TIDMLMS
RNS Number : 8626P
LMS Capital PLC
22 October 2021
22 October 2021
LMS CAPITAL PLC
Third Quarter 2021 Update
LMS Capital plc (the "Company") the listed Investment Company
provides the following update covering the period from 30 June 2021
to date.
Financial Highlights
-- Unaudited Net Asset Value ("NAV") at 30 September 2021 was
GBP46.9 million (58.0p per share). This compares to GBP47.6 million
(59.0p per share) at 30 June 2021;
-- Interim dividend of GBP0.2 million paid in September; and
-- Cash at 31 September 2021 was GBP20.5 million compared to GBP21.4 million at 30 June 2021
Unaudited Net Asset Value at 30 September 2021
The GBP0.7 million decrease in the NAV during the third quarter
reflects payment of the interim dividend of GBP0.2 million and
GBP0.5 million of other movements. The other movements comprise the
following:
-- Unrealised losses of GBP0.7 million on the investment portfolio;
-- GBP0.4 million of portfolio and GBP0.3 million of
non-portfolio foreign exchange gains from the strengthening of the
U.S. Dollar against sterling; and
-- GBP0.4 million of running costs and GBP0.1 million of investment related costs.
The 30 September 2021 NAV is summarised below:
Unaudited Unaudited
30 September 30 June 2021
2021
GBP 000s
------------------------------
Quoted Investments 244 285
-------------- --------------
Unquoted Investments 8,067 7,568
-------------- --------------
Funds 13,216 13,562
-------------- --------------
Subtotal Investment portfolio 21,527 21,415
-------------- --------------
Cash 20,474 21,372
-------------- --------------
Dacian Investment - Funds
Deposited 6,730 6,557
-------------- --------------
Other Net Assets/Liabilities (1,873) (1,752)
-------------- --------------
Net Asset Value 46,858 47,592
-------------- --------------
The NAV at the end of September is based on the valuation of the
Company's investments as at 30 June 2021, adjusted for transactions
in the three months ended 30 September 2021, price movements on
quoted securities, movements in foreign currency exchange rates,
cash calls and distributions from funds, and the latest information
available from third party fund managers.
Portfolio Unrealised Net Gains
The portfolio net unrealised losses of GBP0.7 million, excluding
foreign exchange movements, are summarised below:
Quoted Investments
The Company's quoted investment valuations decreased by a net
GBP0.1 million during the third quarter of 2021, reflecting
underlying market price decreases.
Unquoted Investments
The Company's unquoted investments include assets managed by San
Francisco Equity Partners (ICU Eyewear and YesTo), our direct
holdings in Medhost and Elateral and a convertible debt instrument
with IDE Group Holdings.
Total unquoted investment unrealised losses were GBP0.1 million.
This primarily relates to YesTo where the remaining value of the
investment was written off.
Elateral - The Company has increased its investment by GBP0.4
million as part of an agreement to buyout the former 50%
co-investor and provide additional working capital. LMS' ownership
has increased from approximately 50% to 62.5% of the economic
interest in the company, the balance being held largely by our new
operating partner and the Elateral Chairman both of whom have
invested alongside LMS. Elateral operates in the digital marketing
sector and has a cloud-based software platform which facilitates
the creation and customisation of digital and print marketing
materials.
Funds
The Company's fund investments include its holding in Brockton
Capital Fund I, Opus Capital Partners, Weber Capital Partners
("Weber") and five other smaller fund interests.
Fund unrealised net losses were GBP0.5 million. The principal
movements were:
-- YesTo - Unrealised loss of GBP0.7 million. This investment,
held through and managed by San Francisco Equity Partners, has been
written down to zero pending the outcome of a review of the
financing requirements of the business;
-- Brockton Fund 1 - Unrealised gain GBP0.4 million, reflecting
the third quarter movement in the discounted cash flow valuation;
and
-- Weber - unrealised loss of GBP0.2 million due to the
performance in the U.S. microcap equities held in the fund. Year to
date the fund has increased by 17.2%
The carrying value of the funds is based on the latest available
information from the respective fund managers, generally the 30
June 2021 fund valuation reports except for Weber, which is based
on 30 September 2021 valuations.
Portfolio Realisations
There were no portfolio realisations or fund distributions
during the third quarter.
Liquidity and Outlook
The Company continues to maintain significant cash balances,
GBP20.5 million at 30 September, and remains highly cautious about
the way its liquid resources are deployed. The Company continues to
review opportunities with its real estate teams and has a pipeline
of opportunities for other investments.
Dacian
Dacian, the Romanian oil and gas production company in which
LMS, together with other investors, has committed to invest, has
not yet received the necessary approvals in Romania for its first
acquisition of a business comprising 40 onshore oil and gas
fields.
LMS' and other investors' commitments are conditional on the
necessary approvals being obtained. LMS has committed $9.1 million,
which comprises $9.1 million of senior loans bearing interest at
14% per annum and a 32% equity ownership in the company.
Notwithstanding some delay due to the impact of Covid-19 and
government reorganisations in Romania, the process is taking
substantially longer than envisaged at the time the commitment was
made.
The Dacian management team believes, based on the evidence
available to it, that the approval process is moving towards
successful conclusion, although the timing of such conclusion is
difficult to predict.
The Board maintains close contact with the Dacian team and
continues to monitor the situation closely. If circumstances change
the Board will reconsider its position, however at present it
remains of the view that the merits of the transaction outweigh the
delays, and therefore should await the conclusion of the approval
process.
The information contained in this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon publication of this
announcement, this inside information is now considered to be in
the public domain.
22 October 2021
For further information please contact:
LMS Capital PLC
Nick Friedlos, Managing Director
0207 935 3555
Shore Capital
Robert Finlay
0207 408 4050
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