REG - LMS Capital PLC - First Quarter 2023 Update

LMS CapitalAnnouncement

28/04/2023 07:00

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RNS Number : 8455X  LMS Capital PLC  28 April 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

28 April 2023

 

 

LMS CAPITAL PLC

First Quarter 2023 Update

 

 

LMS Capital plc (the "Company"), the listed Investment Company, provides the
following update covering the three months ended 31 March 2023.

 

Financial Highlights

 

·    Unaudited Net Asset Value ("NAV") at 31 March 2023 was £46.1 million
(57.2p per share). This compares to £46.5 million (57.7p per share) at 31
December 2022;

·    Overall portfolio net gains were £0.1 million.  These comprise net
underlying gains of £0.5 million (including accrued interest on Dacian)
offset by unrealised foreign exchange losses of £0.4 million reflecting the
weakening of the US Dollar compared to sterling in Q1; and

·    Cash at 31 March 2023 was £17.5 million compared to £17.9 million
at 31 December 2022.

 

Unaudited Net Asset Value at 31 March 2023

 

The 31 March 2023 NAV is summarised below:

 

                                 Unaudited  Audited
                                 31 March   31 December

                                 2023        2022
                                 £ 000s
 Mature Investment Portfolio
 Quoted Investments              144        160
 Unquoted Investments            6,701      6,626
 Funds                           13,526     14,033
                                 20,371     20,819
 New Investment Portfolio
 Dacian                          10,280     10,145
                                 10,280     10,145

 Total Investments               30,651     30,964
 Cash                            17,490     17,906
 Other Net Assets/Liabilities    (1,995)    (2,329)
 Net Asset Value                 46,146     46,541

 

The NAV at the end of March is based on the valuation of the Company's
investments as at 31 December 2022, adjusted for transactions in the three
months ended 31 March 2023, 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.

 

The £0.4 million decrease in NAV during the first quarter is comprised of the
following:

·    Net underlying gains of £0.5 million on the investment portfolio;

·    £0.4 million of portfolio unrealised foreign exchange losses from
the strengthening of sterling against the U.S. Dollar;

·    £0.1 million of non-portfolio unrealised foreign exchange losses;

·    £0.5 million of running costs and £0.1 million of investment
related costs; and

·    £0.2 million on bank interest and other income receivable.

 

Portfolio Net Underlying Gains - £0.5 million

 

Quoted Investments

 

The Company's quoted investment valuations remained flat during the first
quarter.

 

Unquoted Investments

 

The Company's unquoted investments include our direct holdings in Dacian
Petroleum, Medhost, Elateral and a convertible debt instrument with IDE Group
Holdings.  ICU Eyewear, the final asset managed by San Francisco Equity
Partners was disposed of during the period resulting in a realised gain of
£0.1 million.

 

Unrealised gains on the unquoted portfolio were £0.4 million during the first
quarter all resulting from Medhost.

 

Dacian Petroleum had £0.3 million in investment accrued interest income
during the first quarter.

 

Funds

 

The Company's fund investments include its holding in Brockton Capital Fund I,
Opus Capital Venture Partners, Weber Capital Partners and five other smaller
fund interests.

 

Fund unrealised net losses were £0.3 million. The principal movements were:

·    Opus Capital Venture Partners - Unrealised loss of £0.8 million,
driven by a reduction in the fund manager's valuation of the Fund's two
principal remaining investments, primarily reflecting movements in comparable
market indices;

·    Brockton Capital Fund 1 - Unrealised gain of £0.3 million,
reflecting the unwinding of the discount rate as the investment is valued on a
discounted cash flow basis;

·    Weber Capital Partners - Unrealised gain of £0.1 million due to the
performance in the U.S. microcap equities held in the fund; and

·    Other unrealised gains on funds of £0.1 million.

 

The carrying value of the funds is based on the latest available information
from the respective fund managers, generally the 31 December 2022 fund
valuation reports except for Weber Capital Partners, which is based on 31
March 2023 valuations.

 

Liquidity and Outlook

 

Portfolio realisations were £0.3 million during the period.

 

Cash balances were £17.5 million at 31 March 2023.

 

As laid out in our Annual Report, our 2023 priorities are:

·    to bring to fruition the work that has been undertaken, particularly
with our real estate teams, to deploy new capital from our own balance sheet
in conjunction with our co-investors;

·    to support the Dacian team as it enters its second year of operation
with an emphasis on its workover program to increase production; and

·    to continue to manage the mature asset portfolio to optimise
realisation proceeds

 

 

 

For further information please contact:

LMS Capital plc

Nick Friedlos, Managing Director

0207 935 3555

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