REG - LMS Capital PLC - Final Results for the Year Ended 31 December 2025
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RNS Number : 2125X LMS Capital PLC 19 March 2026
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LEI: 2138004UJ1TW8UCELX08
19 March 2026
LMS CAPITAL PLC
Final Results for the Year Ended 31 December 2025
The Board of LMS Capital plc ("LMS" or the "Company") is pleased to announce
the Company's audited annual results for the year ended 31 December 2025.
Financial Summary
31 December 2025 31 December 2024
Net asset value £29.0m £36.2m
Cash available at year end £6.8m £13.5m
Portfolio movement (£0.3m) (£4.9m)
Net running costs £1.4m £1.7m
Net asset value per share (p) 35.9p 44.8p
2025 key points
· Net Asset Value ("NAV") - £29.0 million
The NAV at 31 December 2025 was £29.0 million, 35.9 pence per share (31
December 2024: £36.2 million, 44.8 pence per share).
· Return of Capital to Shareholders - £1.6 million, 2.0 pence
per share
The Company made its first return of capital to shareholders in July 2025 of
2.0 pence per share.
· Portfolio Movements - £0.3 million reduction
The portfolio net decrease comprises:
· Valuation changes:
o Unrealised foreign exchange losses £1.1 million;
o Net realised gains and unrealised underlying losses in portfolio £2.5
million.
· Additional investment in Dacian and Castle View £4.7 million; and
· Realisations £1.4 million.
· Net Running Costs - £1.4 million
Net running costs, including those incurred by subsidiaries, were £1.4
million (2024: £1.7 million) and there were an additional £0.9 million
(2024: £0.8 million) of investment related costs.
· Portfolio Realisations - £1.4 million
Realisations include Weber £0.7 million, Brockton £0.6 million and others
£0.1 million.
· Year End Cash Balance - £6.8 million
Cash balances at the year end, including amounts held by subsidiaries, were
£6.8 million, representing 23.3% of the NAV (2024: £13.5 million and
representing 37.4% of the NAV). Cash held by the Company was £6.6 million
(2024: £11.6 million).
A copy of the Company's Annual Report and Accounts for the year ended 31
December 2025 will shortly be submitted to the National Storage Mechanism and
will be available for inspection. The Annual Report and Accounts will also be
available on the Company's website.
For further information please contact:
LMS Capital plc
Nick Friedlos, Managing Director
0207 935 3555
Chairman and Managing Director's Report
We are pleased to report our results for the year ended 31 December 2025.
In February 2025, the Board announced that, mindful of the challenges facing
the Company in terms of its size, limited secondary market liquidity and the
discount to NAV at which the ordinary shares had been trading, it had
determined to carry out a strategic review of the Company's future direction
and was intending to consult with shareholders. Following that consultation,
the Board reached the conclusion that shareholder value would be best served
by a managed realisation of the Company's assets and returns of capital to
shareholders over time (the "Managed Realisation").
A general meeting was convened in May 2025 at which shareholders voted in
support of proposals, set out in a circular to shareholders, for a change to
the Company's investment policy to permit the Managed Realisation and any
related matters required.
The focus of the Board and the team therefore since May 2025 has been on the
optimum route to realisation of the Company's assets in a reasonable period of
time. To date, a total of 4p per share (£3.2 million), comprising 2 pence per
share in July 2025 and a further 2 pence per share in January 2026, has been
returned to shareholders. This was financed principally through realisations
of the Weber Fund, the most readily liquid investment, and a final
distribution from Brockton Fund 1 in Q3 2025.
Net Asset Value ("NAV") overview
The NAV of the Company at 31 December 2025 was £29.0 million, 35.9 pence per
share (31 December 2024: £36.2 million, 44.8 pence per share).
For the year as a whole, the Company's estimated NAV, after adjusting for the
July 2025 distribution, has decreased by £5.6 million, most of which occurred
in the first half and was reported at 30 June 2025. The principal underlying
portfolio changes on a full year basis were:
· A decrease of £1.1 million from unrealised foreign exchange losses
on US dollar denominated investments;
· Underlying portfolio net decrease £2.5 million comprising:
o Decrease in Dacian £2.0 million, the bulk of which was recognised prior
to the additional investment made in July 2025 and reflecting the impact of
the additional funding on the prior investment valuation;
o Decrease in Castle View £0.5 million, reflecting additional working
capital required pending the sale of the stock of apartments;
o Decrease in Elateral £0.6 million; and
o £0.6 million realised gain, reported in Q3 and being clawback by the
Brockton Fund, now dissolved, of historic carried interest payments to its
managers.
· Full year running costs, including those of the subsidiaries, were
£1.4 million. Cost saving measures during the year have reduced the annual
run rate of costs to approximately £1.3 million by December 2025;
· Investment costs for the year of £0.9 million. This includes one-off
amounts of £0.4 million during the first half of the year, relating to the
issue of the circular to shareholders and implementation of the B Share scheme
and the write off of historic management fees on Dacian. Other costs relate
principally to the individuals who are focussed entirely on the oversight and
development of the retirement living business; and
· Other net income of £0.3 million comprising bank interest of £0.4
million less unrealised foreign exchange losses of £0.1 million on
non-portfolio assets.
The balance sheet at the year end can be summarised as follows:
Financial results for the year ended 31 December 2025
31 December
2025 2024
£'m £'m
Mature Investment Portfolio
Quoted investments - 0.1
Unquoted investments 1.1 1.7
Funds 4.9 5.8
6.0 7.6
Other Investments
Energy - Dacian 9.7 9.3
Retirement Living - Castle View 7.5 6.6
17.2 15.9
Total Investments 23.2 23.5
Cash and cash equivalents 6.8 13.5
Other net liabilities (1.0) (0.8)
Net Assets 29.0 36.2
Liquidity - Cash less other net liabilities
Cash
Cash balances in the Company and its subsidiaries (excluding investee
companies - see note 24) at 31 December 2025 were £6.8 million (31 December
2024: £13.5 million).
Net liabilities
Net liabilities in the Company and its subsidiaries of £1.0 million (31
December 2024: £0.8 million) consist primarily of accruals for income taxes
and other sundry costs.
Retirement Living
Castle View
LMS, through its wholly owned subsidiary LMS Retirement Living Limited,
acquired its investment in Castle View Retirement Village ("Castle View") in
December 2023.
Castle View is a retirement development comprising 64 self-contained
apartments close to Windsor town centre, together with communal facilities
including 24-hour reception, lounges, bars, library and a restaurant facility.
Residents acquire their apartments, and the right to use the communal
facilities, on 250-year leases and pay an annual service charge, which covers
the day to day running of the scheme, plus a deferred fee on resale of an
apartment. The deferred fee is designed to cover the costs of constructing the
communal facilities, their ongoing maintenance and updating, and to provide a
return on capital invested.
At the half year we reported that there were sale reservations on two
apartments to the value of £1.3 million. During the autumn, both these
reservations proceeded to completed sales, at the indicated prices.
The purchase of retirement apartments is typically financed by the sale of an
existing larger property, and slowness in the housing market overall, has a
knock-on effect on the ability of purchasers to complete on retirement
apartments.
To accelerate full occupancy and to reduce the holding costs of unoccupied
units and create additional income, the decision was taken to offer apartments
for rental alongside sale. Rental demand has been good. Two rentals were
concluded prior to the year end and a further two in 2026 to date.
Of the 15 units which were unsold when the village was acquired in December
2023, 5 currently remain unoccupied and are for sale or rental. Rental
transactions are in progress on a further 1 apartment with a continuing flow
of new enquiries.
The current debt facility on Castle View does not permit rentals. The Company
has invested £1.0 million to pay down the current debt on the units rented
prior to the year end and is in discussions to secure a new facility which
will allow it to refinance in part this investment and will provide finance
for further rental units.
The increase in valuation of Castle View from £6.6 million at the half year
to £7.5 million reflects the additional investment by the Company in the
rental units. The acquisition debt has been reduced from £4.8 million at the
half year to £3.0 million at the year end, as a result of the two sales noted
above and the paydown of debt on the rental units.
Retirement Living Outlook
The Board has previously stated that it continues to see opportunity in the
sector. This remains the case, particularly in the acquisition of existing
stock which offers long-term value potential but also provides attractive
income. Accordingly, the Board may seek to attract outside investment into the
Company's retirement living subsidiary which could add additional assets to
create a retirement living platform and enhance realisation value.
Dacian
Additional working capital investment during 2025
In August 2025 the Company announced that, following a detailed review of the
business in conjunction with a new leadership team at Dacian, it had agreed to
invest up to $5.3 million of additional capital.
Other investors agreed to invest a further $0.24 million. Whilst
acknowledging the risks inherent in the oil and gas industry and Dacian's past
track record, the Board reached the view that the returns on the additional
investment are attractive and will offer investors the prospect of a
materially better overall financial outcome on realisation than seeking an
immediate sale.
Key elements of the plan to be executed by the new team were
· Investment in inventory of replacement components and implementation
of a maintenance plan to reduce the frequency of equipment failures and
consequent interruptions to production;
· Carrying out a programme of well workovers and interventions,
financially evaluated and risk adjusted in accordance with industry best
practice, to enhance production over the next 12 months;
· Taking opportunities to monetise some unutilised land and equipment
held by Dacian;
· Evaluating and presenting to external capital, an identified set of
additional development projects within Dacian's fields; and
· Continuing to work with partners in the development of other
opportunities including in clean energy initiatives.
Execution of the plan is still in process but progress to date has been
satisfactory. The new team structure has worked well since being put in place
in mid-2025.
Mobilisation of resources and inventory for the maintenance plan and for the
workover programme were initially slower than anticipated, but are now well
underway. Early indications are that the capital cost of projects is at or
slightly below budgeted cost. An early major workover, accounting for
approximately 10% of the overall production gain, began flowing in January
2026 and is delivering the planned level of production. More detailed
discussions with potential partners on opportunities in clean energy have
commenced.
Whilst there is still much to be delivered the Board remains confident in the
team and the plan.
Dacian capital structure
As previously reported, the investment in 2020 by the Original Investor Group,
structured as senior loan notes with a coupon of 14% per annum on a
compounding basis (the "Senior Loan Notes") and an equity subscription at
nominal value, was restructured by a debt to equity swap in July 2024. Further
bridge finance has also been provided in 2024 and 2025. In summary the Dacian
financing has been provided as follows:
· Initial Investment in 2020, structured as senior loan notes with a
coupon of 14% per annum on a compounding basis (the "Senior Loan Notes"), and
an equity subscription at nominal value;
· Debt to equity swap in July 2024, which converted the initial
investment to equity and diluted the Founder team; and
· Bridge finance during 2024 and 2025. The tranches all have a maturity
date of June 2026 and entitle the lenders to additional equity shares.
The debt to equity swap, whilst agreed between all shareholders, has been
awaiting regulatory approval in Romania, which approval we have always been
advised should be forthcoming. We are pleased to report that the regulatory
approval was finally received on 5 February 2026.
As a result of its participation in the initial investment and participation
in the bridge finance since May 2025, LMS in aggregate will have invested
$14.7 million and owns 60% of the equity in Dacian and holds $5.6 million of
loan instruments. The other members of the Original Investor Group own 37% and
hold $3.5 million of loan instruments.
Looking forward
As previously announced in connection with the Managed Realisation, the Board
is not proposing an annual dividend. Any future distributions will be
considered in the context of the Managed Realisation and communicated to
shareholders as appropriate.
We would like to express our appreciation for the support from our team and
from the network of people with whom we work on a regular basis. We would also
like to express our appreciation for the continued support of our
shareholders.
James
Wilson
Nicholas Friedlos
Chairman
Managing Director
Portfolio Management Review
The movement in NAV during the year was as follows:
2025 2024
£'000 £'000
Opening NAV 36,155 42,141
Net realised and unrealised reductions on investments (3,838) (4,504)
Investment interest income 339 1,186
Dividends - (747)
Return of Capital (1,615) -
Overheads and other net movements (2,024) (1,921)
Closing NAV 29,017 36,155
Cash realisations and new and follow-on investments from the portfolio were as
follows:
Year ended 31 December
2025 2024
£'000 £'000
Proceeds from the sale of investments 119 29
Proceeds from redemption of convertible debt - -
Distributions from funds 1,325 894
Total - gross cash realisations 1,444 923
Fund calls - (55)
Follow on investments (4,642) -
Total - net (3,198) 868
Realisations in 2025 include distributions received from GW 2001 Fund and
Brockton Capital Fund 1.
Below is a summary of the investment portfolio of the Company and its
subsidiaries, which reflects all investments held by the Group:
31 December 2025 31 December 2024
Mature investment portfolio GBP denominated USD denominated Total GBP denominated USD denominated Total
£'000 £'000 £'000 £'000 £'000 £'000
Quoted - 44 44 54 5 59
Unquoted 1,100 - 1,100 1,680 56 1,736
Funds 256 4,587 4,843 293 5,584 5,877
1,356 4,631 5,987 2,027 5,645 7,672
Other investments GBP denominated USD denominated Total GBP denominated USD denominated Total
£'000 £'000 £'000 £'000 £'000 £'000
Dacian - 9,669 9,669 - 9,258 9,258
Castle View 7,526 - 7,526 6,553 - 6,553
7,526 9,669 17,195 6,553 9,258 15,811
Total investments 8,882 14,300 23,182 8,580 14,903 23,483
Basis of valuation:
Quoted investments
Quoted investments for which an active market exists are valued at the closing
bid price at the reporting date.
Unquoted direct investments
Unquoted direct investments for which there is no active market are valued
using the most appropriate valuation technique with regard to the stage and
nature of the investment.
Valuation methods that may be used include:
· investments in an established business are valued using
revenue multiples depending on the stage of development of the business and
the extent to which it is generating sustainable revenue or earnings;
· investments in an established business which is generating
sustainable revenue or earnings but for which other valuation methods are not
appropriate are valued by calculating the discounted value of future cash
flows;
Funds
Investments in managed funds are valued at fair value. The general partners of
the funds will provide periodic valuations on a fair value basis, the latest
available of which the Company will adopt provided it is satisfied that the
valuation methods used by the funds are not materially different from the
Company's valuation methods. Adjustments will be made to the fund valuation
where the Company believes the evidence available supports an alternative
valuation.
Performance of the investment portfolio
The return on investments for the year ended 31 December was as follows:
Year ended 31 December
2025 2024
Realised Unrealised Realised Unrealised
gains/(losses) gains/(losses) Total gains/(losses) gains/(losses) Total
Asset type £'000 £'000 £'000 £'000 £'000 £'000
Quoted (12) 37 25 6 (62) (56)
Unquoted 23 (4,177) (4,154) - (1,690) (1,690)
Funds 572 (281) 291 457 (3,210) (2,753)
583 (4,421) (3,838) 463 (4,962) (4,499)
Charge for incentive plans - (5)
Income and fair value adjustments on investment portfolio (3,838) (4,504)
Net operating and other expenses of subsidiaries (4,180) (8,520)
Provision against amounts receivable from subsidiaries 4,267 -
Net loss on investments (3,751) (13,024)
Approximately 62% of the portfolio at 31 December 2025 was denominated in US
Dollars (31 December 2024: 63%) and the above table includes the impact of
currency movements. In the year ended 31 December 2025, the strengthening of
sterling against the US Dollar resulted in an unrealised foreign currency loss
of £1.1 million (2024: unrealised gain of £0.2 million). As is common
practice in private equity investment, it is the Board's current policy not to
hedge the Company's underlying non-sterling investments.
Quoted investments
31 December
2025 2024
Company Sector £'000 £'000
Tialis Essential IT plc UK technology - 54
Arsenal Digital Holdings Inc US energy 44 5
44 59
The changes in valuation on the quoted portfolio arose as follows:
Year ended 31 December
2025 2024
Gains/(losses), net £'000 £'000
Realised
Weatherford International Inc - 6
Tialis Essential IT plc (12) -
(12) 6
Unrealised
Tialis Essential IT plc - (54)
Arsenal Digital Holdings Inc 37 (4)
Other quoted holdings - (2)
Unrealised foreign currency losses - (2)
37 (62)
Total fair value increases/(decreases) 25 (56)
Unquoted investments
31 December
2025 2024
Company Sector £'000 £'000
Dacian Romanian energy 9,669 9,258
Castle View Retirement living 7,526 6,553
Elateral UK technology 1,100 1,680
Cresco US consumer - 56
18,295 17,547
The changes in valuation on the unquoted portfolio arose as follows:
Year ended 31 December
2025 2024
Gains/(losses), net £'000 £'000
Realised
Medhost Inc 23 -
23 -
Unrealised
Dacian (2,036) (2,112)
Castle View (879) 241
Cresco 1 18
Elateral (580) -
Unrealised foreign currency (losses)/gains (683) 163
(4,177) (1,690)
Total fair value decreases (4,154) (1,690)
Valuations are sensitive to changes in the following inputs:
· the operating performance of the individual businesses within
the portfolio;
· changes in the revenue multiples and transaction prices of
comparable businesses, which are used in the underlying calculations;
· changes in the estimated future cash flows of the individual
businesses which are derived based on judgemental inputs (see note 20 for
further details); and
· the discount rates applied to valuations.
Fund interests
31 December
2025 2024
General partner Sector £'000 £'000
Brockton Capital Fund 1 UK real estate - -
Opus Capital Venture Partners US venture capital 3,092 3,329
GW 2001 Fund US quoted micro-caps 1,495 2,243
EMAC ILF Europe real estate 256 292
Simmons Parallel Energy UK energy - 1
Other interests - 12
4,843 5,877
The changes in valuation on the Company's fund portfolio arose as follows:
Year ended 31 December
2025 2024
Gains/(losses), net £'000 £'000
Realised
Brockton CF (II) Scotland - 457
Brockton Capital Fund 1 572 -
572 457
Unrealised
Brockton Capital Fund 1 - (2,526)
Opus Capital Venture Partners (8) (870)
GW 2001 Fund 155 24
Simmons Parallel Energy (1) 104
Others (net) (63) (13)
Unrealised foreign currency (losses)/gains (364) 71
(281) (3,210)
Total fair value increases/(decreases) 291 (2,753)
Costs
Running costs, including those of the subsidiaries, for the year were £1.4
million (2024: £1.7 million) and investment related costs being support costs
for real estate and co-investment activities, were £0.9 million (2024: £0.8
million) which included one-off amounts of £0.4 million during the first half
of the year, relating to the issue of the circular to shareholders and
implementation of the B Share scheme and the write off of historic management
fees on Dacian.
Taxation
The tax provision for the year is £nil (2024: £0.1 million).
Financial Resources and Commitments
At 31 December 2025 cash holdings, including cash in subsidiaries, were £6.8
million (31 December 2024: £13.5 million) and neither the Company nor any of
its subsidiaries had any external debt in either 2025 or 2024.
At 31 December 2025, subsidiary companies had commitments of £0.4 million (31
December 2024: £2.5 million) to meet outstanding capital calls from fund
interests.
LMS CAPITAL plc
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with UK adopted international accounting
standards and applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors are required to prepare the
Financial Statements in accordance with UK adopted international accounting
standards. Under company law the Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Company and of the profit or loss of the Company
for that period.
In preparing these Financial Statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable
and prudent;
· state whether they have been prepared in accordance with UK
adopted international accounting standards, subject to any material departures
disclosed and explained in the Financial Statements;
· prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business; and
· prepare a Directors' Report, a Strategic Report and
Directors' Remuneration Report which comply with the requirements of the
Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the Financial Statements comply with the Companies
Act 2006.
They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities. The Directors have ensured that the Annual Report and
Accounts, taken as a whole, are fair, balanced, and understandable and provide
the information necessary for shareholders to assess the position and
performance, business model and strategy.
Website publication
The Directors are responsible for ensuring the Annual Report and the Financial
Statements are made available on a website. Financial Statements are
published on the Company's website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company's website is the responsibility of
the Directors. The Directors' responsibility also extends to the ongoing
integrity of the Financial Statements contained therein.
Directors' responsibilities pursuant to DTR4
The Directors confirm to the best of their knowledge:
· The Financial Statements have been prepared in accordance
with the applicable set of accounting standards, give a true and fair view of
the assets, liabilities, financial position and profit and loss of the
Company.
· The Annual Report includes a fair review of the development
and performance of the business and the financial position of the Company,
together with a description of the principal risks and uncertainties that they
face.
For and on behalf of the Board.
James Wilson
Chairman
Company Income Statement
For the year ended 31 December 2025
Year ended 31 December
2025 2024
Notes £'000 £'000
Net loss on investments 2 (3,751) (13,024)
Provision against amounts receivable from subsidiaries 14 (4,267) -
Interest income 3 1,303 1,416
Other income 362 427
Dividend income 2 2,498 8,000
Total loss on investments (3,855) (3,181)
Interest payable 4 (58) (331)
Operating expenses 5 (1,698) (1,842)
Loss before tax (5,611) (5,354)
Taxation 8 - -
Loss for the year (5,611) (5,354)
Attributable to:
Equity shareholders (5,611) (5,354)
Loss per ordinary share - basic 9 (7.0)p (6.6)p
Loss per ordinary share - diluted 9 (7.0)p (6.6)p
All activities of the Company are classed as continuing.
Company Statement of Other Comprehensive Income
For the year ended 31 December 2025
Year ended 31 December
2025 2024
£'000 £'000
Loss for the year (5,611) (5,354)
Other comprehensive income - -
Total comprehensive loss for the year (5,611) (5,354)
Attributable to:
Equity shareholders (5,611) (5,354)
Company Statement of Financial Position
As at 31 December 2025
31 December
2025 2024
Notes £'000 £'000
Assets
Non-current assets
Right-of-use assets 19 - 14
Investments 11 4,091 7,842
Amounts receivable from subsidiaries 14 18,541 17,805
Total non-current assets 22,632 25,661
Current assets
Operating and other receivables 12 106 231
Cash and cash equivalents 13 6,565 11,646
Total current assets 6,671 11,877
29,303 37,538
Total assets
Liabilities
Current liabilities
Operating and other payables 15 (285) (462)
Amounts payable to subsidiaries 16 (1) (921)
Total current liabilities (286) (1,383)
Non-current liabilities
Lease liabilities 19 - -
Total non-current liabilities - -
(286) (1,383)
Total liabilities
29,017 36,155
Net assets
Equity
Share capital 17 8 8,073
Share premium - 508
Capital redemption reserve - 24,949
Shares to be issued 18 410 322
Retained earnings 28,599 2,303
Total equity shareholders' funds 29,017 36,155
Net asset value per ordinary share 25 35.94p 44.79p
Company Statement of Changes in Equity
For the year ended 31 December 2025
Capital Shares
Share Share redemption to be Retained Total
capital premium reserve issued earnings equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2024 8,073 508 24,949 207 8,404 42,141
Comprehensive income for the year
Loss for the year - - - - (5,354) (5,354)
Equity after total comprehensive 8,073 508 24,949 207 3,050 36,787
income for the year
Contributions by and distributions
to shareholders
Share-based payments - - - 115 - 115
Dividends (note 10) - - - - (747) (747)
As at 31 December 2024 8,073 508 24,949 322 2,303 36,155
Comprehensive income for the year
Loss for the year - - - - (5,611) (5,611)
Equity after total comprehensive 8,073 508 24,949 322 (3,308) 30,544
income for the year
Contributions by and distributions
to shareholders
Share capital reduction (8,065) (508) (24,949) - 33,522 -
Share-based payments - - - 88 - 88
Issue of B share capital 1,615 - - - (1,615) -
Return of capital (1,615) - - - - (1,615)
Dividends (note 10) - - - - - -
As at 31 December 2025 8 - - 410 28,599 29,017
Company Cash Flow Statement
For the year ended 31 December 2025
Year ended 31 December
2025 2024
Notes £'000 £'000
Cash flows from operating activities
Loss before tax (5,611) (5,354)
Adjustments for non-cash income and expenses:
Equity settled share-based payments 18 88 115
Depreciation of right-of-use assets 19 14 28
Interest expense on lease 19 1 2
Losses on investments 2 3,751 13,024
Provision against amounts receivable from subsidiaries 14 4,267 -
Interest income 3 (1,303) (1,416)
Interest payable 4 58 331
Dividend income 2 (2,498) (8,000)
Adjustments to incentive plans 2 - (12)
Exchange differences on cash balances 134 (6)
(1,099) (1,288)
Changes in operating assets and liabilities
Decrease/(increase) in operating and other receivables 98 (93)
(Decrease)/increase in operating and other payables (161) 55
Increase in amounts receivable from subsidiaries (2,505) (1,987)
(Decrease)/increase in amounts payable to subsidiaries (978) 6,097
Net cash (used in)/ from operating activities (4,645) 2,784
Cash flows from investing activities
Interest received 3 1,330 609
Net cash from investing activities 1,330 609
Cash flows from financing activities
Dividends paid 10 - (747)
Return of capital (1,615)
Repayment of principal lease liabilities 19 (16) (31)
Repayment of lease interest 19 (1) (2)
Net cash used in financing activities (1,632) (780)
Net (decrease)/increase in cash (4,947) 2,613
Exchange (losses)/gains on cash balances (134) 6
Cash and cash equivalents at the beginning of the year 13 11,646 9,027
Cash and cash equivalents at the end of the year 13 6,565 11,646
Notes to the Financial Statements
1. Material accounting policies
Reporting entity
LMS Capital plc ("the Company") is a public limited company limited by shares
incorporated in the United Kingdom and registered in England and Wales with
company number 5746555. The address of the registered office is 3 Bromley
Place, London W1T 6DB.
The Company was formed on 17 March 2006 and commenced operations on 9 June
2006 when it received the demerged investment division of London Merchant
Securities plc.
Basis of preparation
These Financial Statements for the year ended 31 December 2025 have been
prepared in accordance with UK adopted International Accounting Standards. The
Financial Statements are presented in sterling which is also the Company's
functional currency.
LMS Capital plc adopted an amendment to IFRS 10 with effect from 11 January
2016, which exempts investment entities from presenting consolidated financial
statements. As a result, the Company is not required to produce consolidated
accounts and only presents the results of the Company.
The Financial Statements have been prepared on the historical cost basis
except for investments and share options which are measured at fair value,
with changes in fair value recognised in the Income Statement.
The Company's business activities and financial position are set out in the
Strategic Report on pages 10 to 15 and in the Portfolio Management Review on
pages 16 to 21. In addition, note 20 to the financial information includes a
summary of the Company's financial risk management processes, details of its
financial instruments and its exposure to credit risk and liquidity risk.
Taking account of the financial resources available to it, the Directors
believe that the Company is well placed to manage its business risks
successfully. After making enquiries, the Directors have a reasonable
expectation that the Company has adequate resources for the foreseeable
future.
Going concern
The Directors acknowledge that, at a General Meeting held on 14 May 2025,
shareholders approved a change to the Company's investment policy requiring a
Managed Realisation of the assets held within the Group and a return of
capital over time to the shareholders.
Following the approval by the shareholders, it is expected that the Managed
Realisation of the Company will take place over time which is expected to be a
period greater than 12 months from the date of this report.
Based on the above, the Directors intend to cease trade of the Company at the
conclusion of the Managed Realisation process. Therefore, the Directors do not
consider it to be appropriate to adopt the going concern basis of accounting
in preparing the financial statements. On this basis, the Directors have
prepared the financial statements on a basis other than going concern.
The Viability Statement of the Company is included in the Strategic Report on
page 15.
As required by IAS 1, the Directors have prepared the financial statements on
a basis that the Company is no longer a going concern. No material adjustments
arose as a result of ceasing to apply the going concern basis.
New and revised accounting standards and amendments effective for the current
period
New and revised accounting standards and amendments that are effective for
annual periods beginning 1 January 2025 which have been adopted for the first
time by the Company:
• Lack of Exchangeability (Amendment to IAS 21 - The Effects
of Changes in Foreign Exchange Rates) (effective 1 January 2025)
The adoption of the amendment listed above did not have any material impact on
the Company's results.
There are no other standards, amendments to standards or interpretations that
are effective for annual periods beginning on 1 January 2025 that have had a
material effect on the Company's Financial Statements.
New accounting standards, amendments and interpretations not yet effective,
and which have not been early adopted
Other standards and amendments that are effective for subsequent reporting
periods beginning on or after 1 January 2026 and have not been early adopted
by the Company include:
• Amendments to the Classification and Measurement of
Financial Instruments (Amendments to IFRS 9 - Financial Instruments and IFRS
7) (effective 1 January 2026)
• Contracts Referencing Nature-dependent Electricity
(Amendments to IFRS 9 and IFRS 7) (effective 1 January 2026)
• IFRS 18 - Presentation and Disclosure in Financial
Statements (effective 1 January 2027)
• IFRS 19 - Subsidiaries without Public Accountability:
Disclosures. (effective 1 January 2027) (Not yet endorsed by the UK
Endorsement Board)
These standards and amendments are not expected to have a significant impact
on the Financial Statements in the period of initial application and therefore
detailed disclosures have not been provided. The Board is still assessing
the potential impact of IFRS 18 - Presentation and Disclosure in Financial
Statements.
IFRS 2 - Share-based Payment
IFRS 2 - Share-based Payment requires an entity to recognise equity-settled
share-based payments measured at fair value at the date of grant. The fair
value determined at the grant date of the equity-settled share-based payments
is expensed over the vesting period, together with a corresponding increase in
other capital reserves, based upon the Company's estimate of the shares that
will eventually vest, which involves making assumptions about any performance
and service conditions over the vesting period. Non-vesting conditions and
market vesting conditions are factored into the fair value of the options
granted. The vesting period is determined by the period of time the relevant
participant must remain in the Company's employment before the rights to the
shares transfer unconditionally to them. The total expense is recognised over
the vesting period, which is the period over which all the specified vesting
conditions are to be satisfied. At the end of each period, the Company revises
its estimates on the number of awards it expects to vest based on the service
conditions.
Any awards granted are to be settled by the issuance of equity are deemed to
be equity settled share-based payments, accounted for in accordance with IFRS
2 - Share-based Payment.
Where the terms of an equity-settled transaction are modified, as a minimum,
an expense is recognised as if the terms had not been modified. In addition,
an expense is recognised for any increase in the value of the transaction as a
result of the modification, as measured at the date of modification.
Where an equity-settled transaction is cancelled, it is treated as if it had
vested on the date of the cancellation, and any expense not yet recognised for
the transaction is recognised immediately. However, if a new transaction is
substituted for the cancelled transaction and designated as a replacement
transaction on the date that it is granted, the cancelled and new transactions
are treated as if they were a modification of the original transaction, as
described in the previous paragraph.
Accounting for subsidiaries
The Directors have concluded that the Company has all the elements of control
as prescribed by IFRS 10 - Consolidated Financial Statements in relation to
all its subsidiaries and that the Company continues to satisfy the three
essential criteria to be regarded as an investment entity as defined in IFRS
10, IFRS 12 - Disclosure of lnterests in Other Entities and IAS 27 - Separate
Financial Statements. The three essential criteria are such that the entity
must:
• Obtain funds from one or more investors for the purpose of
providing these investors with professional investment management services;
• Commit to its investors that its business purpose is to
invest its funds solely for returns from capital appreciation, investment
income or both; and
• Measure and evaluate the performance of substantially all of
its investments on a fair value basis.
In satisfying the second essential criteria, the notion of an investment time
frame is critical. An investment entity should not hold its investments
indefinitely but should have an exit strategy for their realisation. Although
the Company has invested in equity interests that have an indefinite life, it
invests typically for a period of up to 10 years. In some cases, the period
may be longer, depending on the circumstances of the investment, however,
investments are not made with intention of indefinite hold. This is a common
approach in the private equity industry.
Subsidiaries are therefore measured at fair value through profit or loss, in
accordance with IFRS 13 - Fair Value Measurement and IFRS 9 - Financial
Instruments.
The Company's subsidiaries, which are wholly owned and over which it exercises
control, are listed in note 24.
Use of estimates and judgements
The preparation of the Financial Statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis; revisions to
accounting estimates are recognised in the period in which the estimates are
revised and in any future periods affected.
The areas involving significant judgements are:
· valuation technique selected in estimating fair value of
unquoted investments - note 11;
· valuation technique selected in estimating fair value of
investments held in funds - note 11; and
· going concern - note 1.
The areas involving significant estimates are:
· estimated inputs used in calculating fair value of unquoted
investments - note 11; and
· estimated inputs used in calculating fair value of
investments held in funds - note 11.
Estimates and judgements are continually evaluated. They are based on
historical experience and other factors, including expectations of future
events that may have financial impact on the entity and that are believed to
be reasonable under the circumstances.
Segmental reporting
The Board has considered the requirements of IFRS 8 - Operating Segments and
is of the view that the Company is engaged in a single segment business, which
is one of investing activities, and that therefore the Company has only a
single operating segment.
Investments in subsidiaries
The Company's investments in subsidiaries are stated at fair value which is
considered to be the carrying value of the net assets of each subsidiary other
than their investments. On disposal of such investments, the difference
between net disposal proceeds and the corresponding carrying amount is
recognised in the Income Statement.
Valuation of investments
The Company and its subsidiaries manage their investments with a view to
profit from the receipt of dividends, interest income and increase in fair
value of equity investments which can be realised on sale. Therefore, all
quoted, unquoted and managed fund investments are designated at fair value
through profit or loss which can be realised on sale and carried in the
Statement of Financial Position at fair value.
Fair values have been determined in accordance with the International Private
Equity and Venture Capital Valuation ("IPEV") Guidelines. These guidelines
require the valuer to make judgments as to the most appropriate valuation
method to be used and the results of the valuations.
Each investment is reviewed individually with regard to the stage, nature and
circumstances of the investment and the most appropriate valuation method
selected. The valuation results are then reviewed and any amendment to the
carrying value of investments is made as considered appropriate.
Quoted investments
Quoted investments for which an active market exists are valued at the bid
price at the reporting date.
Unquoted direct investments
Unquoted direct investments for which there is no active market are valued
using the most appropriate valuation technique with regard to the stage and
nature of the investment. Valuation methods that may be used include:
· investments in an established business are valued using
revenue multiples depending on the stage of development of the business and
the extent to which it is generating sustainable revenue or earnings;
· investments in an established business which is generating
sustainable revenue or earnings but for which other valuation methods are not
appropriate are valued by calculating the discounted cash flow of future
revenue or earnings; and
· the Company has adopted the IPEV guidelines issued in
December 2022.
Funds
Investments in managed funds are valued at fair value. The general partners of
the funds will provide periodic valuations on a fair value basis, the latest
available of which the Company will adopt provided it is satisfied that the
valuation methods used by the funds are not materially different from the
Company's valuation methods. Adjustments will be made to the fund valuation
where the Company believes there is evidence available for an alternative
valuation.
Foreign currencies
Transactions in foreign currencies are recorded at the rate of exchange at the
date of transaction. Monetary assets and monetary liabilities denominated in
foreign currencies at the reporting date are reported at the rates of exchange
prevailing at that date and exchange differences are included in the Income
Statement.
Intercompany receivables
The Company measures intercompany receivables and other receivables at fair
value less any expected credit losses. Expected credit losses are measured
through a loss allowance at an amount equal to:
· the 12-month expected credit losses (expected credit losses
from possible default events within 12 months after the reporting date); or
· full lifetime expected credit losses (expected credit losses
from all possible default events over the life of the financial instrument).
A loss allowance for full lifetime expected credit losses is required for
intercompany receivables and other receivables if the credit risk has
increased significantly since initial recognition.
Impairment losses on financial assets carried at amortised cost are reversed
in subsequent periods if the expected credit losses decrease.
Cash and cash equivalents
Cash comprises cash at banks, and short-term deposits. Cash equivalents are
short-term, highly-liquid investments that are readily convertible to known
amounts of cash, and that are subject to an insignificant risk of changes in
value, and include money market funds.
Dividend payable
Dividend distributions to the shareholders are recognised as a liability in
the Financial Statements when approved at an annual general meeting by the
shareholders. Interim dividends approved during the year are recorded upon
payment.
Income
Gains and losses on investments
Realised and unrealised gains and losses on investments are recognised in the
Income Statement in the period in which they arise.
Interest income
Interest income is recognised as it accrues using the effective interest
method.
Dividend income
Dividend income is recognised on the date the Company's right to receive
payment is established.
Expenditure
Income tax expense
Income tax expense comprises current and deferred tax. Income tax expense is
recognised in the Income Statement except to the extent that it relates to
items recognised in other comprehensive income or directly in equity.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the reporting date, and
any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet liability approach,
providing for temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the reporting date. A deferred
tax asset is recognised to the extent that it is probable that future taxable
profits will be available against which temporary differences can be utilised.
Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit will be
realised.
Additional income taxes that arise from the distribution of dividends are
recognised at the same time as the liability to pay the related dividend is
recognised.
2. Net loss on investments
Gains and losses on investments were as follows:
Year ended 31 December
2025 2024
Investment portfolio of the Company Realised Unrealised Total Realised Unrealised Total
Asset type £'000 £'000 £'000 £'000 £'000 £'000
Unquoted - - - - - -
Charge for incentive plans - (12)
- (12)
Investment portfolio of subsidiaries
Asset type
Quoted (12) 37 25 6 (62) (56)
Unquoted 23 (4,177) (4,154) - (1,690) (1,690)
Funds 572 (281) 291 457 (3,210) (2,753)
583 (4,421) (3,838) 463 (4,962) (4,499)
Total 583 (4,421) (3,838) 463 (4,962) (4,511)
Credit for incentive plans - 7
(3,838) (4,504)
Operating and similar income/(loss) of subsidiaries* (4,180) (8,520)
Provision against amounts receivable from subsidiaries 4,267 -
Net losses on investments (3,751) (13,024)
* Includes operating and legal costs and taxation charges of subsidiaries.
During the year the Company and its subsidiaries carried out a further
exercise to settle the debtor and creditor balances that had accumulated over
a period of years between companies within the Group. This will achieve a
simplification of accounting within the Group. Settlement of the balances
was achieved through offsetting debtor and creditor amounts where appropriate
and through the declaration of dividends by various subsidiary companies to
holding companies within the Group. As part of this exercise dividends of
£2,408,000 (2024: £8,000,000) were declared by LMS Capital Group Limited to
LMS Capital plc and £89,738 (2004: £nil) by LMS Co-Invest Limited to LMS
Capital plc. The assets of LMS Capital plc increased by the amount of these
dividends but as a result of this a reduction in the fair value of the
investments in subsidiaries has been recognised. This exercise had no overall
effect on the net assets of the Company.
The Company operated carried interest arrangements in line with normal
practice in the private equity industry. The charge for incentive plans for
the Company is £nil (2024: charge of £12,000) and other incentives relating
to historic arrangements. The charge for subsidiaries is included in the net
gains/(losses) on investments in the Income Statement. All carried interest
arrangements have now ceased.
3. Interest income
Year ended 31 December
2025 2024
£'000 £'000
Bank interest 395 612
Interest receivable on intercompany loans 908 804
1,303 1,416
4. Interest payable
Year ended 31 December
2025 2024
£'000 £'000
Interest payable on intercompany loans 58 331
58 331
5. Operating expenses
Operating expenses comprise administrative expenses and include the following:
Year ended 31 December
2025 2024
£'000 £'000
Directors' remuneration (note 6) 653 811
Staff expenses (note 7) 300 342
Depreciation on right-of-use assets 14 28
Rent (short-term leases) 12 -
Other administrative expenses 427 566
Expenses incurred for General Meeting and circular 168 -
Foreign currency exchange differences 28 (6)
Auditor's remuneration 96 101
1,698 1,842
Audit fees of £24,000 (2024: £54,000) were directly charged to subsidiaries.
6. Directors' Remuneration
Year ended 31 December
2025 2024
£'000 £'000
Directors' remuneration 467 595
Directors' social security contributions 82 96
Share-based payments 66 87
Directors' other benefits 38 33
653 811
The highest paid Director was Nicholas Friedlos 273 381
(2024 - Nicholas Friedlos)
The Directors are considered to be the only key management personnel.
7. Staff Expenses
Year ended 31 December
2025 2024
£'000 £'000
Wages and salaries 226 242
Employers' social security contributions 24 47
Share-based payments 23 28
Pension costs 18 16
Employees' other benefits 9 9
300 342
Pensions costs are amounts payable to employees' defined contribution pension
plans and are recognised on an accruals basis as they are incurred.
The average number of staff was as follows:
2025 2024
Directors 5 5
Staff 2 2
Total 7 7
8. Taxation
Year ended 31 December
2025 2024
£'000 £'000
Current tax expense
Current year - -
Total tax expense - -
Reconciliation of tax expense Year ended 31 December
2025 2024
£'000 £'000
Loss before tax (5,611) (5,354)
Corporation tax using the Company's domestic tax rate - 25.0% (2024: 25.0%) (1,403) (1,339)
Expenses not deductible / non-taxable income 1,381 1,125
Deferred tax asset not recognised (2) 22
Group relief surrendered 24 192
Total tax expense - -
At year end, there are cumulative potential deferred tax assets of £2.411
million (2024: £2.713 million) in relation to the Company's cumulative tax
losses of £9.643 million (2024: £10.852 million). It is uncertain when the
Company will generate sufficient taxable profits in the future to utilise
these amounts and therefore no deferred tax asset has been recognised in the
current or prior year.
9. Loss per ordinary share
The calculation of the basic and diluted loss per share, in accordance with
IAS 33, is based on the following data:
Year ended 31 December
2025 2024
£'000 £'000
Loss
Loss for the purpose of net loss per share attributable to equity holders of (5,611) (5,354)
the parent
Number Number
Number of shares
Weighted average number of ordinary shares for the purposes of basic loss per 80,727,450 80,727,450
share
Loss per share Pence Pence
Basic (7.0) (6.6)
Diluted (7.0) (6.6)
The Company share awards may be dilutive when the Company makes a profit.
10. Dividends
Dividends declared during the years ending 31 December 2025 and 31 December
2024 were as follows:
Dividend date Payment date Dividend £'000 Pence per share
Final dividend payment for 2023 31 May 2024 21 June 2024 505 0.625
Interim dividend payment for 2024 16 August 2024 13 September 2024 242 0.300
Total as at 31 December 2024 747 0.925
Final dividend payment for 2024 - - - -
Interim dividend payment for 2025 - - - -
Total as at 31 December 2025 - -
11. Investments
The Company's investments comprised the following:
31 December
2025 2024
£'000 £'000
Total investments 4,091 7,842
These comprise:
Investment portfolio of subsidiaries 23,182 23,483
Other net liabilities of subsidiaries (19,091) (15,641)
4,091 7,842
The carrying amounts of the subsidiaries' investment portfolios were as
follows:
31 December
Investment portfolio of subsidiaries 2025 2024
Asset type £'000 £'000
Quoted 44 59
Unquoted 18,295 17,547
Funds 4,843 5,877
Investment portfolio of subsidiaries 23,182 23,483
Other net liabilities of subsidiaries (19,091) (15,641)
4,091 7,842
The movement in the subsidiaries' investment portfolio were as follows:
Quoted securities Unquoted securities Funds Other net liabilities of subsidiaries Total
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2024 144 18,837 9,469 (7,596) 20,854
Accrued interest - 1,041 - - 1,041
Proceeds from disposals (29) - - - (29)
Distributions from partnerships - - (894) - (894)
Contributions to partnerships - - 55 - 55
Fair value movements (56) (1,690) (2,753) - (4,499)
Dividends paid - - - (8,000) (8,000)
Other movements * - (641) - (45) (686)
Balance at 31 December 2024 59 17,547 5,877 (15,641) 7,842
* Other movements relate to investment related provisions no longer
required.
Quoted securities Unquoted securities Funds Other net liabilities of subsidiaries Total
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2025 59 17,547 5,877 (15,641) 7,842
Accrued interest - 339 - - 339
Purchases - 4,642 - - 4,642
Proceeds from disposals (40) (79) - - (119)
Distributions from partnerships - - (1,325) - (1,325)
Fair value movements 25 (4,154) 291 - (3,838)
Dividends paid - - - (2,498) (2,498)
Other movements - - - (952) (952)
Balance at 31 December 2025 44 18,295 4,843 (19,091) 4,091
The following table analyses investments carried at fair value at the end of
the year, by the level in the fair value hierarchy into which the fair value
measurement is categorised. The different levels have been defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets;
Level 2: inputs other than quoted prices included within level 1 that are
observable for the asset, either directly (i.e. as prices) or indirectly (i.e.
derived from prices); and
Level 3: inputs for the asset that are not based on observable market data
(unobservable inputs such as trading comparables and liquidity discounts).
Fair value measurements are based on observable and unobservable inputs.
Observable inputs reflect market data obtained from independent sources, while
unobservable inputs reflect the Company's view of market assumptions in the
absence of observable market information (see note 20 - Financial risk
management).
The Company's investments are analysed as follows:
31 December
2025 2024
£'000 £'000
Level 1 - -
Level 2 - -
Level 3 4,091 7,842
4,091 7,842
Level 3 includes:
31 December
2025 2024
£'000 £'000
Investment portfolio of subsidiaries 23,182 23,483
Other net liabilities of subsidiaries (19,091) (15,641)
4,091 7,842
The investment portfolio of subsidiaries includes quoted investments of
£44,000 (2024: £59,000). There were no transfers between levels during the
year ending 31 December 2025.
12. Operating and other receivables
31 December
2025 2024
£'000 £'000
Other receivables and prepayments 106 231
106 231
13. Cash and cash equivalents
31 December
2025 2024
£'000 £'000
Bank balances 58 125
Money market funds 6,507 11,521
6,565 11,646
14. Amounts receivable from subsidiaries
31 December
2025 2024
£'000 £'000
Amounts receivable from subsidiaries 18,541 17,805
18,541 17,805
Amounts receivable from subsidiaries are intercompany loans repayable on
demand and incur interest at 5% per annum. In accordance with IAS 1.66
amounts receivable from subsidiaries are classified as non-current as the
expectation is that the balances will not be received within 12 months of the
balance sheet date.
During the year the Company made a provision of £4,267,000 (2024: £nil)
against the balance due from Lioness Property Investments Limited.
15. Operating and other payables
31 December
2025 2024
£'000 £'000
Trade payables 80 37
Lease liabilities - 16
Other non-trade payables and accrued expenses 205 409
285 462
Other long-term lease liabilities - -
285 462
16. Amounts payable to subsidiaries
31 December
2025 2024
£'000 £'000
Amounts payable to subsidiaries 1 921
1 921
Amounts payable to subsidiaries are intercompany loans repayable on demand and
incur interest at the rate of 5% per annum.
17. Capital and reserves
2025 2024
Ordinary shares Number £'000 Number £'000
Balance at the beginning of the year 80,727,450 8,073 80,727,450 8,073
Balance at the end of the year 80,727,450 8 80,727,450 8,073
The Company's ordinary shares have a nominal value of 0.01p (2024: 10p) per
share and all shares in issue are fully paid up.
On 14 May 2025, shareholders approved a reduction of capital ("the Reduction")
whereby the Company's stated capital was reduced from £8,072,745 to
£8,072.745 by cancelling and extinguishing capital to the extent of 9.99
pence on each issued fully paid up Ordinary Share, and to cancel the entire
amount standing to the credit of the Company's share premium account and
capital redemption reserve to create a distributable reserve.
The Reduction was approved by the High Court on 10 June 2025 and was enacted
on this date.
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company.
To facilitate the first return of capital to shareholders on 14 July 2025, the
Company issued and immediately redeemed 161,454,900 B shares of 1p each.
18. Share awards
Employee Share Incentive Plan
On 15 August 2023, the Remuneration Committee approved the issue of 686,064
nil-cost options.
The options vest to 15 August 2026 and have both a performance and a
continuous service condition attached to them.
Performance condition
The Performance Condition for the Award shall be determined by reference to
the Company's performance in deploying its available uninvested capital at 31
December 2022. The level of performance and hence the amount of the Award that
vests will be determined at the discretion of the Remuneration Committee.
The targets for deployment of Investible Capital are:
(a) At least 50% of Investible Capital should have been Deployed
by 31 December 2024;
(b) 100% of Investible capital should have been Deployed by 31
December 2025.
(c) The investments into which capital has been Deployed should
be performing satisfactorily, taking account of the relatively early stage of
such investments at the time the Performance Conditions are assessed.
For the purposes of this award Investible Capital has been set at £12.4
million.
IFRS 2: Share-based Payment addresses the accounting for the Share Plan. This
sets out the definition of a share-based payment and in this case the Share
Plan is classified as an equity settled transaction with cash alternatives,
the Company has the discretion to settle the liability fully or partly in
cash. Since there is no present obligation to settle the award in cash, the
scheme will be accounted for as equity settled.
Both the performance condition and the service condition, which is to be
employed for three years from the effective date of award, are considered to
be non-market vesting condition per IFRS 2. On this basis the Share Plan will
be recognised at fair value at the date of the award and will be amortised
over the life of the plan on a straight-line basis.
The LMS Capital plc share price on the date of the award was 21p. This gives a
fair value of the award at the date of issue of £144,073.
Management expect the performance condition to be met and the award to vest in
full. In the event the performance condition is not met, the Remuneration
Committee has the discretion to settle the awards in full.
As there is a service condition attached to the Share Plan, an estimate of
whether there will be leavers is required over the vesting period. In this
instance there is no expectation that any members of staff will leave within
three years and as such 100% of the award will be used to recognise the
expense over three years.
2025 2024
Number of awards Weighted average fair value per award (pence) Number of awards Weighted average fair value per award (pence)
Outstanding at 1 January 686,064 21.0 686,064 21.0
Granted - - - -
Options lapsed (81,967) 21.0 - -
Outstanding at 31 December 604,097 21.0 686,064 21.0
Exercisable at the year end - - - -
Value Creation Plan
At the Annual General Meeting on 17 May 2023, shareholders approved the
proposed amendments to the VCP whereby the original units awarded in 2020
would be cancelled and a smaller number of new units would be issued. 384
new units were awarded on 14 June 2023, with a fair value at grant of £461
per unit. The awards vest quarterly over five years provided the employee is
still in service of the Company. The final vesting date is 14 June 2028.
2025 2024
Number of awards Weighted average fair value per award (£) Number of awards Weighted average fair value per award (£)
Outstanding at 1 January 384 461.00 384 461.00
New units issued - - - -
Options lapsed (35) 461.00 - -
Outstanding at 31 December 349 461.00 384 461.00
Exercisable at the year end - - - -
19. Leases
Lease commitments
The Company leases office space and information with regards to this lease is
outlined below:
Rental lease asset 31 December
2025 2024
£'000 £'000
Balance at 1 January 14 42
Depreciation for the year (14) (28)
Balance at 31 December - 14
Rental lease liability 31 December
2025 2024
£'000 £'000
Balance at 1 January 16 46
Unwinding of the discount on lease liability 1 3
Lease payments (17) (33)
Balance at 31 December - 16
Short-term leases are not capitalised in accordance with IFRS 16. The total
expense for short-term leases in the year was £12,000 (2024: £nil).
20. Financial risk management
The following tables analyse the Company's financial assets and financial
liabilities in accordance with the categories of financial instruments in IFRS
9. Assets and liabilities outside the scope of IFRS 9 are not included in the
table below:
31 December
2025 2024
Fair value through profit or loss Measured at amortised cost Total Fair value through profit or loss Measured at amortised cost Total
Financial assets £'000 £'000 £'000 £'000 £'000 £'000
Investments 4,091 - 4,091 7,842 - 7,842
Amounts receivable from subsidiaries - 18,541 18,541 - 17,805 17,805
Operating and other receivables - 31 31 - 164 164
Cash and cash equivalents 6,507 58 6,565 11,521 125 11,646
Total 10,598 18,630 29,228 19,363 18,094 37,457
Financial liabilities
Operating and other payables - 285 285 - 446 446
Amounts payable to subsidiaries - 1 1 - 921 921
Lease liabilities - - - - 16 16
Total - 286 286 - 1,383 1,383
Intercompany payables to subsidiaries are all repayable on demand thus there
are no discounted contractual cash flows to present.
Within cash and cash equivalents are investments in money market funds to the
value of £6,507,000 (2024: £11,521,000) which are deemed to meet the
classification as cash equivalent and are classed as level 2 within the fair
value hierarchy.
The Company has exposure to the following risks from its use of financial
instruments:
· credit risk;
· liquidity and cashflow risk; and
· market risk.
This note presents information about the Company's exposure to each of the
above risks, its policies for measuring and managing risk, and its management
of capital.
Credit risk
Credit risk is the risk of the financial loss to the Company if a counterparty
to a financial instrument fails to meet its contractual obligations and arises
principally from the Company's receivables and its cash.
31 December
2025 2024
£'000 £'000
Amounts receivable from subsidiaries 18,541 17,805
Operating and other receivables 31 164
Cash and cash equivalents 6,565 11,646
25,137 29,615
The Company limits its credit risk exposure by only depositing funds with
highly rated institutions. Cash holdings at 31 December 2025 and 2024 were
held in institutions currently rated A or better by S&P Global. Given
these ratings, the Company does not expect any counterparty to fail to meet
its obligations and therefore, no allowance for credit loss is made for bank
deposits.
The loss allowance as at 31 December 2025 and 31 December 2024 was determined
as follows for trade receivables:
Current More than 30 days past due More than 60 days past due More than 120 days past due Total
31 December 2025 £'000 £'000 £'000 £'000 £'000
Other receivables 31 - - - 31
Total 31 - - - 31
Current More than 30 days past due More than 60 days past due More than 120 days past due Total
31 December 2024 £'000 £'000 £'000 £'000 £'000
Other receivables 164 - - - 164
Total 164 - - - 164
The Company recognised credit losses of the full value of receivable for trade
receivables not recovered after four months. As at 31 December 2025, the
Company does not have an outstanding trade receivable (2024: £nil).
For the year ending 31 December 2025, the Company recognised a credit loss of
£4,267,000 against an amount receivable from a subsidiary (2024: £nil). No
credit losses were recognised on other amounts receivable from subsidiaries
totalling £18,541,000.
Liquidity and cashflow risk
Liquidity and cashflow risk is the risk that the Company will not be able to
meet its financial obligations as they fall due. The Company's financing
requirements are met through a combination of liquidity from the sale of
investments and the use of cash resources.
The following table shows an analysis of the undiscounted financial
liabilities by remaining expected maturities as at 31 December 2025 and 31
December 2024:
Financial liabilities:
31 December 2025 Up to 3 months 3-12 months 1-5 years Over 5 years Total
£'000 £'000 £'000 £'000 £'000
Operating and other payables 285 - - - 285
Amount payable to subsidiaries 1 - - - 1
Total 286 - - - 286
31 December 2024 Up to 3 months 3-12 months 1-5 years Over 5 years Total
£'000 £'000 £'000 £'000 £'000
Operating and other payables 446 - - - 446
Amount payable to subsidiaries 921 - - - 921
Lease liabilities 8 8 - - 16
Total 1,375 8 - - 1,383
In addition, some of the Company's subsidiaries have uncalled capital
commitments to funds of £428,000 (2024: £2,458,000) for which the timing of
payment is uncertain (see note 21).
Market risk
Market risk is the risk that changes in market prices such as foreign exchange
rates, interest rates and equity prices will affect the Company's income or
the value of its holdings of financial instruments. The Company aims to manage
this risk within acceptable parameters while optimising the return.
Currency risk
The Company is exposed to currency risk on those of its investments which are
denominated in a currency other than the Company's functional currency which
is pounds sterling. The only other significant currency within the investment
portfolio is the US dollar. Approximately 62% of the investment portfolio of
the subsidiaries is denominated in US dollars.
The Company does not hedge the currency exposure related to its investments.
The Company regards its exposure to exchange rate changes on the underlying
investment as part of its overall investment return and does not seek to
mitigate that risk through the use of financial derivatives.
The Company is exposed to translation currency risk on sales and purchases
which are denominated in a currency other than the Company's functional
currency. The currency in which these transactions are denominated is
principally US dollars.
The Company's exposure to foreign currency risk was as
follows:
31 December
2025 2024
GBP USD Other GBP USD Other
Financial assets £'000 £'000 £'000 £'000 £'000 £'000
Investments 4,091 - - 1,037 6,805 -
Amounts receivable from subsidiaries 4,241 14,300 - 17,803 2 -
Right-of-use assets - - - 14 - -
Operating and other receivables 106 - - 231 - -
Cash 6,529 36 - 11,280 366 -
Operating and other payables (285) - - (462) - -
Amount payable to subsidiaries (1) - - (921) - -
Net exposure 14,681 14,336 - 28,982 7,173 -
The aggregate net foreign exchange (loss)/profit recognised in profit or loss
were:
31 December
2025 2024
£'000 £'000
Net foreign exchange (loss)/profit on investments (1,047) 232
Net foreign exchange (loss)/profit on non-investments (124) 90
Total net foreign exchange (loss)/profit recognised in profit before income (1,171) 322
tax for the year
At 31 December 2025, the rate of exchange was USD $1.35 = £1.00 (2024: $1.25
= £1.00).
A 5% strengthening of sterling against the US Dollar would result in a foreign
exchange gain of £755,000. A 5% weakening of sterling against the US Dollar
would result in a foreign exchange loss of £683,000.
Interest rate risk
At the reporting date, the Company's cash is exposed to interest rate risk and
the sensitivity below is based on these amounts.
An increase of 100 basis points in interest rates at the reporting date would
have increased equity by £66,000 (2024: increase of £116,000) and increased
the profit for the year by £66,000 (2024: increased the profit £116,000). A
decrease of 100 basis points would have decreased equity and increased the
loss for the year by the same amounts. This level of change is considered to
be reasonable based on observations of current conditions.
Fair values
All items not held at fair value in the Statement of Financial Position have
fair values that approximate their carrying values.
Other market price risk
Equity price risk arises from equity securities held as part of the Company's
portfolio of investments. The Company's management of risk in its investment
portfolio focuses on diversification in terms of geography and sector, as well
as type and stage of investment.
The Company's investments comprise unquoted investments in its subsidiaries.
The subsidiaries' investment portfolios comprise investments in quoted and
unquoted equity and debt instruments. Quoted investments are quoted on the
main stock exchanges in London and New York. A proportion of the unquoted
investments are held through funds managed by external managers.
As is common practice in the venture and development capital industry, the
investments in unquoted companies are structured using a variety of
instruments including ordinary shares, preference shares and other shares
carrying special rights, options and warrants and debt instruments with and
without conversion rights. The investments are held for resale with a view to
the realisation of capital gains. Generally, the investments do not pay
significant income.
The significant unobservable inputs used at 31 December 2025 in measuring
investments categorised as level 3 in note 11 are considered below:
1. Unquoted securities (carrying value £18.3 million)
are valued using the most appropriate valuation technique such as a
revenue-based approach, an earnings-based approach, or a discounted cash flow
approach. These investments are sensitive to both the overall market and
industry specific fluctuations that can impact multiples and comparable
company valuations. In most cases the valuation method uses inputs based on
comparable quoted companies for which the key unobservable inputs are:
· revenue multiples of 1.5 times, also dependent on attributes at
individual investment level; and
· Discounts applied of up to 50%, to reflect the illiquidity risk
of the unquoted companies. The discount used requires the exercise of
judgement taking into account factors specific to individual investments such
as size and rate of growth compared to other companies in the sector.
2. Investments in funds (carrying value £4.8 million)
are valued using the reported NAV from the general partners of the fund
interests with adjustments made for calls, distributions and foreign currency
movements since the date of the report (if prior to 31 December 2025). The
reported NAVs of the funds are fair value based. The Company also carries
out its own review of individual funds and their portfolios to satisfy itself
that the underlying valuation bases are consistent with its basis of valuation
and knowledge of the investments and the sectors in which they operate.
However, the degree of detail on valuations varies significantly by fund and,
in general, details of unobservable inputs used are not available.
Two of the Company's subsidiaries' underlying investments are valued using
discounted cash flow ("DCF") models. These models rely on detailed cash flow
forecasts and on substantial subjective judgemental inputs and the derived
valuations are sensitive to small changes in these inputs as follows:
Castle View - valuation £7.5 million
A key driver of value is the right to receive Deferred Management Fee ("DMF")
income in the future when units are resold. The current valuation assumes
that 8 units will be resold each year in the future. With all other inputs
being equal, applying an average unit turnover range of 5 to 9 units would
result in a valuation range of £5.4 million to £8.1 million.
A discount rate of 9.5% has been applied to the valuation. To demonstrate
sensitivity, with all other inputs being equal, a discount range of 8% to 11%
would result in a valuation range of £8.2 million to £6.9 million.
Dacian Petroleum - valuation £9.7 million
The valuation of Dacian Petroleum is sensitive to the following inputs:
· Oil price;
· Production levels; and
· Discount rate.
An oil price of $60 per barrel has been used in the valuation, being Dacian's
expectation of the average oil price during 2026. The effect of a decrease
or increase in oil price of $5 per barrel, with all other inputs being equal,
would result in a valuation of between £9.0 million and £10.3 million.
The effect of a decrease or increase in production of 5%, with all other
inputs being equal, would result in a valuation of between £9.2 million and
£10.0 million.
A discount rate of 15% has been applied to the valuation which reflects a
slight increase on the coupon of 14% on the original Senior Loan Notes before
the anticipated conversion. To demonstrate sensitivity, with all other
inputs being equal, a discount range of 10% to 20% would result in a valuation
range of £10.7 million to £8.7 million.
The valuation of Dacian Petroleum also makes use of multiple unobservable
inputs such as the value of underlying assets, oil and gas reserves and
potential exploration opportunities. It is impractical to sensitise these
inputs.
The valuation of the investments in subsidiaries makes use of multiple
interdependent significant unobservable inputs and it is impractical to
sensitise variations of any one input on the value of the investment portfolio
as a whole. Estimates and underlying assumptions are reviewed on an ongoing
basis however inputs are highly subjective. Changes in any one of the
variables, earnings or revenue multiples or illiquidity discounts could
potentially have a significant effect on the valuation.
The reported values of the level 3 investments would change, should there be a
change in the underlying assumptions and unobservable inputs driving these
values. The Company has performed a sensitivity analysis to assess the overall
impact of a 10% movement in these reported values of investments, on the
profit for the year. The effect on loss is shown in the table below:
31 December
2025 2024
£'000 £'000
Effect of 10% decrease in investment value (409) (784)
Effect of 10% increase in investment value 409 784
Capital management
The Company's total capital at 31 December 2025 was £29.0 million (2024:
£36.2 million) comprising equity share capital and reserves. The Company had
no borrowings at 31 December 2025 (2024: £nil).
In order to meet the Company's capital management objectives, the Board
monitors and reviews the broad structure of the Company's capital on an
ongoing basis. This review includes:
· Working capital requirements and follow-on investment capital
for portfolio investments, including calls from funds;
· Capital available for new investments; and
· The annual dividend policy and other possible distributions
to shareholders.
21. Capital commitments
31 December
2025 2024
£'000 £'000
Outstanding commitments to funds 428 2,458
Publicly committed funding to Dacian 1,029 -
1,457 2,458
The outstanding commitments to funds comprise unpaid capital calls in respect
of funds where a subsidiary of the Company is a limited partner. At the
balance sheet date it is not expected that these outstanding commitments will
be called. The outstanding funding to Dacian represents the balance of the
$5.3 million commitment previously announced in August 2025.
As of 31 December 2025 the Company has no other contingencies or commitments
to disclose (2024: £nil).
22. Related party transactions
During the year, the Company paid rent of £26,390 (2024: £32,780) to The
Rayne Foundation for its office space. Robert Rayne has previously been the
Chairman of The Rayne Foundation.
During the year the following transactions occurred with Group companies:
31 December 2025 Advanced to Received from Interest receivable / (payable) Dividends/ fees received Balance due from/ (due to)
£ £ £ £ £
LMS Capital Group Limited 14,000 2,473,000 2,607 2,408,000 (341)
LMS Capital Holdings Limited 3,088,087 2,622,179 (46,224) - 6,832
LMS Co-Invest Limited - 262,839 - 89,738 -
Lion Investments Limited 237,655 126,000 226,618 - 5,085,991
LMS Tiger Investments (II) Limited - - - - 1,828
LMS Retirement Living Limited 1,933,640 - 421,620 140,789 10,570,909
Lioness Property Investments Limited - 571,730 210,824 - 4,267,052
Lion Property Investments Limited 526,295 5,620 (12,241) - -
Westpool Investment Trust plc 3,159,575 682,379 46,950 222,007 2,875,474
LMS Capital (Bermuda) Limited - 2,708 - 514 (451)
31 December 2024 Advanced to Received from Interest receivable / (payable) Dividends/ fees received Balance due from/ (due to)
£ £ £ £ £
LMS Capital Group Limited 14,000 8,000,000 2,122 8,000,000 48,052
LMS Capital Holdings Limited 8,061,499 5,970,862 (314,791) - (412,852)
LMS Co-Invest Limited 43,444 - 6,550 59,370 173,101
Lion Investments Limited 158,196 260,000 223,455 109,761 4,747,718
Tiger Investments Limited 1,128 - - - -
LMS Tiger Investments (II) Limited - - - - 1,828
Cavera Limited - 243,047 - - -
LMS Retirement Living Limited 1,857,604 12,017 352,119 126,828 8,074,860
Lioness Property Investments Limited - - 220,379 - 4,627,958
Lion Property Investments Limited 33 190,882 (16,637) - (508,434)
Westpool Investment Trust plc 37,077 36,367 - 129,285 129,321
LMS Capital (Bermuda) Limited 229,053 226,888 - 933 1,743
Details of Directors' remuneration are disclosed in note 6.
23. Subsequent events
The Company made its second return of capital to shareholders of 2 pence per
share, totalling £1,615,000 on 19 January 2026.
There are no other subsequent events that would materially affect the
interpretation of these Financial Statements.
24. Subsidiaries
The Company's subsidiaries and along with the Company are collectively
referred to as the Group, are as follows:
Name Country of incorporation Holding % Activity
LMS Capital (Bermuda) Limited Bermuda 100 Investment holding
LMS Capital Group Limited England and Wales 100 Investment holding
LMS Capital Holdings Limited England and Wales 100 Investment holding
Lioness Property Investments Limited England and Wales 100 Investment holding
Lion Investments Limited England and Wales 100 Investment holding
LMS Tiger Investments (II) Limited England and Wales 100 Investment holding
Westpool Investment Trust plc England and Wales 100 Investment holding
LMS Retirement Living Limited England and Wales 100 Investment holding
The registered office addresses of the Company's subsidiaries are as follows:
Subsidiaries incorporated in England and Wales: 3 Bromley Place, London,
United Kingdom, W1T 6DB.
Subsidiaries incorporated in Bermuda: Clarendon House, 2 Church Street,
Hamilton HM 11, Bermuda.
Lion Cub Property Investments Limited was dissolved on 7 January 2025. Lion
Property Investments Limited, Tiger Investments Limited, Cavera Limited and
LMS Co-invest Limited were dissolved on 16 December 2025.
Investee companies, even if a controlling interest is held, do not form part
of the Group for reporting purposes.
25. Net asset value per share
The net asset value per ordinary share in issue is as follows:
31 December
2025 2024
Net assets (£'000) 29,017 36,155
Number of ordinary shares in issue 80,727,450 80,727,450
Net asset value per share (pence) 35.94 44.79
NAV per share is considered to be an Alternative Performance Measure ("APM").
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