LOM Releases 2008 Audited Financials
Hamilton, Bermuda - April 28, 2009 -- LOM (Holdings) Limited today released its audited
results for 2008.
More information can be found in the shareholders letter, appended below, and the audited
financial results available on the web at www.lom.com/financial-statements.
2008 Letter to Shareholders
April 22, 2009
Dear shareholder:
2008 was the worst year for the financial markets since the 1930s. A person would have had to
be a hermit living in a cave not to know that the global banking system collapsed and had to be
supported by various governments, that the world’s giant investment banking and broking firms
have either gone bankrupt or been bailed out by their governments and that the world’s largest
insurance group collapsed. The global real estate and automobile industries are on life support
and credit around the world seized up in the last quarter of 2008. Every major economy with the
exception of China has fallen into deep recession. Equity markets returns were deeply
negative. The corresponding destruction of investor capital has been dramatic. The US market
fell 39%, UK fell 32%, Germany fell 41%, France fell 42%, Japan fell 42%, China fell 65% and
Hong Kong fell 48%.
The collapse in the major markets caused business activity in the second half of 2008 to
virtually stop for LOM. Our commission revenue declined substantially as a result. Although
management took rapid steps to reduce our overheads the speed of the decline meant that we
were not able to avoid posting a loss for the year.
• 2008 full year loss for LOM Holdings was $765,000 or 11 cents per shares versus a
profit of $2.478 million in 2007
• Assets under administration fell 44% to $640 million
• There was no return on equity
• Revenues declined 47% to US$8.8 million
• Operating costs declined 32% to US$9.5 million
The Group’s balance sheet remained strong at year end with no debt with our cash levels at
15% of total assets. Subsequent to the end of 2008 we received an additional amount of cash
representing the reimbursement from our insurers of our expensed legal cost which bolstered
our cash levels to 22% of total assets.
We have incurred significant expenses in implementing our new customer accounting software
which we expect will go live in the first half of this year.
One bright spot for the Group is that revenues in our asset management division increased
14%. Additionally, S&P affirmed the AAA status of our US$ money market fund.
At the end of 2008 LOM’s book value per share was US$3.10. During the year our share price
on the Bermuda Stock Exchange traded between a low of $3.50 and a high of $4.05.
Given the fact that the group has lost money last year and that trading conditions remain
extremely difficult we have decided to suspend dividend payments until conditions improve.
However, the cost-cutting initiatives made in November of last year and Feburary of this year
are starting to help.
Nevertheless, LOM is strong enough to weather this storm and will be in a good position to
resume profitable growth as conditions improve.
Although the environment remains very challenging, there are significant opportunities for
investors in the current markets. We encourage our clients to ensure they have been in recent
contact with their financial advisor at LOM to review their investment strategy.
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 LOM:
The LOM Group is an offshore international financial services company, providing a complete range of
investment services and products through its regulated subsidiaries in Bermuda, Bahamas and Grand
Cayman and a marketing office in London, England. In business for over 16 years, LOM today provides
brokerage, asset management, and corporate finance services to its primarily high net-worth individual
and institutional customers in over 75 countries around the world. The parent company, LOM (Holdings)
Limited, is publicly listed on the Bermuda Stock Exchange (symbol LOM BH). The consolidated group is
debt-free and has shareholder's equity of over $19 million.
