Omni Bridgeway Ltd · ASX:OBL
Omni Bridgeway — IMF Bentham — HY2016 Earnings Presentation
17 slides from Omni Bridgeway's earnings presentation, February 2016
Slide 1: HY2016 Half-Year Results Investor Presentation
HY2016 Half-Year f Results February 2016 Investor Presentation
Slide 2: Agenda
AGENDA HY2016 Results Overview HY2016 Highlights g g Implementation of Strategy Funding Track Record Balance Sheet Investment Portfolio Investment Portfolio History Consistent Risk Management Possible Completions FY2016 Settlement of Class Action against S&P Enterprise Value
Slide 3: HY2016 Results Overview
HY2016 RESULTS OVERVIEW The HY2016 result reflects the effects of the previous strategy of pursuing a small number of large cases During this period five matters were completed, resulting in three losses (all of which are subject to appeal), and two wins MATTER GROSS INCOME NET INCOME USA Case 0
Slide 4: HY2016 Highlights
HY2016 HIGHLIGHTS HY2015 FY2015 HY2016 HY2016 v HY2015 Gross Income (from cases) $77.6M $92.3M $26.2M 66% Net Income (from cases) $37.7M $14.6M $11.8M 69% NPBT $32.5M $9.2M $(0.6)M 102% NPAT $23M $6.3M $(0.9)M 104% Dividends (cents per share) 5 cents 10 cents ‐ ‐ EPS 13.81 3.78 (0.01) 101%
Slide 5: Implementation of Strategy
IMPLEMENTATION OF STRATEGY We have achieved a number of key outcomes: Increased geographic footprint with the opening of our office in Canada in January 2016 Increased I d the th number b off matters tt funded f d d from f 37 to t 47 andd the th portfolio tf li from f $2 0BN tto $2.0BN $3.2BN
Slide 6: Funding Track Record
FUNDING TRACK RECORD IMF’s track record to 31 December 2015 Settlements Summary 180 cases commenced and completed since Won listing. ROI off 144% 144%. Average investment period of 2.4 years. 13 Generated revenue of $1.67BN: 119 180 Cases $1055M to Clients (63%); Completed $613M to IMF c
Slide 7: Balance Sheet Strength
BALANCE SHEET STRENGTH Cash Investments1 Net Assets $M $M $M $124.34 $134.40 $130.11 $208.65 $98 50 $98.50 $98 64 $98.64 $99 48 $99.48 $105.57 196.94 $93.61 $79.14 2 $85.82 $191.13 $185.90 $179.08 HY14 FY14 HY15 FY15 HY16 HY14 FY14 HY15 FY15 HY16 HY14 FY14 HY15 FY15 HY16 1 Investments include capita
Slide 8: Investment Portfolio at 31 December 2015
INVESTMENT PORTFOLIO AT 31 DECEMBER 2015 IMF expects to generate average gross revenue of 15% of the portfolio value over 3 years. (b) (b) (b) (a) Proportion Possible Possible Possible Estimated Number of Claim value range of total completion completion completion claim value cases value FY2016 FY20
Slide 9: Investment Portfolio History
INVESTMENT PORTFOLIO HISTORY IMF Quarterly Investment Portfolio and Number of Cases $4 50 Millions ortfolio 45 $3 Completion In Two Financial Years Time of Cases in Po ent Portfolio o 40 $3 35 Completion in the 30 Next Financial Year $2 Investme Number o 25 Completion in the $2 Current Financial 20
Slide 10: Consistent Risk Management
CONSISTENT RISK MANAGEMENT • Risk management process includes: – Case C selection; l ti – Investment Committee review; and – Case Management. • Case selection must meet minimum legal, factual and commercial criteria before recommendation to the Investment Committee • Rigorous Investment Committee pr
Slide 11: Possible Completions in FY2016
POSSIBLE COMPLETIONS IN FY2016 Below is a list of matters that may complete by 30 June 2016. Other matters may also complete in that period. Matter p Description Bank Fees The High Court heard the appeal on 4 and 5 February 2015. We are advised that a decision may be received before the end of the c
Slide 12: Settlement of Class Action against S&P
SETTLEMENT OF CLASS ACTION AGAINST S&P On 19 February 2016 IMF announced the conditional settlement of the class action against S&P concerning CDOs rated by S&P and distributed by Lehman Brothers Australia Subject to the satisfaction of the conditions, the settlement will result in IMF recognisi
Slide 13: Enterprise Value
ENTERPRISE VALUE Net assets as at 31 December 2015 of $180M, and a market capitalisation of $222M The implied average gross income from the portfolio is $470M over a three pperiod,, and net income before tax of $300M, $ , which needs to be discounted for potential losses and time value 13
Slide 14: Growth Strategy
GROWTH STRATEGY The Company’s focus for the next 12 months includes: Further geographic expansion requiring the assessment of additional offices in the US and possibly in Asia where IMF is currently funding three cases in Hong Kong The roll out of possible new products in Australia potentially
Slide 15: US Business
US BUSINESS Operates from three offices with 13 staff and represents 40% of the Group’ss portfolio Group Looking to expand geographically; association with new Toronto office and mayy look at new office in next 12 months in Texas,, Illinois or Washington DC Considering a number of significant
Slide 16: European Joint Venture
EUROPEAN JOINT VENTURE The Tesco shareholder class action is now unconditionally funded, and the VW class action is in the process of signing up participants Relations with the JV partner require management given the difference in views on process p IMF remains committed to maintaining its Eur
Slide 17: Capital Management
CAPITAL MANAGEMENT To fund its growth, the Company is seeking new debt, in the form of IMFHAs or OTC bonds to circa $50M Not considering equity Given the loss for HY2016 and the Company’s Company s continued focus on the growth strategy, the Board has decided not to pay an interim dividend 17