Lms Capital Regulatory News (LMS)

9 May 2014

LMS Capital plc ("the Company")

Interim Management Statement

The Board of LMS Capital is pleased to present the Company's Interim Management Statement as required by the UK Listing Authority's Disclosure and Transparency Rule 4.3. This statement relates to the period from 1 January 2014 to 8 May 2014.

LMS Capital is an investment company which, following a general meeting on 30 November 2011, is undertaking a realisation strategy with the aim of achieving a balance between an efficient return of cash to shareholders and optimising the value of the Company's investments. Its investment portfolio consists of small to medium sized companies across a range of sectors.

The Company had cash of £18.9 million at 31 March 2014. On that date we completed the sale of our largest investment, Updata Infrastructure (UK) Limited, and the proceeds were received early in April. Net proceeds of this transaction (after transaction expenses and carried interest) were £27.2 million. Other proceeds from realisations in the first quarter were fund distributions of £4.1 million. In the same period calls from our outstanding fund commitments were £0.6 million, leaving uncalled commitments to funds at 31 March 2014 of £7.9 million.

The Company's unaudited net asset value per share at 31 March 2014 was 94 pence, an increase of 6 pence from 88 pence as at 31 December 2013. The principal factors in this increase were:

· the realised net gain equivalent to 4p per share on the sale of our interest in Updata, and

· unrealised gains on our quoted investments, in particular Weatherford International and ChyronHego Corporation, amounting to 2p per share. Around two thirds of this increase arose on our shareholding in Weatherford International.

 Since 31 March 2014, the share price of Weatherford International has improved further and, in isolation, this improvement increases the Company's NAV per share by 2p compared to 31 March 2014. However, the recent strengthening of £ sterling against the US dollar has resulted in unrealised exchange losses and therefore at the date of this report the increase in NAV per share since the end of the first quarter is around 1p per share.

Since the end of the first quarter, the Company has sold 10% of its holding in Weatherford International for net proceeds of approximately £2.6 million.

The Directors have previously stated their aim to announce a further distribution to shareholders later this year and today we have made a separate announcement explaining that we are sending a circular to shareholders setting out details of a proposed tender offer in relation to a return of up to a further £40 million to shareholders.

If taken up in full, this would bring to £115 million the total capital returned to shareholders since the Company's realisation strategy was approved by shareholders on 30 November 2011. This would equate to around 48% of the net asset value at the end of 2011 and approximately 74% of the Company's market capitalisation at the time of the November 2011 General Meeting.

Investments

The carrying value of the investment portfolio at 31 March 2014 is based on the valuation of the Company's investments as at 31 December 2013 with adjustments for transactions in the three months ended 31 March 2014 including price movements on quoted securities, movements in foreign currency exchange rates, cash calls and distributions from funds and purchases and sales of quoted and unquoted securities. The next full valuation of the portfolio will be for our half year results as at 30 June 2014.

The Company's investment portfolio at 31 March 2014 (and 31 December 2013) was as follows:

Details of our ten largest investments by valuation at 31 March 2014, representing approximately 69% of the total portfolio, are set out in the appendix to this statement.

This statement is a general description of the financial position and performance of the Company for the period from 1 January 2014 to 8 May 2014. It does not contain any profit forecast or forward looking information. Future NAV and share price performance are likely to be affected by a number of factors, including (but not limited to) general economic and market conditions and specific factors affecting the financial performance or prospects of individual investments within the Company's portfolio.

For further information please contact:

LMS Capital plc 020 7935 3555

Nick Friedlos, Executive Director

Tony Sweet, Chief Financial Officer

J.P. Morgan Cazenove 020 7742 4000

Michael Wentworth-Stanley

MHP Communications 020 3128 8100

Tim McCall

Katie Hunt

About LMS Capital

LMS Capital is an investment company which, following a general meeting on 30 November 2011, is undertaking a realisation strategy with the aim of achieving a balance between an efficient return of cash to shareholders and optimising the value of the Company's investments. Its investment portfolio consists of small to medium sized companies across a range of sectors.

www.lmscapital.com

LMS Capital plc Appendix

Interim management statement - 9 May 2014

The Company's principal investments by valuation at 31 March 2014 were as follows:

*San Francisco Equity Partners manages these investments.