Business is booming, according to Burford Capital's chief investment officer, Jonathan Molot, and demand for litigation finance has never been higher, which is very good news for the world's largest provider of investment capital to this niche area. This helped to boost the company's total income at the half-year stage by 18 per cent to $13.6m (£8.67m). Moreover, the purchase of UK-based Firstassist for $11.5m is already showing results, delivering $3.7m of profits in the first four months.
Burford invests in civil litigation cases, and five of these were resolved in the first half, bringing the total of investments concluded to 14. What's more, the aggregate net return on the $48m invested in these 14 cases is expected to be at least $82m, giving a 70 per cent return when fully realised. And Burford continues to add to its portfolio, investing $40.5m in six new cases and a further $4.2m to existing investments in the first half.
It's worth noting that much of the potential return on the investment portfolio has yet to be realised, with more than half of Burford's capital invested only last year. In fact, short-term realisations tend to be less profitable as they usually comprise cases settled before going to court.
| BURFORD CAPITAL (BUR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 107p | MARKET VALUE: | £193m | |
| TOUCH: | 105-107p | 12-MONTH HIGH: | 148p | LOW: 101p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 22 | |
| DISCOUNT TO NAV: | 2% | NET CASH: | $13.5m | |
| Half-year to 30 Jun | Net asset value (¢) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 172 | 7.14 | 3.96 | nil |
| 2012 | 171 | 4.54 | 2.78 | nil |
| % change | - | -36 | -30 | - |
£1=$1.569 | ||||
