Burford Capital Limited · LSE:BUR
Burford Capital — FY2014 Earnings Presentation
15 slides from Burford Capital's earnings presentation, Mar 18, 2015
Slide 1: Burford Capital 2014 Results
Investor Presentation Burford Capital 2014 Results March 2015 | Burford
Slide 2: Demand for outside funding outstrips supply
“Demand for outside funding outstrips supply. Returns are impressive.” The Economist
Slide 3: 2014 Highlights
2014 Highlights Income & operating profit Cumulative gross & net recoveries Cumulative dividends in milions) in millions) declared & annual D! Gin milions) 80 60 250 o 50, 7.008 200 60 —— o 40 160 5.236 40 30 100 4766 J 20 20 ia 3.666 o 10) 3.666 i) co) “4 oO 20132014 2010 «2011 «2012-2013 2014 ° 20
Slide 4: Litigation market at a glance
Litigation market at a glance The law market is enormous and capital starved. 6 law firms in UK would be in the FTSE 100 if public 1 million+ lawyers in US $300 billion annual law firm revenue in US PAY largest US firms generated $36 billion in annual profits Law firms lack external capital to enabl
Slide 5: Litigation: A desirable asset class
Litigation: A desirable asset class Robust demand for Burford’s capital Strong investment attributes • Investment performance uncorrelated to market or economic activity • Litigation process automatically provides “exit” in every matter • Medium duration assets: process averages 3+ years; settle
Slide 6: Significant profit growth
Significant profit growth • 43% increase in 2014 operating profit to $60.7 million (2013: $42.5 million) • 17% ROE • While all components of the business contributed to 2014’s strong profit, the litigation investment portfolio – with its 78% margin – provided well over half our profit, growing at mo
Slide 7: Strong portfolio returns
Strong portfolio returns Burford has the industry’s largest diversified portfolio • Burford has committed $510 million to investments since inception, constructing a widely diversified portfolio • $150 million capital committed in 2014 alone – 3x 2013 • 32 investments have generated $209 million i
Slide 8: Leading rapid evolution of the market
Leading rapid evolution of the market • From a standing start in 2009, where 100% of our activity was single case financing, the litigation finance market has evolved with dramatic speed • The market today is composed of widely disparate transactional structures, many of which increase diversificati
Slide 9: Performance shows benefit of diversification
Performance shows benefit of diversification 9
Slide 10: Progressive increase in dividends
Progressive increase in dividends • 34% dividend increase proposed to 7.00¢ per share (2013: 5.23¢) composed of 1.74¢ paid in December and 5.26¢ to be paid in June • $48 million in declared dividends since inception • Doubling of dividend payout in 5 years • Yield 3x AIM 50 average and almost 2x ave
Slide 11: Approach to Capital Management
Approach to Capital Management • Balance sheet strengthened with $150 million retail bond - eight year, fixed 6.5% interest rate • More robust balance sheet spurred investment activity - closed 2014 having committed three times as much capital to new investments as in 2013 • Formalisation of revised
Slide 12: UK Insurance
UK Insurance Surpassing expectations • Insurance business continues to outperform expectations • Acquisition purchase price long ago recovered • Income up 16% in 2014 vs. expectations of decline; costs reduced by 25% • 2014: $19 million contribution to operating profit • Hidden asset on MunichRe’s
Slide 13: New Initiatives
New Initiatives • New initiatives segment allows Burford to explore new opportunities and invest in growth and expansion transparently • 2014: Law firm lending • Recourse, interest rate lending to litigation law firms in US • Underserved, unprofessional market • 2015: Judgment enforcement • Pernicio
Slide 14: The leading team in the industry
The leading team in the industry 50 people in offices on two continents—litigators, investment bankers, and veterans of the world’s top law firms, financial institutions, and corporations. Christopher P. Bogart Hugh Steven Wilson Jonathan T. Molot Aviva O. Will Sir Peter Middleton GCB Chief Executiv
Slide 15: Notice and Disclaimer
NOTICE AND 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 Ca