Last checked at 18 Mar 2015 07:01
18 March 2015
BURFORD CAPITAL DELIVERS 43% GROWTH IN 2014 OPERATING PROFIT
34% increase in dividend proposed
Burford Capital Limited ("Burford" or "the Company"), the world's largest provider of investment capital and risk solutions for litigation,announces its financial results for the full year ended 31 December 2014.
Highlights
· 43% increase in Burford's operating profit for 2014 to $60.7 million (2013: $42.5 million)*, representing a 17% return on equity
· 34% dividend increase proposed, to 7.00¢ per share (2013: 5.23¢), composed of 1.74¢ interim dividend paid in December 2014 and final dividend of 5.26¢ to be paid in June 2015
· 35% increase in Burford's income for the year, to $82.0 million (2013: $60.7 million):
o 23% increase in income from the litigation investment portfolio amid continuing increases in activity levels;
o 16% increase in insurance income reflecting strong performance of the historical book
· Continued strong investment returns: Since inception, 32 investments have generated $209 million in gross investment recoveries** and $78 million net of invested capital, producing a 60% net return on invested capital
o This represents a 56% increase in net investment recoveries over the position at 31 December 2013 and a significant increase in net ROIC from its prior 52% level
· Material increase in cash generation: Burford generated $63 million of cash from the investment portfolio in 2014, an increase of 98% over 2013's level
· Robust demand for Burford's capital reflected in $150 million of new investment commitments in 2014, more than three times 2013's level
· Completion of a successful issue of retail bonds on the main market of the London Stock Exchange, raising $150 million (£90 million) of capital to be deployed in litigation finance activities
*Excluding the accounting impact of the Burford UK acquisition, the 2012 Reorganisation and 2013 UK Restructuring.
** See definitions in Note 3 of Annual Report.
Christopher Bogart, Chief Executive Officer of Burford, commented:
"We are very pleased with 2014's results. It was an excellent year for Burford with growth in revenue and profits across all areas of the Company. As Burford enters its sixth year, we have continued to generate strong investment returns and continue to see growing, evolving and diversifying demand for the litigation finance solutions we provide."
Sir Peter Middleton, Chairman of Burford, commented:
"We are pleased to report another successful year of significant growth and progress for Burford. As a result, the Board recommends a 34% increase in the dividend. We are proud to have assembled what is clearly the leading and most experienced team in the litigation finance industry and we look forward to our future progress in this rapidly evolving sector. "
Financial Summary
A financial summary is set out below. Burford's complete annual report and audited accounts are attached in PDF form to this RNS and are available from the Burford website: www.burfordcapital.com
The figures for taxation and profit after tax exclude the impact of the Burford UK acquisition, the 2012 Reorganisation and the one-off 2013 UK Restructuring and are shown to assist in understanding the underlying performance of the Company. All other figures presented are derived directly from the audited consolidated financial statements.
2014 | 2013 | % change | |||
$'000 | $'000 | ||||
Litigation investment income | 47,847 | 38,847 | 23% | ||
Insurance income | 24,338 | 20,910 | 16% | ||
New initiatives income | 222 | - | |||
Other income | 9,627 | 903 | |||
Total income | 82,034 | 60,660 | 35% | ||
Operating expenses - litigation investment | (10,416) | (9,005) | |||
Operating expenses - insurance | (5,396) | (6,779) | |||
Operating expenses - new initiatives | (1,561) | - | |||
Operating expenses - corporate | (3,950) | (2,362) | |||
Operating profit | 60,711 | 42,514 | 43% | ||
Finance costs | (3,652) | - | |||
Profit before tax and the impacts relating to the Burford UK acquisition, the 2012 Reorganisation and 2013 UK Restructuring costs | 57,059 | 42,514 | 34% | ||
Taxation* | (2,906) | (2,276) | |||
Profit after tax** | 54,153 | 40,238 | 35% | ||
* Taxation does not include deferred taxation credit on amortisation of embedded value intangible asset.
** This is profit after tax excluding the impact of the Burford UK acquisition, the 2012 Reorganisation, and 2013 UK Restructuring.
Investor and Analyst Conference Call
Burford will host a conference call for investors and analysts at 11:30am (GMT) / 7:30am (EDT) on Wednesday 18 March 2015. The dial-in number for the conference call is 0800 376 7922 / 1 (866) 966-1396 and the passcode is 97542914.
An accompanying presentation will be available on the Investor Relations page of the Burford website: www.burfordcapital.com/investor-relations/
A replay facility will be available until 25 March 2015. The dial-in number for the replay facility is 0800 953 1533 / 1 (866) 247-4222 and the passcode is 97542914.
http://www.rns-pdf.londonstockexchange.com/rns/7134H_-2015-3-17.pdf
For further information, please contact:
Macquarie Capital (Europe) Limited - NOMAD and Joint Broker
Ken Fleming +44 (0)20 3037 2000
Nicholas Harland
Espirito Santo Investment Bank - Joint Broker
John Riddell +44 (0)20 7456 9191
Harry Stockdale
RBC Capital Markets - Joint Broker
Oliver Hearsey +44 (0)20 7653 4000
Neustria Partners - Financial Communications for Burford Capital
Robert Bailhache +44 (0)20 3021 2580
robert.bailhache@neustriapartners.com
About Burford Capital
Burford Capital is the world's largest provider of investment capital and risk solutions for litigation with the largest and most experienced dedicated team in the industry. Burford is publicly traded on the London Stock Exchange's AIM market under the ticker symbol BUR. Burford provides a broad range of corporate finance and insurance solutions to lawyers and clients engaged in significant litigation and arbitration around the world.
For more information about Burford, visit www.burfordcapital.com
-------------------------------------------
Sir Peter Middleton, Chairman of Burford, has informed the Company that Hume Capital Securities plc, another firm as to which he serves as Chairman, has been placed into administration and he will no longer serve as a director thereof.