Last checked at 
16 Nov 2011 07:00
16 November 2011LMS Capital plcInterim Management Statement
The Board of LMS Capital ("LMS" or "the Company) is pleased to present the Company's Interim Management Statement ("IMS") as required by the UK Listing Authority's Disclosure and Transparency Rule 4.3. This statement relates to the period from 1 July 2011 to 15 November 2011.
On 7 November 2011, the Company issued a circular to shareholders convening a General Meeting on 30 November to consider proposals including the amendment of the Company's investment objective to implement an orderly wind-down of the business. This IMS and the financial information included herein have been prepared on the basis of the Company's current investment objective and do not include adjustments, if any, which would be required if the investment objective were changed.
The most significant recent developments and financial highlights were as follows:
* In September we completed a restructuring and acquisition of certain of the profitable trading entities of 365 plc, which provides IT managed services. This transaction increased our interest from 23% to 84% for net consideration of £1.8 million; * Also in September Updata entered into a borrowing facility which enabled it to return to us £2.85 million of our original investment cost; * In July we sold our remaining shares in Gulfmark Offshore at a small premium to the 30 June 2011 carrying value; * Also in July we completed on the sale of the last of the 7 fund positions, the disposal of which was announced in the first half; * Uncalled fund commitments at 30 September were £25.2 million - down from £ 27.5 million at the end of June and £40.7 million at the end of 2010; * Net Asset Value per share was 89 pence at 30 September 2011, a decrease of 4% from 93 pence at 30 June 2011. The principal factor in this decline was the share price of Weatherford International which at the end of September was 35% lower than at the end of June. This resulted in an unrealised loss for the quarter of £8.5 million before currency effects, reducing NAV per share by 3 pence.
Consolidated Portfolio subsidiaries
The latest available trading results for our portfolio subsidiaries are to 30 September:
* Updata enjoyed a strong third quarter. Results were in line with budget and revenues for the nine months were 12% ahead of the same period last year. * Wesupply's revenues in the third quarter were 24% higher than in the corresponding period last year and the company has continued to trade profitably since the fourth quarter of 2010. A turnaround has been effected as this is the first annual profit recorded by the company. * Entuity experienced difficult trading conditions in the third quarter as corporate customers have become cautious of even small spending commitments, but for the year to date revenues are 13% ahead of last year with EBITDA slightly behind 2010 after the lower Q3 performance. * ITS increased its revenues but continued to trade at a loss. In October the trading subsidiaries were sold for $2.5 million (of which $1 million has been received and the balance is due for payment in 2012). * NEP performed strongly with revenues and EBITDA for the quarter 20% ahead of the same period in 2010. A large number of new accounts are being contracted and to date new meters under management are up approx 20% year on year.
Financial information
The Company's unaudited net asset value per share at 30 September 2011 was 89 pence, a 4% decline from 30 June; this decline principally reflects the decline in the share price of our principal quoted investment, Weatherford International. The Company's financial position at the end of October was substantially unchanged.
The carrying value of the portfolio at 30 September 2011 is based on the valuation of the Company's investment portfolio as at 30 June 2011 with adjustments for transactions in the three months ended 30 September 2011 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 full year results as at 31 December 2011.
The Company's investment portfolio at 30 September 2011 (and 30 June 2011) wasas follows: 30 30 September June 2011 2011 £'000 £'000 US Quoted 20,806 31,296 Unquoted 39,378 37,133 Funds 71,304 71,666 US total 131,488 140,095 UK Quoted 922 1,062 Unquoted 44,710 45,617 Funds 35,542 37,569 UK total 81,174 84,248 Total 212,662 224,343
Details of our largest investments by valuation at 30 September 2011, representing about 75% of the total portfolio, are set out in the appendix to this statement.
During the three months ended 30 September 2011 total funds invested by the Company were £5.6 million in unquoted securities and to meet fund calls. Proceeds from fund distributions were £4.4 million and from sales of quoted holdings were £1.4 million.
This statement is a general description of the financial position and performance of the Company for the period from 1 July 2011 to 15 November 2011. It does not contain any profit forecast or forward looking information. Future performance and share price is 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 3555Glenn Payne, Chief Executive OfficerTony Sweet, Chief Financial OfficerJ.P. Morgan Cazenove Limited 020 7588 2828Michael Wentworth-StanleyMatrix Corporate Capital LLP 020 3206 7175Paul Fincham / Rob NaylorBrunswick Group LLP 020 7404 5959Simon SporborgFiona Micallef-EynaudAbout LMS Capital
LMS Capital is an investment company focused on small to medium sized companies in our preferred sectors of consumer, energy and business services. We partner with experienced managers in profitable, growing companies where we believe we can add value.
LMS Capital plc Appendix
Interim management statement - 16 November 2011
The Company's principal investments by valuation at 30 September 2011 were asfollows:Name Geography Sector Date of Book initial value investment £'000 Quoted investments Weatherford US Oilfield services 1984 16,052International Chyron Corporation US Media/technology 1995 3,446 Direct investments Method Products* US Consumer products 2004 18,002 HealthTech Holdings US Hospital information 2007 16,099 systems Updata Infrastructure UK Wide area networks 2009 12,650UK Nationwide Energy US Energy service 2010 10,517Partners provider Apogee Group UK Digital printing 2010 11,000 solutions Rave Reviews Cinemas US Cinema operations 2002 7,328 Yes To* US Consumer products 2008 7,013 Entuity UK Network management 2000 6,500 software Penguin Computing* US Linux server systems 2004 6,055 Luxury Link* US Internet commerce 2006 5,374 Fund investments Brockton UK Real estate 2006 17,803 (Funds I & II) BV Investment Partners US Media and 1996 10,150 communications (Funds V, VI & VII) Amadeus Capital UK Technology 1998 4,417 (Funds I & II) Primus Capital US Business services 2000 4,261 (Funds V & VI) CMEA Ventures US Technology 2000 3,532 (Funds IV & VI)
*San Francisco Equity Partners manages these investments.
1
XLON