities 1.2 1.6 1.7
-------------------------------- -------------- ------------ -----------
Invested Total 68.7 150.0 101.2
-------------------------------- -------------- ------------ -----------
Cash 60.8 19.7 56.5
-------------------------------- -------------- ------------ -----------
Total 12 9.5 169.7 157.7
-------------------------------- -------------- ------------ -----------
Senior Secured Loans and CLOs:
The US senior secured market (leveraged loan market) started
strongly in 2020 with a majority of loans trading over par. The
pipeline to refinance loans was at a very high levels and CLO debt
spreads also compressed to much tighter levels than in 2019.
Management took advantage of the situation and refinanced one of
its 2017 vintage CLOs and reduced the cost of debt.
However, the leveraged loan markets declined sharply alongside
the S&P 500 Index and other risk assets across the world as
governments took drastic measures to slowdown the spread of
COVID-19. Default expectations and risk premiums increased as the
uncertainty of the resulting economic impact on borrowers was too
high. Rating agencies downgraded over 35% of the leveraged loan
market during the first half of 2020. Loans in the travel,
entertainment, retail and energy sectors were the most impacted.
The trailing 12-month US loan default rate increased to 3.96% as of
30 June 2020 from 1.38% as of 30 June 2019.
Subsequently as some of the lockdown restrictions were lifted,
and the credit markets responded favourably to the enormous US
fiscal and monetary stimulus and prices in the leveraged loan
market rebounded as well. The rate of downgrades slowed
considerably and several borrowers were taken off negative watch.
The percentage of loans trading at distressed levels (price below
80) reduced from 57% at its peak on 23 March 2020 to about 8% as of
end of June 2020.
Significant rating downgrades and somewhat higher defaults
caused key over-collateralization ratios (OC ratios) to decline in
April and May and over 25% of US CLOs were failing their junior OC
tests. These CLOs were forced to divert distributions away from
equity investors to bolsters the deal structure. At the same time,
active trading by some CLO managers and a price recovery in CCC
rated assets have helped in reparation of OC ratios.
New issue CLO formation, which was previously at high levels,
ground to a halt in March and April. AAA liabilities widened from
low 120 bps in January to 400+ bps in March before tightening back
to mid-160 bps as at end of the reporting period. As debt spreads
tightened from the lows, new issue formation has restarted
especially in cases where warehouses were already open pre-COVID-19
and needed to be converted to CLOs.
In addition to refinancing one of its CLOs, management quickly
cut risk and converted its open warehouse to a CLO prior to the
sell-off and increased its cash position substantially. As of end
of June 2020, the Company had over USD 60m of cash at hand and no
borrowings. Further, the Company's CLO equity portfolio is
positioned towards newer and longer reinvestment period
transactions with higher OC cushions. As a result, most of the CLO
positions in the Company's portfolio were passing its junior OC
test ratios and made distributions in April and continue to do so.
Management expects CLO equity payments to increase somewhat in the
future as wider new issue loans spreads and LIBOR floor benefit
increases the arbitrage.
During the reporting period the Company's US CLO portfolio and
warehouses generated over USD 1.5m of cash distributions. As of end
of June, the Company had no open warehouses. Looking ahead, if
there are no further lockdowns and significant business disruptions
due to the COVID-19 pandemic, the Company expects the loan market
to offer compelling risk-reward characteristics with better spreads
and documentation. The Company continues to look for opportunities
to invest in long reinvestment CLO equity at low prices as well as
discounted BB rated tranches. Management continues to focus on
sectors such as Retail, Healthcare and Technology that are expected
to undergo shifts due to technology or regulation. As at 30 June
2020, 100% of the Company's CLO portfolio is invested in
post-crisis US CLOs.
The Company's CLO portfolio is divided into the following
geographical areas:
30 June Percentage 30 June Percentage
2020 2019 Amount
Amount
US $000 US $000
US CLOs 66,4 100.0% 106,134 100.0%
------ ------ ------ ------
66,4 100% 106,134 100%
------ ------ ------ ------
Private Equity Funds
The other private equity investments held by the Company are
incorporated in the form of Managed Funds (mostly closed end funds)
mainly in emerging economies. The investments of these funds into
their portfolio companies were mostly done in 2008 and 2009.
Overall, the Company expects that exits of portfolio companies
should materialize by 2021.
The following summarizes the book value of the private equity
funds as at 30 June 2020:
Name Book Value
US $m
-------------------- ------------
Evolution Venture
(Israel) 3.4
-------------------- ------------
Other investments 2.7
-------------------- ------------
Total 6.1
-------------------- ------------
Evolution Venture:
Evolution is an Israel focused Venture Capital fund. It invests
in early stage technology companies. The fund has now exited its
investment in WhiteSmoke and written off the Wi-Fi solutions and
digital radio investments. Its main asset is its investment in a
virtualization technology company, which continues to perform
well.
The following table reconciles the review of activities to the
Group's financial assets as at 30 June 2020.
Name 30 June 200
Book Value
US $m
------------------------------------- -------------
Financial portfolio 68.7
------------------------------------- -------------
Private Equity Funds 6.1
------------------------------------- -------------
Total 74.8
------------------------------------- -------------
Financial assets at fair
value through profit or
loss (note 4 ) 68.7
------------------------------------- -------------
Financial assets at fair
value through other comprehensive
income (note 5 ) 6.1
------------------------------------- -------------
Total 74.8
------------------------------------- -------------
Events after the reporting date
There are no material events after the reporting date, which
have a bearing on the understanding of these interim condensed
consolidated financial statements.
Litigation
Information is provided in note 22 to the interim condensed
consolidated financial statements.
Livermore Investments Group Limited
Condensed Consolidated Statement of Financial Position
as at 30 June 2020
30 June 30 June 31 December
2020 2019 2019
Note Unaudited Unaudited Audited
Assets US $000 US $000 US $000
Non-current assets
Property, plant and equipment 36 26 45
Right-of-use asset 295 370 329
Financial assets at fair value through profit or loss 4 66,381 106,134 98,418
Financial assets at fair value through other
comprehensive income 5 6,135 6,518 6,204
Investments in subsidiaries 8 5,917 5,443 5,787
-------- -------- --------
78,764 118,491 110,783
-------- -------- --------
Current assets
Trade and other receivables 9 8,186 6,333 8,251
Financial assets at fair value through profit or loss 4 2,302 43,905 2,837
Cash at bank 10 60,757 19,689 56,499
-------- -------- --------
71,245 69,927 67,587
-------- -------- --------
Total assets 150,009 188,418 178,370
-------- -------- --------
Equity
Share capital 11 - - -
Share premium 169,187 169,187 169,187
Other reserves (21,089) (20,198) (20,598)
Retained earnings (3,274) 34,008 24,491
-------- -------- --------
Total equity 144,824 182,997 173,080
-------- -------- --------
Liabilities
Non-current liabilities
Lease liability 211 288 248
-------- -------- --------
211 288 248
-------- -------- --------
Current liabilities
Bank overdrafts 10 - 18 -
Trade and other payables 12 4,804 5,033 4,907
Lease liability - current portion 84 82 83
Current tax liability 86 - 52
-------- -------- --------
4,974 5,133 5,042
-------- -------- --------
Total liabilities 5,185 5,421 5,290
-------- -------- --------
Total equity and liabilities 150,009 188,418 178,370
-------- -------- --------
Net asset valuation per share
Basic and diluted net asset valuation per share (US $) 13 0.83 1.05 0.99
-------- -------- --------
Livermore Investments Group Limited
Condensed Consolidated Statement of Profit or Loss
for the six months ended 30 June 2020
--------------------------------------------------------------------------------------------------
Note Six months Six months Year
ended ended ended
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Investment income
Interest and distribution income 15 12,321 11,512 29,028
Changes in value of investments 16 (32,881) 923 (25,358)
------ ------ ------
(20,560) 12,435 3,670
Operating expenses 17 (1,289) (3,513) (5,132)
------ ------ ------
Operating (loss) / profit (21,849) 8,922 (1,462)
Finance costs 18 (25) (10) (18)
Finance income 18 157 201 550
------ ------ ------
(Loss) / profit before taxation (21,717) 9,113 (930)
Taxation charge (48) (11) (151)
------ ------ ------
(Loss) / profit for period / year (21,765) 9,102 (1,081)
------ ------ ------
(Loss) / earnings per share
Basic and diluted (loss) / earnings per share (US $) 20 (0.12) 0.-05 (0.006)
------ ------ ------
Livermore Investments Group Limited
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2020
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
(Loss) / profit for the period / year (21,765) 9,102 (1,081)
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss
Foreign exchange (losses) / gains from translation of subsidiaries (22) (18) 9
------ ------ ------
(21,787) 9,084 (1,072)
------ ------ ------
Items that are not reclassified subsequently to profit or loss
Financial assets designated at fair value through other comprehensive
income
* Fair value losses (469) (420) (181)
------ ------ ------
Total comprehensive (loss) / income for the period / year (22,256) 8,664 (1,253)
------ ------ ------
The total comprehensive income for the period is wholly
attributable to the owners of the Company.
Livermore Investments Group Limited
Condensed Consolidated Statement of Changes in Equity
for the period ended 30 June 2020
Share Translation reserve Investment Retained earnings Total
premium revaluation reserve
US $000 US $000 US $000 US $000 US $000
Balance at 1 January
2019 169,187 12 (20,291) 25,425 174,333
------ ------ ------ ------ ------
Loss for the year - - - (1,081) (1,081)
Other comprehensive
income:
Financial assets at fair
value through OCI
* Fair value losses - - (181) - (181)
Foreign exchange gains
on the translation of
subsidiaries - 9 - - 9
Transfer of realised
gains - - (147) 147 -
------ ------ ------ ------ -----
Total comprehensive
loss for the year - 9 (328) (934) (1,253)
------ ------ ------ ------ ------
Balance at 31 December
2019 169,187 21 (20,619) 24,491 173,080
Dividends - - - (6,000) (6,000)
------ ------ ------ ------ ------
Transactions with
owners - - - (6,000) (6,000)
------ ------ ------ ------ ------
Loss for the period - - - (21,765) (21,765)
Other comprehensive
income:
Financial assets at fair
value through OCI
* Fair value losses - - (469) - (469)
Foreign exchange losses
on the translation of
subsidiaries - (22) - - (22)
------ ------ ------ ------ ------
Total comprehensive
loss for the period - (22) (469) (21,765) (22,256)
------ ------ ------ ------ ------
Balance at 30 June 2020 169,187 (1) (21,088) (3,274) 144,824
------ ------ ------ ------ ------
Share Translation reserve Investment Retained earnings Total
premium revaluation reserve
US $000 US $000 US $000 US $000 US $000
Balance at 1 January
2019 169,187 12 (20,291) 25,425 174,333
------ ------ ------ ------ ------
Profit for the period - - - 9,102 9,102
Other comprehensive
income:
Financial assets at fair
value through OCI
* Fair value losses - - (420) - (420)
Foreign exchange losses
on the translation of
subsidiaries - (18) - - (18)
Transfer of realised
losses - - 519 (519) -
------ ------ ------ ------ ------
Total comprehensive
income for the period - (18) 99 8,583 8,664
------ ------ ------ ------ ------
Balance at 30 June 2019 169,187 (6) (20,192) 34,008 182,997
------ ------ ------ ------ ------
Livermore Investments Group Limited
Condensed Consolidated Statement of Cash Flows
for the period ended 30 June 2020
Note Six months Six months Year
ended ended ended
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Cash flows from operating activities
(Loss) / profit before tax (21,717) 9,113 (930)
Adjustments for:
Depreciation expense 46 42 98
Interest expense 18 25 10 18
Interest and distribution income 15 (12,321) (11,512) (29,028)
Bank interest income 18 (119) (133) (437)
Changes in value of investments 16 32,881 (923) 25,358
Exchange differences 18 (38) (68) (113)
------ ------ ------
(1,243) (3,471) (5,034)
Changes in working capital
Increase in trade and other receivables (13) (2,962) (5,391)
Decrease in trade and other payables (104) (894) (1,020)
------ ------ ------
Cash flows from operations (1,360) (7,327) (11,445)
Interest and distribution received 12,471 11,442 29,756
Tax paid (14) (11) (98)
------ ------ ------
Net cash from operating activities 11,097 4,104 18,213
------ ------ ------
Cash flows from investing activities
Acquisition of investments (21,058) (31,739) (50,200)
Proceeds from sale of investments 20,254 21,068 62,273
------ ------ ------
Net cash from investing activities (804) (10,671) 12,073
------ ------ ------
Cash flows from financing activities
Interest paid (25) (64) (18)
Dividends paid (6,000) - -
Lease liability payments (48) (41) (96)
------ ------ ------
Net cash from financing activities (6,073) (105) (114)
------ ------ ------
Net increase / (decrease) in cash and cash equivalents 4,220 (6,672) 30,172
Cash and cash equivalents at beginning of the period / year 56,499 26,214 26,214
Exchange differences on cash and cash equivalents 38 129 113
Translation differences on foreign operations' cash and
cash equivalents - - -
------ ------ ------
Cash and cash equivalents at the end of the period / year 10 60,757 19,671 56,499
------ ------ ------
Notes to the Interim Condensed Consolidated Financial
Statements
1. Accounting policies
The interim condensed consolidated financial statements of
Livermore have been prepared on the basis of the accounting
policies stated in the 2019 Annual Report, available on
www.livermore-inv.com .
The application of the IFRS pronouncements that became effective
as of 1 January 2020 has no significant impact on the Company'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
Company's last annual consolidated financial statements for the
year ended 31 December 2019.
Covid-19 uncertainty
In March 2020, the World Health Organisation recognised that
coronavirus (COVID-19) was in the state of pandemic. The Company
continues to monitor the COVID-19 pandemic situation closely, with
a focus on the impact on the Company's CLO and US senior secured
loan portfolios. The spread of the virus, government policy
responses and changing demand patterns are expected to have a
negative impact on the operations and earnings of some of the
borrowers in the CLO portfolio. The Company has been in close
contact with managers of its individual CLO positions and is
tracking the level of rating downgrades of underlying loans to
CCC+/Caa rating and a worsening default outlook. A significant
concentration of CCC+/Caa rated loans can turn off the
distributions to the equity and lower mezzanine tranches of CLOs
and would result in significant drop in the market values of those
CLO portfolio constituents. The full extent of the impact will
depend on the length and severity of the crisis and is expected to
vary widely between sectors and companies.
The Company has been positioned very conservatively for several
months with high liquidity and cash reserves (in excess of USD 60m
as of 30 June 2020) and a CLO portfolio that consists largely of
CLOs with long reinvestment periods, which should benefit somewhat
from the volatility in the market. The Company has no debt.
3. Basis of preparation
These unaudited interim condensed consolidated financial
statements are for the six months ended 30 June 2020. 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 financial
statements and should be read in conjunction with the consolidated
financial statements of the Company for the year ended 31 December
2019.
The financial information for the year ended 31 December 2019 is
extracted from the Company's consolidated financial statements for
the year ended 31 December 2019 which contained an unqualified
audit report.
Investment entity status
Livermore meets the definition of an investment entity, as this
is defined in IFRS 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 and as at the reporting date, one of its
subsidiaries provide such services. Note 8 shows further details of
the consolidated and unconsolidated subsidiaries.
References to the Company hereinafter also includes its
consolidated subsidiary (note 8).
4. Financial assets at fair value through profit or loss
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Non-current assets
Fixed income investments (CLO Income Notes) 66,381 106,134 98,418
------ ------ ------
66,381 106,134 98,418
------ ------ ------
Current assets
Fixed income investments 1,115 42,293 1,127
Public equity investments 1,187 1,612 1,710
------ ------ ------
2,302 43,905 2,837
------ ------ ------
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.
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 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Non-current assets
Private equities 6,135 6,518 6,204
------ ------ ------
For description of each of the above categories, refer to note
7.
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 investments in the loan
market through CLOs and open warehouse facilities, as well as
investments in fixed and floating rate bonds and perpetual bank
debt.
-- 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.
-- Public equity investments relate to investments in shares of
companies listed on public stock exchanges.
7. Fair value measurements of financial assets and liabilities
The table in note 7.2 below 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.
The level within which the financial asset is classified is
determined based on the lowest level of significant input to the
fair value measurement.
7.1 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 based on 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 an adjusted net asset valuation basis.
7.2 Fair Value Hierarchy
Financial assets measured at fair value are grouped into the
fair value hierarchy as follows:
30 June 2020 Unaudited Unaudited Unaudited Unaudited
US $000 US $000 US $000 US $000
Level 1 Level 2 Level 3 Total
Assets
Fixed income investments 1,115 66,381 - 67,496
Private equities - - 6,135 6,135
Public equity investments 1,187 - - 1,187
Investments in subsidiaries - - 5,917 5,917
------ ------ ------ ------
2,302 66,381 12,052 80,735
------ ------ ------ ------
30 June 2019 Unaudited Unaudited Unaudited Unaudited
US $000 US $000 US $000 US $000
Level 1 Level 2 Level 3 Total
Assets
Fixed income investments 1,125 106,134 41,168 148,427
Private equities - - 6,518 6,518
Public equity investments 1,612 - - 1,612
Investments in subsidiaries - - 5,443 5,443
------ ------ ------ ------
2,737 106,134 53,129 162,000
------ ------ ------ ------
31 December 2019 Audited Audited Audited Audited
US $000 US $000 US $000 US $000
Level 1 Level 2 Level 3 Total
Assets
Fixed income investments 1,127 98,418 - 99,545
Private equities - - 6,204 6,204
Public equity investments 1,710 - - 1,710
Investments in subsidiaries - - 5,787 5,787
------ ------ ------ ------
2,837 98,418 11,991 113,246
------ ------ ------ ------
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
different levels.
Financial assets within level 3 can be reconciled from beginning
to ending balances as follows:
Six months ended 30 At fair At fair value
June 2020 value through through profit Investments
OCI or loss in subsidiaries
Private Fixed Income
equities investments Total
US $000 US $000 US $000 US $000
As at 1 January 2020 6,204 - 5,787 11,991
Purchases 400 15,000 - 15,400
Settlement (15,000) (15,000)
Gains /(losses) recognised
in:
-Profit or loss - - 130 130
-Other comprehensive
income (469) - - (469)
------ ------ ------ ------
As at 30 June 2020 6,135 - 5,917 12,052
------ ------ ------ ------
Six months ended 30 At fair At fair value
June 2019 value through through profit Investments
OCI or loss in subsidiaries
Private Fixed Income
equities investments Total
US $000 US $000 US $000 US $000
As at 1 January 2019 6,387 38,490 5,205 50,082
Purchases - 20,000 - 20,000
Settlement - (20,000) - (20,000)
Gains recognised in:
-Profit or loss - 2,678 238 2,916
-Other comprehensive
income 131 - - 131
------ ------ ------ ------
As at 30 June 2019 6,518 41,168 5,443 53,129
------ ------ ------ ------
Year ended 31 December At fair At fair value
2019 value through through profit Investments
OCI or loss in subsidiaries
Private Fixed Income
equities investments Total
US $000 US $000 US $000 US $000
As at 1 January 2019 6,387 38,490 5,205 50,082
Purchases - 23,000 - 23,000
Settlement (33) (60,500) - (60,533)
Gains / (losses) recognised
in:
-Profit or loss - (990) 582 (408)
-Other comprehensive
income (150) - - (150)
------ ------ ------ ------
As at 31 December
2019 6,204 - 5,787 11,991
------ ------ ------ ------
The above recognised gains / (losses) are allocated as
follows:
Six months ended 30 June At fair
2020 At fair value through
value through profit or Investments
OCI loss in subsidiaries
Private Fixed Income
equities investments Total
US $000 US $000 US $000 US $000
Profit or loss
- Financial assets held
at period-end - - 130 130
------ ------ ------ ------
Other comprehensive income
- Financial assets held
at period-end (469) - - (469)
------ ------ ------ ------
Total gains / (losses)
for period (469) - 130 (339)
------ ------ ------ ------
Six months ended 30 June At fair At fair Investments
2019 value through value through in subsidiaries
OCI profit or
loss
Private Fixed Income
equities investments Total
US $000 US $000 US $000 US $000
Profit or loss
- Financial assets held
at period-end - 2,678 238 2,916
------ ------ ------ ------
Other comprehensive income
- Financial assets held
at period-end 131 - - 131
------ ------ ------ ------
Total gains for period 131 2,678 238 3,047
------ ------ ------ ------
Year ended 31 December At fair At fair Investments
2019 value through value through in subsidiaries
OCI profit or
loss
Private Fixed Income
equities investments Total
US $000 US $000 US $000 US $000
Profit or loss
- Financial assets held
at period-end - - 582 582
- Financial assets not
held at period-end - (990) - (990)
------ ------ ------ ------
- (990) 582 (408)
------ ------ ------ ------
Other comprehensive income
- Financial assets held
at period-end (150) - - (150)
------ ------ ------ ------
Total gains / (losses)
for period (150) (990) 582 (558)
------ ------ ------ ------
The Company has not developed itself 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.
Fixed income investments within level 3 represent open
warehouses that have been valued based on their net asset value.
Their net asset value is primarily driven by the fair value of
their underlying loan asset portfolio plus received and accrued
interest less the nominal value of the financing and accrued
interest on the financing. In all cases, due to the nature and the
short life of a warehouse, the carrying amounts of the warehouses'
underlying assets and liabilities are considered as representative
of their fair values.
Private equities within level 3 represent investments in private
equity funds. Their value has been determined by each fund manager
based on the funds' net asset value. Each fund's net asset value is
primarily driven by the fair value of its underlying investments.
In all cases, considering that such investments are measured at
fair value, the carrying amounts of the funds' 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 measured at fair value and receivables from the Company
itself. 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.
8. Investment in subsidiaries
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Unconsolidated subsidiaries
As at 1 January 5,787 5,205 5,205
Fair value gains 130 238 582
------ ------ ------
As at 30 June / 31 December 5,917 5,443 5,787
------ ------ ------
The investments in which the Company has a controlling interest
as at the reporting date are as follows:
Name of Subsidiary Place of Holding Voting Principal activity
incorporation rights
and shares
held
Consolidated subsidiary
Livermore Capital Switzerland Ordinary 100% Administration
AG shares services
Unconsolidated subsidiaries
Livermore Properties British Ordinary 100% Holding of investments
Limited Virgin Islands shares
Mountview Holdings British Ordinary 100% Investment vehicle
Limited Virgin Islands shares
Sycamore Loan Strategies Cayman Islands Ordinary 100% Investment vehicle
Ltd shares
Livermore Israel Israel Ordinary 100% Holding of investments
Investments Ltd shares
Sandhirst Ltd Cyprus Ordinary 100% Holding of investments
shares
9. Trade and other receivables
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Financial items
Accrued interest and distribution income 1 205 80
Amounts due by related parties (note 21) 8,118 6,061 8,091
------ ------ ------
8,119 6,266 8,171
Non-financial items
Prepayments 60 67 71
VAT receivable 7 - 9
------ ------ ------
8,186 6,333 8,251
------ ------ ------
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 have been
determined to be close to 0%.
No receivable amounts have been written-off during either 2020
or 2019.
10. Cash and cash equivalents
Cash and cash equivalents included in the consolidated cash flow
statement comprise the following:
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Demand deposits 60,757 16,153 41,499
Short - term fixed deposits - 3,536 15,000
------ ------ ------
Cash at bank 60,757 19,689 56,499
Bank overdraft used for cash management purposes - (18) -
------ ------ ------
Cash and cash equivalents 60,757 19,671 56,499
------ ------ ------
11. Share capital
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
174,813,998 ordinary shares with no par value.
12. Trade and other payables
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Financial items
Trade payables 50 37 23
Amounts due to related parties (note 21) 4,454 3,906 4,468
Accrued expenses 300 1,090 416
------ ------ ------
4,804 5,033 4,907
------ ------ ------
13. Net asset value per share
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
Net assets attributable to ordinary shareholders (USD 000) 144,824 182,997 173,080
------------- ------------- -------------
Closing number of ordinary shares in issue 174,813,998 174,813,998 174,813,998
------------- ------------- -------------
Basic net asset value per share (USD) 0.83 1.05 0.99
------------- ------------- -------------
The diluted net asset value per share equals the basic net asset
value per share since no potentially dilutive shares exist at any
of the reporting dates presented.
14. 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:
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Investment Income
Other European countries (991) 367 (463)
United States (17,062) 11,803 5,096
India (96) 3 (171)
Asia (2,411) 262 (792)
------ ------ ------
(20,560) 12,435 3,670
------ ------ ------
Investments
Other European countries 2,367 2,247 2,215
United States 67,535 149,046 100,235
India 221 710 716
Asia 10,612 9,997 10,080
------ ------ ------
80,735 162,000 113,246
------ ------ ------
Investment income, comprising interest and distribution income
as well as fair value gains or losses on investments, is allocated
based on 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.
15. Interest and distribution income
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Interest from investments 239 357 695
Distribution income 12,082 11,155 28,333
------ ------ ------
12,321 11,512 29,028
------ ------ ------
Interest and distribution income is analysed between the
Company's different categories of financial assets, as follows:
Six months ended 30 June 2020
Unaudited
Interest from Distribution Total
investments income
Financial assets at fair value US $000 US $000 US $000
through profit or loss
Fixed income investments 239 12,076 12,315
Public equity investments - 6 6
------ ------ ------
239 12,082 12,321
------ ------ ------
Six months ended 30 June 2019
Unaudited
Interest from Distribution Total
investments income
Financial assets at fair value US $000 US $000 US $000
through profit or loss
Fixed income investments 357 10,903 11,260
Public equity investments - 252 252
------ ------ ------
357 11,155 11,512
------ ------ ------
Year ended 31 December 2019
Audited
Interest from Distribution Total
investments income
Financial assets at fair value US $000 US $000 US $000
through profit or loss
Fixed income investments 695 28,002 28,697
Public equity investments - 331 331
------ ------ ------
695 28,333 29,028
------ ------ ------
The Company's distribution income derives from multiple issuers.
The Company does not have concentration to any single issuer.
16. Changes in value of investments
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Fair value (losses) / gains on financial assets through profit or
loss (32,492) 685 (25,940)
Fair value gains on investment in subsidiaries 130 238 582
Fair value losses on derivatives (519) - -
------ ------ ------
(32,881) 923 (25,358)
------ ------ ------
During the period, the Company entered into stock options and
futures at open markets, for speculative purposes. All positions
were then closed with a net loss of USD 519,120.
The investments disposed of had the following cumulative (i.e.
from the date of acquisition up to the date of disposal) financial
impact in the Company's net asset position:
Disposed in 2020
Realised (losses)/ gains* Cumulative distribution or Total financial impact
Unaudited interest Unaudited
Unaudited
US $000 US $000 US $000
Financial assets at fair value
through profit or loss
Fixed income investments (638) 1,340 702
Derivatives (519) - (519)
------ ------ ------
(1,157) 1,340 183
------ ------ ------
* difference between disposal proceeds and original acquisition
cost
17. Operating expenses
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Directors' fees and expenses 440 1,842 2,307
Other salaries and expenses 87 89 202
Professional and consulting fees 342 1,004 1,360
Legal expenses 3 2 18
Bank custody fees 56 54 111
Office cost 116 115 221
Depreciation 48 42 98
Other operating expenses 195 339 726
Audit fees 13 26 89
------ ------ ------
1,289 3,513 5,132
------ ------ ------
18. Finance costs and income
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Finance costs
Bank interest 25 10 18
------ ------ ------
Finance income
Bank interest income 119 133 437
Foreign exchange gain 38 68 113
------ ------ ------
157 201 550
------ ------ ------
19. Dividends
On 31 December 2019, the Board announced an interim dividend of
USD 6m (USD 0.0343 per share) to members on the register on 24
January 2020. The dividend was paid on 21 February 2020.
The Board of Directors will decide on the Company's dividend
policy for 2019 based on profitability, liquidity requirements,
portfolio performance, market conditions, and the share price of
the Company relative to its net asset value.
20. (Loss) / earnings per share
Basic (loss) / earnings per share has been calculated by
dividing the (loss) / profit for the year attributable to ordinary
shareholders of the Company by the weighted average number of
shares in issue of the Company during the relevant financial
periods.
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
(Loss) / profit for the period / year attributable to ordinary
shareholders of the parent
(USD 000) (21,765) 9,102 (1,081)
--------- --------- ---------
Weighted average number of ordinary shares outstanding 174,813,998 174,813,998 174,813,998
--------- --------- ---------
Basic (loss) / earnings per share (USD) (0.12) 0.05 (0.006)
--------- --------- ---------
The diluted (loss) / earnings per share equals the basic (loss)
/ earnings per share since no potentially dilutive shares were in
existence during 2020 and 2019.
21. Related party transactions
The Company is controlled by Groverton Management Ltd, an entity
owned by Noam Lanir, which
at 30 June 2020 held 76.62% of the Company's voting rights.
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
US $000 US $000 US $000
Amounts receivable from unconsolidated subsidiaries
Sandhirst Limited 188 131 161 (1)
------- ------- -------
Amounts receivable from key management
Loan receivable 1,000 - 1,000 (2)
------- ------- -------
Amounts receivable from parent company
Loan receivable 6,930 5,930 6,930 (3)
------- ------- -------
Amounts payable to unconsolidated subsidiaries
Livermore Israel Investments Ltd (3,522) (3,522) (3,522) (4)
------- ------- -------
Amounts payable to other related party
Loan payable (149) (149) (149) (5)
------- ------- -------
Amounts payable to key management
Directors' current accounts (52) (172) (7) (4)
Other key management personnel (731) (63) (790) (6)
------- ------- -------
(783) (235) (797)
------- ------- -------
Key management compensation
Short term benefits
Executive Directors' fees 398 398 795 (7)
Executive Directors' reward payments - 1,400 1,400
Non-executive Directors' fees 42 44 87
Non-executive Directors' reward payments - - 25
Other key management fees 170 632 890 (8)
------- ------- ------
610 2,474 3,197
------- ------- -------
(1) The amounts receivable from unconsolidated subsidiaries and
the Directors' current accounts with debit balances are interest
free, unsecured, and have no stated repayment date.
(2) A loan with a balance at 30 June 2020 of USD 1m was made to
a key management employee and a Company's Director. The loan is
free of interest, is unsecured and is repayable on demand. This
loan is included within trade and other receivables (note 9).
(3) A loan with a balance at 30 June 2020 of USD 6.93m was made
to the Company's parent, Groverton Management Ltd. The loan is free
of interest, is unsecured and is repayable on demand. This loan is
included within trade and other receivables (note 9).
(4) The amounts payable to unconsolidated subsidiaries and
Directors' current accounts with credit balances are interest free,
unsecured, and have no stated repayment date.
(5) A loan with a balance at 30 June 2020 of USD 0.149m has been
received from a related company (under common control) Chanpak Ltd.
The loan is free of interest, unsecured and repayable on demand.
This loan is included within trade and other payables (note
12).
(6) The amount payable to other key management personnel relates
to a payment made on behalf of the Company for investment purposes
and accrued consultancy fees.
(7) These payments were made directly to companies which are related to the Directors.
(8) Other key management fees are included within professional fees (note 17).
No social insurance and similar contributions nor any other
defined benefit contributions plan costs incurred for the Group in
relation to its key management personnel in either 2020 or
2019.
Noam Lanir, through an Israeli partnership, was the major
shareholder of Babylon Limited, an Israel based Internet Services
Company. The investment was sold during first quarter of 2020. The
Company as of 30 June 2020 held a total of 1.941m shares at a value
of USD 1.328m which represents 4% of its effective voting rights.
The Company's investment is included within financial assets at
fair value through profit or loss - public equity investments (note
4).
22. Litigation
Fairfield Sentry Ltd vs custodian bank and beneficial owners
One of the custodian banks that the Company uses faces a
contingent claim up to USD 2.1m, and any interest as will be
decided by a US court and related legal fees, with regard 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
proves to be successful Livermore will have to compensate the
custodian bank since the transaction was carried on Livermore's
behalf. The same case was also filed in BVI where the Privy Council
ruled against the plaintiffs.
As a result of the surrounding uncertainties over the existence
of any obligation for Livermore, as well as for the potential
amount of exposure, the Directors cannot form an estimate of the
outcome for this case and therefore no provision has been made.
No further information is provided on the above case as the
Directors consider it could prejudice its outcome.
23. 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 as at 30 June 2020.
24. Events after the reporting date
There are no material events after the reporting date, which
have a bearing on the understanding of these interim condensed
consolidated financial statements.
25. Preparation of interim financial statements
Interim condensed consolidated financial statements are
unaudited. Consolidated financial statements for Livermore
Investments Group Limited for the year ended 31 December 2019,
prepared in accordance with International Financial Reporting
Standards as adopted by the European Union, on which the auditors
gave an unqualified audit report are available on the Company's
website www.livermore-inv.com.
Review Report to the Members of Livermore Investments
Group Limited
Review Report on the interim Condensed Consolidated Financial
Statements
Introduction
We have reviewed the interim condensed consolidated financial
statements of Livermore Investments Group Limited (the "Company")
and its subsidiary (together with the Company "the Group"), which
are presented in pages 7 to 25 and comprise the condensed
consolidated statement of financial position as at 30 June 2020 and
the consolidated statements of comprehensive income, changes in
equity and for the period from 1 January 2020 to 30 June 2020, and
notes to the interim condensed consolidated financial statements,
including a summary of significant accounting policies.
The Board of Directors is responsible for the preparation and
presentation of these interim condensed consolidated financial
statements in accordance with International Financial Reporting
Standards applicable to interim financial reporting as adopted by
the European Union ('IAS34 Interim Financial Reporting'). Our
responsibility is to express a conclusion on these interim
condensed consolidated financial statements based on our
review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements 2410, 'Review of Interim Financial
Information Performed by the Independent Auditor of the Entity'. A
review of interim financial information consists of making
inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the accompanying interim condensed
consolidated financial information does not present fairly, in all
material respects, the financial position of the entity as at June
30, 2020, and of its financial performance and its cash flows for
the six month period then ended in accordance with IAS 34 'Interim
Financial Reporting' as adopted by the European Union.
Emphasis of Matter
We draw attention to the note 22 of the interim condensed
consolidated financial statements which describes the uncertainty
related to the outcome of a legal claim against one of the
custodian banks that the Group and the Company uses on its behalf.
Our conclusion is not modified in respect of this matter.
Other information
The Board of Directors is responsible for the other information.
The other information comprises the information included in the
Chairman's and Chief Executive's Review and Review of Activities,
but does not include the condensed consolidated financial
statements and our review report thereon.
Our conclusion on the condensed consolidated financial
statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our review of the condensed 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 review 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.
Other Matter
This report, including the conclusion, 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 conclusion, accept or assume responsibility
for any other purpose or to any other person to whose knowledge
this report may come to.
Froso Yiangoulli
Certified Public Accountant and Registered
Auditor
for and on behalf of
Grant Thornton (Cyprus) Ltd
Certified Public Accountants and Registered
Auditors
Nicosia, 25 September 2020
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