2025 results at a glance: NAV down, cash lower, capital returned
Here’s the shape of LMS Capital’s year. Net asset value (NAV) fell to £29.0 million, or 35.9p per share, from £36.2 million (44.8p) a year ago. Cash ended the year at £6.8 million, down from £13.5 million, after funding follow-on investments and a first capital return to shareholders.
| Metric | 31 Dec 2025 | 31 Dec 2024 |
|---|---|---|
| Net asset value | £29.0m | £36.2m |
| NAV per share | 35.9p | 44.8p |
| Cash balance | £6.8m | £13.5m |
| Cash as % of NAV | 23.3% | 37.4% |
| Net running costs | £1.4m | £1.7m |
| Portfolio movement | £0.3m decrease | £4.9m decrease |
| Capital returned | £1.6m (2.0p/share) | Not applicable |
Bottom line in the income statement: a loss of £5.6 million for the year, or 7.0p per share.
Managed Realisation: what’s happening and why it matters
Back in May 2025, shareholders approved a Managed Realisation – essentially a wind-down plan that prioritises selling assets and handing cash back to investors. In July 2025 LMS paid 2.0p per share, funded mainly by liquid positions in the Weber Fund and a final Brockton Fund 1 distribution. A further 2.0p per share followed in January 2026, taking total returned so far to 4.0p per share (£3.2 million).
Because the strategy is now to realise assets rather than to grow indefinitely, the accounts are prepared on a basis other than going concern. That’s normal for companies in run-off and is a useful reminder: future value here will come from execution of disposals, not from new long-dated growth bets.
What drove the NAV fall in 2025
- FX headwind: Sterling strength hurt US dollar holdings, creating £1.1 million of unrealised currency losses. About 62% of the portfolio is USD-denominated and LMS doesn’t hedge.
- Underlying portfolio changes: Net decrease of £2.5 million, including Dacian (-£2.0 million), Castle View (-£0.5 million) and Elateral (-£0.6 million), partially offset by a £0.6 million realised gain from a Brockton clawback.
- Costs: Net running costs of £1.4 million and investment-related costs of £0.9 million, of which £0.4 million were one-offs linked to the shareholder circular, B Share scheme and a Dacian fee write-off. The annual run-rate was trimmed to roughly £1.3 million by year end.
Dacian Petroleum: bigger ownership, clearer plan, execution risk
LMS doubled down on Dacian in 2025, agreeing to invest up to $5.3 million of additional capital alongside $0.24 million from others. The thesis: invest in maintenance inventory, a structured well workover plan, monetise non-core assets, and surface additional development projects to external capital. Early progress has been “satisfactory” with an early major workover flowing to plan from January 2026.
Crucially, the long-delayed Romanian regulatory approval for the July 2024 debt-to-equity swap landed on 5 February 2026. Post-restructure and bridge financings, LMS has invested $14.7 million, owns 60% of Dacian’s equity, and holds $5.6 million of loan instruments. The Original Investor Group holds 37% and $3.5 million of loans.
Opinion: this is the key swing factor for NAV in 2026. The plan is sensible and early signs are encouraging, but oil and gas carries operational and commodity risk. Also note remaining bridge maturities in June 2026 and a publicly committed balance of £1.0 million still to fund into Dacian.
Castle View Retirement Village: pivot to rentals and refinancing
Castle View in Windsor comprises 64 apartments with communal amenities. Sales in retirement living can bottleneck when the broader housing market slows, so LMS added a rental option to accelerate occupancy and reduce holding costs. Two rentals completed before year end and a further two in 2026 to date; of the 15 units unsold at acquisition in December 2023, 5 remain unoccupied and are available for sale or rent.
The current debt facility doesn’t permit rentals. LMS therefore invested £1.0 million to pay down debt on the units rented pre year end and is negotiating a new facility to refinance part of that and support further rentals. The carrying value rose to £7.5 million (from £6.6 million at the half year) reflecting that additional investment. Acquisition debt has reduced from £4.8 million at the half year to £3.0 million at year end thanks to two apartment sales and the paydown noted.
Opinion: the rental pivot is pragmatic and should stabilise cash flows while the market works through. The near-term catalyst is securing a flexible facility that aligns with a mixed sale/rent strategy. The Board also signals it may seek outside capital into the retirement living subsidiary to build a platform and enhance realisation value.
Funds and mature holdings: modest realisations, FX drag
- Realisations: £1.4 million in 2025, mainly Weber £0.7 million and Brockton £0.6 million.
- Funds valuation: £4.8 million at year end (2024: £5.9 million). Within that, Opus Capital Venture Partners was slightly down, GW 2001 Fund ticked up, and Brockton Fund 1 finished distributing.
- Quoted portfolio: £44,000 total, small in context. Overall quoted movement was a £25,000 gain.
These pieces provided liquidity for the first capital return, but they aren’t large enough to drive the whole outcome from here. That job falls mainly to Dacian and Castle View.
Costs, cash and commitments: runway check
Cash closed at £6.8 million across the Company and subsidiaries, equal to 23.3% of NAV. There’s £0.4 million of outstanding fund commitments and the remaining publicly committed funding to Dacian of £1.0 million. With the cost base trimmed to about £1.3 million run-rate and no external debt, liquidity looks adequate for the Managed Realisation plan, subject to asset sale timing.
No ordinary dividend is proposed, consistent with the run-off approach. Future distributions will come via further returns of capital as assets are realised.
My take: the investment case in three lines
- Positive: The company is executing on its promise to return cash – 4.0p per share already – and has simplified the portfolio to two main value drivers. Regulatory approval at Dacian removes a major uncertainty.
- Caution: NAV fell to 35.9p, cash is down, and a strong pound shaved £1.1 million off value. Dacian remains the key risk-reward lever.
- What unlocks upside: Delivering Dacian’s workover and maintenance plan through 2026, securing a rental-friendly facility at Castle View, and a steady cadence of realisations to fund more capital returns.
Key things to watch in 2026
- Further capital returns: Frequency and size, given cash generation and realisations.
- Dacian milestones: Production uplift from the workover programme, bridge finance maturities in June 2026, and any monetisation of non-core assets.
- Castle View refinancing: New facility terms that enable rentals and partial refinancing of the £1.0 million paydown; continued sales/rental momentum on the remaining 5 units.
- FX sensitivity: With 62% USD exposure and no hedging, sterling strength or weakness will move reported NAV.
- Cost discipline: Keeping the run-rate near £1.3 million while driving realisations.
Final word
This is a classic run-off story now. The first two pence pieces have landed in shareholders’ accounts, with more to come as assets are realised. The year’s NAV decline is disappointing, but the heavy lifting is concentrated in a tighter set of drivers, and the company has the cash, approvals and plan to keep going. Execution from here will decide whether investors exit closer to, above or below the current 35.9p NAV.
