Lms Capital Share Discussion Threads

[tiltonboy] 17/6/2016 11:46

A decent slug of sales has just been absorbed, and buyers have reloaded.

Hopefully the new NED will get this sorted!

[mad foetus] 07/6/2016 07:32

WFT has been doing well in US: up 8% yesterday and 20% since the nadir of last month.

[skyship] 03/6/2016 06:23

After the bizarre happening last Summer when the LMS Capital (LMS) BoD tried and failed to usurp shareholders wishes for liquidation, many continue to harbour doubts as to the Board’s probity.

However, there is no escaping the 4 principal facts:

1. Their past performance with the liquidation process has been impeccable, with 63% of the NAV at the start of the process having already been returned – a figure equal to the MCap at the start of the process

2. The liquidation process is again on track with a 28.7% tender at NAV in Dec’15

3. At the AGM last month the BoD again reaffirmed the liquidation process and the continuing return of capital through Tenders; and for the first time they put a timescale to completion of the process – essentially by Dec’17

4. The current NAV = 88p; versus the offer price of 63p; ie the shares are trading at a full 28.4% discount, even though in liquidation mode

These are the basic facts which should justify an element of research. That research will quickly uncover last month’s AGM statement which revealed that already the Company is refilling the cash coffers – now up to £15m, so likely halfway to what will be needed for the next Tender.

So, now one needs to practice a little conjecture. Say the next Tender will be declared again for 28.7% - that would translate to 29.7m shares @, well let’s be conservative and predict an NAV fall from 88p to 85p, so @ 85p would cost £25.25m. Note – we already have £15m in the kitty!

So, buy @ 63p…..sell a minimum of 28.7% @ 85p…..yes, that’s a profit of 35% on that part. But wait, it gets better.

First, there is the official Tender overage – that was an additional 3.4% in the last Tender, the 4th Tender providing these profitable trading opportunities.

Add to that the unofficial overage which arises from having your stock held in a Joint Stock Nominee Account. I got another 7% from Selftrade last time around – a total of 39.4% redeemed at NAV. Many posters on the LMS thread did even better than that. The Nominees overage is a fickle friend paying out better for some than for others – but always more! This aspect will only make sense to the professional investor; but the few who visit here are just that, so I won't dwell on that.

The final soupcon of information for the time-being. The well-respected IC tipster Simon Thompson has just revisited LMS. He wrote a piece on LMS yesterday. I won’t post his entire article as the IC Online is a subscription site; however, I will post his closing remarks:

=======================
“Of course, the fall in LMS's net asset value from 96p last autumn, to 92p at end of December 2015, and to around 88p now will make some investors cautious even though the aforementioned one-off hit on an unlisted investment and the fall in Weatherford's share price account for the vast majority of the decline. However, I believe the discount is simply too deep given the impressive track record of the company in successfully divesting its interests.

I also believe that given the surge in the cash pile, and the fact that LMS's uncalled commitments to funds it has invested in is only £4.1m, then it's only reasonable to expect LMS to make another hefty cash return later this year through a tender offer pitched at net asset value, a factor that is simply not being reflected in the share price. The company is due to report results at the end of July and I would anticipate further news on likely capital distributions then. I would point out too that every time the company has announced a tender offer the share price has bounced back strongly.

Needless to say, I rate LMS Capital's shares a buy on a bid-offer spread of 62p to 63p.”
====================

So, in a difficult year VALUE is hard to find. LMS certainly represents VALUE. And if you are still looking for a hedge against a plunge in CABLE following an unlikely BREXIT vote, the LMS portfolio is 66% $-denominated.

[tiltonboy] 02/6/2016 13:55

Following their demotion from the small cap index, I think there will be a bit of stock come out, so I've put a few on the board to buy at 61.5p.

[leedsu36] 23/5/2016 09:42

Absolute disgraceful goings on here all profits creamed off by greedy directors as usual.

[skyship] 19/5/2016 12:20

strath - thnx, sorry, should simply have referred back to yr prvious posts on the subject.

[strathroyal] 19/5/2016 12:02

Sky,

Agree that NEP looks the most likely sale. It has been an underperformer anyway and was partially written down last year so not really a surprise that the sale is at a loss.

Regarding BC, I have tried to research this but there is only a limited amount of information available. It appears at one time LMS had a 16.7% stake (and may still have) in fund 1. The sole remaining asset here is Curzon Street, where Chinese investors have bought a 70% stake which reputedly valued the site at £200M. On that basis LMS's stake would be worth around £10M and so presumably we have a much smaller stake in Fund 2 whose assets include a 50% interest in Virtus Data Centres.

As the monies in Fund 1 appear to be tied up for the foreseeable future (see hxxp://www.costar.co.uk/en/assets/news/2016/May/Brockton-completes-formation-of-Chinese-JV-for-Curzon-St-makeover/), I'm surprised LMS are receiving any distribution and assume it won't be substantial.

[skyship] 19/5/2016 10:38

On the basis of the above I would guess that Nationwide Energy Pertners is out the door for c£5.5m-£6.0m.

Of more interest is the Brockton position. Views anyone?

Incidentally - topped up with a few @ 62.88p - IMO looking really cheap at a 28.4% discount to the 88p NAV.

[skyship] 19/5/2016 08:06

# CASH UP
# WEATHERFORD - 42% SOLD @ over $8
# another sale in pipeline

NAV down slightly; but all looking moderately hopeful & on line for the next Tender at end 2016...

=====================

AGM statement

LMS Capital plc ("the Company") has issued the following statement ahead of the Annual General Meeting of the Company which is being held today.

The Company's unaudited net asset value at 31 March 2016 was GBP92.1 million (31 December 2015: GBP95.1 million), equivalent to 89p per share, a decrease of 3p from 92p at 31 December 2015. The principal factor in this decrease is that the Company has reached agreement in principle to sell its interest in one of its unlisted investments and has reduced the carrying value of this investment by GBP3.6 million to reflect the expected net proceeds from the sale.

The Company had cash of GBP5.6 million at 31 March 2016 (31 December 2015: GBP6.1 million). Proceeds from realisations in the first quarter were GBP0.6 million, of which GBP0.3 million was distributions from funds; in the same period calls from our outstanding fund commitments were GBP0.1 million. Uncalled commitments to funds at 31 March 2016 were GBP4.1 million.

Since 31 March 2016:


-- the Company sold 600,000 shares in Weatherford
International at an average price of $8.07
for net proceeds of GBP3.4 million. The book
value of these 600,000 shares at the end
of March was GBP3.2 million (31 December
2015: GBP3.4 million). The sale of these
shares reduced the Company's holding to 819,000
shares;
-- the share price of Weatherford International
has declined from its end March level which,
in isolation, reduces the Company's NAV per
share by approximately 1p compared to 31
March 2016;
-- Brockton Capital Fund 1 completed the sale
of a majority stake in the redevelopment
project which comprises the principal asset
remaining in the fund. The Company expects
to receive an initial distribution in the
near future with the bulk of the value expected
to be realised on completion of the redevelopment
project.


Following the sale of the unlisted investment referred to above (which would be the Company's first realised loss on a direct investment since commencement of the realisation strategy) the Company's pro-forma cash balance would be approximately GBP15 million. The Directors are continuing to seek ways to optimise value from the remaining investment portfolio.

[eeza] 11/5/2016 13:35

Rayne's the reason we've still got them !!!

[strathroyal] 11/5/2016 13:22

WFT obviously at a bargain price as Robert Rayne bought 100,000 at $5.587 on Monday.

[tiltonboy] 06/5/2016 08:31

A question needs to be asked of the board for their justification in not selling the Weatherford holding. Now down to a 5.67 bucks.

I may not be a holder any longer, but it still makes me fume that they have managed to keep their jobs, given their behaviour.

[mad foetus] 12/4/2016 09:25

If anyone is still holding, the AGM is on 19 May and resolutions 2, 3 and 4 concern the remuneration committee and the re-appointment of 2 directors. I think I will vote against. It is the first time I have ever voted against directors, but I feel this lot are not carrying out their duties in the interests of shareholders.

[eeza] 11/4/2016 13:04

Incestuous - Robert Rayne.

"29th June, 2007



LMS Capital invests in Brockton Capital



LMS Capital plc, ("LMS Capital" or "the Company"), the AIM-quoted investment

company with stakes in public and private UK and US companies and funds, today

announces the acquisition of a 16.7% interest in Brockton Capital Fund 1 LP

("Brockton Capital"), a real estate opportunity fund, and a 9% interest in the

Brockton Capital management company (together, "Brockton"), from Derwent London

plc ("Derwent") for �7.9 million in cash. Derwent acquired the asset as part of

its merger with London Merchant Securities plc.



LMS Capital typically invests in companies and sectors that have the potential

for superior growth over the medium to long term and where management has

extensive prior investment experience. These include the following sectors:

Energy, Applied Technology, Media & Leisure and Healthcare & Medical. As stated

previously by the Board, LMS Capital has been looking for opportunities in new

sectors, in particular real estate where management has a strong track record.



Brockton Capital was established in 2005 by property entrepreneurs David Marks

(formerly of Blackstone) and Jason Blank (formerly of Merrill Lynch) and has

funds under management of �135 million. The book value of Derwent's investment

in Brockton was �6.9 million as at March 2007 and the pre-tax loss attributable

to it in the 10 months to 31 December 2006 was �174,000. The outstanding capital

commitment is approximately �16 million, which has been assumed by LMS Capital.



As a result of Robert Rayne's position as Chief Executive of LMS Capital and

Chairman of Derwent and his family's substantial interests in LMS Capital and

Derwent, the acquisition of the stake in Brockton is a related party transaction

under the AIM Rules. The LMS Capital directors (with the exception of Robert

Rayne), having consulted with N M Rothschild and Sons Limited, consider the

terms of the transaction to be fair and reasonable insofar as LMS Capital's

shareholders are concerned .

[mad foetus] 11/4/2016 12:00

"With effect from January 2011 the Company entered into a lease agreement with
Derwent London plc in respect of the premises comprising its head office and
registered office. Under the terms of the lease the Company pays an annual rent
of GBP289,000 to Derwent London plc plus certain service charges. Robert Rayne is Chairman of Derwent London plc."

Can anyone explain why a company such as LMS should require a property that needs to pay such a rent? It doesn't seem right to me.

[strathroyal] 21/3/2016 20:12

Regarding the valuation of Brockton, the article I posted recently (766) stated that the investment by the Chinese valued Curzon Street at £200M. Brockton have retained a 30% stake in what was said to be the last remaining asset of Fund 1. LMS accounts from 2007 state that they owned 16.67% of Fund 1 so that would give a maximum £10M valuation to the LMS stake.

This sale took place after the end of Brockton's Q3.

Again, looking at old accounts, it would appear that LMS put up around £5M to the second fund, which is only 1%. I cannot find any valuations for the second fund although one of the biggest investments was in Virtus Data Centres, 50% of which has now been sold.

[eeza] 21/3/2016 10:57

I couldn't find any accounts lodged at Companies House.

[sleepy] 21/3/2016 10:52

Which Brockton entity have they invested in? Does it file accounts?

[skyship] 21/3/2016 09:27

eeza - one possible explanation is that the Brockton valuation is at 30th September; whereas the success with Fund 111 came post the year end - Jan'16. But surely they should have made a post year end upgrade. It could well happen at a later stage...

[eeza] 21/3/2016 09:22

Bought 29 June 2007 for £7.9m cash from Derwent.

[skyship] 21/3/2016 09:19

eeza - the success of Brockton Fund 111 would surely suggest that the management group is held in good light; otherwise no way could they have raised another £800m AUM. The 20% decrease in the management company's valuation is really bizarre.

[mad foetus] 21/3/2016 09:13

Igbert,
The link eeza sent shows the St James property, and it appeared to have been bought and sold quickly to make a quick turn.
I really wonder what has gone on here. Clearly we need more information on the Brockton investment in terms of when it was bought precisely and at what value. I am trying to think of an honest explanation for the write down. And struggling. Unfortunately, the absence of a true NED on this board makes holding the board to account very difficult: they all appear to be cut from the same cloth and vintage, and their obscene remuneration reveals a contempt for both shareholders and fiduciary duties.