LMS Capital has announced preliminary results for the year ended 31 December 2016. At the general meeting on 16 August 2016 shareholders voted in favour of proposals to change the Company’s investment policy so that the Company may now make new investments focused on private equity opportunities. On the same date the Company appointed Gresham House Asset Management Limited to manage its investment portfolio.
The meeting also approved a further tender offer which returned GBP6 million to shareholders, bringing to GBP161 million the amount returned since the beginning of the realisation strategy in 2012. The Company also undertook to return up to a further GBP11 million to shareholders on the basis of realisations from the existing investment portfolio.
The Net Asset Value at 31 December 2016 was GBP68.1 million, 71p per share (31 December 2015: GBP95.1 million, 92p per share). The 23% decline in NAV per share reflects a disappointing performance from the investment portfolio, particularly in the second half of 2016.
Unquoted investments contributed net losses of GBP15.9 million (2015: net gains of GBP10.1 million), most of which arose on three US investments – ICU Eyewear, Medhost and Nationwide Energy Partners.
Gresham House says it has initiated a staged approach to achieving the objectives outlined in 2016 including: optimising the value of existing assets, reducing costs and facilitating the return of capital to shareholders before investing in line with the new investment policy and seeking to grow the business.
Martin Knight, Chairman of LMS Capital, said: “2016 was a transformational year for the Company. The performance of the investment portfolio in the second half of the year was disappointing but following the appointment of GHAM as investment manager, the Board looks forward to improved performance in 2017 and beyond.”
LMS : LMS Capital sees 23% NAV drop in 2016