Share Search
Visit the Share Search
Burford Capital predicts spike in business, shares jump
28th Apr 2020 08:55
(Sharecast News) - Burford Capital, the litigation finance specialist, saw total income slide in 2019 but predicted a strong performance in the current year following the coronavirus outbreak.
The Aim-listed firm said total income was $356.7m in the 12 months to 31 December, a 15% decline on 2018, with net realised gains $28m lower and net unrealised gains down $52m. Operating profit was off 24% at $279.3m, while profit after tax was $226m compared to $329m a year earlier.
Burford attributed the performance to a "quiet" second half for asset realisation.
However, total commitments reached a new high of $1.6bn during the year, and Burford generated more than $1bn in cash, with $518m on the balance sheet, compared to $526m in 2018.
Christopher Bogart, chief executive, said: "Against the measure of success of growing Burford's business, and substantial free cash, Burford had a spectacular year and 2020 is off to a terrific start.
"We have significant cash on hand, in addition to our proven cash generating capacity, and access to hundreds of millions of dollars of fund capital to boot. And much as we share the world's distress at our current health crisis, the reality is that we expect its aftermath to be a time of significant demand for our services and a moment when uncorrelated cash flowers are especially attractive."
Jamie Donald, analyst at Liberum, said: "Burford has noted 2020 has started well, with $300m of investment successes, comparing to consensus revenue of $370m for 2020. We believe the long-term drivers for litigation finance remain in place, and Burford remains diversified and well-placed to benefit from this."
As at 1500 BST, shares in Burford were ahead 23% at 500.20p.
The Aim-listed firm said total income was $356.7m in the 12 months to 31 December, a 15% decline on 2018, with net realised gains $28m lower and net unrealised gains down $52m. Operating profit was off 24% at $279.3m, while profit after tax was $226m compared to $329m a year earlier.
Burford attributed the performance to a "quiet" second half for asset realisation.
However, total commitments reached a new high of $1.6bn during the year, and Burford generated more than $1bn in cash, with $518m on the balance sheet, compared to $526m in 2018.
Christopher Bogart, chief executive, said: "Against the measure of success of growing Burford's business, and substantial free cash, Burford had a spectacular year and 2020 is off to a terrific start.
"We have significant cash on hand, in addition to our proven cash generating capacity, and access to hundreds of millions of dollars of fund capital to boot. And much as we share the world's distress at our current health crisis, the reality is that we expect its aftermath to be a time of significant demand for our services and a moment when uncorrelated cash flowers are especially attractive."
Jamie Donald, analyst at Liberum, said: "Burford has noted 2020 has started well, with $300m of investment successes, comparing to consensus revenue of $370m for 2020. We believe the long-term drivers for litigation finance remain in place, and Burford remains diversified and well-placed to benefit from this."
As at 1500 BST, shares in Burford were ahead 23% at 500.20p.