1st Quarter 2018 update

27 April 2018

LMS Capital plc

1st Quarter 2018 update

LMS Capital plc ("LMS" or "the Company") is issuing the following update covering the period from 1 January 2018 to date.

31 March 2018 Net Asset Value

The Company's unaudited net asset value ("NAV") at 31 March 2018 was £60.2 million (31 December 2017 £64.5 million), equivalent to 75p per share (31 December 2017: 80p per share). The most significant movements in the quarter were:

· A strengthening of sterling against the US Dollar and decreases in prices of quoted securities in the period from I January 2018 to 31 March 2018 account for £3.8 million of the reduction in NAV. The principal items within this are:

o IDE Group plc share price reduction £1.4 million;

o Weatherford share price reduction £0.7 million

o An adverse change of approximately 3.7% in the sterling/US Dollar exchange rate over the period has resulted in a reduction in NAV of £1.5 million

· Other net changes amount to a £0.5 million reduction. In addition to operating costs, the main items are:

o Gain on sale of Brockton Capital LLP of £0.6 million. As announced by the Company on 26th March, actual proceeds were £3.1m. This amount, which included a distribution of surplus cash in the vehicle sold, exceeded by £0.6 million, the estimate used in the 31 December 2017 NAV;

o Reduction of £0.7 million in the carrying value of Medhost, a co investment with Primus Capital which is the lead manager. The reduction is based on Primus Capital's most recent reported carrying value published late March.

The reduction in share price of IDE Group between the end of December 2017 and end of March 2018 followed a number of announcements in the first quarter. However, the company has confirmed that trading for the year to 31 December 2017 was broadly in line with expectations, although cash generation was weaker than expected. Full year results are due for release in early May.

The NAV at the end of March is based on the valuation of the Company's investments as at 31 December 2017, adjusted for transactions in the three months ended 31 March 2018, price movements on quoted securities, movements in foreign currency exchange rates, cash calls and distributions from funds, latest reports from third party fund managers, purchases and sales of quoted and unquoted securities and operating expenses.

Since the end of March, further movements in the prices of the Company's quoted investments and changes in the sterling/US Dollar exchange rate have not had a significant impact (either individually or in aggregate) on the Company's NAV as at the end of March.

Portfolio management

Gresham House Asset Management ("GHAM") continues to manage the portfolio through its board representation on those investments where LMS has board rights and through maintaining regular dialogue and meetings with third party managers and others.

During the period since 1 January 2018 the principal portfolio events have been the conclusion of the sale of the Company's interest in Brockton Capital LLP and an investment of £600,000 in Northbridge Industrial Services PLC ("Northbridge"), an AIM quoted company that hires and sells specialist industrial equipment to utilities, public sector and oil and gas industries. The Northbridge investment is via a participation in an 8% p.a. yielding convertible loan instrument. The investment was sourced by GHAM and is the Company's first investment, other than follow on investments in the existing portfolio, since the conclusion of its realisation strategy and adoption of its new investment policy in August 2016.

Strategy and outlook

Liquidity events on the Company's larger investments are controlled by third party managers, however, based on the information available, the Company believes there is the reasonable prospect of liquidity from the existing portfolio over the next 18 months. The proceeds from the sale of Brockton Capital LLP have provided the Company with some liquidity to commence new investment activities.

The Board and the manager continue to evaluate strategic options for the Company to increase scale and enhance shareholder value.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse regulations (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

Martin Knight, Chairman 0203 837 6270

Gresham House Asset Management Limited

Graham Bird 0203 837 6270

J.P. Morgan Cazenove

Michael Wentworth-Stanley 0207 742 4000