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(Alliance News) - Burford Capital Ltd said Wednesday that 2020 was the best year in its history for portfolio performance, generating record levels of realised gain and more cash from successes than ever before.
The litigation finance firm fully reinstated its dividend in response.
Shares in Burford Capital were 0.5% higher in London on Wednesday afternoon at 705.00 pence.
"Burford ended the year with its highest-ever levels of cash liquidity, and its portfolio of ongoing matters is larger than it has ever been," the company said.
"Burford's concluded case [return on invested capital] rose to its highest year-end level in our history. New business, which suffered from the effects of the pandemic in the first half of 2020, snapped back in the second half. Notably, Burford's YPF-related assets, comprising the Petersen and Eton Park claims, did not contribute to earnings in 2020, for the first time in five years."
The claims related to Argentine government-controlled energy company YPF, which was renationalised after having conducted an initial public offering.
Burford's core legal finance business recorded realisations of USD608 million, up 72% from USD354 million in 2019, while balance sheet realisations grew 47% to USD336 million from USD228 million.
This, the company said, led to its capital provision-direct business seeing realised gains doubling to USD361 million from USD178 million, with balance sheet realised gains up 48% to USD179 million from USD121 million.
Chief Executive Christopher Bogart said: "2020 was another year of strong performance for Burford. We achieved record amounts of asset realisations from core litigation finance, which generated more realised gains and cash proceeds from case successes than ever before, driving our cumulative concluded case ROIC to an all-time year-end high of 92%.
"With cash on Burford's balance sheet of USD336 million at the end of 2020, we are in a strong position to fund the additional future growth we anticipate. We look to the remainder of 2021 with excitement."
Burford's said its group-wide total income crossed the half-billion-dollar mark in 2020 for the first time in its history, driven by significant asset realisations during the year.
"As our managed funds participated in a sizeable share of these realisations, which should generate performance fees for Burford in future years, Burford's consolidated and balance sheet-only total income was largely flat in 2020 compared to 2019. Profit after tax was down given modestly higher operating expenses and higher than normal book tax charges," Burford added.
The litigation finance company posted a USD225.5 million pretax profit for 2019, with total income of USD351.8 million.
For 2020, Burford is guiding for total income between USD345 million and USD355 million, with operating profit between USD240 million and USD250 million.
Turning to shareholder distributions, Burford noted it suspended its dividend in early 2020 due to uncertainty caused by the virus pandemic, but given the year's outcome and Burford's strong liquidity position, is proposing a full resumption of the dividend at its previous annual level of 12.5 US cents per share.
"Although Burford did not pay an interim dividend in December 2020, we will nonetheless recommend payment of the entire full year dividend of 12.5 US cents per share in June 2021," it added.
By Paul McGowan; paulmcgowan@alliancenews.com
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