Burford Capital (BUR) provides litigation finance for corporations to pursue strong legal claims. Reaching a successful conclusion with legal cases takes time and Burford has only been around since September 2009 - but the pace of investment recoveries has started to accelerate. Indeed, last year produced as much in recoveries as the previous two years combined, and the group's total income more than doubled in 2012 to $54.2m (£35.3m).
Investment recoveries reached $47m, representing a return on invested capital of 61 per cent, and at at the year-end there was a further $19m of net investment recoveries pending. However, the headline profit was trimmed by a internal restructuring, and some accounting changes, which led to a non-cash charge of $11m. A further $27m charge is expected in the current year, although Burford stressed that this will not affect the group's net asset value.
Group income, meanwhile, was boosted by a $11.1m pre-tax contribution from Firstassist Legal Expenses, the UK legal expenses insurance provider acquired in February for $18.75m. There's plenty of business in the pipeline at Firstassist, too, with over $40m of premiums written - the proceeds from which will only be booked as profits when the relevant cases conclude.
| BURFORD CAPITAL (BUR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 107p | MARKET VALUE: | £219m | |
| TOUCH: | 105-108p | 12-MONTH HIGH: | 136p | LOW: 92p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 17 | |
| PREMIUM TO NAV: | 1% | NET CASH: | $25.6m | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010* | 105 | 1.90 | 6.70 | 2.22 |
| (¢) | ($m) | (¢) | (¢) | |
| 2011 | 172 | 15.9 | 8.83 | 3.66 |
| 2012 | 162 | 16.9 | 9.59 | 4.76 |
| % change | -6 | +6 | +9 | +30 |
Ex-div: 22 May Payment: 17 Jun *From 11 Sep 2009 to end-Dec 2010 £1=$1.53 | ||||
