LOM (Holdings) Limited Releases 2011 Results

Hamilton, Bermuda – 25 April, 2012 - LOM (Holdings) Limited (“the Company”; Ticker: LOM.BH) today announced the financial results to fiscal year end 31 December, 2011. In a letter to shareholders the Company stated:

Dear Shareholder,

2011 has proved to be another year of struggle for the investment industry around the world and has been even more difficult for LOM.

The year started out on a positive note. We had an 8% rally in the US equity markets with a much smaller rally in Europe. Additionally we witnessed a returning confidence to the markets and a resumption of client activity along with greater activity in our brokerage operations.

However in July a re-eruption of the European debt crisis caused markets around the world to fall precipitously over the summer months. To compound this situation the engineered slowing in China's economic activity began to show through in their growth numbers and raised concerns over a hard landing in what is now the world's second largest economy. Along with these declines in equity prices and investor confidence came a substantial reduction in LOM's broking volumes.

From July through the end of September these factors caused markets to suffer rapid and severe setbacks. The US markets fell almost 18.5% over the summer and Europe fell almost 22%. Other major equity markets fared worse. The best performing major market over the year was the US and that was because it managed a 15% rally in the fourth quarter to end essentially unchanged over the year. Other markets fared worse; Europe declined 13.5% over 2011; Hong Kong declined almost 20%; Japan down 18.5% and China down 21%.

The junior equity markets fared even worse; Canada's TSX Venture exchange declined 35% over the year and London's AIM market had a 26% loss in 2011.

It is a reality for the LOM group that our brokerage revenues (at 40% of our total revenues) are extremely sensitive to the state of the global equity markets. For revenues to grow we generally require an environment of low volatility with generally rising equity prices. Unfortunately we have for the last four years been experiencing the exact opposite of such a scenario.

The management has made every effort to grow our asset management business which is less directly sensitive to global equity markets.  Though this effort has been successful with revenues growing 17% last year, it is a long slow process and cannot in the short term make up for the revenue declines in the brokerage arm. Thus we have concentrated on reducing costs as much as possible while still attempting attract new business and to recruit new brokers.

LOM has posted a significant loss in 2011 as we have decided to write down or write off several of our investments. We have taken a charge of $907,948 on our holding of the Bermuda Stock Exchange as a result of the pricing agreed between the Exchange and the TSX group in the BSX's recent placement with their strategic investor. Additionally we took a charge of $750,558 to reflect the write off of CAMRA (a portfolio management system that failed to work and which we purchased to replace our current portfolio management system). Against these charges we did have a significant write back of $447,231, relating to Pembrook Resources, an investment which we were required by our auditors to write down last year but this year was required to write up.

Overall for 2011 LOM (Holdings) Limited posted a loss of $1,471,617. If one strips out all investment revaluations (the write downs of the BSX and CAMRA and the write ups of Pembrook and others and the effects of foreign currency translation adjustments) the group would have had a net loss of $120,439.  

Group highlights for 2011 are:

·         Assets under administration fell 22% to $681 million.

• There was no return on equity.
• Total revenues fell 5.5% to US$8.336 million.
• Total costs rose 7.6% to US$9.808 million. (ex the CAMRA expense costs fell 1%)

The group’s balance sheet remained strong at year end with no debt and our cash levels are at 20% of total assets.

At the end of 2011, LOM’s book value per share was US$2.70.  During the year our share price on the Bermuda Stock Exchange traded between a low of $2.90 and a high of $3.60.

Despite the extremely difficult environment and as outlined in my letter of last year we finalized the investment in our online trading facility and I am pleased to announce that after being used internally for six months it is now available for all of our customers who wish to use it. I would like to commend our IT staff for getting a very difficult project completed.

Going forward I cannot hold out much hope that the environment in the market is going to improve in the next year. Many of the underlying problems as regards the European debt situation and the managed Chinese slowdown remain in place and will continue to sap investor confidence in the global equity markets. Pressure will continue on our broking revenues and our ability to increase those revenues will be limited to the speed with which we can recruit and train new brokers.

We plan to continue to grow the asset management business by increasing the size of our current funds and bringing new fund offerings to the market. I am pleased to say that our most recent fund launch, the LOM Stable Income Fund was our best fund launch to date and after six months has assets over $21 million.

We constantly review our cost structure and will continue to do so. Staff costs remain the largest expense we have at 32% of total expenses. Through the process of attrition we have managed to reduce our staff numbers by 4 individuals over the last 5 months and now stand at 25 full time staff.

Our challenge remains to recruit and train new brokers and to attract additional customers and assets to the group while constantly driving down costs.

On behalf of the Board of Directors I would like to extend our thanks to our customers, employees and shareholders for their support and loyalty over the past year.

Scott Lines

CEO

LOM (Holdings) Limited.

About the LOM Group:

LOM is a publicly-held, international financial services company, providing a complete range of investment services and products through its regulated subsidiaries in Bermuda and Bahamas. In business for 20 years, LOM today has over $700 million in client assets under administration and provides brokerage, custody, asset management, and corporate finance services to its primarily high net-worth individual and institutional customers in over 75 countries around the world.  LOM is publicly listed on the Bermuda Stock Exchange (symbol LOM.BH).

Find out more about LOM at www.lom.com