Lms Capital Share Discussion Threads

[mad foetus] 27/11/2015 10:23

hashertu
I believe that is ballpark correct, but you need to look at it from the shareholder perspective as well.

You could buy 100 shares for £76 now (most of us I suspect bought at 70-74p over the summer). You will be able to tender 30 of them at 96p (in practice, you may be able to tender more). So you get back £28.80. Your 70 remaining shares will therefore have cost you £47.20, or 67p each. They will have an NAV of 96/7p.

As tilts says, part of the value here depends upon how liquid the rump investments are and how much gets eaten up in admin fees. I'm surprised the tender is so limited - there was £40m in cash 6 months ago so I would have thought they could have sold down more. To be honest, we want to see the whole thing wound up.

[tiltonboy] 27/11/2015 10:08

SKY,

Of course they have been successful, they have been selling off the low-hanging fruit, but it is the rump that concerns me. If there isn't a discernible rump, then my concerns will have been unfounded, and I will have missed an opportunity. I will just have to take advantage of the next one that comes along.

[hashertu] 27/11/2015 10:02

It is my understanding that the tender offer is constrained by the cash available to distribute (stated as up to £40 million).
Divide £40 million by the NAV/per share on 11 Dec and that determines the number of shares that will be tendered for.
Divide this number by the number of shares in issue on 11 Dec and you get the basic entitlement (per cent). The RNS states UP TO 29.98%.
Based on 146 million shares, 97p NAV/share, £40 million cash returned, the basic entitlement would be 28.2%, being 41.2 million shares.
This leaves NAV of £101.6m and 104.8 shares in issue (=NAV of 97p/share), but no cash in the company.
Please correct me if I am wrong.

[tiltonboy] 27/11/2015 09:05

A couple of comments:

"Also the Board is effectively endorsing September valuations" - Sorry SKY but I would treat the valuations of unlisted portfolio holdings with a huge pinch of salt. It's the rump you need to worry about In the case of ICV and GFIR they were fanciful to say the least, and IMHO downright crooked in places. I am not saying this is the case here, but can I get enough of my investment out by way of Tender to take the gamble.

I am probably being over-cautious, and part of that is down to having a board that I do not trust.

[stupidboypike] 27/11/2015 09:05

Looks like mostly unquoted, but no reason I can see to give an effective 58% discount

LMS Capital plc

Principal investments by valuation - 30 June 2015

Brockton Capital UK Fund Property 2006 15,168
Weatherford International US Quoted Energy 1984 11,090
Medhost Inc US Unquoted Technology 2007 13,312
Yes To, Inc* US Unquoted Consumer 2008 7,938
Nationwide Energy
Partners US Unquoted Energy 2010 10,382

ICU Eyewear* US Unquoted Consumer 2010 6,594
Penguin Computing* US Unquoted Technology 2004 6,629
B-2-B service
Wesupply UK Unquoted provider 2000 7,500
Entuity UK Unquoted Technology 2000 5,000
Opus Capital Venture
Partners US Fund Technology 2006 4,552

[badtime] 27/11/2015 08:53

Oh my ...profit

[stupidboypike] 27/11/2015 08:35

Thanks SKY, so if we take your 18p off we have a remaining NAV of 49 against share price 20.6 a 58% discount. I would love to know any bear thoughts about the remaining assets. Tilts?

(edited - got the figures wrong!)

[skyship] 27/11/2015 08:32

SBP - we will still have a readily marketable WFT holding worth 7p; and that great Brockton Capital holding, again readily marketable and worth 11p. Also the Board is effectively endorsing September valuations; so I have absolutely no reservations over their portfolio.

IMO now at 77p they are still cheap and should be bought to 80p...

[stupidboypike] 27/11/2015 08:26

tilts, totally agree and I would welcome any thoughts/information on remaining assets. Simon T says that LMS have a good record of achieving above NAV on realisation. That makes an effective 42% discount look harsh unless there are good grounds to worry about the remaining assets. Best regards SBP

[stupidboypike] 27/11/2015 08:25

My extremely rough calcs go like this. Assuming you get 40% tendered (you usually get more than the minimum) then we get 38.4p per share, leaving a residue on today's price of 38.6. Against that I think we lose around 29p in NAV. So all things being equal we would have a NAV of 67 and a share price of 38.6, a 42% discount. Looks to me like they are a hold at least, maybe even a buy?

Best regards SBP

[tiltonboy] 27/11/2015 08:23

SBP,

You need to take a view on the remaining assets!

[stupidboypike] 27/11/2015 08:09

SKY,

Any comments on where we are likely to be post tender. Tilts comments worry me slightly.

Best regards SBP

[smarm] 27/11/2015 08:04

Skyship - thank you and well done.

S

[skyship] 27/11/2015 07:49

Yes - a 29.98% Tender at likely to be 96p. What a relief - was beginning to doubt my own sanity here! Wonder whether there will be a chance to pick up more first thing...
===========================================================================

Trading update

The Company's unaudited net asset value per share at 30 September 2015 was 96 pence, up 2 pence (2%) from 94 pence as at 30 June 2015. The principal factors in this increase were the gain on the sale of Wesupply and the strengthening of the US dollar against GBP sterling which resulted in unrealised currency gains of GBP2.6 million in the third quarter. These two positive factors were partially offset by the weakening of the share price of Weatherford International. Since the end of September the Weatherford International share price has improved and, as at 25 November 2015, the estimated nest asset value per share has increased by 1p to 97 pence per share.

Martin Knight, Chairman of LMS Capital, said:

"Your Board is pleased to be able to make a further cash return to shareholders reflecting the continued progress with the realization strategy during the year. This fourth tender offer brings to GBP155 million the total returned to date to shareholders, equivalent to the market capitalization of the Company when the realization strategy commenced."

[mad foetus] 27/11/2015 07:11

NAV up to 97p, tender of 30%. Good stuff!

[badtime] 25/11/2015 19:52

Brum have sold 2k i understand ..looking forward to a good game

[tiltonboy] 25/11/2015 18:46

Missing out again. Maybe next season.

[badtime] 25/11/2015 16:31

Hi Tilts..coming down this weekend?

[tiltonboy] 25/11/2015 16:05

SKYSHIP,

ICV before that, and more recently LEAF (still might get our money back) have taught me to avoid concentration risk, especially where the low-hanging fruit has been sold, and the remaining investments may be hard to shift.

All well and good getting a 30% premium for 30% of your holding....sorry, getting boring now!

[skyship] 25/11/2015 14:57

Tilts - re yr 621 above. I fully understand concerns regarding portfolio consolidation, concerns possibly coloured by the disastrous GFIR - but that has been hit by very poor investment criteria in the early investment stage; and write-offs in Brazil and the Ukraine. Obviously that experience shouldn't impact upon a reasonable assessment of LMS. Also LMS is not yet at the extreme consolidation phase; so I would suggest not yet relevant.

MF - re yr 622 above. Agreed, interesting that the great investment in Brockton has disappeared from the website. The Company has emailed me to confirm that LMS still holds its Brockton stake; so perhaps just a clerical error...or sale is in progress and someone acted a bit prematurely!

[mad foetus] 24/11/2015 17:22

Some very large trades today. Someone buying or selling £300k in a single trade. All we need is news, get this one wound up before the directors bleed it dry!

[cousin jack] 20/11/2015 13:33

Thanks Tilts and others. Interesting thoughts for weighing the risk/reward balance. Always good to hear a range of views.

[mad foetus] 20/11/2015 12:45

The main concern I have is over the absurd level of fees that the directors get. But at least one of the major institutional investors is on the case and there can be little doubt that unless significant progress is made by the end of the year there is a chance of an EGM being called and the board being thrown out.

In the end, the assets are valuable, the company is in wind-down mode and major investors are expecting cash back sooner rather than later. The board themselves have said the costs are disproportionate to the valued of AUM as the assets are sold off. It is not without risks but it definitely worth a punt imo.

[my retirement fund] 20/11/2015 12:41

Also one has to assign a credibility of supposed value to those residual assets.

The past actions of the board have discredited all trust and one must expect a worst case scenario which is those assets are worth very little.

Its interesting the last dubious board involvement was an attempt to invest all of this into a sector where it would be very easy to appear to render the assets worthless.

One wonders if there could have been an ulterior motive for such an unhinged venture. Could it be that the asset value is not entirely what one expects.

Could the company have been subjected to some kine of fraud at some stage?

[mad foetus] 20/11/2015 12:40

does anyone know what has happened to the investment in Brockton Capital - it was the biggest investment at the last results but seems to have dropped off the website.