Burford Capital Limited · LSE:BUR
Burford Capital — Q1 2023 Earnings Presentation
25 slides from Burford Capital's earnings presentation, Jun 13, 2023
Slide 1: Burford Capital First Quarter 2023 Results
June 13, 2023 Burford Capital First Quarter 2023 Results This presentation is for the use of Burford’s public shareholders and is not an offering of any Burford private fund.
Slide 2: Notice & disclaimer
Notice & disclaimer This presentation (this “Presentation”) provides certain information to facilitate review and understanding of the business, financial position and results of operations of Burford Capital Limited and its subsidiaries (the “Company”, “Burford”, “we”, “our” or “us”) at and for the
Slide 3: Positive portfolio-wide momentum drove strong 1Q23 financial results
Positive portfolio-wide momentum drove strong 1Q23 financial results Significant growth in total revenues, net income and tangible book value - Broad pick-up in portfolio activity, with capital provision income, excluding YPF-related assets, more than doubling Total revenues1 +219% to $185 million -
Slide 4: Growth in Burford-only total revenues drives significant earnings
Growth in Burford-only total revenues drives Three months ended March 31, significant earnings Selected statement of operations data 2023 2022 $ change % change Burford-only improvement ($ in thousands, except per share data) • Burford-only capital provision Capital provision income 316,015 100,587
Slide 5: Strong new business focused on adding higher expected return capital provision
Strong new business focused on adding higher expected Group-wide new commitments Capital provision-direct Group-wide deployments Capital provision-direct return capital provision ($ in millions) ($ in millions) assets to balance sheet 126 97 • Burford-only new business at 25 91 strong levels, especi
Slide 6: Growth in Burford-only capital provision and asset management income
Growth in Burford-only Capital provision income Burford-only capital provision and asset ($ in millions) 316 management income reflect faster portfolio velocity 192 • Increase in capital provision income broad based 101 - Growth in unrealized gains driven by increasing frequency of case 33 88 milest
Slide 7: Operating expenses reflect strong portfolio performance and certain idiosyncratic events
Operating expenses reflect strong portfolio Total operating expenses 1Q23 1Q22 performance and certain Burford-only ($ in thousands) idiosyncratic events Salaries and benefits 12,492 9,461 Annual incentive compensation 4,686 3,601 • GAAP operating expenses include cash and non-cash elements Equity c
Slide 8: Robust liquidity and low leverage
1Q23 cash bridge Group-wide realizations Robust liquidity and low Burford-only ($ in millions) Capital provision-direct ($ in millions) leverage 97 6 147 45 256 73 210 35 • Liquidity position of $183 million at 183 March 31, 2023 comprises $53 million 50 in cash and cash equivalents and $130 million
Slide 9: Four pillars of Burford's value proposition
Four pillars of Burford’s value proposition 1. Core portfolio 2. Origination platform • Burford-only capital provision-direct cumulative realizations • Clear market leader with significant scale and meaningfully larger since inception of $2.3 billion with an 89% ROIC and 29% IRR than any competitor1
Slide 10: Financial results
Financial results [Burford
Slide 11: Statement of operations for the three months ended March 31, 2023
Statement of operations for the three months ended March 31, 2023 Elimination of third-party interests Strategic Advantage ($ in thousands) Consolidated Value Fund BOF-C Colorado Fund Other Burford-only Revenues Capital provision income 475,933 (107) (48,308) (99,769) (7,022) (4,712) 316,015 Less: T
Slide 12: Statement of operations for the three months ended March 31, 2022
Statement of operations for the three months ended March 31, 2022 Elimination of third-party interests Strategic Advantage ($ in thousands) Consolidated Value Fund BOF-C Colorado Fund Other Burford-only Revenues Capital provision income 140,739 (508) (18,595) (15,925) (366) (4,758) 100,587 Less: Thi
Slide 13: Statement of financial position at March 31, 2023
Statement of financial position at March 31, 2023 Elimination of third-party interests Strategic Advantage ($ in thousands) Consolidated Value Fund BOF-C Colorado Fund Other Burford-only Assets Cash and cash equivalents 65,994 (1,759) (8,010) (20) (1,391) (1,440) 53,374 Marketable securities 130,056
Slide 14: Statement of financial position at December 31, 2022
Statement of financial position at December 31, 2022 Elimination of third-party interests Strategic Advantage ($ in thousands) Consolidated Value Fund BOF-C Colorado Fund Other Burford-only Assets Cash and cash equivalents 107,658 (1,906) (7,003) (20) (23,635) (1,415) 73,679 Marketable securities 13
Slide 15: Supplementary data
Supplementary data [Burford
Slide 16: Burford has generated strong cash-on-cash returns
Burford has generated strong cash-on-cash returns • Burford has generated consistently high returns on $2.3 billion of realizations since inception in 2009 • A recurring mix of settlements and wins drives strong returns in reasonable time frames, with asymmetrically low losses • Cumulative ROIC incr
Slide 17: YPF summary judgment ruling a complete win against Argentina with respect to liability
YPF summary judgment ruling a complete win against Argentina with respect to liability1 • Awaiting court scheduling of evidentiary hearing and resolution of Argentina’s reconsideration motion • Release of decision on March 31, 2023 drove revaluation of YPF-related assets as of that date, from $823 m
Slide 18: Reconciliations
Reconciliations [Burford
Slide 19: Reconciliations for cash receipts & book value and tangible book value per share
Reconciliations for cash receipts & book value and tangible book value attributable to BCL per ordinary share Cash receipts reconciliation for three months ended March 31, 2023 ($ in millions) For three months ended March 31, 2023 Consolidated proceeds from capital provision assets 144 Less: Elimina
Slide 20: Capital provision income and asset management income
Capital provision income and asset management income Capital provision income For three months ended March 31, 2023 For three months ended March 31, 2022 Elimination of Elimination of third-party third-party ($ in thousands) Consolidated interests Burford-only Consolidated interests Burford-only Rea
Slide 21: YPF-related income, carrying value and realizations
YPF-related income, carrying value and realizations Capital provision income, excluding YPF-related assets reconciliation For the three months ended March 31, ($ in thousands) 2023 2022 Capital provision income 475,933 140,739 Less: Capital provision income from YPF-related assets (291,345) (49,839)
Slide 22: Capital provision-direct deployments and realizations
Capital provision-direct deployments and realizations Reconciliation of capital provision-direct deployments - consolidated to Group-wide (for the three months ended March 31, 2023 and 2022) Elimination of third-party interests to ($ in millions) Consolidated Burford only Burford-only Other funds BO
Slide 23: Consolidated portfolio to Group-wide and capital provision income, excluding YPF-related assets
Consolidated portfolio to Group-wide and capital provision income, excluding YPF-related assets Consolidated portfolio to Group-wide reconciliation At March 31, 2023 March 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 Consolidated carrying value 4,202,864 3,735,556 3,117,263 2,714,3
Slide 24: Covenant calculations at March 31, 2023 and December 31, 2022
Covenant calculations at March 31, 2023 and December 31, 2022 Covenant calculations at March 31, 2023 Covenant calculations at December 31, 2022 $ in millions $ in millions From the condensed consolidated statement of financial position and note 9, Debt From the condensed consolidated statement of f
Slide 25: [Burford
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