Litigation Capital Management Ltd · LSE:LIT
Litigation Capital Management — Q2 2020 Earnings Presentation
29 slides from Litigation Capital Management's earnings presentation, Mar 17, 2020
Slide 1: Investor Presentation March 2019
INVESTOR PRESENTATION MARCH 2019 Litigation Capital Management Limited AIM: LIT
Slide 2: Important notices and disclaimer
Important notices and disclaimer Disclaimer The information in this presentation or on which this presentation is based has been obtained from sources that LIT believes to be reliable and accurate. However, none of LIT, LIT’s directors, officers, employees, its shareholders or any of their respectiv
Slide 3: An introduction to LCM
An introduction to LCM S paalieNesco : ~~.
Slide 4: Experienced team with extensive track record
Experienced team with extensive track record Patrick Moloney Nick Rowles-Davies Stephen Conrad Executive Director Executive Director Executive Director Chief Executive Officer Executive Vice Chairman Chief Financial Officer Appointed to the board in Founder and CEO of 25 years Investment Banki
Slide 5: Snapshot
Snapshot Background Offices & Operations Investment Track Record Founded in 1998 Head office Sydney 86% of litigation projects are 20 year track record Other offices in Melbourne, profitable1 One of the first proponents of the Brisbane, Singapore and London approximately 97% of funded
Slide 6: Investment highlights
Investment highlights Established & Experienced Demonstrated track record - Portfolio IRR of 78%1 Strong Return on Capital Cumulative ROIC 117%1 Diversified Pipeline and Disciplined Project Selection Estimated A$409m capital commitment2 Profitable and Cash Generative Adjusted A$2.7m PBT3 and
Slide 7: Half year results 2019
Half year results 2019
Slide 8: Half year results highlights ($A)
Half year results highlights ($A) Adjusted Revenue H1 2019 H1 2018 Change % $11.7m Statutory Revenue $18.50m $6.59m 181% Adjusted Profit before tax¹ Adjusted Revenue $11.71m $0.10m 11498% Gross Profit $5.67m $0.03m 18521% $2.7m Adjusted PBT¹ $2.72m ($1.62m) 268% Cumulative ROIC² 117% Adjusted dilute
Slide 9: Financial Summary ($A)
Financial Summary ($A) Cash generation Cash as at period end ($ in millions) ($ in millions) 52.6 74% 79% CAGR¹ 27.1 CAGR¹ 11 13.8 3.4 5.9 0.6 1.6 3.3 1.9 2015 2016 2017 2018 HY2019 2015 2016 2017 2018 HY2019 Total Capital Deployed on Total Equity Litigation Investments ($ in millions) ($ in million
Slide 10: Organic Cash Generation ($A)
Organic Cash Generation ($A) $11.0 million of cash organically generated by the completion of Litigation Projects in H1 2019. LCM has a strong capital position to expand its portfolio of investment opportunities and invest in the growth of the business H1 2019 Cash Flow Waterfall Litigation Invest
Slide 11: Current operating costs ($A)
Current operating costs ($A) Creation of a global platform and the growth this will provide LCM has resulted in a revision of the operating cost base. The underlying operating cost base for LCM is anticipated to be A$9.5-10 million for the year FY2019 Estimate Operating Costs (A$ in millions) 0.7 10
Slide 12: Dividends
Dividends Inaugural interim dividend declared in line with LCM’s progressive but measured dividend policy, which looks to adopt the appropriate balance between capital investment and dividend payment Responsible approach to balance sheet capital management Progressive, but measured dividend Interim
Slide 13: Portfolio Update
Portfolio Update
Slide 14: Strong & Diversified Project Portfolio
Strong & Diversified Project Portfolio Portfolio by Type / Industry sector (number of Portfolio diversification achieved projects) through: – Industry sector – Capital commitment 1 – Geographic location 5 Class Actions - 38%¹ 9 – Jurisdiction Commercial - 33% 1 Portfolio of 24 litigation related pro
Slide 15: Investment Portfolio Opportunities
Investment Portfolio Opportunities Very large and diverse pre-qualified pipeline of Pipeline by Type / Industry Sector (number of investment opportunities projects) 1 Corporate portfolio funding seen as a significant global opportunity for LCM 8 5 Class Actions - 8% – Extensive experience of Nick Ro
Slide 16: LCM's Disciplined Project Selection - Key Funding Criteria
LCM’s Disciplined Project Selection - Key Funding Criteria Strict project selection process has underpinned a strong average ROIC of 117% over the past 7.5 years. Clear Legal Principles The claim must be based on clear legal principles and not any novel points of law. The claim should be supported b
Slide 17: Returns on concluded litigation investments by individual case
Returns on concluded litigation investments by individual case FY 1 2 Time to resolve No. Type MOIC (x) ROIC (x) completion (months) ROIC vs. Invested Capital 1 Commercial 12 2.4 1.4 13.0 2 Commercial 12 10.8 9.8 1.0 14x 56.1x 39.4x 25.3x 3 Commercial 12 2.4 1.4 7.0 4 Commercial 12 3.6 2.6 7.0 5 Com
Slide 18: Revenue & Accounting Model
Revenue & Accounting Model Income generated from the financing and management of successful Litigation Projects Income model is reflected in each financing agreement it enters into with its clients. A typical litigation financing arrangement provides for the following: – LCM meets all or part of the
Slide 19: The growth opportunity
The growth opportunity
Slide 20: Strategic Growth Focus
Strategic Growth Focus BALANCED • LCM will target Litigation Projects which meet its Funding Criteria and deliver a balanced portfolio in terms of PORTFOLIO size, funding structure, area of law and geographical region. • Immense global opportunity utilising the extensive experience of Nick Rowles-Da
Slide 21: Conclusion
Conclusion
Slide 22: Looking forward
Looking forward Continuing past success, while evolving the business for the future LCM is now a truly global litigation finance provider – Offices in Australia – New offices in London and Singapore Significant growth opportunities from current portfolio and pipeline – 8 corporate portfolio transact
Slide 23: Appendices
POE EXPERIENCE COUNTS
Slide 24: LCM Timeline
LCM Timeline 1998 2014 2016 Phase 1 – Inception of LCM Phase 2 – Capital raising Phase 3 – Looking forward Built process and market Strengthening market Leveraging our strong presence to originate, presence, building out market position and evaluate and manage risk sophisticated governance experienc
Slide 25: UK Strategy & Rationale for AIM Admission
UK Strategy & Rationale for AIM Admission • The UK market: - is much bigger than any single market in Australia or Asia - brings with it more disputation in a larger economy - is a well established centre for international arbitration • Provides a base for a broader reach into the EMEA region • Brin
Slide 26: Financial Benefit of Corporate Litigation Finance
Financial Benefit of Corporate Litigation Finance Corporate litigation financing provides a substantial benefit to corporates by transferring the risk and P&L impact of litigation to the financier. Without Litigation External Financing Finance, client pays: Actual Cost $10 million (as an example) Ex
Slide 27: Glossary
Glossary Cash conversion rate means the net cash flows of the Group divided by the Net Profit After Tax for the year. Completed means, in respect of a Case or Litigation Project, that it has been settled, for which there has been a judgment or from which LCM has elected to withdraw from funding (oth
Slide 28: Important Information
Important Information NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR Australia IN PART, IN, INTO OR WITHIN THE UNITED STATES, CANADA, JAPAN OR SOUTH AFRICA OR This presentation may only be distributed in Australia to select investors (Exempt Investors) ANY OTHER JU
Slide 29: Important Information
Important Information New Zealand Requirements) may otherwise have with respect thereto, the ordinary shares have been This presentation has not been registered, filed with or approved by any New Zealand subject to a product approval process, which has determined that the ordinary shares regulatory
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