The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Yuri.F what if LCM adopted fair value accounting like BUR? Wouldn't the figures look much better? but they don't. So no credit for that? you could argue they could adopt fair value accounting as they have a good idea of the carrying value of a lot of their cases, although these are not fully resolved.
for the upcoming results will there not be at least the windfall from the sovereign fund (i think they mentioned 50 million in performance fees to be collected in the last results from record recoveries), the Russian divorce case (20 million as the rest was already recognized as unrealised gains, good to see the back of that case) , and the Steinhoff settlement (not sure of the numbers there) ? plus any other cases that we don't know of, so a good chance the results could be good?
sometimes these can be OTC trades that occurred previously in past days and only come through now? big blocks like that can be sold at a discount, i don't think it means much. I have seen it with other shares..
Second, some amount of 2020’s success went to our
funds, where it is expected to generate performance fees
that will ultimately be crystallized to us under the funds’
waterfalls. We do not recognize those fees until they are
paid, so the impact of 2020’s successes on the funds are
not reflected in our income statement. Had they been,
2020 would have exceeded 2019 nicely.
this is what laconic was saying about gains from the SW funds:
"Third, that level of growth requires a more diversified
capital structure to support it than a simple cash balance
sheet. Thus, we have made increasing use of our third party funds to support that growth. That, however, alters
the timing of our cash receipts, as the receipt of
performance fees is typically back-end loaded. And that’s
partly why, in a strong year, our operating profit has
actually declined somewhat, as we are essentially
subsidizing the funds today with operating expenses in
exchange for the expectation of future performance fees.
Today, the balance sheet advances about half of each
new dollar deployed but bears 100% of the operating cost. "
does anyone understand why Repsol would have to pay this back if Burford win? surely they would have to pay it back regardless? are Repsol and Peterson completely separate entities? thanks
Does anyone know what the consensus earnings estimates are for tomorrow? thanks
yea but Alavib there are companies with far higher P/E ratios, that actually post profits below expectations but the SP still reacts positively, say Tesla though admittedly it's a completely different industry. I am sure there are many other examples. I think the biggest problem with BUR right now is sentiment, complicated income statements and a lack of understanding of their bizz model, and some institution that is relentlessly selling ..
https://www.businesslive.co.za/bd/markets/2021-03-03-watch-stock-picks-intel-and-burford-capital/
so.. today and monday should see some action in the YPF case? extract from that article in La Nation:
"The plaintiffs notified Sebastián Eskenazi by means of a certificate requesting documents and testimony on February 11, 2021, during a stopover in Miami," says the document presented by Petersen Energía (who used to belong to the Eskenazi), which LA NACION accessed . And it continues: "The citation documents require the presentation of documents on February 26, 2021 and a statement on March 1, 2021."
thank you Laconic, that clarifies things. I did not realize this regarding the gains through the funds. So the current profit figures do not account for the "splitting the profits" part of the gains through the fund? how long does it typically take BUR to repay the capital back ?
hi guys, thanks for all the insightful posts. I need to take more time to look into the statement, but i guess the big question is why did such high (historic) realized gains equated to a slightly lower year on year profit, was it all down to the tax bill and higher expenses they mention? must be a massif tax bill then. Or is it because they re-deployed a lot of the gains into new cases (as they said H2 saw an increase in commitments more or less in line with the previous years H2 commitments). Like everyone here, struggling with the sp movement but all in all it was a positive year for BUR.
No negativity in this article..
https://www.morningstar.co.uk/uk/news/AN_1613568147265985000/burford-capital-reinstates-dividend-after-historic-2020.aspx