Litigation Capital Management Ltd · LSE:LIT
Litigation Capital Management — FY2021 Earnings Presentation
23 slides from Litigation Capital Management's earnings presentation, Sep 21, 2021
Slide 1: Full year results Presentation 2021
Full year results Presentation 2021 Litigation Capital Management Limited ACN 608 667 509
Slide 2: Sustained growth & strong financials in disrupted market conditions
Sustained growth & strong financials in disrupted market conditions Highlights – FY21 Adjusted profit Boost in investment performance increasing adjusted net profit by 47% before tax1 Applications Applications across all regions increased by 10% despite disruption caused by COVID-19 Assets under Inc
Slide 3: Building scale
Building scale Growth in opportunity Increased investment Sustained growth Capital committed in year 1 Number of applications $109m Total assets under management 572 Capital invested 2 $336m $88m Applications Capital committed Capital invested AUM FY21 572 FY21 109 FY21 88 FY21 336 FY20 522 FY20 147
Slide 4: Maintaining performance through disciplined investment
Maintaining performance through disciplined investment 10-year cumulative portfolio ROIC of LCM has maintained its high investment return metrics whilst 153% 1 building scale 9-year ROIC 134% Increased the return on invested capital 10-year cumulative Maintained internal rate of return over 10
Slide 5: Full year results highlights
Full year results highlights – exclusive of third-party fund ($A) Gross Revenue FY 2021 FY 2020 Change % from investments1 Gross revenue from resolution of investments1 $36.3m $35.8m 1% $36.3m Gross profit $26.1m $21.7m 20% Increase in Adjusted profit before tax2 $15.8m $11.1m 42% Statutory PBT2 Sta
Slide 6: FY21 Balance sheet overview
FY21 Balance sheet overview – exclusive of third-party fund ($A) Capital invested Total equity 82.2 90.1 48.5 ($m) ($m) 76.2 41.3 27.8 14.6 25.4 16.7 7.2 3.5 4.7 7.4 5.6 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Cash generation1 37.5 Cash as at 49.1 2 ($m) 30.7 period end
Slide 7: FY21 cash movements
FY21 cash movements – exclusive of third-party fund ($A) Litigation Investments Operating activities Investing activities 37.5 (47.6) Financing activities 36.4 (1.8) 0.07 0.6 35.5 24.9 (12.4) (0.08) 0.01 (2.1) Cash Cash Capital Expenses Property, Refund of Interest Proceeds Payments Proceeds
Slide 8: Current portfolio of direct investments
Current portfolio of direct investments Balances as at Portfolio by industry Portfolio by industry Portfolio by region Portfolio by individual 13 September 2021 sector sector (estimated A$ capital capital commitment¹ (A$ millions) (estimated A$ capital (number of projects) commitment)¹ (estimated A$
Slide 9: LCM Global Alternative Returns Fund
LCM Global Alternative Returns Fund Balances as at Portfolio by industry Portfolio by industry Portfolio by geography Portfolio by individual 13 September 2021 sector sector (estimated A$ capital capital commitment¹ (A$ millions) (estimated A$ capital (number of investments) commitment) 2 (estimated
Slide 10: Portfolio profile
Portfolio profile Portfolio by claim size Portfolio by LFA maturity1 (A$) (months) 27 16 8 12 7 7 7 6 5 months 6 4 5 10 year average 4 time to completion 1 <10m 11-20m 20-50m 51 - 100 - 201m - 501m> <6 7-12 13-24 25-36 37-48 >49 100m 200m 500m LCM’s entire portfolio comprising LCM’s entire portfolio
Slide 11: LCM's high returns on invested capital & reinvestment creates compounding effect
LCM’s high returns on invested capital & reinvestment creates compounding effect Theoretical capital growth potential of LCM’s current balance sheet FPF LCM profits • The return on invested capital 243 ROIC 1x (“ROIC”) that LCM has achieved Fund performance fees (“FPF”) ROIC direct investments or co
Slide 12: Limited downside risk creates asymmetric returns
Limited downside risk creates asymmetric returns Unique characteristics of disputes finance as an asset class Individual actual performance of LCM’s investments over the past 10 years, including losses 18 Profit per project1 1000% ROIC per project1,2 16 14 800% 12 600% A$ millions 10 8 400% 6 4 200%
Slide 13: Favourable market dynamics
Favourable market dynamics Uncorrelated Countercyclical Low market returns business penetration Each and every investment Global financial markets are Despite demand for litigation whether the subject of a experiencing high volatility. finance steadily increasing, the direct investment or as p
Slide 14: Outlook
Outlook Mature portfolio of high yielding assets Growing asset management business expected to have US$450m AUM in the near future Balance sheet capital growing through investment realisations Increased capital available to facilitate continued growth Management to be centralised in London after COV
Slide 15: Appendices
(— Appendices LeM
Slide 16: Consolidated income statement
Consolidated income statement For the period ended 30 June 2021 Consolidated Consolidated LCM only Fund FY21 LCM only Fund FY20 • Gross revenue fell marginally by 4% to A$m A$m A$m A$m A$m A$m $37.1m, however Gross profit was up Revenue from contracts with customers 23% inclusive of third party inte
Slide 17: Adjusted profit & EBITDA reconciliation
Adjusted profit & EBITDA reconciliation For the period ended 30 June 2021 Consolidated Consolidated LCM only Fund FY21 LCM only Fund FY20 • Non operating costs include expenses which A$m A$m A$m A$m A$m A$m are considered unusual, non-cash or one-off Statutory profit after tax 9.0 (0.1) 8.9 6.4 (1.2
Slide 18: Consolidated statement of financial position
Consolidated statement of financial position As at 30 June 2021 Consolidated Consolidated LCM only A$m Fund A$m FY21 A$m LCM only A$m Fund A$m FY20 A$m • 71% Increase in contract costs Current assets exclusive of third-party investments, Cash and cash equivalents 35.5 14.2 49.7 24.9 6.8 31.8 demonst
Slide 19: Consolidated statement of cash flows
Consolidated statement of cash flows As at 30 June 2021 Consolidated Consolidated • Cash generated from the resolution of LCM only Fund FY21 FY20 matters during the period was $37.5m A$m A$m A$m A$m exclusive of third party funds, an Cash flows from operating activities Proceeds from litigation cont
Slide 20: Scalable business, sustained cost base
Scalable business, sustained cost base A$ Millions 350 0.4 Total committed1 portfolio Total opex 34% Opex as a % of portfolio/AUM 0.35 300 Total AUM as at 30 June 2021 FY21 opex3 Portfolio under management 2 0.3 Opex as % of Current Portfolio 250 0.25 200 0.2 150 13% 0.15 13% 13% 100 9% 9% 0.1 7% 8%
Slide 21: Significant growth since initial listing
Significant growth since initial listing Applications received Total portfolio under Operating capital in the 12-month management ($m)2 period3 ($m)1 336 138 572 522 250 • Exponential growth in total 92 portfolio 918% 74 91 98 125 • Significant growth in 33 16 applications feeding portfolio - ASX IP
Slide 22: Important notices and disclaimer
Important notices and disclaimer NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND DEPENDENCIES, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, NEW ZEALAND, JAPAN, THE REPUBLI
Slide 23: Contact Information
Contact Information Offices Brisbane Sydney Level 54, Level 12, The Chifley Tower 111 Eagle Street, 2 Chifley Square, Brisbane QLD 4000 Sydney NSW 2000 T +61 7 3012 6478 T +61 2 8098 1390 Singapore London Marina Bay Financial Centre Bridge House Tower 1, Level 11 181 Queen Victoria Street 8 Marina B
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