Interim Management Statement

15 November 2010

                                LMS Capital plc                                

                         Interim Management Statement                          

The Board of LMS Capital ("LMS" or "the Company) 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 July 2010 to 12 November 2010.

The most significant recent developments and financial highlights were as
follows:

  * The Company invested a further $1.8 million (£1.3 million) in Nationwide
    Energy Partners ("NEP") to enable it to fund its first purchase of an
    existing infrastructure as opposed to new construction;
   
  * San Francisco Equity Partners ("SFEP"), the private equity firm in which
    LMS Capital is the majority partner, acquired Zoom Eyeworks, Inc. a leading
    designer of innovative, expressive eyewear products;
   
  * We continued our refined strategic focus for the Company with realisations
    from underperforming older investments. This included the sale of our
    interest in Citizen Limited (trading as Vio), the sale of Kizoom Limited's
    software division, and the sale of our stake in Corizon Limited;
   
  * Net Asset Value per share was 83 pence at 30 September 2010 unchanged from
    30 June 2010.
   
Glenn Payne, Chief Executive of LMS Capital, commented:

"LMS Capital is now implementing the change in focus we highlighted in our half
year statement. We continue to demonstrate our credentials as a partner of
choice in direct investments in growing, profitable businesses in the energy,
consumer and applied technology sectors where we have demonstrable expertise.

While speed of recovery from the global recession remains uncertain, the
experience of our portfolio companies is that the worst appears to be behind
them. Our management teams remain focused on cost management and we expect
revenue growth and improved earnings performance from a number of the portfolio
companies."

Recent developments

In July we invested a further $1.8 million (£1.3 million) in NEP to enable it
to fund its first purchase of an existing infrastructure as opposed to new
construction. The company's ability to expand its operations in this way was a
key factor in our initial investment thesis.

In August, SFEP acquired a controlling stake in Zoom Eyeworks, Inc, one of the
leading providers of non-prescription reading glasses in the U.S., as well as
sunglasses and accessories. Zoom's brands, which include Zoom, Dr. Dean Edell
and ICU, are sold in approximately 15,000 outlets throughout the drug, food,
convenience and speciality retail channels in the US. LMS provided capital of
$6.6 million (£4.2 million) for this investment.

 

In the Company's half year statement (dated 10 August 2010) we outlined our
plans to exit certain underperforming older investments. In line with this
plan, in September we concluded the following transactions:

  * We sold our interest in Citizen Limited (trading as Vio) to the company for
    which Vio had been acting as a value added reseller in the UK;
   
  * Kizoom Limited sold its software division and we are working with
    management on plans for its remaining hardware business;
   
  * We sold our stake in Corizon Limited for a nominal sum which covered our
    costs of disposal.
   
The above transactions had no significant impact on the Company's net asset
value (following write downs on these investments at 30 June this year) but
release management resources to focus on our more profitable and growing
investments.

In line with the Company's revised investment focus we have made no further
commitments to funds. At 30 September 2010 LMS Capital had uncalled commitments
to funds of £44.2 million which we expect to be called over the next three to
five years. Cash and other liquid assets, including the value of our quoted
portfolio, were £53.8 million; our borrowing facility of £15 million is fully
drawn.

Consolidated Portfolio subsidiaries

The latest available trading results for our portfolio subsidiaries are to 30
September.

  * Updata continues to perform in line with our expectations when we invested
    in July 2009. Revenues and profit are significantly ahead of the same
    period last year;
   
  * Wesupply's revenues were slightly behind the corresponding period last year
    as a result of timing differences although their EBITDA performance, while
    still negative, is substantially better as a result of the 2009 cost
    cutting measures;
   
  * Revenues at Entuity are significantly ahead of last year and EBITDA for the
    first nine months of the year is higher than budgeted;
   
  * ITS (formerly Offshore Tool & Energy) continues to feel the effects of
    severe capital spending reductions by customers but the company expects to
    see an improvement in its prospects from the fourth quarter of this year;
   
  * NEP continues to perform in line with our expectations. EBITDA is 25% ahead
    of the prior year and a large pipeline of new accounts is being pursued;
   
  * Cost reductions at Kizoom and CopperEye have significantly reduced the
    losses in these businesses which are being marketed for sale.
   
Financial information

The Company's unaudited net asset value per share at 30 September 2010 was 83
pence, unchanged from 30 June; in the third quarter, unrealised foreign
currency losses offset valuation improvements of our quoted and fund interests.
The position at the end of October was substantially unchanged.

The carrying value of the portfolio at 30 September 2010 is based on the
valuation of the Company's investment portfolio as at 30 June 2010 with
adjustments for transactions in the three months ended 30 September 2010
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. In addition, where the Company has invested
further amounts to meet working capital requirements in its existing unquoted
portfolio, such amounts have been written off as fair value adjustments in the
period. The next full valuation of the portfolio will be for our full year
results as at 31 December 2010.

The Company's investment portfolio at 30 September 2010 (and 30 June 2010) was
as follows:

                           30       30 June
                    September              
                         2010          2010
                                           
                        £'000         £'000
                                           
US                                         
                                           
Quoted                 32,638        26,625
                                           
Unquoted               29,623        31,386
                                           
Funds                  79,869        82,130
                                           
US total              142,130       140,141
                                           
UK                                         
                                           
Quoted                 14,165        13,695
                                           
Unquoted               45,329        45,370
                                           
Funds                  34,815        31,064
                                           
UK total               94,309        90,129
                                           
Total                 236,439       230,270

Details of our largest investments by valuation at 30 September 2010,
representing about 71% of the total portfolio, are set out in the appendix to
this statement.

During the three months ended 30 September 2010 total funds invested by the
Company were £10.5 million in unquoted securities and to meet fund calls.
Proceeds from fund distributions were £5.2 million. We sold certain of our
smaller quoted holdings for proceeds of approximately £0.8 million.

This statement is a general description of the financial position and
performance of the Company for the period from 1 July 2010 to 12 November 2010.
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 3555

Glenn Payne, Chief Executive Officer

Tony Sweet, Chief Financial Officer

J.P. Morgan Cazenove Limited 020 7588 2828

Michael Wentworth-Stanley

Brunswick Group LLP 020 7404 5959

Simon Sporborg

Leonora Burtenshaw

About LMS Capital

LMS Capital is an investment company with over 30 years' experience in private
equity and development capital investment. Our objective is to deliver superior
absolute returns for shareholders through a portfolio of direct investments;
our focus is on small to medium sized companies in our preferred sectors of
energy & utilities, applied technology (software and services), and consumer.

We seek to partner with experienced managers in profitable, growing companies
where we expect to be able to add value. We continue to be cautious in our
investment approach, aiming to grow our investments (and NAV) by 15%+ per annum
via acquisitions and follow-on funding without undue risk or investing in
unproven businesses.

LMS Capital plc Appendix

Interim management statement - 15 November 2010

The Company's principal investments by valuation at 30 September 2010 were as
follows:

Name                   Geography         Sector          Date of    Book  
                                                         initial    value 
                                                        investment        
                                                                    £'000 
                                                                          
Quoted investments                                                        
                                                                          
Weatherford               US     Oilfield services         1984     22,075
International                                                             
                                                                          
Prostrakan Group plc      UK     Quoted                    1999     12,057
                                                                          
Gulfmark Offshore         US     International offshore    2008      4,830
                                 services                                 
                                                                          
Direct investments                                                        
                                                                          
Method Products*          US     Consumer products         2004     17,646
                                                                          
Updata Infrastructure     UK     Wide area networks        2009     13,000
UK                                                                        
                                                                          
Nationwide Energy         US     Energy service            2010      8,877
Partners                         provider                                 
                                                                          
Rave Reviews Cinemas      US     Cinema operations         2002      7,952
                                                                          
HealthTech Holdings       US     Hospital information      2007      7,911
                                 systems                                  
                                                                          
Apogee Group              UK     Digital printing          2010      7,902
                                 solutions                                
                                                                          
Penguin Computing*        US     Linux server systems      2004      5,738
                                                                          
Wesupply                  UK     Supply chain              2000      5,500
                                 connectivity software                    
                                                                          
Luxury Link*              US     Internet commerce         2006      5,113
                                                                          
Entuity                   UK     Network management        2000      5,000
                                 software                                 
                                                                          
Fund investments                                                          
                                                                          
Brockton                  UK     Real estate               2006     15,377
                                                                          
(Funds I & II)                                                            
                                                                          
BV Investment Partners    US     Media and                 1996      8,475
                                 communications                           
(Funds V, VI & VII)                                                       
                                                                          
Spectrum Equity           US     Communications, media,    1999      5,596
Investors                        information services                     
                                                                          
(Funds III & IV)                                                          
                                                                          
Weber Funds               US     Micro-cap listed          1999      5,456
                                 technology companies                     
(Funds I & II and GW                                                      
2001)                                                                     
                                                                          
Scottish Equity           UK     Information               2001      4,874
Partners                         technology, healthcare                   
                                 and energy                               
(Funds II & III)                                                          
                                                                          
Brynwood Partners         US     Consumer products         2004      4,499
                                                                          
(Fund V)                                                                  

*San Francisco Equity Partners manages these investments.