Omni Bridgeway Ltd · ASX:OBL
Omni Bridgeway — FY2020 Earnings Presentation
20 slides from Omni Bridgeway's earnings presentation, August 2020
Slide 1: FY2020 Results Presentation
FY2020 Results Presentation August 2020 IMF Bentham, Bentham IMF, ROLAND ProzessFinanz have all now adopted the unified global name Omni Bridgeway.
Slide 2: Disclaimer
Disclaimer • The material in this presentation has been prepared by Omni Bridgeway (OBL) and is general background information about Omni Bridgeway'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: ROI
Slide 3: Highlights
Highlights FINANCIALS: REFINANCED DEBT: • Material number of conditional and unconditional completions • Extended maturity profile generating $314m of revenue and income • Aligned covenants across debt facilities • $98m of NCI extinguished • Reduced borrowing rate • $628m of investments (made larges
Slide 4: Audit Delay
Audit Delay • The delay in the release of the financial results arose from a request from the auditor to review the valuation of the liability associated with the deferred and the variable deferred acquisition consideration (collectively “Consideration”). That request was made on the day before the
Slide 5: Financial Results Overview
Financial Results Overview FY 2020 FY 2019 % move from prior $m $m year Litigation contract income 257.5 35.0 ▲636% Revenue from cases 21.7 - Purchased claims income 9.7 - Management & performance fees 1.4 0.1 Other income (incl foreign exchange & interest) 24.0 9.9 ▲142% Total revenue and income 31
Slide 6: Operating Expenditure
Operating Expenditure FY 2020 FY 2019 • Actual cash costs have increased 20% from the prior year, however they have $m $m decreased as a percentage of net assets, investments and EPV, reflecting an As per Profit and Loss Statement improvement in operational efficiency. Finance costs (1.4) (0.1) Depr
Slide 7: Sources and Applications of Cash
Sources and Applications of Cash FY 2020 FY 2019 • IFRS reporting does not necessarily represent the cash generating capacity of $m $m the business given revenue recognition principles and capitalisation of certain Cash generation expenses into intangibles Proceeds from litigation funding 171.0 43.2
Slide 8: Balance Sheet Strength & Investment Portfolio
Balance Sheet Strength & Investment Portfolio Cash & Net Receivables Net Assets ($million) 312.2 ($million) 767.2 217.6 515.5 139.1 141.8 142.4 367.8 201.4 206.3 • Material growth in all key metrics including income, liquid assets, net assets, investments and portfolio FY16 Balance Sheet FY17 Fund 1
Slide 9: EPV Diversity
EPV Diversity EPV by Geography EPV by Investment Type 0% 10% 13% 13% 1% 18% 11% 43% 0% 27% 6% 21% 2% 10% 1% 23% Appeal Arbitration Commercial Corporate Funding Insolvency Law Firm Asia Australia Canada UK & EMEA United States Multi Party Other IP Patent Whistleblower Inclusion of OBE Group • Diversi
Slide 10: Funding Funnel
Funding Funnel Funding applications continue to grow year on year as our geographic expansion takes hold. Investments from year-to-year largely track funding commitments. Funding Applications Funding Commitments 1,400 400 700 1,296 1,200 350 600 300 Funds Committed ($million) 1,000 974 500 Investmen
Slide 11: Fund Summary
Fund Summary Amounts owing to investors Amounts owing to Omni Bridgeway Commence Capital Returns1 Capital Fees EPV date Fund size Committed A$m A$m A$m A$m A$m Fund 1 10 Feb 2017 USD 167m 100% 127.9 40.9 60.8 6.3 2,798.8 Funds 2 & 3 3 Oct 2017 AUD 180m 99% 50.1 20.0 16.2 1.4 2,939.9 Fund 4 1 Apr 201
Slide 12: Non-Controlling Interests
Non-Controlling Interests NCI Fund 1 Funds 2&3 Fund 4 Fund 6 Total • First Generation Funds remain within the 100% A$m A$m A$m A$m A$m proceeds (& profit) distribution to NCI stage of Opening (202.5) (68.6) (25.5) - (296.6) the distribution waterfall Acquired during the period - - - (104.8) (104.8)
Slide 13: ROIC Track Record
ROIC Track Record ROIC • ROIC as a measure for our investments is becoming less relevant given our transition to 165% 163% 165% 156% funds management 154% 160% 159% • ROIC in the US has declined over the last 147% financial year as a consequence of investments 121% 118% 134% 132% that completed in a
Slide 14: Wivenhoe / Westgem
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 15: Regulation / Common Fund Orders / Contingency Fees
Regulation / Common Fund Orders / Contingency Fees • The High Court’s decision on Common Fund Orders (CFOs) in December 2019 caused some consternation amongst industry participants but has not resulted in a wholesale change in the funding of class actions. The implications are yet to be felt on comp
Slide 16: Culmination of Initial Five Year Plan
Culmination of Initial Five Year Plan 1 July 2015 30 June 2020 • This financial year has been the strongest in our company’s Australia, USA, Canada, history, with record income of Increased jurisdictional coverage Australia, USA, UK Asia, UK, EMEA $314.3m and net profit before tax and fair value adj
Slide 17: Next Five Year Plan
Next Five Year Plan • The previous business plan was focussed on diversification. The current business plan is focussed on differentiation. Omni Bridgeway now finds itself as the largest litigation funder in the world and our vision is to be recognised as the global leader in managing and financing
Slide 18: Risk Mitigation
Risk Mitigation Risk Potential impact Strategic response PORTFOLIO Potential for a funded case to be lost = Omni Bridgeway • Deliberate transition from idiosyncratic risk to systemic risk of a portfolio CONCENTRATION investment lost and exposure to adverse costs • Portfolio represents increased numb
Slide 19: Glossary of Terms and Notes
Glossary of Terms and Notes ESTIMATED PORTFOLIO VALUE (EPV) EPV for an investment where the funding entity earns: (i) a percentage of the resolution proceeds as a funding commission, is the current estimate of the investment’s recoverable amount after considering the perceived capacity of the defend
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