TIDMLMS
RNS Number : 0606A
LMS Capital PLC
31 January 2022
31 January 2022
LMS CAPITAL PLC
NAV Estimate as at 31 December 2021
LMS Capital plc (the "Company") the listed investment company
provides the following update and estimate of net asset value
("NAV") as at 31 December 2021.
Net Asset Value Estimate
The Company has commenced the year end valuation review process
which is based on the latest performance updates from portfolio
companies and third-party fund manager valuations.
The Board currently estimates that the year end NAV will be in
the region of GBP49.1 million (60.8p per share). This NAV estimate,
which represents an increase of GBP1.9 million (after adding back
dividends paid) on the prior year, reflects information currently
available to the Board on the performance and prospects of
individual investments in the Company's portfolio and is subject to
further evaluation as well as completion of the annual audit. The
valuation methodology and policy adopted is consistent with prior
years and is in line with IPEV guidelines.
The estimated 31 December 2021 NAV is summarised below:
Preliminary Unaudited Audited
31 December 30 June 2021 31 December 2020
2021
GBP 000s
------------------------------------------------
MATURE ASSET PORTFOLIO 22,979 21,415 22,193
------------- -------------- -----------------
NEW INVESTMENTS - DACIAN 7,958 0 0
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Total Investment Portfolio 30,937 21,415 22,193
------------- -------------- -----------------
Cash 20,113 21,372 20,591
------------- -------------- -----------------
Other Net Assets/Liabilities (1,949) 4,805 5,139
------------- -------------- -----------------
Net Asset Value 49,101 47,592 47,923
Pence per Share 60.8p 59.0p 59.4p
------------- -------------- -----------------
Overview
-- The 31 December 2021 estimate of GBP49.1 million compares
with GBP47.6 million being the unaudited NAV to 30 June 2021. NAV
at the prior year end, 31 December 2020 was GBP47.9 million.
Adjusting for GBP0.7 million dividends paid during the year, the
NAV has increased by GBP1.9 million during the year.
-- We are pleased to be issuing this NAV update having now
completed the Dacian transaction, whereby the Company has acquired
senior loans and equity in Dacian's business comprising onshore,
late life, oil and gas production assets in Romania. The investment
is structured as unsecured senior loans which carry a coupon of 14%
per annum and a subscription for share capital for a nominal sum.
The senior loans are expected to be repaid with interest over
approximately 4 years. LMS holds $9.1 million of the 14% senior
loans and 32% of the outstanding ordinary shares.
-- Some 15 months' interest income has been recognised on Dacian
following that deal's completion in November 2021. This represents
a pre-tax return of 18% in the year on the amount set side in
September 2020 to pre-fund that investment. The Board expects the
investment to meet or exceed the Company's medium-term return
targets over its life.
-- The unrealised gains shown during the year on the mature
asset portfolio are in line with expectations. This portfolio is
held in the expectation of realisation in a 1 to 3 year period.
-- The Board is aware of the impact on overall returns of the
Company's uninvested cash and is focussed on developing
opportunities to deploy capital that will meet or exceed its target
return of 12% to 15% per year.
-- Running costs remain strictly controlled since the return to
self-management. The Board expects to see a reduction in net
running costs in the range of 5% to 10% in 2022 as the benefits of
income from the Company's co-investment activities begin to be
realised.
The Company will be issuing its full year end results in March
and will provide a detailed update on the portfolio at that
stage.
NAV changes
The NAV has increased by GBP2.2 million during the fourth
quarter. Overall for the year as a whole, the Company's NAV, after
adding back dividends paid, has increased by GBP1.9 million. The
principal components of the full year increase are described
below.
-- Excluding the effect of foreign exchange rate changes, the
mature asset portfolio showed a net unrealised gain of GBP2.6
million in the year, representing a return of 12% on the opening
value of the portfolio. The principal elements were:
o An increase of GBP1.5 million in Brockton reflecting the
unwinding of the discounted cash flows;
o An increase of GBP0.8 million in Weber Capital Partners, a US
listed company fund;
o An increase of GBP0.4 million in the Opus Capital Venture
Partners fund;
o An increase of GBP0.2 million in the value of Medhost;
o A decrease of GBP0.7 million in YesTo related to the winding
up of the business. YesTo has been fully written off in the second
half of 2021; and
o Other portfolio net gains were GBP0.4 million.
-- Interest income of GBP1.2 million on the Dacian senior loans
from September 2020 through the end of 2021. The Dacian investment
was conditionally funded by investors in September 2020, pending
completion. Completion occurred in November 2021 and under the
terms of the Dacian investment agreement, once completion occurs,
interest accrues to investors from the date of the original
funding.
-- Other movements were a net reduction of GBP1.9 million and include the following:
o Full year running costs were GBP1.8 million;
o Investment support costs (support costs for real estate and
co-investment activities) were GBP0.3 million; and
o Unrealised foreign exchange gains of GBP0.2 million on
non-portfolio assets, principally US Dollar bank accounts, due to
the weakening of the US dollar against the sterling.
Further information on the performance of the portfolio,
underlying investment valuations and changes during the year will
be included in the Company's audited results for the year ended 31
December 2021, which it expects to announce in March 2022.
Outlook
The Company continues to have significant cash balances, GBP20.1
million at 31 December 2021 (31 December 2020: GBP20.6 million),
and remains focussed on identifying opportunities to deploy capital
in its areas of expertise - real estate, energy and late-stage
private equity. Notwithstanding the impact and uncertainties around
the Coronavirus pandemic, the Company made progress during 2021,
particularly with the closing of the Dacian transaction in November
2021 and in building a pipeline of opportunities with its real
estate industry partners. Further updates on the Company's
portfolio will be included in the Company's final results
announcement in March 2022.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the 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
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END
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January 31, 2022 01:59 ET (06:59 GMT)
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