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Juridica pays out

RESULTS: Juridica's investment portfolio, comprising US civil litigation cases, is starting to pay out - with more upside on the way
September 17, 2012

Don't be too concerned about the headline loss - Juridica has very lumpy cash flow. And while gross cash receipts in the first half came to just $800,000 (£491,000), case wins in July and August mean that a further $35.2m will be paid by the end of the year. Most of this has already been promised as a dividend - leaving the shares looking attractive.

IC TIP: Buy at 93p

Juridica invests in civil litigation cases in the US where plaintiffs have a strong case but insufficient funds to proceed. And some of the 23 different cases are now starting to pay off, with management expecting to see further substantial returns over the next 18 months. The money due by the year-end comes from three cases in the antitrust and competition portfolio, and there are still another three cases to be settled.

Additional investments of $2.25m were made in three investments originally funded in 2009. Two of these resulted in a substantial percentage increase in potential proceeds for Juridica, while the third will pay for additional legal work that, if successful, will also boost the expected return.

Peel Hunt expects full-year adjusted pre-tax profit of $50m, giving EPS of 47.8¢ (2011:$37.8m/31.1¢).

JURIDICA (JIL)
ORD PRICE:93pMARKET VALUE:£97m
TOUCH:91-93p12-MONTH HIGH:93pLOW: 74p
DIVIDEND YIELD:22%†PE RATIO:9
DISCOUNT TO NAV:26%NET CASH:$23.9m

Half-year to 30 JunNet asset value (¢)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (p)
201120116.114.7nil
2012205-1.59-0.1313.0
% change+2---

Ex-div: 19 Dec

Payment: 4 Jan

†Includes special dividend of 7p paid in February 2012

£1=$1.63