TIDMBUR
RNS Number : 3209M
Burford Capital Limited
13 September 2023
September 13, 2023
BURFORD CAPITAL REPORTS FIRST HALF AND SECOND QUARTER 2023
FINANCIAL RESULTS;
STRONGEST SET OF SIX-MONTH FINANCIAL RESULTS IN BURFORD'S
HISTORY
Burford Capital Limited ("Burford"), the leading global finance
and asset management firm focused on law, today announces its
unaudited financial results at and for the three and six months
ended June 30, 2023 .(1) Burford's report on Form 6-K at and for
the three and six months ended June 30, 2023, including unaudited
condensed consolidated financial statements (the "2Q23 Quarterly
Report"), is available at
http://www.rns-pdf.londonstockexchange.com/rns/3209M_1-2023-9-13.pdf
and on the Burford Capital website at
http://investors.burfordcapital.com .
Christopher Bogart, Chief Executive Officer of Burford Capital,
commented:
"We have produced the strongest set of six-month financial
results in Burford's history, with net income attributable to
shareholders of nearly $240 million and tangible book value per
share growth of 12% over the past six months. Our core portfolio
generated a lot of cash with realized gains tripling on our core
portfolio realizations, and new business was very strong. Our new
valuation methodology is sensitive to interest rate changes and
thus higher rates during the first six months of 2023 were a
headwind for the fair value of our core portfolio, especially
during the second quarter, but these valuation movements are
non-cash and unrealized and are expected to continue to fluctuate
over time. Operating expenses reflect strong portfolio performance
and certain idiosyncratic events."
(1) In this announcement, references to (1) "2Q23" and "2Q22"
are to Burford's unaudited financial results for the three months
ended June 30, 2023 and 2022, respectively, and (2) "1H23"and
"1H22" are to Burford's unaudited financial results for the six
months ended June 30, 2023 and 2022, respectively.
All figures in this announcement are unaudited and presented on
a consolidated basis in accordance with the generally accepted
accounting principles in the United States ("US GAAP"), unless
otherwise stated. Definitions, reconciliations and information
additional to those set forth in this announcement are available on
the Burford Capital website and in the 2Q23 Quarterly Report (as
defined above). In addition, Burford applied its revised valuation
methodology for capital provision assets to its unaudited condensed
consolidated financial statements at June 30, 2023 and for the
three and six months ended June 30, 2023 and 2022 included in this
announcement. Thus, for comparative purposes, this announcement
contains Burford's restated unaudited condensed consolidated
financial statements for the six months ended June 30, 2022.
However, because Burford has not previously issued quarterly
financial statements, the unaudited condensed consolidated
financial statements for the three months ended June 30, 2022
contained in this announcement have not historically been presented
and therefore are not a restatement of previously issued unaudited
condensed consolidated financial statements.
Highlights
Key activity(2)
======================================================================================
-- 2Q23 realized gains tripled to $59 million, up 254% from $17
million in 2Q22
o 1H23 realized gains of $94 million, up 255% from $27 million
in 1H22
-- 2Q23 realizations of $133 million, up 167% from $50 million
in 2Q22
o 1H23 realizations of $195 million, up 178% from $70 million
in 1H22, reflecting increased portfolio velocity, as the
case backlog in the courts continues to clear
-- 2Q23 cash receipts(3) of $150 million, up 266% from $41 million
in 2Q22
o 1H23 cash receipts(3) of $247 million, up 148% from $99
million in 1H22, primarily driven by realizations including
three matters that generated aggregate proceeds of $147
million
-- 2Q23 deployments of $181 million, up 159% from $70 million
in 2Q22
o 1H23 deployments of $248 million, up 103% from $122 million
in 1H22, reflecting in part the balance sheet's greater
participation in new capital provision-direct assets
(2) Represents Burford-only capital provision-direct assets
(3) Represents Burford-only proceeds from capital provision-direct,
capital provision-indirect and asset management
Financial results(4)
======================================================================================
-- Total revenues in 1H23 of $382 million, up 214% from $122
million in 1H22, driven by higher capital provision income
due to positive momentum in the progression of our portfolio
o In 2Q23, while realized gains were up sharply, total revenues
were $43 million (2Q22: $15 million), reflecting the impact
of increased discount rates on our revised valuation methodology
-- Operating income in 1H23 of $284 million, up 332% from $66
million in 1H22; operating income in 2Q23 was essentially
at breakeven, primarily reflecting increased operating expenses
o Increase in operating expenses in 2Q23 driven primarily
by an increase in compensation expenses and general, administrative
and other expenses compared to 2Q22
o All but $1.2 million of the increase in compensation and
benefits in 2Q23 compared to 2Q22 was non-cash, driven
principally by accruals as a result of increases in Burford's
share price and asset values
o Increase in general, administrative and other expenses
in 2Q23 compared to 2Q22 includes $3.3 million in audit,
professional and corporate legal fees due to the development
of the revised fair value methodology and build-out of
quarterly reporting
-- Net income attributable to Burford Capital Limited shareholders
of $238 million in 1H23 (1H22: $7 million), with net income
per ordinary and diluted share of $1.09 and $1.07, respectively
(1H22: $0.03 each)
o Net loss attributable to Burford Capital Limited shareholders
of $22 million in 2Q23 (2Q22: net loss of $49 million),
with net loss per ordinary and diluted share of $0.10 each
(2Q22: net loss per ordinary and diluted share of $0.23
each)
-- Tangible book value attributable to Burford Capital Limited
per ordinary share of $8.26 at June 30, 2023, up 12% from
$7.36 at December 31, 2022
(4) Represents Burford-only
Portfolio
======================================================================================
-- Group-wide portfolio grew to $7.0 billion at June 30, 2023
(December 31, 2022: $6.1 billion), due to significant fair
value gains and growth in deployments and undrawn commitments
o Group-wide new commitments of $557 million in 2Q23 (2Q22:
$363 million) and $722 million in 1H23 (1H22: $445 million)
-- Consolidated fair value of capital provision assets increased
18% to $4.4 billion at June 30, 2023 from $3.7 billion at
December 31, 2022
o O f the $672 million increase in capital provision asset
value in 1H23, $280 million attributable to the YPF-related
assets
-- Fair value of Burford-only capital provision assets increased
16% to $3.1 billion at June 30, 2023 from $2.6 billion at
December 31, 2022
o Of the $423 million increase in capital provision asset
value in 1H23, $185 million attributable to the YPF-related
assets
-- On September 8, 2023, the court rendered a decision in the
YPF-related assets holding that the appropriate date for the
tender offer was April 16, 2012 and that pre-judgment interest
should run from May 3, 2012 at a simple interest rate of 8%
-- Cumulative ROIC since inception from Burford-only capital
provision-direct assets steady at 88% (December 31, 2022:
88%) and IRR of 29% (December 31, 2022: 29%)
Liquidity and capital
======================================================================================
-- Burford-only cash and cash equivalents and marketable securities
of $441 million at June 30, 2023 (December 31, 2022: $210
million)
o Strong liquidity position at June 30, 2023 primarily reflects
issuance of $400 million in senior notes in June 2023
and increasing Burford-only realizations, partially offset
by strong Burford-only deployments
o On July 12, 2023, Burford redeemed in full the aggregate
outstanding principal amount of the 6.125% bonds due 2024
at a redemption price of par
-- Burford-only due from settlement of capital provision assets
decreased 19% to $93 million at June 30, 2023, of which $69
million (74%) was collected in cash at September 7, 2023
-- Total shareholders' equity attributable to Burford Capital
Limited was $1,942 million at June 30, 2023 (December 31,
2022: $1,743 million)
o Total shareholders' equity attributable to Burford Capital
Limited per ordinary share of $8.87 at June 30, 2023 (December
31, 2022: $7.97 per ordinary share)
Dividend
======================================================================================
-- On September 8, 2023, Burford's board of directors declared
an interim dividend of 6.25c per ordinary share payable on
December 7, 2023 to shareholders of record on November 10,
2023, with an ex-dividend date of November 9, 2023
Investor and Analyst Conference Call
Burford will hold a conference call for investors and analysts
at 10.00am EDT / 3.00pm BST on Wednesday, September 13, 2023. The
dial-in number for the conference call is +1 646 787-9445 (USA) /
+44 (0)20 4587 0498 (UK) / +44 (0)20 3936 2999 (all other
locations) and the access code is 329784. To minimize the risk of
delayed access, participants are urged to dial into the conference
call by 9.40am EDT / 2.40pm BST .
A live webcast of the call will also be available at
https://www.investis-live.com/burfordcapital/6499460f383e9013000dafed/rosepu
, and pre-registration at that link is encouraged.
An accompanying 2Q23 and 1H23 results presentation for investors
and analysts will also be made available on the Burford Capital
website prior to the conference call at
http://investors.burfordcapital.com .
Following the conference call, a replay facility for this event
will be available until Wednesday, September 27, 2023 by dialing +1
845 709-8569 (USA) / +44 (0)20 3936 3001 (UK) / +44 (0)20 3936 3001
(all other locations) and using the replay access code 178093. A
replay facility will also be accessible through the webcast at
https://www.investis-live.com/burfordcapital/6499460f383e9013000dafed/rosepu
.
For further information, please contact:
Burford Capital Limited
For investor and analyst inquiries:
Robert Bailhache, Head of Investor Relations, +44 (0)20 3530
EMEA and Asia - email 2023
Jim Ballan, Head of Investor Relations, Americas
- email +1 (646) 793 9176
For press inquiries:
David Helfenbein, Vice President, Public Relations
- email +1 (212) 235 6824
Numis Securities Limited - NOMAD and Joint +44 (0)20 7260
Broker 1000
Giles Rolls
Charlie Farquhar
+44 (0)20 7029
Jefferies International Limited - Joint Broker 8000
Graham Davidson
Tony White
+44 (0)20 3207
Berenberg - Joint Broker 7800
Toby Flaux
James Thompson
About Burford Capital
Burford Capital is the leading global finance and asset
management firm focused on law. Its businesses include litigation
finance and risk management , asset recovery and a wide range of
legal finance and advisory activities. Burford is publicly traded
on the New York Stock Exchange (NYSE: BUR) and the London Stock
Exchange (LSE: BUR), and it works with companies and law firms
around the world from its offices in New York, London, Chicago,
Washington, DC, Singapore, Dubai, Sydney and Hong Kong.
For more information, please visit www.burfordcapital.com.
Summary Financial Statements and Reconciliations
The tables below set forth summaries of the condensed
consolidated and Burford-only statements of operations for the
three and six months ended June 30, 2023 and 2022, the condensed
consolidated and Burford-only statements of financial position at
June 30, 2023 and December 31, 2022 and corresponding
reconciliations from consolidated to Burford-only financial results
. Furthermore, the tables below set forth certain additional
reconciliations for financial information contained in this
announcement.
Summary condensed consolidated statements of operations
Three months ended Six months ended
June 30, June 30,
--------------------- --------------------
($ in thousands) 2023 2022 2023 2022
================================ ========== ========= ========= =========
Revenues
Capital provision income 35,667 35,006 511,600 175,745
Plus/(Less): Third-party
interests in capital
provision assets 4,813 16,857 (95,532) 218
Asset management income 1,894 2,394 3,891 5,508
Services and other income 2,177 (6,767) 5,497 (10,879)
Total revenues 44,551 47,490 425,456 170,592
Total operating expenses 43,632 26,540 97,931 56,827
Operating income 919 20,950 327,525 113,765
Finance costs and loss
on debt extinguishment 21,124 21,636 41,677 37,477
Foreign currency transactions
(gains)/losses (8,898) 2,544 (11,338) 3,058
(Loss)/income before income
taxes (11,307) (3,230) 297,186 73,230
(Provision) for income
taxes (8,969) (14,942) (16,081) (18,366)
Net income (20,276) (18,172) 281,105 54,864
========== ========= ========= =========
Net income attributable
to Burford Capital
Limited shareholders (21,540) (49,352) 237,885 6,928
========== ========= ========= =========
Net income attributable
to Burford Capital
Limited shareholders per
ordinary share
Basic $ (0.10) $ (0.23) $ 1.09 $ 0.03
Diluted $ (0.10) $ (0.23) $ 1.07 $ 0.03
Summary Burford-only statement of operations
Three months ended Six months ended
June 30, June 30,
--------------------- -------------------
($ in thousands) 2023 2022 2023 2022
============================ ========== ========= ======== =========
Revenues
Capital provision income 35,392 (4,810) 351,407 95,777
Asset management income 5,684 25,829 25,041 36,763
Services and other income 2,161 (5,641) 5,466 (10,885)
Total revenues 43,237 15,378 381,914 121,655
Operating income (330) (10,660) 284,338 65,826
Net income (21,540) (49,352) 237,885 65,826
Net income per share:
Basic $ (0.10) $ (0.23) $ 1.09 $ 0.03
Diluted $ (0.10) $ (0.23) $ 1.07 $ 0.03
Reconciliation of summary condensed consolidated statement of
operations to summary Burford-only statement of operations
Three months ended June 30, 2023
-------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
----------------------------------------------------------------------------
Elimination of third-party interests
--------------------------------------------------------
Strategic
Value Advantage
($ in thousands) Consolidated Fund BOF-C Colorado Fund Other Burford-only
------------------ ------------- ---------- --------- --------- ---------- ---------- ------------------
Capital provision
income 35,667 (100) 72 4,728 (4,983) 8 35,392
Plus/(Less):
Third-party
interests in
capital
provision assets 4,813 - - (4,753) - (60) -
Asset management
income 1,894 46 3,744 - - - 5,684
Services and
other
income 2,177 - (1) - - (15) 2,161
Total revenues 44,551 (54) 3,815 (25) (4,983) (67) 43,237
Operating income 919 87 3,628 - (4,903) (61) (330)
Net income/(loss) (20,276) 87 3,628 - (4,903) (76) (21,540)
Three months ended June 30, 2022
-------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
----------------------------------------------------------------------------
Elimination of third-party interests
--------------------------------------------------------
Strategic
Value Advantage
($ in thousands) Consolidated Fund BOF-C Colorado Fund Other Burford-only
------------------ ------------- ---------- --------- --------- ---------- ---------- -------------
Capital provision
income 35,006 (1,769) (55,580) 16,423 48 1,062 (4,810)
Plus/(Less):
Third-party
interests in
capital
provision assets 16,857 - - (16,435) - (422) -
Asset management
income 2,394 57 23,378 - - - 25,829
Services and
other
income (6,767) 1,132 - - - (6) (5,641)
Total revenues 47,490 (580) (32,202) (12) 48 634 15,378
Operating income 20,950 (245) (32,240) - 138 737 (10,660)
Net income/(loss) (18,172) (245) (32,240) - 138 1,167 (49,352)
Six months ended June 30, 2023
------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
---------------------------------------------------------------------
Elimination of third-party interests
------------------------------------------------------
Strategic
Value Advantage
($ in thousands) Consolidated Fund BOF-C Colorado Fund Other Burford-only
-------------------------- ------------- ---------- --------- --------- ---------- -------- -------------
Capital provision
income 511,600 (207) (48,236) (95,041) (12,005) (4,704) 351,407
Plus/(Less): Third-party
interests in capital
provision assets (95,532) - - 95,011 - 521 -
Asset management
income 3,891 92 21,058 - - - 25,041
Services and other
income 5,497 - (2) - - (29) 5,466
Total revenues 425,456 (115) (27,180) (30) (12,005) (4,212) 381,914
Operating income 327,525 181 (27,397) - (11,802) (4,169) 284,338
Net income/(loss) 281,105 181 (27,397) - (11,802) (4,202) 237,885
Six months ended June 30, 2022
------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
---------------------------------------------------------------------
Elimination of third-party interests
------------------------------------------------------
Strategic
Value Advantage
($ in thousands) Consolidated Fund BOF-C Colorado Fund Other Burford-only
-------------------------- ------------- ---------- --------- --------- ---------- -------- -------------
Capital provision
income 175,745 (2,277) (74,175) 498 (318) (3,696) 95,777
Plus/(Less): Third-party
interests in capital
provision assets 218 - - (510) - 292 -
Asset management
income 5,508 218 31,037 - - - 36,763
Services and other
income (10,879) - - - - (6) (10,885)
Total revenues 170,592 (2,059) (43,138) (12) (318) (3,410) 121,655
Operating income 113,765 (1,357) (43,200) - (77) (3,305) 65,826
Net income/(loss) 54,864 (1,357) (43,200) - (77) (3,302) 6,928
Reconciliation of capital provision income excluding YPF-related
assets
For the six months ended June 30,
($ in thousands) 2023 2022
-------------------------------------------------------- ------------------- --------------
Capital provision income 511,600 175,745
Less: Capital provision income from YPF-related assets (277,318) (1,440)
-------------------------------------------------------- ------------------- --------------
Capital provision income excluding YPF-related assets 234,282 174,305
======================================================== =================== ==============
Summary condensed consolidated statement of financial
position
At
($ in thousands) June 30, 2023 December 31, 2022
============================================================================= ============== ==================
Total assets 5,177,712 4,288,359
Total liabilities 2,441,646 1,901,289
Total Burford Capital Limited equity 1,942,025 1,742,584
Non-controlling interests 794,041 644,486
Total shareholders' equity 2,736,066 2,387,070
Basic ordinary shares outstanding 218,957,218 218,581,877
Total shareholders' equity attributable to Burford Capital Limited per basic
ordinary share 8.87 7.97
Total shareholders' equity per basic ordinary share 12.50 10.92
Reconciliation of summary condensed consolidated statement of
financial position to summary Burford-only statement of financial
position
At June 30, 2023
--------------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
-----------------------------------------------------------------------------------
Elimination of third-party interests
--------------------------------------------------------------------
Strategic Value
($ in thousands) Consolidated Fund BOF-C Colorado Advantage Fund Other Burford-only
------------------ ------------- ---------------- ---------- ---------- --------------- --------- -------------
Total assets 5,177,712 (2,518) (556,238) (504,275) (178,766) (73,413) 3,862,502
Total liabilities 2,441,646 (141) (4,234) (504,275) (75) (12,444) 1,920,477
Total
shareholders'
equity 2,736,066 (2,377) (552,004) - (178,691) (60,969) 1,942,025
At December 31, 2022
--------------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
-----------------------------------------------------------------------------------
Elimination of third-party interests
--------------------------------------------------------------------
Strategic Value
($ in thousands) Consolidated Fund BOF-C Colorado Advantage Fund Other Burford-only
------------------ ------------- ---------------- ---------- ---------- --------------- --------- -------------
Total assets 4,288,359 (2,779) (477,590) (409,249) (103,523) (76,792) 3,218,426
Total liabilities 1,901,289 (228) (4,234) (409,249) (120) (11,616) 1,475,842
Total
shareholders'
equity 2,387,070 (2,551) (473,356) - (103,403) (65,176) 1,742,584
Reconciliation of components of realizations from a consolidated
basis to a Group-wide basis
Three months ended June 30, 2023
-------------------------------------------------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
-------------------- ---------------------------------------------------------------------------------------------------------------
Eliminations Other
($ in thousands) Consolidated and adjustments Burford-only funds BOF-C Group-wide
-------------------- -------------------- -------------------------- ------------------------ ---------------- --------------------- ----------------
Capital
provision-direct 130,520 2,677 133,197 22,986 17,328 173,511
Capital
provision-indirect 27,064 (22,605) 4,459 22,290 - 26,749
Post-settlement - - - 79,576 - 79,576
Total realizations 157,584 (19,928) 137,656 124,852 17,328 279,836
==================== ========================== ======================== ================ ===================== ================
Three months ended June 30, 2022
---------------------------------------------------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
-------------------- -----------------------------------------------------------------------------------------------------------------
Eliminations Other
($ in thousands) Consolidated and adjustments Burford-only funds BOF-C Group-wide
-------------------- -------------------- -------------------------- ------------------------ ----------------- --------------------- -----------------
Capital
provision-direct 54,769 (4,919) 49,850 14,043 9,069 72,962
Capital
provision-indirect 7,114 (1,792) 5,322 13,326 - 18,648
Post-settlement - - - 8,840 - 8,840
Total realizations 61,883 (6,711) 55,172 36,209 9,069 100,450
==================== ========================== ======================== ================= ===================== =================
Six months ended June 30, 2023
-------------------------------------------------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
-------------------- ---------------------------------------------------------------------------------------------------------------
Eliminations Other
($ in thousands) Consolidated and adjustments Burford-only funds BOF-C Group-wide
-------------------- -------------------- -------------------------- ------------------------ ---------------- --------------------- ----------------
Capital
provision-direct 246,252 (51,309) 194,943 73,376 52,751 321,070
Capital
provision-indirect 39,644 (33,089) 6,555 32,774 - 39,329
Post-settlement - - - 98,256 - 98,256
Total realizations 285,896 (84,398) 201,498 204,406 52,751 458,655
==================== ========================== ======================== ================ ===================== ================
Six months ended June 30, 2022
-------------------------------------------------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
-------------------- ---------------------------------------------------------------------------------------------------------------
Eliminations Other
($ in thousands) Consolidated and adjustments Burford-only funds BOF-C Group-wide
-------------------- -------------------- -------------------------- ------------------------ ---------------- --------------------- ----------------
Capital
provision-direct 75,980 (5,778) 70,202 24,381 12,319 106,902
Capital
provision-indirect 12,466 (6,367) 6,099 17,901 - 24,000
Post-settlement - - - 38,303 - 38,303
Total realizations 88,446 (12,145) 76,301 80,585 12,319 169,205
==================== ========================== ======================== ================ ===================== ================
Reconciliation of components of deployments from a consolidated
basis to a Group-wide basis
Three months ended June 30, 2023
--------------------------------------------------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
-------------------- ----------------------------------------------------------------------------------------------------------------
Eliminations Other
($ in thousands) Consolidated and adjustments Burford-only funds BOF-C Group-wide
-------------------- -------------------- -------------------------- ------------------------ ----------------- --------------------- ----------------
Capital
provision-direct 246,840 (65,387) 181,453 6,070 58,504 246,027
Capital
provision-indirect 78,794 (65,662) 13,132 65,662 - 78,794
Post-settlement - - - 31,939 - 31,939
Total deployments 325,634 (131,049) 194,585 103,671 58,504 356,760
==================== ========================== ======================== ================= ===================== ================
Three months ended June 30, 2022
---------------------------------------------------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
-------------------- -----------------------------------------------------------------------------------------------------------------
Eliminations Other
($ in thousands) Consolidated and adjustments Burford-only funds BOF-C Group-wide
-------------------- -------------------- -------------------------- ------------------------ ----------------- --------------------- -----------------
Capital
provision-direct 92,445 (22,273) 70,172 8,926 21,291 100,389
Capital
provision-indirect 5,429 (3,518) 1,911 3,518 - 5,429
Post-settlement - - - 26,116 - 26,116
Total deployments 97,874 (25,791) 72,083 38,560 21,291 131,934
==================== ========================== ======================== ================= ===================== =================
Six months ended June 30, 2023
-------------------------------------------------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
-------------------- ---------------------------------------------------------------------------------------------------------------
Eliminations Other
($ in thousands) Consolidated and adjustments Burford-only funds BOF-C Group-wide
-------------------- -------------------- -------------------------- ------------------------ ---------------- --------------------- ----------------
Capital
provision-direct 331,525 (83,079) 248,446 12,983 75,956 337,385
Capital
provision-indirect 112,794 (93,995) 18,799 93,995 - 112,794
Post-settlement - - - 35,806 - 35,806
Total deployments 444,319 (177,074) 267,245 142,784 75,956 485,985
==================== ========================== ======================== ================ ===================== ================
Six months ended June 30, 2022
-------------------------------------------------------------------------------------------------------------------------------------
(GAAP) (Non-GAAP)
-------------------- ---------------------------------------------------------------------------------------------------------------
Eliminations Other
($ in thousands) Consolidated and adjustments Burford-only funds BOF-C Group-wide
-------------------- -------------------- -------------------------- ------------------------ ---------------- --------------------- ----------------
Capital
provision-direct 183,566 (61,436) 122,130 14,667 60,304 197,101
Capital
provision-indirect 20,176 (16,776) 3,400 16,776 - 20,176
Post-settlement - - - 43,152 - 43,152
Total deployments 203,742 (78,212) 125,530 74,595 60,304 260,429
==================== ========================== ======================== ================ ===================== ================
Reconciliation of consolidated proceeds from capital provision
assets to Burford-only cash receipts
Six months Three months Three months
ended June ended March ended June
($ in thousands) 30, 2023 31, 2023 30, 2023
---------------------------------------------- ------------ ------------- -------------
Consolidated proceeds from capital
provision assets 308,007 144,485 163,522
Less: Elimination of third-party interests (87,513) (60,563) (26,950)
Burford-only total proceeds from capital
provision assets 220,494 83,922 136,572
---------------------------------------------- ------------ ------------- -------------
Burford-only proceeds from capital
provision-direct assets 213,321 77,742 135,579
Burford-only proceeds from capital
provision-indirect assets 7,173 6,180 993
Burford-only total proceeds from capital
provision assets 220,494 83,922 136,572
---------------------------------------------- ------------ ------------- -------------
Consolidated asset management income 3,891 1,997 1,894
Plus: Eliminated income from funds 21,150 17,360 3,790
Burford-only asset management income 25,041 19,357 5,684
Less: Non-cash adjustments(1) (1,728) (7,086) 5,358
Burford-only proceeds from asset management
income 23,313 12,271 11,042
Burford-only proceeds from marketable
security interest and dividends 1,563 881 682
Burford-only proceeds from asset recovery
fee for services 38 83 (45)
Burford-only proceeds from insurance
receipts 1,530 - 1,530
Burford-only proceeds from asset management
and other services 26,444 13,235 13,209
---------------------------------------------- ------------ ------------- -------------
Cash receipts 246,938 97,157 149,781
============================================== ============ ============= =============
(1) Adjustments for the change in asset management receivables
accrued during the applicable period but not yet received at the
end of such period.
Six months Three months Three months
ended June ended March ended June
($ in thousands) 30, 2022 31, 2022 30, 2022
---------------------------------------------- ------------ ------------- -------------
Consolidated proceeds from capital
provision assets 108,541 69,369 39,172
Less: Elimination of third-party interests (21,451) (14,109) (7,342)
Burford-only total proceeds from capital
provision assets 87,090 55,260 31,830
---------------------------------------------- ------------ ------------- -------------
Burford-only proceeds from capital
provision-direct assets 81,511 55,163 26,348
Burford-only proceeds from capital
provision-indirect assets 5,579 97 5,482
Burford-only total proceeds from capital
provision assets 87,090 55,260 31,830
---------------------------------------------- ------------ ------------- -------------
Consolidated asset management income 5,508 3,114 2,394
Plus: Eliminated income from funds 31,255 7,820 23,435
Burford-only asset management income 36,763 10,934 25,829
Less: Non-cash adjustments(1) (26,547) (8,725) (17,822)
Burford-only proceeds from asset management
income 10,216 2,209 8,007
Burford-only proceeds from marketable
security interest and dividends 967 614 353
Burford-only proceeds from asset recovery
fee for services 577 418 159
Burford-only proceeds from insurance
receipts 413 - 413
Burford-only proceeds from other corporate 191 - 191
Burford-only proceeds from asset management
and other services 12,364 3,241 9,123
---------------------------------------------- ------------ ------------- -------------
Cash receipts 99,454 58,501 40,953
============================================== ============ ============= =============
(1) Adjustments for the change in asset management receivables
accrued during the applicable period but not yet received at the
end of such period.
Reconciliation of consolidated aggregate cash receipts from
three matters of note to Burford only cash receipts
Six months ended June 30,
2023
-----------------------------------------------
Elimination
($ in thousands) Consolidated and adjustments Burford-only
----------------------------------------- ------------- ----------------- -------------
Aggregate cash receipts - three matters
of note 181,514 (34,050) 147,464
Reconciliation of consolidated portfolio to Group-wide
portfolio
($ in thousands) At June 30, 2023 At December 31, 2022
============================================== ======================== ==============================
Consolidated carrying value 4,407,888 3,735,556
Consolidated undrawn commitments 1,983,154 1,720,727
---------------------------------------------- ------------------------ ------------------------------
Eliminations of third-party interests:
Less: Attributable to carrying value (1,348,424) (1,100,137)
Less: Attributable to undrawn commitments (471,789) (413,446)
Burford-only Carrying value 3,059,464 2,635,419
Burford-only undrawn commitments 1,511,365 1,307,281
---------------------------------------------- ------------------------ ------------------------------
Burford-only portfolio 4,570,829 3,942,700
---------------------------------------------- ------------------------ ------------------------------
Other funds carrying value 1,115,482 1,076,320
Other funds undrawn commitments 265,502 239,145
---------------------------------------------- ------------------------ ------------------------------
Other funds portfolio 1,380,984 1,315,465
---------------------------------------------- ------------------------ ------------------------------
BOF-C carrying value 597,340 516,982
BOF-C undrawn commitments 434,930 371,724
---------------------------------------------- ------------------------ ------------------------------
BOF-C portfolio 1,032,270 888,706
---------------------------------------------- ------------------------ ------------------------------
Total group-wide portfolio 6,984,083 6,146,871
============================================== ======================== ==============================
Reconciliation of consolidated to Burford-only cash and cash
equivalents and marketable securities
At June 30, 2023 At December 31, 2022
----------------------------------------------- -----------------------------------------------
(GAAP) (Non-GAAP) (GAAP) (Non-GAAP)
-------------------------------- --------------------------------
Elimination of Elimination of
third-party third-party
($ in thousands) Consolidated interests Burford-only Consolidated interests Burford-only
------------------ ------------- ----------------- ------------- ------------- ----------------- -------------
Cash and cash
equivalents 365,336 (31,779) 333,557 107,658 (33,979) 73,679
Marketable
securities 107,180 - 107,180 136,358 - 136,358
Total cash and
cash equivalents
and marketable
securities 472,516 (31,779) 440,737 244,016 (33,979) 210,037
Reconciliation of consolidated to Burford-only capital provision
assets
At June 30, 2023 At December 31, 2022
---------------------------------------------- ----------------------------------------------
(GAAP) (Non-GAAP) (GAAP) (Non-GAAP)
------------------------------- -------------------------------
Elimination Elimination
of third-party of third-party
($ in thousands) Consolidated interests Burford-only Consolidated interests Burford-only
------------------- ------------- ---------------- ------------- ------------- ---------------- -------------
YPF-related
assets 1,512,062 (504,397) 1,007,665 1,232,549 (409,514) 823,035
Other assets 2,895,826 (844,027) 2,051,799 2,503,007 (689,602) 1,813,405
Capital provision
assets 4,407,888 (1,348,424) 3,059,464 3,735,556 (1,099,116) 2,636,440
Reconciliation of consolidated to Burford-only due from
settlement of capital provision assets
At June 30, 2023 At December 31, 2022
----------------------------------------------- -----------------------------------------------
(GAAP) (Non-GAAP) (GAAP) (Non-GAAP)
-------------------------------- --------------------------------
Elimination of Elimination of
third-party third-party
($ in thousands) Consolidated interests Burford-only Consolidated interests Burford-only
------------------ ------------- ----------------- ------------- ------------- ----------------- -------------
Due from
settlement of
capital
provision assets 94,391 (1,754) 92,637 116,582 (1,932) 114,650
Reconciliation of consolidated to Burford-only realized gains on
capital provision-direct assets
Three months ended June 30, 2023 Three months ended June 30, 2022
----------------------------------------------- -----------------------------------------------
(GAAP) (Non-GAAP) (GAAP) (Non-GAAP)
-------------------------------- --------------------------------
Eliminations and Eliminations and
($ in thousands) Consolidated adjustments Burford-only Consolidated adjustments Burford-only
------------------ ------------- ----------------- ------------- ------------- ----------------- -------------
Realized gains
relative to cost 59,335 (554) 58,781 21,497 (4,908) 16,589
Six months ended June Six months ended June
30, 2023 30, 2022
----------------------------------------------- -----------------------------------------------
(GAAP) (Non-GAAP) (GAAP) (Non-GAAP)
-------------------------------- --------------------------------
Eliminations Eliminations
($ in thousands) Consolidated and adjustments Burford-only Consolidated and adjustments Burford-only
------------------ ------------- ----------------- ------------- ------------- ----------------- -------------
Realized gains
relative to
cost 127,405 (33,011) 94,394 32,085 (5,484) 26,601
Reconciliation of tangible book value attributable to Burford
Capital Limited per ordinary share
($ in thousands, except share data) At June 30, 2023 At December 31, 2022
========================================================================= ================ ====================
Total Burford Capital Limited equity 1,942,025 1,742,584
Less: Goodwill (133,962) (133,912)
-------------------------------------------------------------------------- ---------------- --------------------
Tangible book value attributable to Burford Capital Limited 1,808,063 1,608,672
-------------------------------------------------------------------------- ---------------- --------------------
Basic ordinary shares outstanding 218,957,218 218,581,877
-------------------------------------------------------------------------- ---------------- --------------------
Tangible book value attributable to Burford Capital Limited per ordinary
share 8.26 7.36
-------------------------------------------------------------------------- ---------------- --------------------
Reconciliation of shareholders' equity attributable to Burford
Capital Limited per ordinary share
($ in thousands, except share data) At June 30, 2023 At December 31, 2022
========================================================================= ================ ====================
Total shareholders' equity 2,653,361 2,387,070
Less: Non-controlling interests (661,083) (644,486)
-------------------------------------------------------------------------- ---------------- --------------------
Total Burford Capital Limited equity 1,942,025 1,742,584
-------------------------------------------------------------------------- ---------------- --------------------
Basic ordinary shares outstanding 218,957,218 218,581,877
-------------------------------------------------------------------------- ---------------- --------------------
Shareholders' equity attributable to Burford Capital Limited per ordinary
share 8.87 7.97
-------------------------------------------------------------------------- ---------------- --------------------
Definitions and Use of Non-GAAP Financial Measures and
Alternative Performance Measures
Burford reports its financial results in accordance with US
GAAP. US GAAP requires us to present financial statements that
consolidate some of the limited partner interests in private funds
we manage as well as assets held on our balance sheet where we have
a partner or minority investor. We therefore refer to various
presentations of our financial results as follows:
-- Consolidated refers to assets, liabilities and activities
that include those third-party interests, partially owned
subsidiaries and special purpose vehicles that we are required
to consolidate under US GAAP. At the date of this announcement,
the major entities where there is also a third-party partner
in, or owner of, those entities include BCIM Strategic Value
Master Fund, LP, Burford Opportunity Fund C LP, Burford
Advantage Master Fund LP, Colorado Investments Limited ("Colorado")
and several other entities in which Burford holds investments
where there is also a third-party partner in, or owner of,
those entities.
-- Burford-only refers to assets, liabilities and activities
that pertain only to Burford on a proprietary basis, excluding
any third-party interests and the portions of jointly owned
entities owned by others.
-- Group-wide refers to the totality of assets managed by
Burford, including those portions of the private funds owned
by third parties and including private funds that are not
consolidated within Burford's consolidated financial statements.
Group-wide is therefore the sum of Burford-only and non-controlling
interests in consolidated and non-consolidated private funds.
Group-wide does not include third-party interests in capital
provision assets, the economics of which have been sold
to those third parties, that do not meet the criteria to
be recognized as a sale under US GAAP. This includes the
third-party interests in Colorado and other capital provision
asset subparticipations.
We subdivide our capital provision assets into two
categories:
-- Direct , which includes all of our capital provision assets
that we have originated directly (i.e., not through participation
in a private fund) from our balance sheet. We also include
direct (i.e., not through participation in a private fund)
complex strategies assets in this category.
-- Indirect , which includes our balance sheet's participations
in two of our private funds (i.e., BCIM Strategic Value
Master Fund, LP and Burford Advantage Master Fund LP) .
We also use certain unaudited alternative performance measures,
including:
-- Internal rate of return ("IRR") is a discount rate that
makes the net present value of a series of cash flows equal
to zero and is expressed as a percentage figure. We compute
IRR on concluded (including partially concluded) legal finance
assets by treating that entire portfolio (or, when noted,
a subset thereof) as one undifferentiated pool of capital
and measuring actual and, if necessary, estimated inflows
and outflows from that pool, allocating costs appropriately.
IRRs do not include unrealized gains or losses.
-- Return on invested capital ("ROIC") from a concluded asset
is the absolute amount of realizations from such asset in
excess of the amount of expenditure incurred in funding
such asset divided by the amount of expenditure incurred,
expressed as a percentage figure. ROIC is a measure of our
ability to generate absolute returns on our assets. Some
industry participants express returns on a multiple of invested
capital ("MOIC") instead of a ROIC basis. MOIC includes
the return of capital and, therefore, is 1x higher than
ROIC. In other words, 70% ROIC is the same as 1.70x MOIC.
Other unaudited alternative performance measures and terms we
use include:
-- Commitment is the amount of financing we agree to provide
for a legal finance asset. Commitments can be definitive
(requiring us to provide funding on a schedule or, more
often, when certain expenses are incurred) or discretionary
(allowing us to provide funding after reviewing and approving
a future matter). Unless otherwise indicated, commitments
include deployed cost and undrawn commitments.
-- Deployment refers to the funding provided for an asset,
which adds to our deployed cost in such asset.
-- Deployed cost is the amount of funding we have provided
for an asset at the applicable point in time.
-- Fair value adjustment is the amount of unrealized gain
or loss recognized in our consolidated statements of operations
in the relevant period and added to or subtracted from,
as applicable, the asset or liability value in our consolidated
statements of financial position.
-- Portfolio includes deployed cost, net unrealized gains
or losses and undrawn commitments.
-- Realization: A legal finance asset is realized when the
asset is concluded (i.e., when litigation risk has been
resolved). A realization will result in us receiving cash
or, occasionally, non-cash assets or recognizing a due from
settlement receivable, reflecting what we are owed on the
asset.
-- Realized gain / loss reflects the total amount of gain
or loss generated by a legal finance asset when it is realized,
calculated as realized proceeds less deployed cost, without
regard for any previously recognized fair value adjustment.
-- Unrealized gain / loss represents the fair value of our
legal finance assets over or under their funded cost, as
determined in accordance with the requirements of the applicable
US GAAP standards, for the relevant financial reporting
period (consolidated statement of operations) or cumulatively
(consolidated statement of financial position).
-- YPF-related assets refers to our Petersen and Eton Park
legal finance assets, which are two claims relating to Republic
of Argentina's nationalization of YPF S.A., the Argentine
energy company.
We also use certain non-GAAP financial measures, including:
-- Cash receipts provide a measure of the cash that our capital
provision and other assets generate during a given period
as well as cash from certain other fees and income. In particular,
cash receipts represent the cash generated from capital
provision and other assets, including cash proceeds from
realized or concluded assets and any related hedging assets,
and cash received from asset management income, services
and/or other income, before any deployments into funding
existing or new assets. Cash receipts are a non-GAAP financial
measure and should not be considered in isolation from,
as a substitute for, or superior to, financial measures
calculated in accordance with US GAAP. The most directly
comparable measure calculated in accordance with US GAAP
is proceeds from capital provision assets as set forth in
our consolidated statements of cash flows. We believe that
cash receipts are an important measure of our operating
and financial performance and are useful to management and
investors when assessing the performance of our Burford-only
capital provision assets.
-- Tangible book value attributable to Burford Capital Limited
is calculated by subtracting intangible assets (such as
goodwill) from total Burford Capital Limited equity . T
angible book value attributable to Burford Capital Limited
per ordinary share is calculated by dividing tangible book
value attributable to Burford Capital Limited by the total
number of outstanding ordinary shares . Each of tangible
book value attributable to Burford Capital Limited and tangible
book value attributable to Burford Capital Limited per ordinary
share is a non-GAAP financial measure and should not be
considered in isolation from, as a substitute for, or superior
to, financial measures calculated in accordance with US
GAAP. The most directly comparable measure calculated in
accordance with US GAAP is total Burford Capital Limited
equity as set forth in our consolidated statements of financial
position. We believe that tangible book value attributable
to Burford Capital Limited per ordinary share is an important
measure of our financial condition and is useful to management
and investors when assessing capital adequacy and our ability
to generate earnings on tangible equity invested by our
shareholders.
For additional information, including reconciliations of our
non-GAAP financial measures to the most directly comparable US GAAP
measures and reconciliations of our alternative performance
measures additional to those set forth in this announcement, see
the 2Q23 Quarterly Report furnished to the US Securities and
Exchange Commission on September 13, 2023 and made available on our
website at http://investors.burfordcapital.com . Non-GAAP financial
measures should not be considered in isolation from, as substitutes
for, or superior to, financial measures calculated in accordance
with US GAAP.
This announcement does not constitute an offer to sell or the
solicitation of an offer to buy any ordinary shares or other
securities of Burford.
This announcement does not constitute an offer of any Burford
private fund. Burford Capital Investment Management LLC, which acts
as the fund manager of all Burford private funds, is registered as
an investment adviser with the US Securities and Exchange
Commission. The information provided in this announcement is for
informational purposes only. Past performance is not indicative of
future results. The information contained in this announcement is
not, and should not be construed as, an offer to sell or the
solicitation of an offer to buy any securities (including, without
limitation, interests or shares in any of Burford private funds).
Any such offer or solicitation may be made only by means of a final
confidential private placement memorandum and other offering
documents.
Forward-looking statements
This announcement contains "forward-looking statements" within
the meaning of Section 21E of the US Securities Exchange Act of
1934, as amended, regarding assumptions, expectations, projections,
intentions and beliefs about future events. These statements are
intended as "forward-looking statements". In some cases,
predictive, future-tense or forward-looking words such as "aim",
"anticipate", "believe", "continue", "could", "estimate", "expect",
"forecast", "guidance", "intend", "may", "plan", "potential",
"predict", "projected", "should" or "will" or the negative of such
terms or other comparable terminology are intended to identify
forward-looking statements, but are not the exclusive means of
identifying such statements. In addition, Burford and its
representatives may from time to time make other oral or written
statements which are forward-looking statements, including in its
periodic reports that Burford files with, or furnishes to, the US
Securities and Exchange Commission, other information made
available to Burford's security holders and other written
materials. By their nature, forward-looking statements involve
known and unknown risks, uncertainties and other factors because
they relate to events and depend on circumstances that may or may
not occur in the future. Burford cautions you that forward-looking
statements are not guarantees of future performance and are based
on numerous assumptions, expectations, projections, intentions and
beliefs and that Burford's actual results of operations, including
its financial position and liquidity, and the development of the
industry in which it operates, may differ materially from (and be
more negative than) those made in, or suggested by, the
forward-looking statements contained in this announcement.
Significant factors that may cause actual results to differ from
those Burford expects include, among others, those discussed under
"Risk Factors" in Burford's annual report on Form 20-F for the year
ended December 31, 2022 filed with the US Securities and Exchange
Commission on May 16, 2023 and other reports or documents that
Burford files with, or furnishes to, the US Securities and Exchange
Commission from time to time. In addition, even if Burford's
results of operations, including its financial position and
liquidity, and the development of the industry in which it operates
are consistent with the forward-looking statements contained in
this announcement, those results of operations or developments may
not be indicative of results of operations or developments in
subsequent periods.
Except as required by law, Burford undertakes no obligation to
update or revise the forward-looking statements contained in this
announcement, whether as a result of new information, future events
or otherwise.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
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For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR LJMLTMTTBMIJ
(END) Dow Jones Newswires
September 13, 2023 07:00 ET (11:00 GMT)
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