London Merchant profits halved as VC perfomance worsens

The securities firm specialising in property and venture capital blames market conditions on reduced earnings from VC investments.

London Merchant Securities Plc (LMS), the UK investment firm concentrating on property and venture capital investment, said today that it had made pre-tax profits of £60.3m in the financial year ending March 31, 2001.

The result means a sharp drop against the firm’s record performance in 1999, when LMS created a surplus of £122.4m. LMS’ stock price reduced slightly following the announcement.

LMS said the slump in global market sentiment had made it impossible for its venture capital arm to repeat the record performance it had turned in the previous year.

The firm added that because conditions had been difficult, overall performance was still decent. “Compared with the record profits of last year, the venture capital division produced good results in testing market conditions”, chairman Graham Green said in a statement.

Talking to Reuters, chief executive Robert Rayne said the property arm of the business had held up well. “We have been maintaining high rates of return and we see no reason why we shouldn’t continue to do so”, Rayne said.