Litigation Capital Management Ltd · LSE:LIT
Litigation Capital Management — FY2022 Earnings Presentation
29 slides from Litigation Capital Management's earnings presentation, Sep 20, 2022
Slide 1: Full year results Presentation 2022
Full year results Presentation 2022 Litigation Capital Management Limited ACN 608 667 509
Slide 2: Presenters
Presenters Patrick Moloney CHIEF EXECUTIVE OFFICER Patrick Moloney is a veteran of the disputes funding industry with 19 year’s experience in the space. Patrick has been a Director of LCM since 2003 and the Chief Executive Officer of the group since December 2013 based out of LCM’s London Office. He
Slide 3: Highlights
EXPERIENCE COUNTS LIGHTS _
Slide 4: Delivering growth and scale as we transition to asset management
Highlights Financial review Operational review Outlook Delivering growth and scale as we transition to asset management Funds under Fund I fully committed and two thirds of the targeted US$300m raised for Fund II with commitments commenced Management Adjusted profit YoY increase in investment perfor
Slide 5: Building scale
Highlights Financial review Operational review Outlook Building scale Measures of sustained Maintenance of Increase in AUM (A$) growth (A$) investment standards Number of applications 11 year cumulative Total assets under 442 IRR management Capital committed in year 1 79% $414m A$104m 11 year cumula
Slide 6: Financial review
EXPERIENCE COUNTS
Slide 7: Full year results highlights
Highlights Financial review Operational review Outlook Full year results highlights – exclusive of third-party fund ($A) Gross Revenue FY 2022 FY 2021 Change % from investments Gross revenue from resolution of investments $47.2m $36.3m 30% $47.2m Gross profit $30.9m $26.1m 18% Adjusted profit before
Slide 8: FY22 Balance sheet overview
Highlights Financial review Operational review Outlook FY22 Balance sheet overview – exclusive of third-party fund ($A) Capital invested ($m) Total equity ($m) 97.9 48.5 90.1 82.2 41.3 76.2 27.8 28.9 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 2 Cash generation1 ($m) Cash as at period end ($m) 49.1 37.5
Slide 9: FY22 cash movements
Highlights Financial review Operational review Outlook FY22 cash movements – exclusive of third-party fund ($A) Litigation Investments Rolling ROIC 26.6 (29.8) Investing activities Financing activities 35.5 (12.0) 13.3 29.3 (1.8) 0.8 1.8 (0.3) (0.6) (4.1) Cash balance Cash Capital Expenses Property,
Slide 10: Operational review
V| ATIONA EXPERIENCE COUNTS
Slide 11: Current portfolio of direct investments
Highlights Financial review Operational review Outlook Current portfolio of direct investments Balances as at Portfolio by industry Portfolio by industry Portfolio by region Portfolio by individual 31 August 2022 sector sector (estimated A$ capital capital commitment¹ (A$ millions) (estimated A$ cap
Slide 12: LCM Global Alternative Returns Fund I
Highlights Financial review Operational review Outlook LCM Global Alternative Returns Fund I Balances as at Portfolio by industry Portfolio by industry Portfolio by geography Portfolio by individual 31 August 2022 sector sector (estimated A$ capital capital commitment¹ (A$ millions) (estimated A$ ca
Slide 13: LCM Global Alternative Returns Fund II
Highlights Financial review Operational review Outlook LCM Global Alternative Returns Fund II Balances as at Portfolio by industry Portfolio by industry 31 August 2022 sector sector (A$ millions) (estimated A$ capital (number of investments) • In line with the structure of Fund I, commitment) 2 we s
Slide 14: Average time to completion
Highlights Financial review Operational review Outlook Average time to completion 6,000,000 5,000,000 27 average time to months completion based on 11 year track record Peak invested capital (A$) 4,000,000 • The maturity of LCMs historical resolutions have typically taken on average 27 months 3,000,
Slide 15: Portfolio maturity profile (A$m)
Highlights Financial review Operational review Outlook Portfolio maturity profile (A$m) Portfolio by Capital Committed & maturity1 Portfolio by Capital Deployed & maturity1 • Notwithstanding the running average, (A$m) (A$m) LCM expects the duration of investments to increase 157 • The expectation is
Slide 16: Three year running performance metrics
Highlights Financial review Operational review Outlook Three year running performance metrics Rolling IRR Rolling ROIC Time to recovery (months) 250% 34 33 231% • We believe a three year cycle is 32 a good indication of 32 performance as we anticipate 31 31 200% our investment life will likely be 36
Slide 17: Business fundamentals
Highlights Financial review Operational review Outlook Business fundamentals • Development of skill and discipline of • Effective investment in disputes is • Sourcing and originating the best investment selection capital intensive dispute investments globally • Building experience over time • Abilit
Slide 18: High returns on invested capital & reinvestment creates compounding effect
Highlights Financial review Operational review Outlook LCM’s high returns on invested capital & reinvestment creates compounding effect Theoretical capital growth potential of LCM’s current portfolio • The return on invested capital (“ROIC”) that LCM has achieved over the past 11 years on a portfoli
Slide 19: Progress of Investment portfolio
Highlights Financial review Operational review Outlook Progress of Investment portfolio Direct investments Fund I Fund II • 6 direct investments completed intra • Fund I fully committed across 26 • As at September 2022 we have now period with revenue recognised of investments, 1 of which resolved in
Slide 20: Outlook
LOM EXPERIENCE COUNTS
Slide 21: Favourable market dynamics
Highlights Financial review Operational review Outlook Favourable market dynamics Each and every investment Global financial markets are Despite demand for litigation whether the subject of a direct experiencing high volatility. finance steadily increasing, the investment or as part of the Historica
Slide 22: Outlook
Highlights Financial review Operational review Outlook Outlook Mature portfolio of high Balance sheet capital yielding investments. Increasing growing through number of direct investments investment realisations expected to reach resolution Growing asset management Increased capital business expecte
Slide 23: Appendices
endices EXPERIENCE COUNTS
Slide 24: Consolidated income statement
Consolidated income statement For the period ended 30 June 2022 Consolidated Consolidated LCM only Fund FY22 LCM only Fund FY21 A$m A$m A$m A$m A$m A$m Revenue from contracts with customers Litigation service revenue Performance fees 47.1 0.1 0.2 - 47.3 0.1 36.3 0.1 0.7 - 36.9 0.1 • Gross revenue in
Slide 25: Adjusted profit & EBITDA reconciliation
Adjusted profit & EBITDA reconciliation For the period ended 30 June 2021 Consolidated Consolidated LCM only Fund FY22 LCM only Fund FY21 A$m A$m A$m A$m A$m A$m Statutory profit after tax 8.9 (2.2) 6.6 9.0 (0.1) 8.9 Add: Depreciation & amortisation 0.1 - 0.1 0.1 - 0.1 Amortisation of finance costs
Slide 26: Consolidated statement of financial position
Consolidated statement of financial position As at 30 June 2022 Consolidated Consolidated LCM only Fund FY22 LCM only Fund FY21 A$m A$m A$m A$m A$m A$m Current assets Cash and cash equivalents 29.3 20.7 49.9 35.5 14.2 49.7 Trade and other receivables 34.5 - 34.5 13.8 - 13.8 • 37% increase in contrac
Slide 27: Consolidated statement of cash flows
Consolidated statement of cash flows As at 30 June 2022 Consolidated Consolidated LCM only A$m Fund A$m FY22 A$m LCM only A$m Fund A$m FY21 A$m • Cash generated from the resolution of Cash flows from operating activities matters during the period was $26.6m Proceeds from litigation contracts - settl
Slide 28: 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 29: Contact Information
Contact Information Offices Sydney Brisbane Level 12, The Chifley Tower Level 54, 2 Chifley Square, 111 Eagle Street, Sydney NSW 2000 Brisbane QLD 4000 T +61 2 8098 1390 T +61 7 3012 6478 London Bridge House Melbourne 181 Queen Victoria Street Level 50, London EC4V 4EG 120 Collins Street T +44 203 9
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