Burford Capital Limited · LSE:BUR
Burford Capital — H1 2020 Earnings Presentation
17 slides from Burford Capital's earnings presentation, Oct 1, 2020
Slide 1: Investor presentation: First half 2020 results
SEPTEMBER 2020 Investor presentation First half 2020 results This presentation is for the use of Burford’s public shareholders or bondholders and is not an offering of equity interests, bonds, or any other securities of Burford or of any fund sponsored by Burford.
Slide 2: Notice & disclaimer
Notice & disclaimer This presentation (“Presentation”) does not constitute or form part of, and should not be construed as, an issue for sale or subscription of, or solicitation of any offer or invitation to subscribe for, underwrite or otherwise acquire or dispose of any securities of Burford Capit
Slide 3: Record realisations drove 1H 2020 performance
1H 2020 IN REVIEW Burford only results without third-party Substantial realised gains Record realisations drove interests in consolidated entities, as adjusted1 Burford balance sheet only ($ in millions) 1H 2020 performance US $’000 1H 2020 1H 2019 % change 186 (except per share) Total income 252,85
Slide 4: Recent large vintages have begun to deliver greater realisations, driving record first-half realised gains
ACCELERATED REALISATIONS Recent large vintages have begun to deliver greater realisations, driving record first-half realised gains Significant acceleration of realisations Capital provision-direct realisations by vintage Group-wide realisations Burford balance sheet only ($ in millions) ($ in milli
Slide 5: Realisations accelerated, especially in the capital provision-direct portfolio
ACCELERATED REALISATIONS Realisations accelerated in 1H 2020, especially in the capital provision-direct portfolio • While some courts and some cases have seen delays because of Covid-19, others continue to function and produce decisions Capital provision realisations Realisations from group of 10 r
Slide 6: 1H 2020 realisations increased cumulative returns, with little impact on concluded asset tenors
ATTRACTIVE RETURNS 1H 2020 realisations increased cumulative returns, with little impact on concluded asset tenors Capital provision-direct Capital provision-direct Burford balance sheet only Burford balance sheet only Portfolio returns—concluded (fully and partially) portfolio Weighted average life
Slide 7: Realisations reaffirmed Burford's ability to deliver outsized results
ATTRACTIVE RETURNS Realisations in 1H 2020 reaffirmed Burford’s ability to deliver outsized results • Cumulative recoveries from adjudication-gains now at $832 million, up 49% from 31 December 2019 • Burford has produced positive outcomes across 90% of its deployments by cost Capital provision-direc
Slide 8: Asymmetric returns on adjudications drive attractive total returns
ATTRACTIVE RETURNS Concluded (fully and partially) capital provision-direct assets Burford balance sheet only—arrayed by ROIC (%) Asymmetric returns on ($ in millions) adjudications drive A B C D attractive total returns 0% or less ROIC 0 to 99% ROIC 100 to 199% ROIC Greater than 200% ROIC Total Dep
Slide 9: Commitments and deployments down because of pandemic; pipeline rebuilding in 2H 2020
IMPACT OF COVID-19 Commitments and deployments down in 1H 2020 because of pandemic; pipeline rebuilding in 2H 2020 • Disruption to clients’ operations and Burford’s disciplined approach in an uncertain environment slowed new commitments dramatically • Deployments also slowed, but not as much because
Slide 10: Portfolio case progress fuelled substantial income and a moderate increase in unrealised gains
MODEST UNREALISED GAINS Portfolio case progress fuelled substantial income and a moderate increase in unrealised gains in 1H 2020 VALUATION POLICY RELIES ON OBJECTIVE EVENTS FAVOURABLE CASE PROGRESS DROVE SUBSTANTIAL 1H 2020 INCOME • Third-party events, such as a secondary sale or market-observed pr
Slide 11: 1H 2020 delivered strong cash receipts despite the market environment
ROBUST CASH GENERATION 1H 2020 delivered strong cash receipts despite the market environment • Burford generated $224 million of cash receipts on its balance sheet - Underpinned by proceeds from capital provision-indirect portfolio – a source of medium-term liquidity - Second-highest cash receipts e
Slide 12: Burford's substantial sources of liquidity are complemented by a conservative debt structure
AMPLE LIQUIDITY Burford’s substantial sources of liquidity are complemented by a conservative debt structure IMMEDIATE LIQUDITIY CONSERVATIVE DEBT STRUCTURE • At 30 June 2020: • Burford has maintained its debt ratings at Ba3 (Positive) by Moody’s and BB- - As it has historically, Burford maintained
Slide 13: Burford has outperformed in a difficult environment
CONCLUSION Burford has outperformed in a difficult environment • Recent vintage realisations are occurring Key per share statistics • Case successes are driving significant realised gains US$ £* • Returns rose again and remain consistently attractive Profit after tax (diluted) for 1H 2020 $0.69 £0.5
Slide 14: Supplementary data
Supplementary data [Burford
Slide 15: Statement of comprehensive income for the half year ended 30 June 2020
RECONCILIATION OF BURFORD-ONLY RESULTS TO CONSOLIDATED FINANCIAL STATEMENTS Statement of comprehensive income for the half year ended 30 June 2020 * The eliminated amounts arise from the services provided by the Group Burford balance Consolidated Elimination of Burford balance Other to the consolida
Slide 16: Financial position for the half year ended 30 June 2020
RECONCILIATION OF BURFORD-ONLY RESULTS TO CONSOLIDATED FINANCIAL STATEMENTS Financial position for the half year ended 30 June 2020 Elimination Burford Elimination Burford Consolidated of third-party balance sheet of third-party balance sheet IFRS interests* only Consolidated interests* only AS OF 3
Slide 17: Burford Capital
Burford Capital