LMS Capital PLC Net Asset Value Estimate/ Progress on Realisations (0186V)
January 25 2017 - 1:00AM
UK Regulatory
TIDMLMS
RNS Number : 0186V
LMS Capital PLC
25 January 2017
25 January 2017
LMS Capital plc
Net Asset Value Estimate and Progress on Realisations
LMS Capital plc (the "Company") is a listed Investment Company
focused on investing directly, and through third party funds, in
small to medium size private companies in the UK, Europe and the
US. Gresham House Asset Management Ltd ("GHAM") was appointed to
manage the investment portfolio in August 2016, alongside a change
of mandate from realisation to focused direct private equity
investment at the smaller end of the market.
Since assuming the investment mandate, significant progress has
been made in transitioning to external management and towards
achieving target annualised cost savings. GHAM has progressively
engaged with the underlying portfolio companies, implementing new
investment processes under the guidance of its newly established
Investment Committee, with a focus on long term shareholder value
creation. GHAM has appointed Tim Farazmand to the Investment
Committee. Tim has over 30 years' experience in UK mid-market
private equity most recently as Managing Director of Lloyds
Development Capital and was also Chairman of the British Venture
Capital Association.
Net Asset Value Estimate
The Company has commenced the year end valuation review process
which is based on the latest performance updates from portfolio
companies and third party fund manager valuations. Whilst
valuations of the Company's US investments have benefitted from
currency movements, performance in some of the Company's
investments has deteriorated since June 2016, impacting their
respective valuations.
As a consequence, the Board currently estimates that the
year-end net asset value will be in the region of GBP67 million
(69.5p per share). This estimate is subject to further evaluation
and completion of the annual audit. The estimate takes into account
the tender offer in September 2016 which returned GBP6 million to
shareholders and incorporates one off costs associated with the
transition from being self-managed to an externally managed
company. Once complete, this transition is expected to deliver
estimated annualised savings of approximately GBP1 million.
The valuation methodology and policy adopted is consistent with
prior years and is in line with IPEV guidelines and takes account
of active sales processes where relevant.
Progress on Realisations
The Company has concluded an agreement to a two stage sale of
one of its US investments. The exit valuation is in line with the
NAV as of 30 June 2016. The stage 1 payment of $4.5 million was
received on 23 January 2017. The second and final stage will be
settled either as a one off payment of $5 million in January 2018
or a loan note repayable with interest in instalments over 4
years.
The Company has also agreed the realisation of its holding in a
US listed companies fund. The realisation is expected to complete
in stages during the first half of 2017. The first stage,
representing 35% of the holding, has been completed at a premium to
30 June 2016 NAV and proceeds of $1.3 million have been received.
The balance is due to be paid in the second quarter of 2017 and
will be determined by the NAV of the fund at the time.
Realisations since the circular sent to shareholders on 27 July
2016 have totalled GBP6.9 million. As set out in the circular, when
net realisation proceeds reach GBP12 million, up to GBP6 million
will be returned to shareholders in a tender offer.
The company expects to announce its audited results in
mid-March.
Enquiries:
LMS Capital PLC
Martin Knight, Chairman 0207 935 3555
Gresham House Asset Management
Graham Bird, Investment Director 0203 837 6275
J.P. Morgan Cazenove
Michael Wentworth-Stanley 0207 742 4000
This information is provided by RNS
The company news service from the London Stock Exchange
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