Interim Management Statement

RNS Number : 5020D

LMS Capital PLC

17 May 2012

LMS Capital plc

LMS Capital is holding its Annual General Meeting today and the Board 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 2012 to 16 May 2012.

LMS Capital is an investment company focused on small to medium sized companies in consumer, energy and business services. Following a General Meeting on 30 November 2011, the Company is undertaking a realisation strategy which aims to achieve a balance between an efficient return of cash to shareholders and optimising the value of the Company's investments.

The Company's unaudited net asset value per share at 31 March 2012 was 88 pence, down two pence from 90 pence as at 31 December 2011. The principal factor in this decrease was unrealised currency losses as the US dollar weakened against £ sterling over the period. Since the end of March the decline in the share price of Weatherford International has reduced net asset value per share by approximately one pence.

In the first three months of the year we received distributions from our fund interests of £4.7 million against £1.5 million of calls from our outstanding fund commitments. Total uncalled commitments to funds at 31 March 2012 were £16.7 million (31 December 2011: £18.9 million). At 31 March 2012 the Company had cash of £31.6 million (31 December 2011: £30.6 million).

We are implementing the realisation plan set out in the Operating Review in the Company's 2011 Annual Report. The Company's performance to date in 2012 (including its revised cost structure) is in line with that plan. The investments are continuing to perform well and our focus is on transforming this performance into suitably timed realisations at appropriate valuations.

There are active sales processes underway on certain of the Company's investments. In current market conditions it is particularly difficult to predict the outcome in terms of timing and proceeds. However the directors remain satisfied with progress to date.

Consolidated Portfolio subsidiaries

The latest available trading results for our portfolio subsidiaries are to 31 March 2012 and are summarised below.

·	Updata continues to perform strongly - revenues from rental contracts for the first quarter were approximately 30% ahead of the same period last year;
·	Nationwide Energy Partners continues to perform in line with our expectations, with revenues 11% ahead of the first quarter last year and a large pipeline of potential new accounts;
·	Wesupply's revenues were 13% ahead of the corresponding period last year resulting in a significantly improved EBITDA performance;
·	Entuity has performed well in the first quarter with positive signs of improved prospects for 2012 after difficult trading conditions in the second half of 2011;
·	365iTMS is performing in line with our expectations at the time of our investment last September.

Investments

The carrying value of the investment portfolio at 31 March 2012 is based on the valuation of the Company's investments as at 31 December 2011 with adjustments for transactions in the three months ended 31 March 2012 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 2012.

The Company's investment portfolio at 31 March 2012 (and 31 December 2011) was as follows:

	31 March 2012	31 December 2011
	£'000	£'000
US
Quoted	23,488	23,339
Unquoted	45,283	46,736
Funds	69,630	72,361
US total	138,401	142,436

UK
Quoted	1,010	860
Unquoted	42,360	42,570
Funds	31,206	32,610
UK total	74,576	76,040

Total	212,977	218,476

Details of our largest investments by valuation at 31 March 2012, representing approximately 76% 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 2012 to 16 May 2012. 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 Nick Friedlos, Executive Director Tony Sweet, Chief Financial Officer		020 7935 3555

J.P. Morgan Cazenove Michael Wentworth-Stanley		020 7588 2828

Brunswick Group LLP Simon Sporborg Venetia Hendy		020 7404 5959

LMS Capital plc Appendix

Interim management statement - 17 May 2011

The Company's principal investments by valuation at 31 March 2012 were as follows:

Name	Geography	Type	Sector	Date of initial investment	Book value £'m

HealthTech Holdings	US	Unquoted	Technology	2007	23.1
Weatherford International	US	Quoted	Energy	1984	19.3
Method Products*	US	Unquoted	Consumer	2004	18.3
Brockton Capital	UK	Funds	Property	2006	13.5
Updata Infrastructure UK	UK	Unquoted	Technology	2009	12.7
Apogee Group	UK	Unquoted	Technology	2010	11.5
Nationwide Energy Partners	US	Unquoted	Energy	2010	10.2
BV Investment Partners	US	Funds	Buyouts	1996	10.2
Yes To, Inc*	US	Unquoted	Consumer	2008	8.0
Rave Reviews Cinemas	US	Unquoted	Consumer	2002	7.1
Penguin Computing*	US	Unquoted	Linux server systems	2004	5.3
Voreda Capital	UK	Fund	Property	2008	5.3
Luxury Link*	US	Unquoted	Internet commerce	2006	4.9
Primus Capital	US	Funds	Business services	2000	4.7
Amadeus Capital	UK	Funds	Technology	1998	4.1
Entuity	UK	Unquoted	Technology	2000	4.0