Omni Bridgeway Ltd · ASX:OBL
Omni Bridgeway — H1 FY2020 Earnings Presentation
21 slides from Omni Bridgeway's earnings presentation, February 2020
Slide 1: Half-Year Results FY2020
HALF-YEAR RESULTS FY2020 Half-Year Ended 31 December 2019
Slide 2: First Half Highlights
First Half Highlights What worked: What didn’t: Purchased Omni Bridgeway: Deferred completion of significant Wivenhoe investment Completed strategic expansion in Europe Modest returns on some case completions Successfully raised equity to facilitate the purchase The loss of two investments
Slide 3: FY2020 – more to come
FY2020 – more to come AUD (millions) Balance sheet Fund 1 Funds 2&3 Fund 4 Fund 5 Fund 6 Total Recognised income Completed investments 37.9 42.8 12.7 29.5 - 8.7 131.6 Ongoing investments 12.3 7.1 0.5 - - - 19.9 Total income recognised 50.2 49.9 13.2 29.5 - 8.7 151.5 Income yet to be recognised Bindi
Slide 4: Individual Case Performance
Individual Case Performance Litigation funding Net gain on contracts – derecognition of ROIC Initial Litigation funding derecognition intangible assets (incl. ROIC IRR Commence commitment contracts – (incl. capitalised (incl. capitalised Attributed to Attributed to capitalised (excl. (excl. Name dat
Slide 5: Omni Bridgeway Contribution (since 8 November)
Omni Bridgeway Contribution (since 8 November) Omni Bridgeway Consolidated Group OB cost @ Consolidated OB cost since acquisition PPA value acquisition Proceeds Profit / (loss) ROIC IRR1 Profit / (loss) ROIC2 IRR3 # $m $m $m $m $m x % $M x % Opening 230 61.5 164.6 n/a n/a n/a n/a n/a n/a n/a n/a Add
Slide 6: Sources and Applications of Cash
Sources and Applications of Cash 1HY 2020 2HY 2019 1HY 2019 2HY 2018 IFRS reporting requires the deferral of income until $m $m $m $m recovery is certain, and in some instances the Cash generation acceleration of the recognition of some expenses Proceeds from litigation funding – intangible assets
Slide 7: Operating Expenditure
Operating Expenditure 1HY 2020 2HY 2019 1HY 2019 2HY 2018 Operating expenditure has increased period on period $m $m $m $m reflecting our strategy to diversify, establish new offices in As per Profit and Loss Statement new jurisdictions and to address competition. Claims portfolio expense (6.2) -
Slide 8: Financial Results Overview
Financial Results Overview 1HY 2020 2HY 2019 1HY 2019 2HY 2018 % move from prior $m $m $m $m half Litigation contract income 142.8 19.7 15.3 22.4 ▲624% Revenue from cases 8.7 - - - ▲100% Litigation expenses (104.2) (25.9) (13.3) (18.8) ▲302% Net gain / (loss) (from investments) 47.3 (6.2) 2.0 3.6 ▲8
Slide 9: Balance Sheet Strength
Balance Sheet Strength Cash & Net Receivables 324.8 Net Assets 758.4 ($million) ($million) 423.5 62.1 5.6 226.1 46.3 515.5 2.4 38.3 23.2 296.6 170.8 144.9 22.5 367.8 10.6 49.7 5.5 15.9 168.3 10.1 175.4 142.5 139.3 334.9 130.1 134.2 132.8 206.3 2.4 203.9 218.9 185.9 201.4 192.4 (0.4) FY15 FY16 FY17 F
Slide 10: Funding Funnel
Funding Funnel Funding Applications Actual and Budgeted Funding Commitments1 700 300 700 600 600 581 250 Deployed Investments (A$m) 500 516 500 Funds Committed (A$m) 467 458 200 430 400 397 399 400 371 150 300 298 299 300 275 268 282 238 266 211 244 235 248 100 200 192 192 192 200 157 164 160 153 14
Slide 11: Investment Portfolio
Investment Portfolio Investments Portfolio (EPV)2 ($million) 622.1 ($million) 9,726.0 161.0 1 180.5 2,419.0 7,956.2 427.0 1.2 568.7 28.6 77.8 2,709.0 321.3 37.6 3,007.2 50.8 5,642.8 9.1 206.7 198.9 1,312.5 190.9 189.6 3,781.9 3,164.3 10.3 402.8 2,699.7 2,758.4 3,438.0 3,379.1 180.6 145.6 154.2 122.5
Slide 12: Investment Portfolio Profile
Investment Portfolio Profile Average Success ROIC excl. IRR excl. Possible completion EPV Number of Number of investment rate on capitalised capitalised Investment FY2020 FY2021 FY2022 FY2023 + current completed length investment overhead overhead costs EPV investments investments (years) number (%)
Slide 13: IMF's ROIC Track Record (excluding Omni Bridgeway)
IMF’s ROIC Track Record (excluding Omni Bridgeway) ROIC in non-US investments have remained relatively stable over the period ROIC ROIC in US investments has been low during the period as a consequence of: Large loss in FY19 in Fund 1 165% 163% Accelerated completion of large matters in Fund
Slide 14: Fund Summary
Fund Summary Accumulated Accumulated Accumulated special Capital called USDm Uncalled capital USDm preferred return management fee distribution USDm USDm USDm Fund 1 Total Investors IMF Total Investors IMF Investors Investors IMF 99% committed 166.7 125.0 41.7 - - - 27.9 1.8 3.6 Distributions (42.1)
Slide 15: Non-Controlling Interests
Non-Controlling Interests NCI Fund 1 Funds 2&3 Fund 4 Fund 6 Total A$m A$m A$m A$m A$m Opening (202.5) (68.6) (25.5) - (296.6) Acquired during the period - - - (104.8) (104.8) Called during the period - - (38.5) (6.1) (44.6) Distributed during the period 37.8 - 3.3 - 41.1 Accumulated preferred retur
Slide 16: The Future
The Future Integration Operations | Rebrand Strategy Business plan | Human resources Footprint Capital deployment | Cross selling | Alternative products Technology Artificial Intelligence Growth opportunities Corporates | Strong pipelines | Global coordination Ongoing risk mitigation Continued diver
Slide 17: Common Fund Orders/Contingency Fees
Common Fund Orders/Contingency Fees The High Court’s decision on CFOs in December 2019 caused some consternation amongst industry participants but has not resulted in a wholesale change in the interest in class actions. The implications are yet to be felt on competitors attitudes to class actions
Slide 18: Wivenhoe
Wivenhoe The decision was handed down in November 2019 in favour of our funded clients, and which found the defendants Sunwater, Seqwater and the State of Queensland (State) liable in negligence to group members. Subsequently the State has advised that it will not appeal the decision, whereas the
Slide 19: Risk Mitigation
Risk Mitigation Risk Potential impact Strategic response Portfolio Concentration Potential for a funded case to be lost = IMF investment lost and Deliberate transition from idiosyncratic risk to systemic risk of a portfolio exposure to adverse costs Portfolio represents increased number of inves
Slide 20: Glossary of Terms and Notes
Glossary of Terms and Notes Estimated Portfolio Value (EPV) EPV for an investment where the IMF funding entity earns a percentage of the resolution proceeds as a funding commission, is IMF’s current estimate of the claim’s recoverable amount after considering the perceived capacity of the defendant
Slide 21: Disclaimer
Disclaimer The material in this presentation has been prepared by IMF Bentham Limited (IMF) and is general background information about IMF's activities. The information is given in summary form and does not purport to be complete. A number of terms used in this presentation including: ROIC, EPV