REG - LMS Capital PLC - Third Quarter 2023 Update

LMS CapitalAnnouncement

30/10/2023 07:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231030:nRSd6252Ra&default-theme=true

RNS Number : 6252R  LMS Capital PLC  29 October 2023

 

 

 

 

 

 

 

 

30 October 2023

 

LMS CAPITAL PLC

Third Quarter 2023 Update

 

LMS Capital plc (the "Company") the listed Investment Company, provides the
following update covering the period from 30 June 2023 to date.

 

Financial Highlights

·    Unaudited Net Asset Value ("NAV") at 30 September 2023 was £42.7
million (52.9p per share). This compares to £44.6 million (55.2p per share)
at 30 June 2023, a decrease in the quarter of 3.8% after adjusting for
dividends paid;

·    Interim dividend of £0.2 million (0.3p per share) paid in September
2023; and

·    Cash at 30 September 2023 was £16.0 million (19.9p per share)
compared to £16.5 million (20.4p per share) at 30 June 2023.

 

Unaudited Net Asset Value at 30 September 2023

The 30 September 2023 NAV is summarised below:

                                  Unaudited            Unaudited

                                  30 September 2023    30 June 2023
                                 £ 000s
 Mature Investment Portfolio
 Quoted Investments              128                   161
 Unquoted Investments            6,357                 6,668
 Funds                           11,976                13,663
                                 18,461                20,492
 New Investment Portfolio
 Dacian                          10,061                9,660
                                 10,061                9,660

 Total Investments               28,522                30,152
 Cash                            16,038                16,500
 Other Net Assets/Liabilities    (1,892)               (2,070)
 Net Asset Value                 42,668                44,582

The NAV at the end of September is based on the valuation of the Company's
investments as at 30 June 2023, adjusted for transactions in the three months
ended 30 September 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 £1.9 million decrease in NAV during the third quarter comprises:

·    dividend payments of £0.2 million;

·    net income and fair value adjustments on the investment portfolio
result in an overall valuation decrease of £1.4 million in the investment
portfolio:

o  net decreases in underlying investment values of £2.4 million on the
mature asset portfolio;

o  offset by net increase of £1.0 million from foreign exchange gains from
the strengthening of the US Dollar against sterling of which £0.6 million
relates to the mature portfolio and £0.4 million to the investment in Dacian;
and

o  no net underlying increase or decrease in the value of Dacian. The
production difficulties experienced at Dacian earlier in the year and
referenced in the half year report, have been overcome and Dacian management
expect production levels to increase;

·    bank interest of £0.2 million; and

·    running costs of £0.4 million, and investment related costs of £0.1
million principally associated with developing real estate deal opportunities.

 

Portfolio Net Underlying Losses

The principal portfolio investments are summarised in Note 1 below.

 

Quoted Investments

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

 

Unquoted Investments

The Company's unquoted investments include our direct holdings in Dacian
Petroleum, Medhost and Elateral.  The convertible debt instrument with
Tiallis Essential IT plc was redeemed at book value during the quarter
realising proceeds of £0.1 million.

 

Unrealised losses on the unquoted portfolio were £0.5 million during the
third quarter and all arose in relation to Medhost, reflecting movements in
comparable public company valuations.

 

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 £1.9 million during the period. The principal
movements were:

·    Brockton Capital Fund 1 - Unrealised loss of £1.5 million,
reflecting a potentially extended sales programme in the current market;

·    Weber Capital Partners - Unrealised loss of £0.4 million due to the
performance in the U.S. microcap equities held in the fund; and

·    other fund investments remained flat during the third quarter.

 

The carrying value of the funds is based on the latest available information
from the respective fund managers, generally the 30 June 2023 fund valuation
reports except for Weber Capital Partners, which is based on 30 September 2023
valuations.

 

Liquidity and Outlook

Portfolio realisations were £0.1 million during the period.  Cash balances
were £16.0 million at 30 September 2023.

 

The Board remains cognisant of its responsibility to demonstrate positive
progress and to create value for shareholders through delivery in its core
areas, namely:

·    bringing to fruition the work that has been undertaken, particularly
on real estate, to deploy new capital from the Company's balance sheet in
conjunction with co-investors;

·    to support the Dacian team, with an emphasis on restarting its
workover programme, following the interruptions to production earlier in the
year; and

·    continuing to manage the mature asset portfolio to optimise
realisation proceeds.

 

 

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.

 

For further information please contact:

LMS Capital plc - Nick Friedlos, Managing Director

0207 935 3555

 

Shore Capital - Robert Finlay

0207 408 4050

 

 

 

 

Note 1 - Portfolio Overview

The following are the principal portfolio investments of the Company,
representing 97.1% of the total portfolio value:

 

Principal unquoted investments

Dacian Petroleum

REGION: EU | YEAR: 2021 | % Holding 32% | NAV £10.1 million (31 December
2022: £10.1 million)

Dacian is a Romanian oil and natural gas production company which completed
its first acquisition in 2021. It operates approximately 100 producing wells
across 40 onshore oil and gas fields in Romania. These are late-life assets,
and the business plan is to prolong the life of this established industrial
infrastructure through careful management and investment in a program of
work-over projects designed to increase production.

 

Medhost

REGION: US | YEAR: 2008 | % Holding 8.8% | NAV £5.7 million (31 December
2022: £5.7 million)

Medhost, a co-investment with funds of Primus Capital, is a healthcare
information technology group that provides cloud-based enterprise,
departmental and healthcare engagement solutions to over 1,000 community and
specialty hospitals. Its products include cloud-based clinical, financial and
operational solutions as well as maintenance, support and consulting services.

 

Elateral

REGION: UK | YEAR: 2008 | % Holding 62.5% | NAV £0.6 million (31 December
2022: £0.6 million)

Elateral operates in the digital marketing sector and has developed
cloud-based software which allows corporate marketing materials to be
distributed to local marketing teams to enable content to be tailored whilst
protecting brand identity. Elateral targets both SME's and large international
companies and has a strong list of global corporate customers.

 

Principal funds

Brockton Capital Fund I

REGION: UK | YEAR: 2008 | NAV £4.9 million (31 December 2022: £6.0 million)

Brockton is a UK real estate fund with one remaining investment in a super
prime London residential development. The Company's investment represents its
share of preferred debt investments via the Brockton fund.

 

Opus Capital Venture Partners

REGION: UK | YEAR: 2008 | NAV £4.4 million (31 December 2022: £5.3 million)

Opus is a US fund that invests in early-stage technology opportunities with
two principal assets remaining.

 

Weber Capital Partners

REGION: US | YEAR: 2008 | NAV £2.0 million (31 December 2022: £2.0 million)

Weber Capital GW 2001 is a fund that invests in listed U.S. microcap stocks,
primarily in the technology and medical sectors.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  NAVMLBBTMTITTFJ