REG - LMS Capital PLC - Company Update and Unaudited Net Asset Value

LMS CapitalAnnouncement

16/02/2026 07:00

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RNS Number : 0146T  LMS Capital PLC  16 February 2026

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT MAY CONSTITUTE INSIDE
INFORMATION AS STIPULATED UNDER THE UK'S MARKET ABUSE REGULATION. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, SUCH INSIDE INFORMATION IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN.

 

LEI: 2138004UJ1TW8UCELX08

 

 

 

16 February 2026

 

LMS CAPITAL PLC

 

Company Update and Unaudited Net Asset value ("NAV") Estimate as at 31
December 2025

 

LMS Capital plc ("LMS" or the "Company") the listed investment company
provides the following update and estimate of net asset value ("NAV") as at 31
December 2025.

 

KEY POINTS

 

Financial Update

 

·      The 31 December 2025 NAV estimate is £29.0 million (36.0p per
share), a decrease of £0.7 million as compared to the last published NAV as
at 30 September 2025 of £29.7 million (36.8p per share), and a decrease of
£5.6 million compared to the prior year end, 31 December 2024, of £36.2
million after adjusting for the first return of capital in July 2025;

 

·      The decrease of £0.7 million since 30 September 2025 is
principally the result of:

 

o  Net decreases of £0.4 million in the underlying portfolio valuations;

o  Interest and other income of £0.1 million;

o  Running costs of £0.3 million and investment costs of £0.1 million; and

o  Unrealised foreign exchange movements in the last quarter were nil.

 

·      Cash at the year end was £6.8 million (8.4p per share) (2024:
£13.5 million, 16.7p per share). Cash of £1.6 million (2p per share) was
distributed to shareholders in July 2025 following the adoption of the managed
realisation plan;

 

·      Further realisation proceeds of £0.7 million were received in
January 2026 and a further distribution of £1.6 million (2p per share) was
made in February 2026 bringing total distributions since the start of the
managed realisation to £3.2 million (4p per share).

 

 

NET ASSET VALUE ESTIMATE

 

The Board currently estimates that the year end NAV will be in the region of
£29.0 million which equates to 36.0p per share. This NAV estimate reflects
information currently available to the Board on the performance and prospects
of individual investments in the Company's portfolio and is subject to further
evaluation as well as completion of the annual audit.

 

The estimated 31 December 2025 NAV is summarised below:

 

                                 Estimated            Most recently reported 30 September 2025  Audited

                                 31 December 2025                                               31 December 2024
                                 £'m
 Dacian *                        9.7                  8.6                                       9.3
 Castle View *                   7.5                  6.5                                       6.6
 Other Investments               6.0                  6.7                                       7.6
 Total Investment Portfolio      23.2                 21.8                                      23.5

 Cash                            6.8                  8.8                                       13.5
 Other Net (Liabilities)/Assets  (1.0)                (0.9)                                     (0.8)

 Net Asset Value                 29.0                 29.7                                      36.2
 NAV per Share                   36.0p                36.8p                                     44.8p

* The balance sheet amounts for Dacian and Castle View reflect the NAV changes
explained below plus the additional cash investment during the year in those
two businesses of $4.2 million and £1.4 million respectively. These are
explained below.

 

The valuation methodology and policy adopted is consistent with prior years
and is in line with IPEV guidelines. The carrying value of the funds is based
on the latest available information from the respective fund managers,
generally the 30 September 2025 fund valuation reports except for Weber which
is based on a 31 December 2025 valuation.

 

The decrease of £0.7 million in NAV during the last quarter of the year
comprises:

 

·      Net decrease of £0.4 million in underlying portfolio valuations:

o  £0.3 million, increase in valuation of Castle View (see below);

o  £0.6 million decrease in the carrying value of Elateral, reflecting more
conservative valuation assumptions;

o  £0.2 million decrease in Dacian; and

o  £0.1 million increase on Weber.

·      Running costs of £0.3 million and investment costs of £0.1
million; and

·      Interest income £0.1 million.

 

For the year as a whole, the Company's estimated NAV, after adjusting for the
July 2025 distribution, has decreased by £5.6 million, most of which occurred
in the first half and was reported at 30 June 2025. The principal underlying
portfolio changes on a full year basis were:

 

·      A decrease of £1.0 million from unrealised foreign exchange
losses on US dollar denominated investments;

·      Underlying portfolio net decrease £2.5 million, excluding the
cash investment in Dacian and Castle View during the year, comprising:

o  Decrease in Dacian £2.0 million, the bulk of which was recognised prior
to the additional July 2025 and reflecting the impact of the additional
funding on the prior investment valuation;

o  Decrease in Castle View £0.5 million, reflecting additional working
capital required pending the sale of the stock of apartments;

o  Decrease in Elateral £0.6 million;

o  £0.6 million realised gain, reported in Q3 and being clawback by the
Brockton Fund, now dissolved, of historic carried interest payments to its
managers.

·      Running costs for the year of £1.4 million.

·      Investment costs for the year of £0.9m. This includes one off
amounts of £0.4 million during the first half of the year, relating to the
issue of the circular to shareholders and implementation of the B Share scheme
and to the write off of historic management fees on Dacian. Other costs relate
principally to the individuals who are focussed entirely on the oversight and
development of the retirement living business.

·      Other net income of £0.2 million comprising bank interest of
£0.4 million less unrealised foreign losses of £0.2 million on non-portfolio
assets.

Further information on the performance of the portfolio, underlying investment
valuations and changes during the year will be included in the Company's
audited results for the year ended 31 December 2025, which it expects to
announce in March 2026.

 

RETIREMENT LIVING

 

Castle View

 

At the half year we reported that there were sale reservations on two
apartments to the value of £1.3 million. During the autumn, both these
reservations proceeded to completed sales, at the indicated prices.

 

The purchase of retirement apartments is typically financed by the sale of an
existing larger property, and slowness in the housing market overall has a
knock-on effect on the ability of purchasers to complete on retirement
apartments.

 

To accelerate full occupancy and to reduce the holding costs of unoccupied
units and create additional income, the decision was taken to offer apartments
for rental alongside sale. Rental demand has been good. Two rentals were
concluded prior to the year end and a further one in January 2026.

 

Of the 15 units which were unsold when the village was acquired in December
2023, 5 currently remain unoccupied and are for sale or rental.  Rental
transactions are in progress on a further 1 apartment with a continuing flow
of new enquiries.

 

The current debt facility on Castle View does not permit rentals on units
which are subject to the facility. To enable initial rental transactions the
Company has invested £0.95 million, at 31 December 2025, to repay the debt on
those rental units. The Company is now in discussions to secure a new facility
which will permit rentals and allow it to refinance part of this investment
and will provide finance for further rental units. In addition, the Company
provided £0.5 million of working capital to Castle View during the year.

 

The acquisition debt has been reduced from £4.8 million at the half year to
£3.0 million as a result of the two sales noted above and the paydown of debt
on the rental units.

 

Retirement Living Outlook

 

The Board has previously stated that it continues to see opportunity in the
sector. This remains the case, particularly in the acquisition of existing
stock which offers long term value potential, but also provides attractive
income. Accordingly, the Board may seek to attract outside investment into the
Company's retirement living subsidiary which could add additional assets to
create a retirement living platform and enhance realisation value.

 

DACIAN

 

Working capital investment during 2025

 

In August 2025 the Company announced that, following a detailed review of the
business in conjunction with a new leadership team at Dacian, it had agreed to
invest up to $5.3 million of additional capital. Other investors agreed to
invest a further $0.24 million. To 31 December 2025 the Company had advanced a
further $3.9 million to Dacian.

 

 

Key elements of the plan to be executed by the new team were:

-     Investment in inventory of replacement components and implementation
of a maintenance plan to reduce the frequency of equipment failures and
consequent interruptions to production;

-     Carrying out a programme of well workovers and interventions,
financially evaluated and risk adjusted in accordance with industry best
practice, to enhance production over the next 12 months;

-     Taking opportunities to monetise some unutilised land and equipment
held by Dacian;

-     Evaluating and presenting to external capital, an identified set of
additional development projects within the fields acquired; and

-     Continuing to work with partners in the development of other
opportunities including in clean energy initiatives.

 

Execution of the plan is still in process, but progress to date has been
satisfactory. The new team structure has worked well since being put in place
in mid-2025.

 

Mobilisation of resources and inventory for the maintenance plan and for the
workover programme was slower than anticipated but is now well underway. Early
indications are that the capital cost of projects is at or slightly below
budgeted cost. The first major workover began flowing in January 2026 and is
delivering the planned level of production.

 

Discussions with potential partners on opportunities in clean energy have
commenced.

 

Outlook for Dacian

 

The Company's 2026 budget indicates a potential further working capital
requirement in the range $1.0 million to $1.5 million in order to complete the
plan set out by the team last July. The actual timing and amount will depend
on the outcomes of the various workover projects currently in hand.

 

Overall, whilst acknowledging the risks inherent in the oil and gas sector and
that there is still much to be delivered at Dacian the Board remains of the
view that the additional investment since July 2025 will show attractive
returns and produce a better outcome for investors on realisation.

 

Dacian capital structure

 

As previously reported the debt to equity swap agreed by shareholders as part
of the July 2024 refinancing round has been awaiting regulatory approval in
Romania. This approval was also a prerequisite for issuing  equity to
investors - including LMS - who provided bridge financing to Dacian in 2024
and 2025 on the basis that they would, once the July 2024 debt equity swap was
approved, be issued with further shares.

 

We are pleased to report that the regulatory approval was finally received on
5 February 2026 and therefore the capital structure agreed by shareholders can
be fully implemented. This will result, based on its current level of
commitment, in LMS owning 60% of the equity in Dacian and $4.2 million of loan
instruments at 31 December 2025, being the $3.9 million advanced during 2025
plus the recovery of $300k of costs incurred by LMS on behalf of Dacian in
prior years.

 

The person responsible for the release of this announcement on behalf of the
Company is IQ EQ Corporate Services (UK) Limited, the Company Secretary.

 

 

For further information please contact:

 

LMS Capital plc

Nick Friedlos, Managing Director

0207 935 3555

 

Shore Capital, Broker

Gillian Martin, Daphne Zhang, Sophie Collins
0207 408 4050

 

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