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I think there is nothing much to read into todays action. We had good idea this was the value of settleement before rns.
Only thing that could move rns is fv accounting but that probably also depends on a fickle market.
The company doea what they and quietly build value. I just hold it long term and ignore the noise
Pros and cons. Fair value without historical allows the trolls to play.
Not sure why this is valued here. If you found a company with roic of 70%+. You would not rven value it at book value.
Not checking in on this so much as long term hold. When chairman scooped up 5m gbp sub 1 pound it was pretty clear. He ran hug investment banks and is on iG board. Clever guy
Or watch the share price in the coming days. Don't think you can read anything into a minor fall in the share price today. The spread has widened which is generally a sign of lower liquidity and you could interpret it that there is a shortage of stock (or lack of trade, but likely the shortage of stock on current prices).
The spread has been between 5% and 7% since Friday, somewhat higher than it's been for a long period of time.
Let's see what happens. Personally, I think this will be GBP120 by the end of the year, if not by the end of the month.
One can ony assume from the almost 3% fall in share price today since the details of the settlement were announced that these sums were considered by the market to be less than had been priced into the share price. The valuation that is placed on the company seems to me to be influenced primarily by the vagaries of Court decisions. In short, Courts come up with such bizarre judgements at times that no one wants to count their chickens before they are hatched. The result is the share price of LIM is likely to follow the awards that are actually made much more closely than the awards that pundits think ought to be made, irrespective of which method of accounting is used by the company in its accounts.
I think their plan is to do both Gallmat (which is helpful).
The aspect I do like about the Fair Value method is that it does give the reader the Board's view of the value of the in-process cases. As they are delivering 2-3x cost, the difference in the inherent value of the business will be substantial. Looking forward to their results which are due out very soon now.
I hope they also keep a historical cost view. That was you do not get all the BS about people not understanding.
Just nuts. Making returns in 100s% and probably just a bit over bookvalue.
Main thing is CEO is invested heavily and is solid. You cannot say that of many aim stocks
I am now a convert to this company - we have now seen a number of very impressive and large settlements come through.
Maybe more importantly, they have (finally!) decided to use Fair Value Accounting (as per Burford - the market leader). This is absolutely transform their numbers in a very positive and material way (P&L and Balance Sheet, no cash effect). The old numbers will be unrecognisable. DYOR but imho this now looks set to take off in a serious way.
To us i suspect about $33M AUD before splitting with fund 1 based on draft numbers to the court.
What is final payout
Federal court of Australia just approved the PFAS class action settlement.
News inbound.
Thanks very useful. So 3x return. Or 6x if within fund.
Hopefully they drag the payment out so our payment happens later when we get 4x
Page 4 references our returns:
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02695533-6A1162519?access_token=83ff96335c2d45a094df02a206a39ff4
Pls post the link. Not sure.
There was a covid backlog. What we can say.
1. Of the cases realised so far roic is far higher than historical 150pct. This is being driven by fact our returns are based on multiple of capital that increases with time.
2. The covid effect is derisking the ongoing expected realisations. When we win, we win much bigger ( due to time multiple). Losses are not impacted by time.
We will have lots of cases still coming close tp judgement. If you look at maturity profile of cases.
Proceeding of cases were delayed during Covid period. Should we expect increased number of cases in the coming quarters resolved, as Covid delays will be unpacked?
And the second question - there is pretty substantial case waiting for granting an award (AUD10,4M investment, AUD20-40M for LIT if succesful). The arbitration hearing were completed in November 2022. Did LIT indicated standard timeframe between final hearing and reward for UNICTRAL proceedings?
Simon Thompson has provided an update of his recent Buy tip for Litigation Capital Management. The article reviews the lack of impact from the Supreme Court ruling and the benefits of moving from Book Value to Fair Value.
The article concludes:
"Furthermore, having delivered a record performance in the financial year to 30 June 2023, the board plan to declare a dividend per share of 2.25p when LCM releases results in September, a pay-out that analysts at Investec had not anticipated. The brokerage expects LCM to report 70 per cent higher revenue of A$51.7mn (£27mn) in the 12-month period and increase pre-tax profit by a quarter to A$25.3mn. On this basis, expect earnings per share (EPS) of 16.4c (8.6p). Investec expects EPS to almost double to 30.6c (16p) in the new financial year, implying the shares are rated on a forward price/earnings (PE) ratio of five.
So, LCM is well-funded, delivering positive news flow, has a modest earnings multiple and the forthcoming results will reveal material hidden value. The shares also trade on 1.8 times spot book value under conservative cash accounting – and therefore I re-iterate my buy call (‘Litigation funder LCM makes an eye-watering return’, 19 June 2023). Buy."
I wrote to cfo and highlighted that they should have a section in presentations on legal landscape.
Getting the answer from a question not answered in a presentation and uploaded as non core is not good enough. Clearly it was a core ?
If they are aware of it, we should cover in presentation. They should also have an RNS ready to go.
Its just a matter of time.
I fully understand the board taking time to ensure that the RNS is right and not rushing one out. A rushed RNS with any errors could cause appreciable damage to the share price. Act in haste and repent at leisure, as the saying goes. Regarding the price dip, yes it did necessitate an unscheduled change of underwear but longer term the share price should recover as favourable results come through. As a long term holder, I will not lose any sleep over this wobble.
Totally agree @goleftmassa. If that ruling was announced after market hours & the RNS from LIT lands this morning then I suspect we'd be trading over £1 right now. Bulletin boards are both a friend & enemy in situations like yesterday, it was a relief to find the source of the fall, but then very stressful to read boll*cks from the likes of Forensic505 who clearly didn't have a clue what they were talking about.
Suspect we'll be punching out to new highs in no time, as faith in management has been significantly reinforced.
Interesting to see how many were bought at 72p - several hundred thousand pounds worth in a handful of trades.
I filled my boots, but not to that level.
Yes definitely agree. I was surprised when they hadn't. Thankfully they've come out with a clear statement confirming the same early this morning.
I must admit that I am left quite frustrated, even after today's partial recovery.
LIT approached £1 yesterday before a completely ridiculous reaction to the Supreme Court ruling. Researching and concluding my post at 15:38 took approximately 5 to 10 minutes. I was 90%+ confident. LIT had given us the information!
Yey, 10 minutes later, a moron states I am wrong. So confidently so that I had to go and double-check again. I wasn't.
Ultimately, we have lost precious momentum and that is extremely disappointing.
Thanks for the post.
I did not actually recall this question and only discovered the Q and A section yesterday.
I also think they should advise on these issues as part of the presentation.
Hello, first time posting - I was about to post the link to the IMC presentation but see the actual Questions & response are already up. I asked these two questions as was viewing this issue as a possibly significant risk, and at the least could lead to real uncertainty, to LCM's business and it was directly in relation to the matter for which we have this decision today. They did not answer the questions on the day of the presentation on 14th March 2023; I did follow up and these were subsequently answered in the recorded and uploaded Q&A.
The answer in relation to the first question is absolutely relevant and important however I do think the answer to the second question 'whether they had advised PI's or investors who participate in the funds' as to the how the case might affect LCM's business, is also of real importance. Patrick answered that they had not reported this matter as they did not perceive this as a risk. Given their line of work which is all based on quantitfying risk and the fact they will have access to the best advice, this answer made me far more comfortable.
That's not to say there isn't any risk and it's certainly appropriate for LCM to clarify the position ASAP but I think this part of the answer should also allay investors' concerns somewhat. In addition, on 17th March 2023 the Chairman and Patrick (CEO) purchased c. £1.2m and £111k of shares respectively at £0.71 per share.
Sorry if this is repetition but I wasn't sure the second question had been noted and as a shareholder I much appreciated this part of the response.
Best wishes,
Mike