TIDMBUR
RNS Number : 5570C
Burford Capital Limited
13 June 2023
13 June 2023
BURFORD CAPITAL REPORTS FIRST QUARTER 2023 FINANCIAL
RESULTS;
PORTFOLIO-WIDE MOMENTUM DRIVES STRONG REVENUE GROWTH
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 months ended March
31, 2023 ("1Q23") .(1) Burford's report on Form 6-K for 1Q23,
including unaudited condensed consolidated financial statements
(the "1Q23 Quarterly Report"), is available at
http://www.rns-pdf.londonstockexchange.com/rns/5570C_1-2023-6-13.pdf
and on the Burford Capital website at
http://investors.burfordcapital.com .
Christopher Bogart, Chief Executive Officer of Burford Capital,
commented:
"We saw continued positive momentum in the first quarter of 2023
in the progression of our portfolio as court activity and legal
processes further normalized in the aftermath of the Covid-19
pandemic. The breadth of the case activity pick-up was reflected in
capital provision income, excluding our YPF-related assets, more
than doubling to $185 million compared to 1Q22, comprising almost a
sixfold increase in realized gains and 41% growth in unrealized
gains. Fair value gains arising from the favorable summary judgment
ruling in our YPF-related assets contributed to an extraordinary
first quarter for total revenues, driving growth in capital
provision income of 238% to reach nearly $500 million. As an
indicator of ongoing portfolio activity, an additional 12 case
milestones have occurred since our May 16 update when we had
observed 28 milestones and expected 61 more through the remainder
of the year."
(1) All 1Q23 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 1Q23 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 March 31, 2023 and
for the three months ended March 31, 2023 and 2022 included in this
announcement. As Burford has not previously issued quarterly
financial statements, its unaudited condensed consolidated
financial statements for the three months ended March 31, 2022 are
not technically restated.
1Q23 highlights
New business
=================================================================================
Group-wide new business
-- New commitments of $165 million, up 102% compared to 1Q22
(1Q22: $82 million)
-- Deployments of $129 million, up 1% compared to 1Q22 (1Q22:
$128 million)
Burford-only capital provision-direct assets, representing assets
capable of generating highest profits for our equity shareholders
-- New commitments of $101 million, up 130% compared to 1Q22
(1Q22: $44 million)
-- Deployments of $67 million, up 29% compared to 1Q22 (1Q22:
$52 million)
Portfolio and liquidity
=================================================================================
-- Group-wide portfolio grew to $6.6 billion at March 31, 2023
(December 31, 2022: $6.1 billion), due to significant fair
value gains but also new deployments and undrawn commitments
-- Broad pick-up in portfolio activity, with capital provision
income, excluding the YPF-related assets, more than doubling
to $185 million compared to 1Q22
o 464% increase in realized gains and 41% increase in unrealized
gains compared to 1Q22
-- Fair value gains arising from the favorable summary judgment
ruling in the YPF-related assets contributed to an extraordinary
first quarter for total revenues
o Burford-only carrying value of the YPF-related assets
(both Petersen and Eton Park) increased to $1.0 billion
at March 31, 2023 (December 31, 2022: $823 million)
-- Cumulative ROIC since inception from Burford-only capital
provision-direct assets of 89% (December 31, 2022: 88%)
and IRR of 29% (December 31, 2022: 29%)
-- Burford-only cash receipts of $97 million, up 66% compared
to 1Q22 (1Q22: $59 million)
-- Burford-only cash and cash equivalents and marketable securities
of $183 million at March 31, 2023 (December 31, 2022: $210
million)
o Due from settlement of capital provision assets decreased
14% to $99 million at March 31, 2023 (December 31, 2022:
$115 million, of which 17% was collected in cash in 1Q23)
Income
=================================================================================
-- Total revenues increased 209% to $381 million (1Q22: $123
million), represented by a higher level of case activity
and portfolio progression, including $192 million of fair
value gains, net of third-party interests, in the YPF-related
assets and $185 million of capital provision income excluding
the YPF-related assets
-- Burford-only capital provision-direct realizations of $64
million (1Q22: $21 million) and realized gains of $36 million
(1Q22: $10 million), with a single matter generating a realized
gain of $27 million
-- Burford-only annualized capital provision-direct realized
loss rate of 0.9% of average portfolio at cost in 1Q23 (2022:
1.0%)
-- Operating income increased 252% to $327 million (1Q22: $93
million), with significant growth in capital provision income
compared to 1Q22, partially offset by third-party interests
in the YPF-related assets fair value adjustments and higher
total operating expenses due to increases in non-cash accruals
in light of the positive performance of Burford's share
price, the increase in the carrying value of the YPF-related
assets and the increase in the carrying value of a legacy
asset recovery matter
-- Net income attributable to Burford Capital Limited shareholders
increased 361% to $259 million (1Q22: $56 million)
o Net income per ordinary and diluted share of $1.17 (1Q22:
$0.25)
Capital
=================================================================================
-- Total shareholders' equity attributable to Burford Capital
Limited was $1,992 million at March 31, 2023 (December 31,
2022: $1,743 million)
o Total shareholders' equity attributable to Burford Capital
Limited per ordinary share of $9.10 at March 31, 2023
(December 31, 2022: $7.97 per ordinary share)
o Tangible book value attributable to Burford Capital Limited
per ordinary share (non-GAAP) of $8.49 at March 31, 2023
(December 31, 2022: $7.36 per ordinary share)
Investor and Analyst Conference Call
Burford will hold a conference call for investors and analysts
at 10.00am EDT / 3.00pm BST on Tuesday, June 13, 2023. The dial-in
number for the conference call is +1 646 787-9445 (USA) / +44 (0)20
3936 2999 (UK) / +44 (0)20 3936 2999 (all other locations) and the
access code is 716110. 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/646f1786796b421300718cbb/ohia
, and pre-registration at that link is encouraged.
An accompanying 1Q23 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 Tuesday, June 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 694153. A
replay facility will also be accessible through the webcast at
https://www.investis-live.com/burfordcapital/646f1786796b421300718cbb/ohia
.
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
Arnav Kapoor
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 months ended March 31, 2023 and 2022, the condensed
consolidated and Burford-only statements of financial position at
March 31, 2023 and December 31, 2022 and corresponding
reconciliations from consolidated to Burford-only financial results
.
Summary condensed consolidated statements of operations
For the three months ended March 31,
($ in thousands) 2023 2022
======================================================================== ==================== ================
Capital provision income 475,933 140,739
Less: Third-party interests in capital provision assets (100,345) (16,639)
Asset management income 1,997 3,114
Services and other income 3,320 (4,112)
Total revenues 380,905 123,102
Total operating expenses 54,299 30,287
Operating income 326,606 92,815
Finance costs and loss on debt extinguishment 20,553 15,841
Foreign currency transactions (gains)/losses (2,440) 514
Income before income taxes 308,493 76,460
(Provision for) income taxes (7,112) (3,424)
Net income 301,381 73,036
Net income attributable to Burford Capital Limited shareholders 259,425 56,280
Net income attributable to Burford Capital Limited per ordinary share:
Basic $1.19 $0.26
Diluted $1.17 $0.25
Summary Burford-only statement of operations
For the three months ended March 31,
($ in thousands) 2023 2022
=========================== ================== ==================
Capital provision income 316,015 100,587
Asset management income 19,357 10,934
Services and other income 3,305 (5,244)
Total revenues 338,677 106,277
Operating income 284,668 76,486
Net income 259,425 56,280
Net income per share:
Basic $1.19 $0.26
Diluted $1.17 $0.25
Reconciliation of summary condensed consolidated statement of
operations to summary Burford-only statement of operations
For the three months ended March 31, 2023
---------------------------------------------------------------------------------
Elimination of third-party interests
=====================================================
Strategic Advantage
($ in thousands) Consolidated Value Fund BOF-C Colorado Fund Other Burford-only
------------------ ------------ ---------- --------- --------- --------- -------- ------------
Capital provision
income 475,933 (107) (48,308) (99,769) (7,022) (4,712) 316,015
Less: Third-party
interests in
capital provision
assets (100,345) - - 99,764 - 581 -
Asset management
income 1,997 46 17,314 - - - 19,357
Services and other
income 3,320 - (1) - - (14) 3,305
Total revenues 380,905 (61) (30,995) (5) (7,022) (4,145) 338,677
Operating income 326,606 94 (31,025) - (6,899) (4,108) 284,668
Net income/(loss) 301,381 94 (31,025) - (6,899) (4,126) 259,425
For the three months ended March 31, 2022
---------------------------------------------------------------------------------
Elimination of third-party interests
=====================================================
Strategic Advantage
($ in thousands) Consolidated Value Fund BOF-C Colorado Fund Other Burford-only
------------------ ------------ ---------- --------- --------- --------- -------- ------------
Capital provision
income 140,739 (508) (18,595) (15,925) (366) (4,758) 100,587
Less: Third-party
interests in
capital provision
assets (16,639) - - 15,925 - 714 -
Asset management
income 3,114 161 7,659 - - - 10,934
Services and other
income (4,112) (1,132) - - - - (5,244)
Total revenues 123,102 (1,479) (10,936) - (366) (4,044) 106,277
Operating income 92,815 (1,112) (10,960) - (215) (4,042) 76,486
Net income/(loss) 73,036 (1,112) (10,960) - (215) (4,469) 56,280
Summary condensed consolidated statement of financial
position
At
($ in thousands) March 31, 2023 December 31, 2022
============================================================================ =============== ==================
Total assets 4,681,314 4,288,359
Total liabilities 2,027,953 1,901,289
Total Burford Capital Limited equity 1,992,278 1,742,584
Non-controlling interests 661,083 644,486
Total shareholders' equity 2,653,361 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 9.10 7.97
Total shareholders' equity per basic ordinary share 12.12 10.92
Reconciliation of summary condensed consolidated statement of
financial position to summary Burford-only statement of financial
position
At March 31, 2023
------------------------------------------------------------------------------------
Elimination of third-party interests
========================================================
Strategic Advantage
($ in thousands) Consolidated Value BOF-C Colorado Fund Other Burford-only
Fund
----------------- ------------ --------- ---------- ---------- ---------- --------- ------------
Total assets 4,681,314 (2,747) (491,735) (509,018) (109,839) (73,919) 3,494,056
Total liabilities 2,027,953 (279) (4,234) (509,018) (142) (12,502) 1,501,778
Total
shareholders'
equity 2,653,361 (2,468) (487,501) - (109,697) (61,417) 1,992,278
At December 31, 2022
------------------------------------------------------------------------------------
Elimination of third-party interests
========================================================
Strategic Advantage
($ in thousands) Consolidated Value BOF-C Colorado Fund Other Burford-only
Fund
----------------- ------------ --------- ---------- ---------- ---------- --------- ------------
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 deployments from a consolidated
basis to a Group-wide basis
For the three months ended March 31, 2023
-------------------------------------------------------------------------------
Eliminations and
($ in thousands) Consolidated adjustments Burford-only Other funds BOF-C Group-wide
--------------------------- ============ ================ ------------- ----------- ------- ----------
Capital provision-direct 84,685 (17,692) 66,993 6,913 17,452 91,358
Capital provision-indirect 34,000 (28,333) 5,667 28,333 - 34,000
Post-settlement - - - 3,867 - 3,867
--------------------------- ------------ ---------------- ------------- ----------- ------- ----------
Total new deployments 118,685 (46,025) 72,660 39,113 17,452 129,225
=========================== ============ ================ ============= =========== ======= ==========
For the three months ended March 31, 2022
-------------------------------------------------------------------------------
Eliminations and
($ in thousands) Consolidated adjustments Burford-only Other funds BOF-C Group-wide
--------------------------- ============ ================ ------------- ----------- ------- ----------
Capital provision-direct 91,121 (39,163) 51,958 5,741 39,013 96,712
Capital provision-indirect 14,747 (13,258) 1,489 13,258 - 14,747
Post-settlement - - - 17,036 - 17,036
--------------------------- ------------ ---------------- ------------- ----------- ------- ----------
Total new deployments 105,868 (52,421) 53,447 36,035 39,013 128,495
=========================== ============ ================ ============= =========== ======= ==========
Reconciliation of consolidated portfolio to Group-wide
portfolio
($ in thousands) At March 31, 2023 At December 31, 2022
============================================== ======================= ==============================
Consolidated carrying value 4,202,864 3,735,556
Consolidated undrawn commitments 1,790,550 1,720,727
---------------------------------------------- ----------------------- ------------------------------
Consolidated portfolio 5,993,414 5,456,283
---------------------------------------------- ----------------------- ------------------------------
Eliminations of third-party interests:
Less: Attributable to carrying value (1,244,931) (1,100,137)
Less: Attributable to undrawn commitments (426,816) (413,446)
Burford-only Carrying value 2,957,933 2,635,419
Burford-only undrawn commitments 1,363,734 1,307,281
---------------------------------------------- ----------------------- ------------------------------
Burford-only portfolio 4,321,667 3,942,700
---------------------------------------------- ----------------------- ------------------------------
Other funds carrying value 1,098,414 1,076,320
Other funds undrawn commitments 267,001 239,145
---------------------------------------------- ----------------------- ------------------------------
Other funds portfolio 1,365,415 1,315,465
---------------------------------------------- ----------------------- ------------------------------
BOF-C carrying value 539,785 516,982
BOF-C undrawn commitments 384,633 371,724
---------------------------------------------- ----------------------- ------------------------------
BOF-C portfolio 924,418 888,706
---------------------------------------------- ----------------------- ------------------------------
Total group-wide portfolio 6,611,500 6,146,871
============================================== ======================= ==============================
Reconciliation of capital provision income excluding YPF-related
assets
For the three months ended March 31,
($ in thousands) 2023 2022
-------------------------------------------------------- ------------------- -----------------
Capital provision income 475,933 140,739
Less: Capital provision income from YPF-related assets (291,345) (49,839)
-------------------------------------------------------- ------------------- -----------------
Capital provision income excluding YPF-related assets 184,588 90,900
======================================================== =================== =================
Reconciliation of consolidated to Burford-only carrying value of
YPF-related assets
At March 31, 2023 At December 31, 2022
------------------------------------------ ------------------------------------------
Elimination of Elimination of
third-party third-party
($ in thousands) Consolidated interests Burford-only Consolidated interests Burford-only
----------------- ------------ -------------- ------------ ------------ -------------- ------------
Deployed cost 62,071 (6,828) 55,243 61,610 (6,985) 54,625
Unrealized gain 1,462,284 (502,297) 959,987 1,170,939 (402,529) 768,,410
------------------ ------------ -------------- ------------ ------------ -------------- ------------
Carrying value of
YPF-related
assets 1,524,335 (509,105) 1,015,230 1,232,549 (409,514) 823,035
================== ============ ============== ============ ============ ============== ============
Reconciliation of consolidated proceeds from capital provision
assets to Burford-only cash receipts
For the three months ended March 31,
--------------------------------------
($ in thousands) 2023 2022
========================================================================== ================== ==================
Consolidated proceeds from capital provision assets 144,485 69,369
Less: Elimination of third-party interests (60,563) (14,109)
-------------------------------------------------------------------------- ------------------ ------------------
Burford-only total proceeds from capital provision assets 83,922 55,260
-------------------------------------------------------------------------- ------------------ ------------------
Burford-only proceeds from capital provision-direct assets 77,742 55,613
Burford-only proceeds from capital provision-indirect assets 6,180 97
-------------------------------------------------------------------------- ------------------ ------------------
Burford-only total proceeds from capital provision assets 83,922 55,260
-------------------------------------------------------------------------- ------------------ ------------------
Consolidated asset management income 1,997 3,114
Plus: Eliminated income from funds 17,360 7,820
Burford-only asset management income 19,357 10,934
Less: Non-cash adjustments(1) (7,086) (8,725)
-------------------------------------------------------------------------- ------------------ ------------------
Burford-only proceeds from asset management income 12,271 2,209
Burford-only proceeds from marketable security interest and dividends 881 614
Burford-only proceeds from asset recovery fee for services 83 418
Burford-only proceeds from asset management and other services 13,235 3,241
-------------------------------------------------------------------------- ------------------ ------------------
Cash receipts 97,157 58,501
========================================================================== ================== ==================
(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 to Burford-only due from
settlement of capital provision assets
At March 31, 2023 At December 31, 2022
--------------------------------------- ---------------------------------------
Elimination Elimination
of of
third-party third-party
($ in thousands) Consolidated interests Burford-only Consolidated interests Burford-only
----------------- ------------ ----------- ------------ ------------ ----------- ------------
Due from
settlement of
capital provision
assets 100,494 (1,755) 98,739 116,582 (1,932) 114,650
Reconciliation of consolidated to Burford-only cash and cash
equivalents and marketable securities
At March 31, 2023 At December 31, 2022
------------------------------------------ ------------------------------------------
Elimination of Elimination of
third-party third-party
($ in thousands) Consolidated interests Burford-only Consolidated interests Burford-only
----------------- ------------ -------------- ------------ ------------ -------------- ------------
Cash and cash
equivalents 65,994 (12,620) 53,374 107,658 (33,979) 73,679
Marketable
securities 130,056 - 130,056 136,358 - 136,358
------------------ ------------ -------------- ------------ ------------ -------------- ------------
Total cash and
cash equivalents
and marketable
securities 196,050 (12,620) 183,430 244,016 (33,979) 210,037
================== ============ ============== ============ ============ ============== ============
Reconciliation of consolidated to Burford-only realizations
For the three months ended March 31, 2023 For the three months ended March 31, 2022
--------------------------------------------- ---------------------------------------------
Eliminations and Eliminations and
($ in thousands) Consolidated adjustments Burford-only Consolidated adjustments Burford-only
---------------------- ============ ================ ------------- ============ ================ -------------
Capital
provision-direct 115,732 (53,986) 61,746 21,211 (859) 20,352
Capital
provision-indirect 12,580 (10,484) 2,096 5,352 (4,575) 777
Post-settlement - - - - - -
---------------------- ------------ ---------------- ------------- ------------ ---------------- -------------
Total realizations 128,312 (64,470) 63,842 26,563 (5,434) 21,129
====================== ============ ================ ============= ============ ================ =============
Reconciliation of consolidated to Burford-only realized
gains
For the three months ended March 31, 2023 For the three months ended March 31, 2022
--------------------------------------------- ---------------------------------------------
Eliminations and Eliminations and
($ in thousands) Consolidated adjustments Burford-only Consolidated adjustments Burford-only
---------------------- ============ ================ ------------- ============ ================ -------------
Realized gains
relative to cost 69,442 (33,829) 35,613 12,303 (2,291) 10,012
Reconciliation of consolidated to Burford-only realized gain on
the conclusion of one matter in 2023
For the three months ended March 31, 2023
---------------------------------------------
Eliminations and
($ in millions) Consolidated adjustments Burford-only
--------------------------------------------------- ============ ================ -------------
Realized gain on one matter that concluded in 2023 49.4 (22.9) 26.5
Reconciliation of tangible book value attributable to Burford
Capital Limited per ordinary share
At At
($ in thousands, except share data) March 31, 2023 December 31, 2022
============================================================================ ============== ==== =================
Total Burford Capital Limited equity 1,992,278 1,742,584
Less: Goodwill (133,936) (133,912)
----------------------------------------------------------------------------- -------------- ---- -----------------
Tangible book value attributable to Burford Capital Limited 1,858,342 1,608,672
----------------------------------------------------------------------------- -------------- ---- -----------------
Basic ordinary shares outstanding 218,957,218 218,581,877
----------------------------------------------------------------------------- -------------- ---- -----------------
Tangible book value attributable to Burford Capital Limited per ordinary
share 8.49 7.36
----------------------------------------------------------------------------- -------------- ---- -----------------
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 1Q23 Quarterly Report furnished to the US Securities and
Exchange Commission on June 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
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
QRFFJMLTMTIBMMJ
(END) Dow Jones Newswires
June 13, 2023 07:00 ET (11:00 GMT)
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