NEW
YORK, Sept. 13, 2023 /PRNewswire/ -- Burford
Capital Limited ("Burford"), the leading global finance and asset
management firm focused on law, today announces its unaudited
financial results at and for the three and six months ended
June 30, 2023.1 Burford's
report on Form 6-K at and for the three and six months ended
June 30, 2023, including unaudited
condensed consolidated financial statements (the "2Q23 Quarterly
Report"), is available on the Burford Capital website at
http://investors.burfordcapital.com.
Christopher Bogart, Chief
Executive Officer of Burford Capital, commented:
"We have produced the strongest set of six-month financial
results in Burford's history, with net income attributable to
shareholders of nearly $240 million
and tangible book value per share growth of 12% over the past six
months. Our core portfolio generated a lot of cash with realized
gains tripling on our core portfolio realizations, and new business
was very strong. Our new valuation methodology is sensitive to
interest rate changes and thus higher rates during the first six
months of 2023 were a headwind for the fair value of our core
portfolio, especially during the second quarter, but these
valuation movements are non-cash and unrealized and are expected to
continue to fluctuate over time. Operating expenses reflect strong
portfolio performance and certain idiosyncratic events."
1
In this announcement, references to (1) "2Q23" and "2Q22" are to
Burford's unaudited financial results for the three months ended
June 30, 2023 and 2022, respectively, and (2) "1H23"and "1H22" are
to Burford's unaudited financial results for the six months ended
June 30, 2023 and 2022, respectively.
|
All figures in this
announcement are unaudited and presented on a consolidated basis in
accordance with the generally accepted accounting principles in the
United States ("US GAAP"), unless otherwise stated.
Definitions, reconciliations and information additional to
those set forth in this announcement are available on the Burford
Capital website and in the 2Q23 Quarterly Report (as defined
above). In addition, Burford applied its revised valuation
methodology for capital provision assets to its unaudited condensed
consolidated financial statements at June 30, 2023 and for the
three and six months ended June 30, 2023 and 2022 included in this
announcement. Thus, for comparative purposes, this announcement
contains Burford's restated unaudited condensed consolidated
financial statements for the six months ended June 30, 2022.
However, because Burford has not previously issued quarterly
financial statements, the unaudited condensed consolidated
financial statements for the three months ended June 30, 2022
contained in this announcement have not historically been presented
and therefore are not a restatement of previously issued unaudited
condensed consolidated financial statements.
|
Highlights
Key activity2
- 2Q23 realized gains tripled to $59
million, up 254% from $17
million in 2Q22
- 1H23 realized gains of $94
million, up 255% from $27
million in 1H22
- 2Q23 realizations of $133
million, up 167% from $50
million in 2Q22
- 1H23 realizations of $195
million, up 178% from $70
million in 1H22, reflecting increased portfolio velocity, as
the case backlog in the courts continues to clear
- 2Q23 cash receipts3 of $150
million, up 266% from $41
million in 2Q22
- 1H23 cash receipts3 of $247
million, up 148% from $99
million in 1H22, primarily driven by realizations including
three matters that generated aggregate proceeds of $147 million
- 2Q23 deployments of $181 million,
up 159% from $70 million in 2Q22
- 1H23 deployments of $248 million,
up 103% from $122 million in 1H22,
reflecting in part the balance sheet's greater participation in new
capital provision-direct assets
2
|
Represents
Burford-only capital provision-direct assets
|
3
|
Represents
Burford-only proceeds from capital provision-direct, capital
provision-indirect and asset management
|
Financial results4
- Total revenues in 1H23 of $382
million, up 214% from $122
million in 1H22, driven by higher capital provision income
due to positive momentum in the progression of our portfolio
- In 2Q23, while realized gains were up sharply, total revenues
were $43 million (2Q22: $15 million), reflecting the impact of increased
discount rates on our revised valuation methodology
- Operating income in 1H23 of $284
million, up 332% from $66
million in 1H22; operating income in 2Q23 was essentially at
breakeven, primarily reflecting increased operating expenses
- Increase in operating expenses in 2Q23 driven primarily by an
increase in compensation expenses and general, administrative and
other expenses compared to 2Q22
- All but $1.2 million of the
increase in compensation and benefits in 2Q23 compared to 2Q22 was
non-cash, driven principally by accruals as a result of increases
in Burford's share price and asset values
- Increase in general, administrative and other expenses in 2Q23
compared to 2Q22 includes $3.3
million in audit, professional and corporate legal fees due
to the development of the revised fair value methodology and
build-out of quarterly reporting
- Net income attributable to Burford Capital Limited shareholders
of $238 million in 1H23 (1H22:
$7 million), with net income per
ordinary and diluted share of $1.09
and $1.07, respectively (1H22:
$0.03 each)
- Net loss attributable to Burford Capital Limited shareholders
of $22 million in 2Q23 (2Q22: net
loss of $49 million), with net loss
per ordinary and diluted share of $0.10 each (2Q22: net loss per ordinary and
diluted share of $0.23 each)
- Tangible book value attributable to Burford Capital Limited per
ordinary share of $8.26 at
June 30, 2023, up 12% from
$7.36 at December 31, 2022
4
|
Represents
Burford-only
|
Portfolio
- Group-wide portfolio grew to $7.0
billion at June 30, 2023
(December 31, 2022: $6.1 billion), due to significant fair value
gains and growth in deployments and undrawn commitments
- Group-wide new commitments of $557
million in 2Q23 (2Q22: $363
million) and $722 million in
1H23 (1H22: $445 million)
- Consolidated fair value of capital provision assets increased
18% to $4.4 billion at June 30, 2023 from $3.7
billion at December 31, 2022
- Of the $672 million increase in
capital provision asset value in 1H23, $280
million attributable to the YPF-related assets
- Fair value of Burford-only capital provision assets increased
16% to $3.1 billion at June 30, 2023 from $2.6
billion at December 31, 2022
- Of the $423 million increase in
capital provision asset value in 1H23, $185
million attributable to the YPF-related assets
- On September 8, 2023, the court
rendered a decision in the YPF-related assets holding that the
appropriate date for the tender offer was April 16, 2012 and that pre-judgment interest
should run from May 3, 2012 at a
simple interest rate of 8%
- Cumulative ROIC since inception from Burford-only capital
provision-direct assets steady at 88% (December 31, 2022: 88%) and IRR of 29%
(December 31, 2022: 29%)
Liquidity and capital
- Burford-only cash and cash equivalents and marketable
securities of $441 million at
June 30, 2023 (December 31, 2022: $210
million)
- Strong liquidity position at June 30,
2023 primarily reflects issuance of $400 million in senior notes in June 2023 and increasing Burford-only
realizations, partially offset by strong Burford-only
deployments
- On July 12, 2023, Burford
redeemed in full the aggregate outstanding principal amount of the
6.125% bonds due 2024 at a redemption price of par
- Burford-only due from settlement of capital provision assets
decreased 19% to $93 million at
June 30, 2023, of which $69 million (74%) was collected in cash at
September 7, 2023
- Total shareholders' equity attributable to Burford Capital
Limited was $1,942 million at
June 30, 2023 (December 31, 2022: $1,743
million)
- Total shareholders' equity attributable to Burford Capital
Limited per ordinary share of $8.87
at June 30, 2023 (December 31, 2022: $7.97 per ordinary share)
Dividend
- On September 8, 2023, Burford's
board of directors declared an interim dividend of 6.25¢ per
ordinary share payable on December 7,
2023 to shareholders of record on November 10, 2023, with an ex-dividend date of
November 9, 2023
Investor and Analyst Conference Call
Burford will hold a conference call for investors and analysts
at 10.00am EDT / 3.00pm BST on
Wednesday, September 13, 2023. The
dial-in number for the conference call is +1 646
787-9445 (USA) / +44 (0)20
4587 0498 (UK) / +44 (0)20 3936 2999 (all other
locations) and the access code is 329784. To minimize the risk
of delayed access, participants are urged to dial into the
conference call by 9.40am EDT /
2.40pm BST.
A live webcast of the call will also be available at
https://www.investis-live.com/burfordcapital/6499460f383e9013000dafed/rosepu,
and pre-registration at that link is encouraged.
An accompanying 2Q23 and 1H23 results presentation for investors
and analysts will also be made available on the Burford Capital
website prior to the conference call at
http://investors.burfordcapital.com.
Following the conference call, a replay facility for this event
will be available until Wednesday, September
27, 2023 by dialing +1 845 709-8569 (USA) / +44 (0)20 3936 3001 (UK) / +44 (0)20
3936 3001 (all other locations) and using the replay access code
178093. A replay facility will also be accessible through the
webcast at
https://www.investis-live.com/burfordcapital/6499460f383e9013000dafed/rosepu.
For further information, please contact:
Burford Capital
Limited
|
|
For investor and
analyst inquiries:
|
|
Robert Bailhache, Head
of Investor Relations, EMEA and Asia - email
|
+44 (0)20 3530
2023
|
Jim Ballan, Head of
Investor Relations, Americas - email
|
+1 (646) 793
9176
|
|
|
For press
inquiries:
|
|
David Helfenbein, Vice
President, Public Relations - email
|
+1 (212) 235
6824
|
|
|
Numis Securities
Limited - NOMAD and Joint Broker
|
+44 (0)20 7260
1000
|
Giles Rolls
|
|
Charlie
Farquhar
|
|
|
|
Jefferies
International Limited - Joint Broker
|
+44 (0)20 7029
8000
|
Graham
Davidson
|
|
Tony White
|
|
|
|
Berenberg –
Joint Broker
|
+44 (0)20 3207
7800
|
Toby Flaux
|
|
James
Thompson
|
|
|
|
About Burford Capital
Burford Capital is the leading global finance and asset
management firm focused on law. Its businesses include litigation
finance and risk management, asset recovery and a wide range
of legal finance and advisory activities. Burford is publicly
traded on the New York Stock Exchange (NYSE: BUR) and the London
Stock Exchange (LSE: BUR), and it works with companies and law
firms around the world from its offices in New York, London, Chicago, Washington,
DC, Singapore,
Dubai, Sydney and Hong
Kong.
For more information, please visit www.burfordcapital.com.
Summary Financial Statements and Reconciliations
The tables below set forth summaries of the condensed
consolidated and Burford-only statements of operations for the
three and six months ended June 30,
2023 and 2022, the condensed consolidated and Burford-only
statements of financial position at June 30,
2023 and December 31, 2022 and
corresponding reconciliations from consolidated to Burford-only
financial results. Furthermore, the tables below set forth certain
additional reconciliations for financial information contained in
this announcement.
Summary condensed consolidated statements of
operations
|
|
Three months ended
June 30,
|
Six months ended
June 30,
|
($ in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Capital provision
income
|
|
35,667
|
|
35,006
|
|
511,600
|
|
175,745
|
Plus/(Less):
Third-party interests in capital
provision
assets
|
|
4,813
|
|
16,857
|
|
(95,532)
|
|
218
|
Asset management
income
|
|
1,894
|
|
2,394
|
|
3,891
|
|
5,508
|
Services and other
income
|
|
2,177
|
|
(6,767)
|
|
5,497
|
|
(10,879)
|
Total
revenues
|
|
44,551
|
|
47,490
|
|
425,456
|
|
170,592
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
43,632
|
|
26,540
|
|
97,931
|
|
56,827
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
919
|
|
20,950
|
|
327,525
|
|
113,765
|
|
|
|
|
|
|
|
|
|
Finance costs and loss
on debt extinguishment
|
|
21,124
|
|
21,636
|
|
41,677
|
|
37,477
|
Foreign currency
transactions (gains)/losses
|
|
(8,898)
|
|
2,544
|
|
(11,338)
|
|
3,058
|
|
|
|
|
|
|
|
|
|
(Loss)/income before
income taxes
|
|
(11,307)
|
|
(3,230)
|
|
297,186
|
|
73,230
|
|
|
|
|
|
|
|
|
|
(Provision) for income
taxes
|
|
(8,969)
|
|
(14,942)
|
|
(16,081)
|
|
(18,366)
|
Net
income
|
|
(20,276)
|
|
(18,172)
|
|
281,105
|
|
54,864
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Burford Capital
Limited
shareholders
|
|
(21,540)
|
|
(49,352)
|
|
237,885
|
|
6,928
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Burford Capital
Limited shareholders
per ordinary share
|
|
|
|
|
|
|
|
|
Basic
|
|
$ (0.10)
|
|
$ (0.23)
|
|
$ 1.09
|
|
$ 0.03
|
Diluted
|
|
$ (0.10)
|
|
$ (0.23)
|
|
$ 1.07
|
|
$ 0.03
|
Summary Burford-only statement of operations
|
|
Three months ended
June 30,
|
Six months ended
June 30,
|
($ in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Capital provision
income
|
|
35,392
|
|
(4,810)
|
|
351,407
|
|
95,777
|
Asset management
income
|
|
5,684
|
|
25,829
|
|
25,041
|
|
36,763
|
Services and other
income
|
|
2,161
|
|
(5,641)
|
|
5,466
|
|
(10,885)
|
Total
revenues
|
|
43,237
|
|
15,378
|
|
381,914
|
|
121,655
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
(330)
|
|
(10,660)
|
|
284,338
|
|
65,826
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
(21,540)
|
|
(49,352)
|
|
237,885
|
|
65,826
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$ (0.10)
|
|
$ (0.23)
|
|
$ 1.09
|
|
$ 0.03
|
Diluted
|
|
$ (0.10)
|
|
$ (0.23)
|
|
$ 1.07
|
|
$ 0.03
|
Reconciliation of summary condensed consolidated statement of
operations to summary Burford-only statement of operations
|
Three months ended
June 30, 2023
|
|
(GAAP)
|
(Non-GAAP)
|
|
|
Elimination of
third-party interests
|
|
($ in
thousands)
|
Consolidated
|
Strategic
Value
Fund
|
BOF-C
|
Colorado
|
Advantage
Fund
|
Other
|
Burford-only
|
Capital provision
income
|
35,667
|
(100)
|
72
|
4,728
|
(4,983)
|
8
|
35,392
|
Plus/(Less):
Third-party interests in capital provision assets
|
4,813
|
-
|
-
|
(4,753)
|
-
|
(60)
|
-
|
Asset management
income
|
1,894
|
46
|
3,744
|
-
|
-
|
-
|
5,684
|
Services and other
income
|
2,177
|
-
|
(1)
|
-
|
-
|
(15)
|
2,161
|
Total
revenues
|
44,551
|
(54)
|
3,815
|
(25)
|
(4,983)
|
(67)
|
43,237
|
|
|
|
|
|
|
|
|
Operating
income
|
919
|
87
|
3,628
|
-
|
(4,903)
|
(61)
|
(330)
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
(20,276)
|
87
|
3,628
|
-
|
(4,903)
|
(76)
|
(21,540)
|
|
Three months ended
June 30, 2022
|
|
(GAAP)
|
(Non-GAAP)
|
|
|
Elimination of
third-party interests
|
|
($ in
thousands)
|
Consolidated
|
Strategic
Value
Fund
|
BOF-C
|
Colorado
|
Advantage
Fund
|
Other
|
Burford-only
|
|
Capital provision
income
|
35,006
|
(1,769)
|
(55,580)
|
16,423
|
48
|
1,062
|
(4,810)
|
|
Plus/(Less):
Third-party interests in capital provision assets
|
16,857
|
-
|
-
|
(16,435)
|
-
|
(422)
|
-
|
|
Asset management
income
|
2,394
|
57
|
23,378
|
-
|
-
|
-
|
25,829
|
|
Services and other
income
|
(6,767)
|
1,132
|
-
|
-
|
-
|
(6)
|
(5,641)
|
|
Total
revenues
|
47,490
|
(580)
|
(32,202)
|
(12)
|
48
|
634
|
15,378
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
20,950
|
(245)
|
(32,240)
|
-
|
138
|
737
|
(10,660)
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
(18,172)
|
(245)
|
(32,240)
|
-
|
138
|
1,167
|
(49,352)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, 2023
|
|
(GAAP)
|
(Non-GAAP)
|
|
|
Elimination of
third-party interests
|
|
($ in
thousands)
|
Consolidated
|
Strategic
Value
Fund
|
BOF-C
|
Colorado
|
Advantage
Fund
|
Other
|
Burford-only
|
Capital provision
income
|
511,600
|
(207)
|
(48,236)
|
(95,041)
|
(12,005)
|
(4,704)
|
351,407
|
Plus/(Less):
Third-party interests in capital provision assets
|
(95,532)
|
-
|
-
|
95,011
|
-
|
521
|
-
|
Asset management
income
|
3,891
|
92
|
21,058
|
-
|
-
|
-
|
25,041
|
Services and other
income
|
5,497
|
-
|
(2)
|
-
|
-
|
(29)
|
5,466
|
Total
revenues
|
425,456
|
(115)
|
(27,180)
|
(30)
|
(12,005)
|
(4,212)
|
381,914
|
|
|
|
|
|
|
|
|
Operating
income
|
327,525
|
181
|
(27,397)
|
-
|
(11,802)
|
(4,169)
|
284,338
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
281,105
|
181
|
(27,397)
|
-
|
(11,802)
|
(4,202)
|
237,885
|
|
Six months ended
June 30, 2022
|
|
(GAAP)
|
(Non-GAAP)
|
|
|
Elimination of
third-party interests
|
|
($ in
thousands)
|
Consolidated
|
Strategic
Value
Fund
|
BOF-C
|
Colorado
|
Advantage
Fund
|
Other
|
Burford-only
|
Capital provision
income
|
175,745
|
(2,277)
|
(74,175)
|
498
|
(318)
|
(3,696)
|
95,777
|
Plus/(Less):
Third-party interests in capital provision assets
|
218
|
-
|
-
|
(510)
|
-
|
292
|
-
|
Asset management
income
|
5,508
|
218
|
31,037
|
-
|
-
|
-
|
36,763
|
Services and other
income
|
(10,879)
|
-
|
-
|
-
|
-
|
(6)
|
(10,885)
|
Total
revenues
|
170,592
|
(2,059)
|
(43,138)
|
(12)
|
(318)
|
(3,410)
|
121,655
|
|
|
|
|
|
|
|
|
Operating
income
|
113,765
|
(1,357)
|
(43,200)
|
-
|
(77)
|
(3,305)
|
65,826
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
54,864
|
(1,357)
|
(43,200)
|
-
|
(77)
|
(3,302)
|
6,928
|
Reconciliation of capital provision income excluding
YPF-related assets
|
|
|
|
|
|
|
For the six months
ended June 30,
|
($ in
thousands)
|
|
2023
|
|
2022
|
Capital provision
income
|
|
511,600
|
|
175,745
|
Less: Capital provision
income from YPF-related assets
|
|
(277,318)
|
|
(1,440)
|
Capital provision
income excluding YPF-related assets
|
|
234,282
|
|
174,305
|
Summary condensed consolidated statement of financial
position
|
|
|
|
|
|
|
At
|
($ in
thousands)
|
|
June 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
Total assets
|
|
5,177,712
|
|
4,288,359
|
|
|
|
|
|
Total
liabilities
|
|
2,441,646
|
|
1,901,289
|
|
|
|
|
|
Total Burford
Capital Limited equity
|
|
1,942,025
|
|
1,742,584
|
|
|
|
|
|
Non-controlling
interests
|
|
794,041
|
|
644,486
|
|
|
|
|
|
Total shareholders'
equity
|
|
2,736,066
|
|
2,387,070
|
|
|
|
|
|
Basic ordinary shares
outstanding
|
|
218,957,218
|
|
218,581,877
|
|
|
|
|
|
Total shareholders'
equity attributable to Burford Capital Limited per basic ordinary
share
|
|
8.87
|
|
7.97
|
Total shareholders'
equity per basic ordinary share
|
|
12.50
|
|
10.92
|
Reconciliation of summary condensed consolidated statement of
financial position to summary Burford-only statement of financial
position
|
At
June 30, 2023
|
|
(GAAP)
|
(Non-GAAP)
|
|
|
Elimination of
third-party interests
|
|
($ in
thousands)
|
Consolidated
|
Strategic
Value
Fund
|
BOF-C
|
Colorado
|
Advantage
Fund
|
Other
|
Burford-only
|
|
|
|
|
|
|
|
|
Total assets
|
5,177,712
|
(2,518)
|
(556,238)
|
(504,275)
|
(178,766)
|
(73,413)
|
3,862,502
|
|
|
|
|
|
|
|
|
Total
liabilities
|
2,441,646
|
(141)
|
(4,234)
|
(504,275)
|
(75)
|
(12,444)
|
1,920,477
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
2,736,066
|
(2,377)
|
(552,004)
|
-
|
(178,691)
|
(60,969)
|
1,942,025
|
|
At December 31,
2022
|
|
(GAAP)
|
(Non-GAAP)
|
|
|
Elimination of
third-party interests
|
|
($ in
thousands)
|
Consolidated
|
Strategic
Value
Fund
|
BOF-C
|
Colorado
|
Advantage
Fund
|
Other
|
Burford-only
|
|
|
|
|
|
|
|
|
Total assets
|
4,288,359
|
(2,779)
|
(477,590)
|
(409,249)
|
(103,523)
|
(76,792)
|
3,218,426
|
|
|
|
|
|
|
|
|
Total
liabilities
|
1,901,289
|
(228)
|
(4,234)
|
(409,249)
|
(120)
|
(11,616)
|
1,475,842
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
2,387,070
|
(2,551)
|
(473,356)
|
-
|
(103,403)
|
(65,176)
|
1,742,584
|
Reconciliation of components of realizations from a
consolidated basis to a Group-wide basis
|
Three months ended
June 30, 2023
|
|
(GAAP)
|
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
|
Eliminations and
adjustments
|
Burford-only
|
Other
funds
|
BOF-C
|
Group-wide
|
Capital
provision-direct
|
130,520
|
|
2,677
|
133,197
|
22,986
|
17,328
|
173,511
|
Capital
provision-indirect
|
27,064
|
|
(22,605)
|
4,459
|
22,290
|
-
|
26,749
|
Post-settlement
|
-
|
|
-
|
-
|
79,576
|
-
|
79,576
|
Total
realizations
|
157,584
|
|
(19,928)
|
137,656
|
124,852
|
17,328
|
279,836
|
|
Three months ended
June 30, 2022
|
|
(GAAP)
|
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
|
Eliminations and
adjustments
|
Burford-only
|
Other
funds
|
BOF-C
|
Group-wide
|
Capital
provision-direct
|
54,769
|
|
(4,919)
|
49,850
|
14,043
|
9,069
|
72,962
|
Capital
provision-indirect
|
7,114
|
|
(1,792)
|
5,322
|
13,326
|
-
|
18,648
|
Post-settlement
|
-
|
|
-
|
-
|
8,840
|
-
|
8,840
|
Total
realizations
|
61,883
|
|
(6,711)
|
55,172
|
36,209
|
9,069
|
100,450
|
|
Six months ended
June 30, 2023
|
|
(GAAP)
|
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
|
Eliminations and
adjustments
|
Burford-only
|
Other
funds
|
BOF-C
|
Group-wide
|
Capital
provision-direct
|
246,252
|
|
(51,309)
|
194,943
|
73,376
|
52,751
|
321,070
|
Capital
provision-indirect
|
39,644
|
|
(33,089)
|
6,555
|
32,774
|
-
|
39,329
|
Post-settlement
|
-
|
|
-
|
-
|
98,256
|
-
|
98,256
|
Total
realizations
|
285,896
|
|
(84,398)
|
201,498
|
204,406
|
52,751
|
458,655
|
|
Six months ended
June 30, 2022
|
|
(GAAP)
|
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
|
Eliminations and
adjustments
|
Burford-only
|
Other
funds
|
BOF-C
|
Group-wide
|
Capital
provision-direct
|
75,980
|
|
(5,778)
|
70,202
|
24,381
|
12,319
|
106,902
|
Capital
provision-indirect
|
12,466
|
|
(6,367)
|
6,099
|
17,901
|
-
|
24,000
|
Post-settlement
|
-
|
|
-
|
-
|
38,303
|
-
|
38,303
|
Total
realizations
|
88,446
|
|
(12,145)
|
76,301
|
80,585
|
12,319
|
169,205
|
Reconciliation of components of deployments from a
consolidated basis to a Group-wide basis
|
Three months ended
June 30, 2023
|
|
(GAAP)
|
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
|
Eliminations and
adjustments
|
Burford-only
|
Other
funds
|
BOF-C
|
Group-wide
|
Capital
provision-direct
|
246,840
|
|
(65,387)
|
181,453
|
6,070
|
58,504
|
246,027
|
Capital
provision-indirect
|
78,794
|
|
(65,662)
|
13,132
|
65,662
|
-
|
78,794
|
Post-settlement
|
-
|
|
-
|
-
|
31,939
|
-
|
31,939
|
Total
deployments
|
325,634
|
|
(131,049)
|
194,585
|
103,671
|
58,504
|
356,760
|
|
Three months ended
June 30, 2022
|
|
(GAAP)
|
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
|
Eliminations and
adjustments
|
Burford-only
|
Other
funds
|
BOF-C
|
Group-wide
|
Capital
provision-direct
|
92,445
|
|
(22,273)
|
70,172
|
8,926
|
21,291
|
100,389
|
Capital
provision-indirect
|
5,429
|
|
(3,518)
|
1,911
|
3,518
|
-
|
5,429
|
Post-settlement
|
-
|
|
-
|
-
|
26,116
|
-
|
26,116
|
Total
deployments
|
97,874
|
|
(25,791)
|
72,083
|
38,560
|
21,291
|
131,934
|
|
Six months ended
June 30, 2023
|
|
(GAAP)
|
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
|
Eliminations and
adjustments
|
Burford-only
|
Other
funds
|
BOF-C
|
Group-wide
|
Capital
provision-direct
|
331,525
|
|
(83,079)
|
248,446
|
12,983
|
75,956
|
337,385
|
Capital
provision-indirect
|
112,794
|
|
(93,995)
|
18,799
|
93,995
|
-
|
112,794
|
Post-settlement
|
-
|
|
-
|
-
|
35,806
|
-
|
35,806
|
Total
deployments
|
444,319
|
|
(177,074)
|
267,245
|
142,784
|
75,956
|
485,985
|
|
Six months ended
June 30, 2022
|
|
(GAAP)
|
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
|
Eliminations and
adjustments
|
Burford-only
|
Other
funds
|
BOF-C
|
Group-wide
|
Capital
provision-direct
|
183,566
|
|
(61,436)
|
122,130
|
14,667
|
60,304
|
197,101
|
Capital
provision-indirect
|
20,176
|
|
(16,776)
|
3,400
|
16,776
|
-
|
20,176
|
Post-settlement
|
-
|
|
-
|
-
|
43,152
|
-
|
43,152
|
Total
deployments
|
203,742
|
|
(78,212)
|
125,530
|
74,595
|
60,304
|
260,429
|
Reconciliation of consolidated proceeds from capital
provision assets to Burford-only cash receipts
($ in
thousands)
|
Six months
ended June
30, 2023
|
Three months
ended March
31, 2023
|
Three months
ended June
30, 2023
|
Consolidated
proceeds from capital provision assets
|
308,007
|
144,485
|
163,522
|
Less: Elimination of
third-party interests
|
(87,513)
|
(60,563)
|
(26,950)
|
Burford-only total
proceeds from capital provision assets
|
220,494
|
83,922
|
136,572
|
Burford-only proceeds
from capital provision-direct assets
|
213,321
|
77,742
|
135,579
|
Burford-only proceeds
from capital provision-indirect assets
|
7,173
|
6,180
|
993
|
Burford-only total
proceeds from capital provision assets
|
220,494
|
83,922
|
136,572
|
Consolidated asset
management income
|
3,891
|
1,997
|
1,894
|
Plus: Eliminated
income from funds
|
21,150
|
17,360
|
3,790
|
Burford-only asset
management income
|
25,041
|
19,357
|
5,684
|
Less: Non-cash
adjustments(1)
|
(1,728)
|
(7,086)
|
5,358
|
Burford-only
proceeds from asset management income
|
23,313
|
12,271
|
11,042
|
Burford-only proceeds
from marketable security interest and dividends
|
1,563
|
881
|
682
|
Burford-only proceeds
from asset recovery fee for services
|
38
|
83
|
(45)
|
Burford-only proceeds
from insurance receipts
|
1,530
|
-
|
1,530
|
Burford-only
proceeds from asset management and other services
|
26,444
|
13,235
|
13,209
|
Cash
receipts
|
246,938
|
97,157
|
149,781
|
|
|
(1)
|
Adjustments for the
change in asset management receivables accrued during the
applicable period but not yet received at the end of such
period.
|
($ in
thousands)
|
Six months
ended June
30, 2022
|
Three months
ended March
31, 2022
|
Three months
ended June
30, 2022
|
Consolidated
proceeds from capital provision assets
|
108,541
|
69,369
|
39,172
|
Less: Elimination of
third-party interests
|
(21,451)
|
(14,109)
|
(7,342)
|
Burford-only total
proceeds from capital provision assets
|
87,090
|
55,260
|
31,830
|
Burford-only proceeds
from capital provision-direct assets
|
81,511
|
55,163
|
26,348
|
Burford-only proceeds
from capital provision-indirect assets
|
5,579
|
97
|
5,482
|
Burford-only total
proceeds from capital provision assets
|
87,090
|
55,260
|
31,830
|
Consolidated asset
management income
|
5,508
|
3,114
|
2,394
|
Plus: Eliminated
income from funds
|
31,255
|
7,820
|
23,435
|
Burford-only asset
management income
|
36,763
|
10,934
|
25,829
|
Less: Non-cash
adjustments(1)
|
(26,547)
|
(8,725)
|
(17,822)
|
Burford-only
proceeds from asset management income
|
10,216
|
2,209
|
8,007
|
Burford-only proceeds
from marketable security interest and dividends
|
967
|
614
|
353
|
Burford-only proceeds
from asset recovery fee for services
|
577
|
418
|
159
|
Burford-only proceeds
from insurance receipts
|
413
|
-
|
413
|
Burford-only proceeds
from other corporate
|
191
|
-
|
191
|
Burford-only
proceeds from asset management and other services
|
12,364
|
3,241
|
9,123
|
Cash
receipts
|
99,454
|
58,501
|
40,953
|
|
|
(1)
|
Adjustments for the
change in asset management receivables accrued during the
applicable period but not yet received at the end of such
period.
|
Reconciliation of consolidated aggregate cash receipts from
three matters of note to Burford only cash receipts
|
Six months ended
June 30, 2023
|
($ in
thousands)
|
Consolidated
|
Elimination and
adjustments
|
Burford-only
|
Aggregate cash receipts
- three matters of note
|
181,514
|
(34,050)
|
147,464
|
Reconciliation of consolidated portfolio to Group-wide
portfolio
|
|
|
($ in
thousands)
|
At June 30,
2023
|
At December 31,
2022
|
Consolidated carrying
value
|
4,407,888
|
3,735,556
|
Consolidated undrawn
commitments
|
1,983,154
|
1,720,727
|
|
|
|
Eliminations of
third-party interests:
|
|
|
Less: Attributable to
carrying value
|
(1,348,424)
|
(1,100,137)
|
Less: Attributable to
undrawn commitments
|
(471,789)
|
(413,446)
|
|
|
|
Burford-only Carrying
value
|
3,059,464
|
2,635,419
|
Burford-only undrawn
commitments
|
1,511,365
|
1,307,281
|
Burford-only
portfolio
|
4,570,829
|
3,942,700
|
|
|
|
Other funds carrying
value
|
1,115,482
|
1,076,320
|
Other funds undrawn
commitments
|
265,502
|
239,145
|
Other funds
portfolio
|
1,380,984
|
1,315,465
|
|
|
|
BOF-C carrying
value
|
597,340
|
516,982
|
BOF-C undrawn
commitments
|
434,930
|
371,724
|
BOF-C
portfolio
|
1,032,270
|
888,706
|
|
|
|
Total group-wide
portfolio
|
6,984,083
|
6,146,871
|
Reconciliation of consolidated to Burford-only cash and cash
equivalents and marketable securities
|
At
June 30, 2023
|
|
At December
31, 2022
|
|
(GAAP)
|
(Non-GAAP)
|
|
(GAAP)
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
Elimination of
third-party
interests
|
Burford-
only
|
|
Consolidated
|
Elimination of
third-party
interests
|
Burford-
only
|
Cash and cash
equivalents
|
365,336
|
(31,779)
|
333,557
|
|
107,658
|
(33,979)
|
73,679
|
Marketable
securities
|
107,180
|
-
|
107,180
|
|
136,358
|
-
|
136,358
|
Total cash and cash
equivalents and marketable securities
|
472,516
|
(31,779)
|
440,737
|
|
244,016
|
(33,979)
|
210,037
|
Reconciliation of consolidated to Burford-only capital
provision assets
|
At
June 30, 2023
|
|
At December
31, 2022
|
|
(GAAP)
|
(Non-GAAP)
|
|
(GAAP)
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
Elimination of
third-party
interests
|
Burford-
only
|
|
Consolidated
|
Elimination of
third-party
interests
|
Burford-
only
|
YPF-related
assets
|
1,512,062
|
(504,397)
|
1,007,665
|
|
1,232,549
|
(409,514)
|
823,035
|
Other assets
|
2,895,826
|
(844,027)
|
2,051,799
|
|
2,503,007
|
(689,602)
|
1,813,405
|
Capital provision
assets
|
4,407,888
|
(1,348,424)
|
3,059,464
|
|
3,735,556
|
(1,099,116)
|
2,636,440
|
Reconciliation of consolidated to Burford-only due from
settlement of capital provision assets
|
At
June 30, 2023
|
|
At December
31, 2022
|
|
(GAAP)
|
(Non-GAAP)
|
|
(GAAP)
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
Elimination of
third-party
interests
|
Burford-
only
|
|
Consolidated
|
Elimination of
third-party
interests
|
Burford-
only
|
Due from settlement of
capital provision assets
|
94,391
|
(1,754)
|
92,637
|
|
116,582
|
(1,932)
|
114,650
|
Reconciliation of consolidated to Burford-only realized gains
on capital provision-direct assets
|
Three months ended
June 30, 2023
|
|
Three months ended
June 30, 2022
|
|
(GAAP)
|
(Non-GAAP)
|
|
(GAAP)
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
Eliminations and
adjustments
|
Burford-only
|
|
Consolidated
|
Eliminations and
adjustments
|
Burford-only
|
Realized gains relative
to cost
|
59,335
|
(554)
|
58,781
|
|
21,497
|
(4,908)
|
16,589
|
|
Six months ended
June 30, 2023
|
|
Six months ended
June 30, 2022
|
|
(GAAP)
|
(Non-GAAP)
|
|
(GAAP)
|
(Non-GAAP)
|
($ in
thousands)
|
Consolidated
|
Eliminations and
adjustments
|
Burford-only
|
|
Consolidated
|
Eliminations and
adjustments
|
Burford-only
|
Realized gains relative
to cost
|
127,405
|
(33,011)
|
94,394
|
|
32,085
|
(5,484)
|
26,601
|
Reconciliation of tangible book value attributable to Burford
Capital Limited per ordinary share
|
|
|
|
|
($ in thousands,
except share data)
|
|
At June 30,
2023
|
|
At December 31,
2022
|
Total Burford Capital
Limited equity
|
|
1,942,025
|
|
1,742,584
|
Less:
Goodwill
|
|
(133,962)
|
|
(133,912)
|
Tangible book value
attributable to Burford Capital Limited
|
|
1,808,063
|
|
1,608,672
|
Basic ordinary shares
outstanding
|
|
218,957,218
|
|
218,581,877
|
Tangible book value
attributable to Burford Capital Limited per ordinary
share
|
|
8.26
|
|
7.36
|
Reconciliation of shareholders' equity attributable to
Burford Capital Limited per ordinary share
|
|
|
|
|
($ in thousands,
except share data)
|
|
At June 30,
2023
|
|
At December 31,
2022
|
Total shareholders'
equity
|
|
2,653,361
|
|
2,387,070
|
Less:
Non-controlling interests
|
|
(661,083)
|
|
(644,486)
|
Total Burford
Capital Limited equity
|
|
1,942,025
|
|
1,742,584
|
Basic ordinary shares
outstanding
|
|
218,957,218
|
|
218,581,877
|
Shareholders' equity
attributable to Burford Capital Limited per ordinary
share
|
|
8.87
|
|
7.97
|
Definitions and Use of Non-GAAP Financial Measures and
Alternative Performance Measures
Burford reports its financial results in accordance with US
GAAP. US GAAP requires us to present financial statements that
consolidate some of the limited partner interests in private funds
we manage as well as assets held on our balance sheet where we have
a partner or minority investor. We therefore refer to various
presentations of our financial results as follows:
- Consolidated refers to assets, liabilities and
activities that include those third-party interests, partially
owned subsidiaries and special purpose vehicles that we are
required to consolidate under US GAAP. At the date of this
announcement, the major entities where there is also a third-party
partner in, or owner of, those entities include BCIM Strategic
Value Master Fund, LP, Burford Opportunity Fund C LP, Burford
Advantage Master Fund LP, Colorado Investments Limited
("Colorado") and several other
entities in which Burford holds investments where there is also a
third-party partner in, or owner of, those entities.
- Burford-only refers to assets, liabilities and
activities that pertain only to Burford on a proprietary basis,
excluding any third-party interests and the portions of jointly
owned entities owned by others.
- Group-wide refers to the totality of assets managed by
Burford, including those portions of the private funds owned by
third parties and including private funds that are not consolidated
within Burford's consolidated financial statements. Group-wide is
therefore the sum of Burford-only and non-controlling interests in
consolidated and non-consolidated private funds. Group-wide does
not include third-party interests in capital provision assets, the
economics of which have been sold to those third parties, that do
not meet the criteria to be recognized as a sale under US GAAP.
This includes the third-party interests in Colorado and other capital provision asset
subparticipations.
We subdivide our capital provision assets into two
categories:
- Direct, which includes all of our capital provision
assets that we have originated directly (i.e., not through
participation in a private fund) from our balance sheet. We also
include direct (i.e., not through participation in a private fund)
complex strategies assets in this category.
- Indirect, which includes our balance sheet's
participations in two of our private funds (i.e., BCIM Strategic
Value Master Fund, LP and Burford Advantage Master Fund LP).
We also use certain unaudited alternative performance measures,
including:
- Internal rate of return ("IRR") is a discount rate that
makes the net present value of a series of cash flows equal to zero
and is expressed as a percentage figure. We compute IRR on
concluded (including partially concluded) legal finance assets by
treating that entire portfolio (or, when noted, a subset thereof)
as one undifferentiated pool of capital and measuring actual and,
if necessary, estimated inflows and outflows from that pool,
allocating costs appropriately. IRRs do not include unrealized
gains or losses.
- Return on invested capital ("ROIC") from a concluded
asset is the absolute amount of realizations from such asset in
excess of the amount of expenditure incurred in funding such asset
divided by the amount of expenditure incurred, expressed as a
percentage figure. ROIC is a measure of our ability to generate
absolute returns on our assets. Some industry participants express
returns on a multiple of invested capital ("MOIC") instead of a
ROIC basis. MOIC includes the return of capital and, therefore, is
1x higher than ROIC. In other words, 70% ROIC is the same as 1.70x
MOIC.
Other unaudited alternative performance measures and terms we
use include:
- Commitment is the amount of financing we agree to
provide for a legal finance asset. Commitments can be definitive
(requiring us to provide funding on a schedule or, more often, when
certain expenses are incurred) or discretionary (allowing us to
provide funding after reviewing and approving a future matter).
Unless otherwise indicated, commitments include deployed cost and
undrawn commitments.
- Deployment refers to the funding provided for an asset,
which adds to our deployed cost in such asset.
- Deployed cost is the amount of funding we have provided
for an asset at the applicable point in time.
- Fair value adjustment is the amount of unrealized gain
or loss recognized in our consolidated statements of operations in
the relevant period and added to or subtracted from, as applicable,
the asset or liability value in our consolidated statements of
financial position.
- Portfolio includes deployed cost, net unrealized gains
or losses and undrawn commitments.
- Realization: A legal finance asset is realized when the
asset is concluded (i.e., when litigation risk has been resolved).
A realization will result in us receiving cash or, occasionally,
non-cash assets or recognizing a due from settlement receivable,
reflecting what we are owed on the asset.
- Realized gain / loss reflects the total amount of gain
or loss generated by a legal finance asset when it is realized,
calculated as realized proceeds less deployed cost, without regard
for any previously recognized fair value adjustment.
- Unrealized gain / loss represents the fair value of our
legal finance assets over or under their funded cost, as determined
in accordance with the requirements of the applicable US GAAP
standards, for the relevant financial reporting period
(consolidated statement of operations) or cumulatively
(consolidated statement of financial position).
- YPF-related assets refers to our Petersen and Eton Park legal finance assets,
which are two claims relating to Republic of Argentina's nationalization of YPF S.A., the
Argentine energy company.
We also use certain non-GAAP financial measures, including:
- Cash receipts provide a measure of the cash that our
capital provision and other assets generate during a given period
as well as cash from certain other fees and income. In particular,
cash receipts represent the cash generated from capital provision
and other assets, including cash proceeds from realized or
concluded assets and any related hedging assets, and cash received
from asset management income, services and/or other income, before
any deployments into funding existing or new assets. Cash receipts
are a non-GAAP financial measure and should not be considered in
isolation from, as a substitute for, or superior to, financial
measures calculated in accordance with US GAAP. The most directly
comparable measure calculated in accordance with US GAAP is
proceeds from capital provision assets as set forth in our
consolidated statements of cash flows. We believe that cash
receipts are an important measure of our operating and financial
performance and are useful to management and investors when
assessing the performance of our Burford-only capital provision
assets.
- Tangible book value attributable to Burford Capital
Limited is calculated by subtracting intangible assets (such as
goodwill) from total Burford Capital Limited equity. Tangible
book value attributable to Burford Capital Limited per ordinary
share is calculated by dividing tangible book value
attributable to Burford Capital Limited by the total number of
outstanding ordinary shares. Each of tangible book value
attributable to Burford Capital Limited and tangible book value
attributable to Burford Capital Limited per ordinary share is a
non-GAAP financial measure and should not be considered in
isolation from, as a substitute for, or superior to, financial
measures calculated in accordance with US GAAP. The most directly
comparable measure calculated in accordance with US GAAP is total
Burford Capital Limited equity as set forth in our consolidated
statements of financial position. We believe that tangible book
value attributable to Burford Capital Limited per ordinary share is
an important measure of our financial condition and is useful to
management and investors when assessing capital adequacy and our
ability to generate earnings on tangible equity invested by our
shareholders.
For additional information, including reconciliations of our
non-GAAP financial measures to the most directly comparable US GAAP
measures and reconciliations of our alternative performance
measures additional to those set forth in this announcement, see
the 2Q23 Quarterly Report furnished to the US Securities and
Exchange Commission on September 13,
2023 and made available on our website at
http://investors.burfordcapital.com. Non-GAAP financial measures
should not be considered in isolation from, as substitutes for, or
superior to, financial measures calculated in accordance with US
GAAP.
This announcement does not constitute an offer to sell or the
solicitation of an offer to buy any ordinary shares or other
securities of Burford.
This announcement does not constitute an offer of any Burford
private fund. Burford Capital Investment Management LLC, which
acts as the fund manager of all Burford private funds, is
registered as an investment adviser with the US Securities and
Exchange Commission. The information provided in this announcement
is for informational purposes only. Past performance is not
indicative of future results. The information contained in this
announcement is not, and should not be construed as, an offer to
sell or the solicitation of an offer to buy any securities
(including, without limitation, interests or shares in any of
Burford private funds). Any such offer or solicitation may be made
only by means of a final confidential private placement memorandum
and other offering documents.
Forward-looking statements
This announcement contains
"forward-looking statements" within the meaning of Section 21E of
the US Securities Exchange Act of 1934, as amended, regarding
assumptions, expectations, projections, intentions and beliefs
about future events. These statements are intended as
"forward-looking statements". In some cases, predictive,
future-tense or forward-looking words such as "aim", "anticipate",
"believe", "continue", "could", "estimate", "expect", "forecast",
"guidance", "intend", "may", "plan", "potential", "predict",
"projected", "should" or "will" or the negative of such terms or
other comparable terminology are intended to identify
forward-looking statements, but are not the exclusive means of
identifying such statements. In addition, Burford and its
representatives may from time to time make other oral or written
statements which are forward-looking statements, including in its
periodic reports that Burford files with, or furnishes to, the
US Securities and Exchange Commission, other information made
available to Burford's security holders and other written
materials. By their nature, forward-looking statements involve
known and unknown risks, uncertainties and other factors because
they relate to events and depend on circumstances that may or may
not occur in the future. Burford cautions you that forward-looking
statements are not guarantees of future performance and are based
on numerous assumptions, expectations, projections, intentions and
beliefs and that Burford's actual results of operations, including
its financial position and liquidity, and the development of the
industry in which it operates, may differ materially from (and be
more negative than) those made in, or suggested by, the
forward-looking statements contained in this announcement.
Significant factors that may cause actual results to differ from
those Burford expects include, among others, those discussed under
"Risk Factors" in Burford's annual report on Form 20-F for the year
ended December 31, 2022 filed with
the US Securities and Exchange Commission on May 16, 2023 and other reports or documents that
Burford files with, or furnishes to, the US Securities and
Exchange Commission from time to time. In addition, even if
Burford's results of operations, including its financial position
and liquidity, and the development of the industry in which it
operates are consistent with the forward-looking statements
contained in this announcement, those results of operations or
developments may not be indicative of results of operations or
developments in subsequent periods.
Except as required by law, Burford undertakes no obligation to
update or revise the forward-looking statements contained in this
announcement, whether as a result of new information, future events
or otherwise.
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SOURCE Burford Capital