TIDMLMS
RNS Number : 3998D
LMS Capital PLC
28 October 2020
28 October 2020
LMS Capital plc
Third Quarter 2020 Update
LMS Capital plc ("LMS" or "the Company"), the investment
company, is issuing the following update covering the period from 1
July 2020 to date.
Financial Highlights
-- Unaudited Net Asset Value ("NAV") at 30 September 2020 was
GBP47.0 million (58.2p per share). This compares to GBP46.5 million
(57.6p per share) at 30 June 2020;
-- At the half year the Company announced the initiation of a
progressive annual dividend policy targeting a dividend equal to
approximately 1.5% of each financial year's closing NAV, subject to
the Company's liquidity, investment income generated, distributable
profits and market conditions. The first interim dividend under
this policy, of GBP0.2 million (GBP0.3p per share) was paid to
shareholders in September 2020;
-- Cash at 30 September was GBP22.0 million. This is after
having funded GBP7.0 million of cash for its previously announced
$9 million investment in Dacian petroleum ("Dacian") - see
below.
Investment in Dacian
-- On 12 August 2020 the Company announced that it was leading
an investor group which has conditionally agreed to finance the
acquisition by Dacian from OMV Petrom, the Romanian oil company, of
a business operating 40 onshore oil and gas fields located in
Romania;
-- Completion of the acquisition by Dacian is conditional upon
Dacian obtaining certain Romanian Government regulatory approvals.
During September, in accordance with the investment agreement, the
investor group were called to deposit funds to be held pending
conclusion of the approval process;
-- The Dacian team has reported to the investor group that,
whilst not yet completed, the approval process is proceeding well
and it is their current expectation that the necessary approvals
will be obtained and the transaction will complete before the
current contractual backstop date in early January 2021; and
-- LMS will provide a further update to the market once the
approval process is completed.
Unaudited Net Asset Value at 30 September 2020
The increase in the NAV over the quarter arises from GBP1.7
million of unrealised gains on the investment portfolio, offset by
GBP0.5 million of portfolio foreign exchange losses from the
weakening of the US Dollar against the sterling, overheads of
GBP0.4 million and other non-portfolio foreign exchange losses of
GBP0.1 million.
The 30 September 2020 NAV is summarised below:
Unaudited Unaudited
30 June 2020 30 September 2020
GBP millions
---------------------------------------
Quoted Investments 0.5 0.4
---------------- ---------------------
Unquoted Investments 8.8 8.3
---------------- ---------------------
Funds 10.0 10.8
---------------- ---------------------
Subtotal Investment portfolio 19.3 19.5
---------------- ---------------------
Cash 29.0 22.0
---------------- ---------------------
Dacian Investment - Funds
Deposited - 7.0
---------------- ---------------------
Other Net Assets/Liabilities (1.8) (1.5)
---------------- ---------------------
Net Asset Value 46.5 47.0
---------------- ---------------------
The NAV at the end of September is based on the valuation of the
Company's investments as at 30 June 2020, adjusted for transactions
in the three months ended 30 September 2020, price movements on
quoted securities, movements in foreign currency exchange rates,
cash calls and distributions from funds, and latest information
from third party fund managers.
The following table summarises the change in NAV for the third
quarter:
GBP millions
Unaudited NAV as at 30 June 2020 GBP 46.5
Unrealised Portfolio Gains 1.7
Unrealised Portfolio Foreign
Exchange Losses (0.5)
Overheads (0.4)
Unrealised Other Foreign Exchange
Losses (0.1)
Interim Dividend (0.2)
------------------------
Unaudited NAV as at 30 September GBP 47.0
2020
The portfolio net unrealised gains of GBP1.7 million,excluding
foreign exchange movements, are summarised below.
Quoted Investments
The Company ' s quoted investment valuations reduced by a net
GBP 0.2 million during the third quarter of 2020. This comprised
unrealised underlying market price reductions of GBP0.2 million
during the quarter, primarily from a decline in the market price of
IDE Group Holdings plc.
Unquoted Investments
The Company ' s unquoted investments include assets managed by
SFEP, YesTo and ICU Eyewear, and our direct holdings in Medhost,
Elateral and Northbridge Industrial Services plc.
Total unquoted investment unrealised gains were GBP0.7 million
for the quarter. Primus Capital, the lead fund manager on Medhost,
increased its latest valuation resulting in an unrealised gain of
GBP0.6 million for the third quarter on the Company's holding in
Medhost. Other net gains were GBP0.1 million.
Funds
The Company's fund investments include its holding in Brockton
Capital Fund 1, Opus Capital and three other smaller fund
interests.
Total fund unrealised gains were GBP1.2 million for the third
quarter as fund valuations increased, primarily from Opus, and an
escrow distribution from a previous exit. The carrying value of the
funds is based on the latest information from the respective fund
managers, generally the 30 June 2020 fund valuation reports.
Portfolio Realisations
Realisations from the portfolio during the quarter were GBP1.0
million, comprising a loan repayment from ICU Eyewear of GBP0.8
million plus other fund distributions and escrow proceeds of GBP0.2
million from a previous exit.
Liquidity and Outlook
The Company continues to maintain significant cash balances,
GBP22.0 million at 30 September, after depositing cash to fund the
Dacian transaction, and remains highly cautious about the way its
liquid resources are deployed.
The Company is reviewing opportunities with its real estate
teams, George Capital and Cavera, but capital has not yet been
deployed. The Company has a pipeline of opportunities for other
investments.
Movements in prices of quoted securities and foreign exchange
rates since 30 September 2020 have not been material.
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
Robert Rayne, Chairman
Nick Friedlos, Managing Director
Tel +44 207 935 3555; +44 7802 686584
Shore Capital
Robert Finlay
Tel +44 207 408 4050
Notes to Editors
LMS Capital plc is a fully listed investment company which aims
to preserve and create wealth through investment and co-investment
from family offices, high net worth investors and others. LMS
expects to deliver an overall total return, net of costs, over the
longer term of 12%-15% per annum, of which an element will include
an annual distribution.
LMS focuses on investing in real estate, energy and late-stage
private equity, areas in which the company has had demonstrable
success for over 40 years, derived from a long history of
investing, a depth of understanding and long-term
relationships.
LMS works with experienced management teams to deliver
exceptional opportunities and 'hard to access' assets not available
via larger funds, enabling wealth creation through nurturing and
careful management. LMS' philosophy of co-investment has led to the
establishment of a formal network of partners, LMS Co-invest Co.,
which is a wholly owned subsidiary and is resourced to develop
co-investment relationships and activity. This model harnesses
experience, capital and access to specialist investment teams to
create enhanced returns.
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END
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October 28, 2020 03:00 ET (07:00 GMT)
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