Member Info for Forensic505

Good coverage in the Financial Times today on the Bounce Back Project MANO doing with Barclays Bank: https://www.ft.com/content/dd3d9a40-96d1-4b34-a6c7-b5e76b843103

Looks like CFO thrown under the proverbial bus and rather inexperienced financial controller promoted (cant see any CFO PLC experience there). Oldest trick in the book. Having watched Robert the CFO on various "Investor Meet the Company" presentations, he always seemed like a decent and solid "numbers guy" who was rather dominated by the CEO on the big strategy issues. Looks like CEO's foray into litigation funding has been pretty much a disaster and the M&A business performing predictably poorly in a very difficult M&A market. I think the CEO should take more responsibility for the strategy and the consequent share price that is now far below its IPO price.

Yes - quite widely reported now.

I see from another board that MD who was Head of EMEA Origination has left LCM for a start up. I believe MD and Nick Rowles Davies (who seems to have left under a bit of a cloud a year or so ago) were the two senior bods from Chancery Capital that merged with LCM just prior to our IPO. Hopefully means that now our CEO is based in the UK he will make some new senior hires. New year new broom !

Hahaha - hope the family turkey works out better! Just watching that YouTube that Gallmat put up. It’s a very good watch. The CEO is very impressive and the interviewer is no patsy, so it’s not a silly puff piece. Strongly recommended.

Ok thanks Scooby. Didn’t know that. You get a scooby-snack :-) Cheers

You must DYOR but someone has suggested to me that LIT are pricing things like the Comet case at their cost of capital. If true then that is insane. This is high risk litigation. High risk must mean high return. But this would explain the very poor share price performance, so maybe it is true??? Has the world gone completely mad???

Great discussion mate. Thank you.

Many thanks mate. I'll take a look.

Helpful guidance. Thank you.

Thanks Gallmat - if that $45m is 3rd party contribution to Operating Cashflows then surely it should be in the top half to get to LIT's net operating cashflow. It is not explained in the notes unfortunately but to me it just looks like their Fund Management business investing in new (ongoing) cases. So not LIT's operating money, its 3rd party monies.

Good luck Nick. I did note that it is subject to "confirmatory due diligence". So not a total slam dunk.

Surprised me that this one is going private having only been on the market a relatively short time.

With respect Gallmat that this not true.

See the RNS on 20 Sept 2022 on this site tab above.

Cash outflow BEFORE investing activities:
2021: $56.5m outflow
2022: $55.2m outflow

When researching all the litigation funding companies I look at cashflow statements and bin the P&Ls. The P&Ls are done on such different bases, cash is not. When I look at LIT we have all years since IPO showing heavy net cash outflows. Fine - initially they were building the book but then the CEO moved the long stated 2.7 year average completion estimate to over 4 years. Add to that expensive debt (13%) and allied inevitable covenant concerns and you start to think that the share price is trying to tell you something…

You will say “the Chairman keeps on buying” (which has kept me/us interested) but he was buying well north of £1….

Good idea Gallmat. There has been a lot of promise here but no delivery.

If this is a genuine win that will actually be paid up to LIT, they would have been legally bound to do an RNS.

Hi Ant, I was referring capital structure not the business.

Your comment is interesting. How do you know "there is a large volume of outstanding claims all due within the next 6 months"? How can you be so sure that multiple judgments will be handed down in such a specific time frame ? If you are right this could be an interesting situation !

I think the problem is too much expensive debt (they pay 13%) and large net cash outflows the past two years.

Interesting. I am not a shareholder but have watched this one fairly closely since IPO. I think there is more upside here for incumbent shareholders. I also think the combination with Panmure makes good strategic sense.

Well done Mano.

Copied from another platform - could not put it better myself:

"1. They've had a rare material case go against them. They are appealing. This is the world of litigation.

2. Since the year end (March 2022) we have had: Ukraine, inflation, interest rate rises, supply chain issues - so they have trimmed I think 10% from their forecast settlement values. Sounds sensible to me.

3. Cash flowing in strongly, big debt repayment out of organic cash and looks like sharp rise in new cases coming through.

SP reaction looks like an invitation to me."