A solid base, a new beginning, a path forward LMS Capital plc Adding value 15% at a time June 2010
We have a history; from here we will generate value Target Expectation Current vs. Projected NAV New deals will be targeted to produce 15% CAGR Investments will unwind as Funds return realisations and direct investments sold LMS is a new 30 year old story Stock 0.86 price NAV @ 31/3/10 NAVe @ 2014 NAVp @ 2020 2
LMS today is a platform for success Energy/Property Applied tech Book value at year end 2009 • LMS has a 30+ year history Consumer £230 million Other WFT • Since 2006 we have been an independent listed private General equity company SFEP VC & BO managed • Our NAV of £230m is a solid Funds PSK foundation for a new beginning Quoted Direct* Funds * SFEP reallocated as direct 3
Our direct investments platform will grow or be sold Applied Technology, Software & Energy, Utilities & Property Consumer & Retail Services 4
Projected cashflows, before new deals, are positive Expenses Funds Direct Quoted 2010 2011 2012 2013 2014 • Based on latest projections the harvesting of legacy direct and Fund investments should produce material sources of capital • With this net inflow we have the ability to finance a number of new deals 5
From a solid base comes a new momentum Focus on New leadership winners and cashflow Jul ‘09 Sep ‘09 Mar ‘10 Apr ‘10 Jun ‘10 New deals Key change is focus: - Focus on key sectors: fewer, larger active investments - Focus on control: reduce overhang of Fund commitments (~£50m) - Focus on disciplined investing: all monies need to demonstrate 15% CAGR 6
Success will be achieved by a simple focus LMS will pursue ... ... direct control or influence investments in growing , profitable companies managed by experienced partners in sectors where our people can add value 7
Experienced, operational deal guys capture alpha People Experience alpha Glenn Payne Led renewables investment focus at First Energy Reserve. Head of strategy at Suez. Consultant at McKinsey & Co. Listed in Top 5 global renewable investors* Pieter Hooft Buyout professional from Apax and JP Morgan Applied Technology, Software & Partners. Consultant at Bain & Co. Head of a Services retail fitness business Consumer Products Ed Snow Technology services leader from Amadeus, Applied Technology, Software & formerly Deutsche Bank, co-founded and Services IPOed tech start up Scott Potter CEO of venture backed internet software Consumer Products and company; corporate finance attorney for Consumer Services leading Silicon Valley law firm. (Internet/Specialty Retail) * Institutional Investor News 8
We will focus on entrepreneurial companies that can grow under our ownership £ Value £ Start up Entrepreneurial Mature Evolution £ Key - Luck - Good management - Size success - Access to Series A - Profitability - Financing factors - Rising tide - Proven business model - M&A 9
We are the partner of choice Consumer Investment 2004 through 2008 2008 Size/position Lead investor with Lead investor and active role in guiding daily interaction with management management Why did LMS First investment was The YesTo founding win? facilitated by team wanted the relationship with same "hands on" Method's chairman; we investment group then led the expansion that financed capital round in 2005. Method Outlook World's fastest growing Fastest growing natural homecare natural personal care brand, Plan in place to line double the business to $200m 10
We are the partner of choice Applied Technology, Software & Services Investment July 2009 March 2010 Size/position Controlling investor, Active Board active Board position position, leading growth via M&A • Speed of response. • Founders knew that Why did LMS • Domain knowledge win? LMS know their • Trusted by business. • Quick turnaround management, • “Created” deal with on deal issues • Structuring vendor flexibility re follow on investments Outlook 50% revenue growth in Growing market, 1st year and EBITDA multiple customer from £2 to 6 million acquisition opportunities 11
We are the partner of choice Energy Investment May 2010 • NEP provides cost saving, profit sharing, Controlling position utility solutions to property companies. NEP makes properties more profitable through Size/position Acquired 55% of $23m advanced water, gas and electric sub- EV plus $15m metering solutions, and utility construction incremental services. commitment • Nationwide Energy Partners replaces the traditional electric utility. All energy for the Why did LMS 46 management property is measured at the primary meter, win? presentations, 6 bids: and NEP then provides power to the property LMS was the favoured and tenants. (but not highest price) • NEP will also build a water utility system into because we know the the property and each individual unit, collect industry and can add all meter data and bill each unit for its water value consumption. Outlook Small market share will • NEP has created a value model to ensure grow and each new commercial properties are paying the lowest dollar has a 3 year cost possible for their electric service. payback 12
We are permanent private equity, not a fund • Building a business takes time, it takes Which would you prefer? knowledge and it takes capital: we have all 3 (MOIC or an exit?) 5,000 4,500 • We do not 4,000 3,500 • have premature exit requirements, 3,000 MOIC • 2,500 starve a growing company of capital, or 2,000 • invest in a business for a quick flip 1,500 1,000 500 • We can hold our investments for as long as 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 they demonstrate value that is greater than a Years sale 5 yrs 10 yrs 45 yrs The power of compounding is on our side – patient 2.3xs 4.0xs 4343.0xs capital can be amply rewarded in our NAV growth A real listed holding company 13
Success is one step at a time • Lead portfolio Use of LMS stock as companies into currency – M&A, new markets New direct deals: • Add new MOE >15% NAV - NEP , Recent direct investments - ... CAGR deals: - Updata - Apogee 30 years of success New Deeper In the money geographies financing skills Funds New people Corporate Deal team Higher profile M&A capabilities brand Expanded Reputation network Deeper bench Capability platform 14
LMS has a solid base, a new beginning, and a path forward • LMS is a 30 year old new story • We are permanent capital, our objective is to grow NAV by 15% pa • Near term cashflows are well understood and large • Our focus is on direct control investments in profitable growing portfolio companies where our people add value • We are emerging as the partner of choice to experienced management teams looking for long term capital 15
Recommend
More recommend
