TIDMLMS
RNS Number : 4183E
LMS Capital PLC
28 October 2022
28 October 2021
LMS CAPITAL PLC
Third Quarter 2022 Update
LMS Capital plc (the "Company") the listed Investment Company,
provides the following update covering the period from 30 June 2022
to date.
Financial Highlights
-- Unaudited Net Asset Value ("NAV") at 30 September 2022 was
GBP48.8 million (60.5p per share). This compares to GBP47.0 million
(58.2 p per share) at 30 June 2022, an increase in the quarter of
4.5% after adjusting for dividends paid;
-- Interim dividend of GBP0.2 million (0.3p per share) paid in September 2022; and
-- Cash at 30 September 2022 was GBP18.4 million (22.8p per
share) compared to GBP18.9 million (23.5p per share) at 30 June
2022.
The portfolio overall has benefitted from unrealised foreign
exchange gains in the quarter with a small net increase in
underlying valuations.
As we enter a period of further economic uncertainty our
significant cash balances put us in a strong position to evaluate
and make the most of opportunities in our chosen sectors.
Unaudited Net Asset Value at 30 September 2022
After adjusting for dividends paid in the quarter of GBP0.2
million, the net increase in NAV during the quarter was GBP2.0
million, comprising the following:
-- Unrealised foreign exchange ("FX") gains of GBP2.1 million on
the investment portfolio. The US dollar strengthened by
approximately 8.3% against sterling during the quarter.
Approximately 75% of the Company's investments are US dollar
denominated;
-- Underlying gains and accrued income on the investment portfolio were GBP0.4 million;
-- Non portfolio foreign exchange gains of GBP0.2 million,
running costs of GBP0.4 million, and investment related costs of
GBP0.1 million.
The 30 September 2022 NAV is summarised below:
Unaudited Unaudited
30 September 30 June 2022
2022
GBP 000s
------------------------------
Quoted Investments 197 182
-------------- --------------
Unquoted Investments 17,501 16,093
-------------- --------------
Funds 15,204 13,970
-------------- --------------
Subtotal Investment
portfolio 32,902 30,245
-------------- --------------
Cash 18,377 18,932
-------------- --------------
Other Net Assets/Liabilities (2,440) (2,216)
-------------- --------------
Net Asset Value 48,839 46,961
-------------- --------------
The NAV at the end of September is based on the valuation of the
Company's investments as at 30 June 2022, adjusted for transactions
in the three months ended 30 September 2022, price movements on
quoted securities, movements in foreign currency exchange rates,
cash calls and distributions from funds, and the latest information
available from third party fund managers.
Portfolio Net Gains
The portfolio net unrealised gains during the quarter to 30
September were GBP2.5 million, of which GBP2.1 million were
unrealised foreign exchange gains and GBP0.4 million were net
unrealised gains in underlying investment valuations. The
movements, are summarised below:
Quoted Investments - GBP0.2 million (30 June 2022 - GBP0.2
million)
The Company's quoted investment valuation has not changed
materially since the 30 June 2022. The principal investment is a
small holding in IDE Group Limited.
Unquoted Investments - GBP17.5 million (30 June 2022 - GBP16.1
million)
The Company's unquoted investments showed unrealised FX gains of
GBP1.4 million and an unrealised loss in the underlying investment
valuations of GBP0.2 million.
The principal holdings are Dacian Petroleum, Medhost, Elateral
and ICU, managed by San Francisco Equity Partners.
Investment Currency 30 Sept. 30 June
2022 2022
GBP' million GBP' million
Onshore oil and gas
production assets in
Dacian Petroleum USD Romania 10.6 9.4
----------- ------------------------------- -------------- --------------
Provides cloud based
enterprise and departmental
management and healthcare
engagement solutions
to community hospitals
Medhost USD in the US. 5.8 5.3
----------- ------------------------------- -------------- --------------
UK/US software company
in the digital marketing
sector providing marketing
Elateral Sterling content management solutions 0.6 0.6
----------- ------------------------------- -------------- --------------
Design and distribution
of eyewear, principally
reading glasses, through
ICU USD large US retailers 0.3 0.6
----------- ------------------------------- -------------- --------------
USD/
Other investments Sterling 0.2 0.2
-------------------------------------------- -------------- --------------
Total 17.5 16.1
-------------- --------------
Dacian - The increase in valuation since the half year comprises
unrealised FX gains of GBP0.9 million and accrued loan interest of
GBP0.3 million. The acquired portfolio of onshore oil and gas wells
has now been operated by the Dacian team for 10 months. As reported
at the half year, a build up of backlog maintenance prior to
Dacian's ownership has required remediation and has diverted the
team from some of its planned workover activity during the year.
The team is gradually managing the reactive maintenance needs and
has conducted some workover projects achieving an increase in
production since commencing operations in November 2021. The
business is EBITDA positive and cash generative and has benefitted
from strong energy prices during the year.
Medhost - The increase in valuation of GBP0.5 million arises
from unrealised FX gains, the underlying investment valuation is
unchanged from the half year. The company operates in a mature
market and continues to be profitable and cash generative and
performing in line with budget.
Elateral - The valuation is unchanged from half year. During the
quarter Elateral received some additional working capital finance
from investors, of which LMS' share was GBP0.2 million.
ICU (managed by San Francisco Equity Partners) - The reduction
of GBP0.3 million during the quarter principally comprises a
reduction in the underlying valuation reflecting concerns around
progress with an exit process that has been underway for several
months. Greater clarity around the outcome is anticipated by the
year end.
Funds - GBP15.2 million (30 June 2022 - GBP14.0 million)
The Company's fund investments showed unrealised foreign
exchange gains of GBP0.7 million and a gain in the underlying asset
valuations of GBP0.6 million.
The Company's fund investments include its holding in Brockton
Capital Fund I, Opus Capital Partners, Weber Capital Partners
("Weber") and five other smaller fund interests.
Investment Currency 30 Sept. 30 June
2022 2022
GBP' million GBP' million
UK real estate fund,
the remaining asset
Brockton of which is a debt investment
Capital Fund in a high end London
1 Sterling residential development 6.4 6.0
----------- -------------------------------- -------------- --------------
Opus Venture Early-stage technology
Capital Fund fund with two principal
2 USD remaining assets 5.8 5.4
----------- -------------------------------- -------------- --------------
US listed microcap investment
fund focussed primarily
Weber Capital on medical and technology
Partners USD sectors 2.3 1.8
----------- -------------------------------- -------------- --------------
USD/
Other investments Sterling 0.7 0.8
--------------------------------------------- -------------- --------------
Total 15.2 14.0
-------------- --------------
Brockton - The increase in valuation since the half year
comprises the third quarter movement in the discounted cash flow
valuation of this asset.
Opus - The increased valuation comprises unrealised FX gains of
GBP0.5 million less a reduction of GBP0.1 million in the underlying
valuation by the third party manager. The reduction in the
underlying valuation reflects movement in the general market
benchmark values used by the manager for valuation purposes.
Weber - The increased valuation since the half year comprises
unrealised FX gains of GBP0.2 million and gains in the underlying
market value of the portfolio of GBP0.3 million. Notwithstanding
general market conditions this fund benefitted during the quarter
from a significant increase in market value of one of its
holdings.
The carrying value of the funds is based on the latest available
information from the respective fund managers, generally the 30
June 2022 fund valuation reports except for Weber, which is based
on a 30 September 2022 valuation.
Portfolio Realisations
There were no portfolio realisations or fund distributions
during the third quarter.
The information contained in this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information please contact:
LMS Capital PLC - Nick Friedlos, Managing Director
0207 935 3555
Shore Capital - Robert Finlay
0207 408 4050
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END
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October 28, 2022 02:00 ET (06:00 GMT)
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