Omni Bridgeway Ltd · ASX:OBL
Omni Bridgeway — IMF Bentham — Investor Presentation (October 2015)
29 slides from Omni Bridgeway's investor presentation, October 2015
Slide 1: Litigation Funding Masterclass
Litigation Funding Masterclass Presenters: Andrew Saker, Chief Executive Officer October 2015 Diane Jones, Chief Operating Officer IMF#2204067v2
Slide 2: Agenda
AGENDA What is Litigation Funding? Overview of IMF Bentham Limited Funding Track Record The IMF Litigation Funding Process Case Study Litigation Funding Market IMF’s Competitors Growth Strategy and Competitive Strengths Target For Funding New Cases Key Risks Accounting Treatmen
Slide 3: What Is Litigation Funding?
WHAT IS LITIGATION FUNDING? As a “litigation funder” IMF provides funding on a contingency basis to businesses and individuals with claims for loss and damage. IMF provides funding for the client’s case or to the client and, in jurisdictions where adverse costs are relevant, agrees to pay any co
Slide 4: Overview of IMF Bentham Limited
OVERVIEW OF IMF BENTHAM LIMITED IMF is the world’s most experienced litigation funder. With a return on investment delivered of 158% since listing, IMF is entering a new strategic phase of growth, international expansion, diversification and capital management. IMF Fast Facts Detail The world’s most
Slide 5: Funding Track Record
FUNDING TRACK RECORD IMF’s track record to 30 June 2015 Settlements Summary 175 cases commenced and completed since Won listing. ROI of 158%. Average investment period of 2.4 years. 13 Generated revenue of $1.63B: 117 175 Cases $1037M to Clients (64%); Completed $591M to IMF comprising:
Slide 6: The IMF Litigation Funding Process
THE IMF LITIGATION FUNDING PROCESS 1. OUTLINE OF CLAIM 2. APPLICATION REVIEW 3. OFFER OF FUNDING The investing process generally begins IMF evaluates opportunities by The IMF Investment Committee receives with the execution of a confidentiality assessing a number of factors, including a due diligenc
Slide 7: Case Study
CASE STUDY Allocation of the matter Due Diligence process and investment parameters Investment Committee process Litigation Funding Agreement ASX Announcement Litigation Mediation Settlement ASX Announcement 7
Slide 8: Litigation Funding Market
LITIGATION FUNDING MARKET There is currently no direct empirical data available on the size of the litigation funding market in any market in which IMF operates. The following estimates have been calculated by reference to third party research reports, court statistics or competitor opinion on l
Slide 9: IMF's Competitors
IMF’S COMPETITORS In Australia it is estimated that IMF has 69% of the litigation funding market. (ref : IBIS 2014) The key industry participants in the markets in which IMF operates include: Australia US Europe JKL/Longford Capital Burford Harbour Litigation Lending Services Gerschen Keller Capit
Slide 10: Growth Strategy and Competitive Strengths
GROWTH STRATEGY AND COMPETITVE STRENGTHS IMF has identified significant opportunities for growth and diversification. Item Opportunity Major growth opportunities Renewed focus on the insolvency market with new products. onshore Additional products being developed to be launched in FY2016. Leve
Slide 11: Target for Funding New Cases
TARGET FOR FUNDING NEW CASES Target set for 2016 to 2018 as follows: DESCRIPTION 2014 2015 2016 2017 2018 Cases funded 8 21 37 54 61 Funds committed (A$) $42M $54M $86M $107M $123M 21 new cases were funded in FY2015 which committed funds of $54M. Diversification achieved in 2015 from a larger nu
Slide 12: Key Risks
KEY RISKS Item Description Choosing, and remaining in, a If a funded case is lost, IMF will lose not only its investment but may also have to pay the defendant’s funded case that is ultimately costs. lost Reliance on key management IMF depends substantially on its executive directors, senior man
Slide 13: Accounting Treatment
ACCOUNTING TREATMENT Inclusion in the investment portfolio Intangible asset Legal fees Capitalised overheads Other overhead costs Gross Revenue Net Revenue Cashflow 13
Slide 14: Profit and Loss Statement June 2015
Profit and Loss Statement 30 June 2015 $ $ Revenue 12,460,365 Litigation contracts in progress - settlements and judgements 92,345,205 Other income 14,589,353 Litigation contracts in progress - expenses (48,519,259) Finance costs (530,286) Litigation contracts in progress - written-down (624,420) De
Slide 15: Balance Sheet June 2015
Balance Sheet 30 June 2015 $ ASSETS Cash and cash equivalents 130,107,653 Trade and other receivables 49,898,578 Intangible assets 99,483,702 $ Other assets 1,722,460 Capitalised external costs 75,299,654 TOTAL ASSETS 281,212,393 Capitalised internal costs 16,504,171 Capitalised borrowing costs 7,67
Slide 16: Australian Business
AUSTRALIAN BUSINESS IMF commenced operations as a listed company in 2001. Item Description Australian footprint Offices in all mainland capital cities. 12 Investment Managers located throughout the country with capacity to manage local relationships. Investment managers and associate investmen
Slide 17: US Business
US BUSINESS IMF commenced its geographical diversification strategy in 2011 with its first international office in New York. Item Description Expanded footprint in US Opened its first office in New York in August 2011. Offices subsequently opened in Los Angeles in September 2013 and San Francisc
Slide 18: European Joint Venture
EUROPEAN JOINT VENTURE IMF expanded to its third international presence with the opening of its joint venture office in March 2014. Item Description Expanded footprint in Europe Opened its first office in London in March 2014. Subsequently opened its second office in Amsterdam in October 2014.
Slide 19: Investment Portfolio at June 2015
INVESTMENT PORTFOLIO AT 30 JUNE 2015 IMF expects to generate average gross revenue of 15% of the portfolio value over 3 years. % of Possible Possible Possible Est. Claim No of Claim Value Range Total Completion Completion Completion Value1 Cases Value FY20162 FY20172 FY20182 <$10M $26M 6 1% $16M $10
Slide 20: Possible Completions in FY2016
POSSIBLE COMPLETIONS IN FY2016 Below is a list of matters that may complete in FY2016. Other matters may also complete in that period. Matter Description Bank Fees On 4 February 2014 Justice Gordon delivered judgment in the ANZ Bank Fees matter. The findings in favour of IMF's clients were that
Slide 21: Consistent Risk Management
CONSISTENT RISK MANAGEMENT Risk management process includes: Case selection; Investment Committee review; and Case Management. Case selection must meet minimum legal and factual criteria before recommendation to the Investment Committee. Rigorous Investment Committee process to challenge
Slide 22: Outlook
OUTLOOK After a strong first half, the second half of FY2015 was impacted by four losses. IMF has significant earnings power and has delivered 158% ROI since listing. New strategic phase of growth, international expansion, diversification and capital management. Further development of intern
Slide 23: Appendices
APPENDICES FY2015 Highlights Historical NPAT and Portfolio Value Historical Results by Half Year Cash Flow History Lost Cases Possible Completions in FY2015 23
Slide 24: FY2015 Highlights
FY2015 HIGHLIGHTS FY2014 FY2015 % Gross Income (from cases) $75.9M $92.3M 22% Net Income (from cases) $25.3M $14.6M 42% NPBT $15.6M $9.2M 41% NPAT $9.9M $6.3M 36% Dividends (cents per share) 10 cents 10 cents - EPS 6.56 3.78 42% Net Asset Backing $1.16 $1.11 4% Net Cash $57.8M $81.9M 4
Slide 25: Historical NPAT and Portfolio Value
HISTORICAL NPAT AND PORTFOLIO VALUE IMF Bentham NPAT & Portfolio Value 2008 to 2015 $50 M $2.50 B $45 M $40 M $2.0 B Portfolio Value $35 M NPAT $30 M $1.50 B $25 M $20 M $1.0 B NPAT $15 M $10 M $0.50 B NPAT Average $5 M IMF Portfolio at 30 June $M $0.0 B 2008 2009 2010 2011 2012 2013 2014 2015 Avera
Slide 26: Historical Results by Half Year
HISTORICAL RESULTS BY HALF YEAR 1HFY13 2HFY13 1HFY14 2HFY14 1HFY15 2HFY15 Gross Income $20.6M $23.3M $33.6M $42.3M $77.6M $14.7M (from cases) Net Income $11.5M $13.1M $17.7M $7.6M $37.7M ($23.1M) (from cases) NPBT $8.7M $11.4M $13.6M $2M $32.5M ($23.3M) NPAT $5.6M $8.2M $9.1M $0.8M $23.0M ($16.7M) E
Slide 27: Cash Flow History
CASH FLOW HISTORY 30-Jun-13 30-Jun-14 30-Jun-15 $M $M $M Payments to suppliers and employees (8,095) (6,751) (15,807) Income tax paid (18,183) (1,502) (7,037) Other (527) (526) (85) Net cash flows (used in) operating activities (26,805) (8,779) (22,929) Net proceeds/(payments) from litigation fundin
Slide 28: Lost Cases
LOST CASES IMF has only lost 10 cases since listing in 2001 (6%), as follows: Name of Case: Investment Initial Court Appeal P&L Impact Time from ID Investment Loss Decision Decision Decision Year to P&L (including Impact adverse costs) (Years) $ Essington FY2004 N/A FY2005 FY2005 2 $0.1M Marminta FY
Slide 29: Employee Analysis
EMPLOYEE ANALYSIS Offices and Full time equivalents in each location. Office Location Number of FTE’s Adelaide 1 Brisbane 2 Melbourne 2 Perth 15 Sydney 17 Los Angeles 3 New York 6 San Francisco 2 Total 48 29