Interim results for the HY ended 31 December 2023

About this update from Litigation Capital Management Ltd

19 March 2024   Litigation Capital Management Limited ("LCM" or the "Company")   Interim results for the half year ended 31 December 2023   Highlights   • Total realisations of A$28.4m, with concluded case investments generating a 3.3x multiple of cash invested • Realisations include performance fees of A$10.2m on concluded cases as the benefits of our fund management model are realised • Total income from litigation assets of A$21.9m, an increase from A$10.1m in HY23 • Net Profit after tax for the period of A$7.3m, compared to a loss of A$2.3m in HY23 • Net assets of A$185.4m as at 31 Dec 23 with cases conservatively valued at 2.0x cash invested · 50% increase in applications for funding reflecting countercyclical nature of the business • Total new commitments of A$90m added in the period • Fund I which comprises US$150m of external capital is fully committed and Fund II which comprises US$291m of external capital is 35% committed at 29 Feb 24 · A$3.36m 1 share buy backs to 15 March 2024, 1.7m shares   Outlook   · The Company is well positioned to take advantage of a sector that is rapidly gaining traction amidst consolidation amongst competitors · Expectation Fund II will be fully committed and Fund III launched within the next 12 months   ( 1 converted at 1.94 GBP to AUD)   Commenting on the results, Patrick Moloney, CEO of Litigation Capital Management, said: "These results demonstrate the opportunity that now presents itself for LCM. Having built a strong foundation for its fund management business, we are now seeing the benefits of it come to fruition. Fund I is already delivering strong returns, and we expect to fully commit Fund II as well as launch a new fund this year."   "At a time when demand for dispute finance is increasing, LCM is extremely well placed to take advantage of this opportunity. This set of results demonstrates that LCM has the knowledge and expertise to make sound investment decisions and deliver for shareholders and fund investors alike ."     LCM will be hosting a webinar for investors today at 11.00 a.m. The presentation is open to all existing and potential shareholders. If you would like to attend this presentation, please register using the following link: https://www.investormeetcompany.com/litigation-capital-management-limited/register-investor   A webinar presentation for analysts will take place at 9.30am. Analysts wishing to attend should contact [email protected] to register.   The accompanying results presentation is available on LCM's website:  https://www.lcmfinance.com/investors/investor-presentations-results   The Interim Financial Report is available at: https://www.lcmfinance.com/investors/investor-presentations-results    Enquiries   Litigation Capital Management c/o Tavistock PR  Patrick Moloney, Chief Executive Officer Mary Gangemi, Chief Financial Officer     Canaccord (Nomad and Joint Broker)  Tel: 020 7523 8000 Bobbie Hilliam Investec Bank plc (Joint Broker) Tel: 020 7597 5970 David Anderson   Tavistock PR Tel: 020 7920 3150 Tim Pearson Katie Hopkins Simon Hudson [email protected]   NOTES TO EDITORS Litigation Capital Management (LCM) is an alternative asset manager specialising in disputes financing solutions internationally, which operates two business models. The first is direct investments made from LCM's permanent balance sheet capital and the second is third party fund management. Under those two business models, LCM currently pursues three investment strategies: Single-case funding, Portfolio funding and Acquisitions of claims. LCM generates its revenue from both its direct investments and also performance fees through asset management.   LCM has an unparalleled track record driven by disciplined project selection and robust risk management.   Currently headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM listed on AIM in December 2018, trading under the ticker LIT.   www.lcmfinance.com     Chief Executive's Statement   Progress on Fund management business   2023 was the year in which our funds management business bedded down and for the first time showed the benefits, with Fund I investments generating cash and outsized returns. This has continued into the first half of the 2024 financial year, with the settlement of an Australian class action, part of Fund I, generating a ROIC after performance fees of 4.0 times.  Following the period end, as previously announced, LCM's investment related to a portfolio of two separate construction related disputes in Fund I has had a successful award, with the financial performance expected to be in line with our historic performance metrics.   The success of this model is clear to see, underpinned by the same rigorous underwriting process which LCM is known for and has developed, and we expect to see further case settlements from Fund I in the second half of the year.   Following on from Fund I, we expect Fund II to be fully committed within the next 12 months (commitments as at 31 December 2023 within Fund II: A$162m) and have plans to launch a further fund as well.   The Funds Management Model enables LCM to leverage third party capital and co-invest in a larger pool of diversified investments. Our co-investment in cases aligns LCM's interests with third party investors and enhances returns to LCM, through performance fees.   Building out this model has been one of our key goals, AUM has increased to A$561m at the end of the period (FY23: A$484m), putting us on solid foundations from which to expand and continue to deliver on this model to provide sustainable growth.     Investment performance   The performance of the business, following LCM's best ever year on record in FY 2023 remains strong. As we have reiterated previously, our investments do not generate linear returns, so the performance of the business in any given six or twelve month period may not accurately reflect the underlying performance of the business. On a three-year basis (FY22-24), our returns remain strong, with a rolling IRR of 67.4% and ROIC of 2.0 x. Recovery times have lengthened from a historic average of 30 months  over a 12.5 year period to 40 over the most recent three-year period, however we are hopeful that court delays as a result of the Covid pandemic, will continue to reduce.   Having moved to Fair Value accounting for FY23, investors can now get a clearer idea of the value of the portfolio, having previously valued all investments at cost. The value of all ongoing cases on our balance sheet was A$213m as at 31 Dec 23, valuing the cases at 2.0x cash invested compared to our long-term track record of achieving 2.8x cash invested. This demonstrates that despite the change in accounting methodology, we will continue to be prudent in our approach to valuation.   In the period, three cases concluded, generating A$28.4m of cash receipts for LCM, inclusive of $10.2m of performance fees with further recoveries due in H2. On these cases, a 3.3x multiple was achieved on A$8.7m cash invested.   Our underwriting team continue to see a strong pipeline of potential investments, with 242 applications for funding in the period, an increase of 50% on H1 2023. From these cases, we have so far committed A$90m to five cases, which again demonstrates our thorough due diligence and robust underwriting practices.     Outlook   LCM is well positioned to take advantage of the growing demands for disputes capital. Across our Asia, European and Australian operations, we have built out highly qualified teams of litigation finance professionals who have developed strong relationships in these markets. Across the globe, economic uncertainty and rising insolvencies means there is the expectation of an increase in disputes, which we believe will drive demand for LCM's capital. Alongside this, LCM finds itself in an improved competitive position, due to industry consolidation and in some cases contraction amongst existing litigation financiers.   Post year end, the UK Government has tabled legislation to end the uncertainty in litigation finance caused by the Supreme Court's ruling last July in PACCAR, which is a positive development for the industry.   We announced in the FY23 results that the business was exploring a sterling retail eligible bond listed on the ORB at the London Stock Exchange to optimise cost of capital and allow us to take advantage of opportunities we see in the market, as well as other alternative debt financing. These discussions are at an advanced stage and an update will be provided in due course.       Patrick Moloney Chief Executive Officer 19 March 2024     Directors' Report   The Directors of Litigation Capital Management Limited (LCM) present their report together with the half-year financial report of the consolidated entity consisting of LCM and its subsidiaries (collectively LCM Group or the Group) for the six month period ended 31 December 2023 and the auditors' review report thereon. 1. Directors The Directors of LCM at any time during or since the end of the financial period are set out below: Jonathan Moulds Patrick Moloney Dr David King Gerhard Seebacher Mary Gangemi   2. Company Secretary Anna Sandham was appointed Company Secretary of LCM in September 2016. Anna is an experienced company secretary and governance professional with over 20 years' experience in various large and small, public and private, listed and unlisted companies. Anna has previously worked for companies including AMP Financial Services, Westpac Banking Corporation, BT Financial Group and NRMA Limited. Anna holds a Bachelor of Economics (University of Sydney), Graduate Diploma of Applied Corporate Governance (Governance Institute of Australia) and is a Chartered Secretary. 3. Principal activities LCM is a global provider of disputes finance and risk management services. LCM has an unparalleled track record, driven by effective project selection, active project management and robust risk management. Headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM listed on AIM in December 2018, trading under the ticker LIT. 4. Operating and financial review Overview of the LCM Group LCM is a company limited by shares and was incorporated on 9 October 2015. LCM was admitted to trade on the Alternative Investment Market (AIM) of the London Stock Exchange on 19 December 2018 under the ticker LIT. LCM was formerly listed on the Australian Securities Exchange (ASX) between 13 December 2016 and 21 December 2018. Its registered office and principal place of business is Level 12, The Chifley Tower, 2 Chifley Square, Sydney NSW 2000, Australia. Operations LCM operates its business through a series of wholly owned subsidiaries. The principal activity of those subsidiaries is the provision of litigation finance and risk management associated with individual and portfolios of disputes. LCM currently operates two business models.  The first is direct investments made from LCM's balance sheet capital.  The second is funds and/or asset management. Under those two business models, LCM currently pursues three investment strategies.  Those strategies are as follows: Single‐case funding: The first and currently largest strategy, is single‐case funding.  That is, the investment in a single dispute.  This is a strategy that LCM has maintained since its inception (through its predecessor company) 25 years ago.  Currently, a large proportion of LCM's investments are in single‐case investments. Portfolio funding: The second strategy pursued by LCM is portfolio funding.  That is, the provision of a portfolio based funding solution to law firms, insolvency practitioners or corporates.  It involves the provision of a financing solution and risk management tools for a bundle of separate disputes.  LCM's particular focus with respect to that strategy is the provision of corporate portfolio financing.   Acquisitions of Claims: The third strategy, in its early stages of evolution, is the investment in smaller disputes (typically insolvency‐based) through the acquisition or assignment of the underlying cause of action. LCM generates its revenue through acquiring a cause of action and pursuing a recovery or award as principal.   Review of financial performance The statutory profit for the Group after adjusting for income tax amounted to $7,293,000 (31 December 2022: loss $2,266,000). Adjusted profit before tax is $15,998,000 (31 December 2022: $1,324,000). Cash on balance sheet was $87,701,000 as at 31 December 2023 (30 June 2023: $104,457,000). Of this, $17,450,000 relates to third-party cash which is restricted cash as it relates to balances held within the fund investment vehicles which have been consolidated with the Group numbers (30 June 2023: $21,484,000). Cash generated during the period from the resolution of investments was $72,772,000 (31 December 2022: $19,615,000). The Directors do not recommend a dividend in respect of the period ended 31 December 2023. 5. Matters subsequent to the end of the financial period In the Directors' opinion, no matter or circumstance has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future years. 6. Lead Auditor's independence declaration The Auditor's independence declaration as required under section 307C of the Corporations Act 2001 is included in LCM's financial statements. 7. Rounding of amounts LCM is of a kind referred to the Australian Securities and Investments Commission Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.     Mr Jonathan Moulds Chairman 19 March 2024   Consolidated statement of profit or loss and other comprehensive income For the period ended 31 December 2023         Restated 31-Dec-23 31-Dec-22 Note $'000 $'000 Income Gain on financial assets at fair value through profit or loss 4 52,429 18,479 Movement in financial liabilities related to third-party interests in consolidated entities 4 (30,546) (8,409) Total income from litigation assets 21,883 10,070 Other income - - Interest income 421 5 Expenses Employee benefits expense 6 (5,938) (4,759) Depreciation expense 6 (80) (80) Corporate expenses (1,960) (2,708) Finance costs 6 (5,543) (3,876) Fund administration expense 6 (1,474) (1,139) Foreign currency gains/(losses) 1,625 (1,316) Total expenses (13,369) (13,878) Profit/(loss) before income tax expense 8,935 (3,803) Analysed as:     Adjusted operating profit 15,998 1,324 Non-operating expenses 6 (1,520) (1,391) Finance costs 6 (5,543) (3,736) Profit/(loss) before income tax expense 8,935 (3,803) Income tax expense 7 (1,642) 1,537 Profit/(loss) after income tax expense 7,293 (2,266) Other comprehensive income Items that may be subsequently reclassified to profit and loss: Movement in foreign currency translation reserve (101) 310 Total comprehensive income for the period 7,192 (1,956) Profit for the period is attributable to: Owners of Litigation Capital Management Limited 7,293 (2,266) 7,293 (2,266) Total comprehensive income for the period is attributable to: Owners of Litigation Capital Management Limited 7,192 (1,956) 7,192 (1,956)     Cents Cents Basic earnings per share 21 6.84 (2.13) Diluted earnings per share 21 6.37 (2.13)   Where applicable, comparative information has been restated to reflect a change in accounting for litigation funding agreements. Refer to Note 3.   The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with accompanying Notes to the Financial Statements.         Consolidated statement of financial position As at 31 December 2023   31-Dec-23 30-Jun-23 Note $'000 $'000       Assets     Cash and cash equivalents 8 87,701 104,457 Trade & other receivables 1,838 2,209 Due from resolution of financial assets 9 19,430 11,873 Financial assets at fair value through profit or loss 10 391,011 391,410 Contract costs 11 39,377 37,277 Property, plant and equipment 182 211 Intangible assets 333 356 Other assets 1,180 1,110 Total assets 541,051 548,903     Liabilities Trade and other payables 12 5,390 7,535 Tax payable 7,770 7,769 Employee benefits 13 988 906 Borrowings 14 59,783 68,976 Financial liabilities related to third-party interests in consolidated entities 15 244,726 243,990 Deferred tax liability 7 37,032 36,259 Total liabilities 355,689 365,435 Net assets   185,362 183,468 Equity Issued Capital 16 69,674 69,674 Treasury shares 16 (796) - Reserves 1,404 1,042 Retained Earnings 115,080 112,753 Parent interest 185,362 183,468 Total equity 185,362 183,468   Where applicable, comparative information has been restated to reflect a change in accounting for litigation funding agreements. Refer to Note 3.   The above Consolidated Statement of Financial Position should be read in conjunction with accompanying Notes to the Financial Statements Consolidated statement of changes in equity For the period ended 31 December 2023   Share based Foreign   Issued Treasury Retained payments currency Total   capital shares earnings reserve translation equity Consolidated $'000 $'000 $'000 $'000 $'000 $'000 Balance at 1 July 2022 (restated) 69,674 - 81,268 1,573 (3,585) 148,929 Loss after income tax expense for the period - - (2,266) - - (2,266) Other comprehensive income for the period - - - - 310 310 Total comprehensive income for the period - - (2,266) - 310 (1,956) Equity Transactions:   Share-based payments (note 22) - - - 308 - 308 - - - 308 - 308 Balance at 31 December 2022 (restated) 69,674 - 79,002 1,881 (3,275) 147,281 Share based Foreign   Issued Treasury Retained payments currency Total   capital shares earnings reserve translation equity Consolidated $'000 $'000 $'000 $'000 $'000 $'000 Balance at 1 July 2023 69,674 - 112,753 2,440 (1,398) 183,468 Profit after income tax expense for the period - - 7,293 - - 7,293 Other comprehensive income for the period - - - - (101) (101) Total comprehensive income for the period - - 7,293 - (101) 7,193 Equity Transactions:   Share-based payments (note 22) - - - 463 - 463 Dividends paid (note 17) - - (4,966) - - (4,966) Treasury shares acquired (note 16) - (796) - - - (796) - (796) (4,966) 463 - (5,298) Balance at 31 December 2023 69,674 (796) 115,080 2,903 (1,498) 185,362   Where applicable, comparative information has been restated to reflect a change in accounting for litigation funding agreements. Refer to Note 3.   The above Consolidated Statement of Changes in Equity should be read in conjunction with accompanying Notes to the Financial Statements.   Consolidated statement of cash flows For the period ended 31 December 2023       Restated   31-Dec-23 31-Dec-22 Note $'000 $'000 Cash flows from operating activities Profit/(loss) after income tax expense for the period 7,293 (2,266) Adjustments for: Gain on financial assets at fair value through profit or loss (21,586) (7,140) Depreciation and amortisation of intangibles 80 80 Share-based payments 463 308 Finance costs reclassified to financing activities 5,543 3,904 Income tax expense 1,642 (1,537) Exceptional items (144) (39) Fund costs reclassified to financing activities 991 777 Other, including foreign exchange rate movements (1,122) (5,887) Change in operating assets and liabilities: Proceeds from resolution of financial assets 9 72,164 21,804 Decrease/(increase) in trade and other receivables 608 (2,189) (Funding) of financial assets 10 (31,531) (50,099) (Increase) in contract costs - litigation contracts (2,305) (2,938) Decrease/(increase) in financial assets 780 432 (Decrease)/Increase in trade and other payables (2,145) 59 (Decrease)/Increase in employee benefits 81 (22) Income Tax paid (868) - (Increase) in other assets (161) 604 Net cash from/(used in) operating activities 29,785 (44,149) Cash flows from investing activities Payments for property, plant and equipment (13) (22) Payments for intangibles (15) (34) Refund/(payment) of security deposits 13 (12) Net cash used in investing activities (15) (69) Cash flows from financing activities Payments for treasury shares (796) - Dividends paid 17 (4,966) - Repayments of borrowings 14 (8,139) (14,494) Payments of finance costs (5,752) (3,482) Payments of fund costs related to third-party interests (991) (777) Contributions from third-party interests in consolidated entities 15 11,010 45,298 Distributions to third-party interests in consolidated entities 15 (35,717) - Net cash (used in)/from financing activities (45,351) 26,545 Net increase/(decrease) in cash and cash equivalents (15,581) (17,673) Cash and cash equivalents at the beginning of the period 104,457 49,964 Effects of exchange rate changes on cash and cash equivalents (1,175) 1,108 Cash and cash equivalents at the end of the period 8 87,701 33,399   Where applicable, comparative information has been restated to reflect a change in accounting for litigation funding agreements. Refer to Note 3.   The above Consolidated Statement of Financial Position should be read in conjunction with accompanying Notes to the Financial Statements Notes to the financial statements For the period ended 31 December 2023   Note 1 General Information   The financial statements cover Litigation Capital Management Limited (the 'Company') as a Group consisting of Litigation Capital Management Limited and the entities it controlled at the end of, or during, the period (referred to as the 'Group'). The financial statements are presented in Australian dollars, which is Litigation Capital Management Limited's functional and presentation currency.   Litigation Capital Management Limited was admitted onto the Alternative Investment Market ('AIM') on 19 December 2018.   Litigation Capital Management Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:   Level 12, The Chifley Tower 2 Chifley Square Sydney NSW 2000   A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is not part of the financial statements.   The financial statements were authorised for issue, in accordance with a resolution of Directors, on 19 March 2024. The Directors have the power to amend and reissue the financial statements.   Note 2 Significant accounting policies These consolidated financial statements are general purpose financial statements for the interim reporting period ended 31 December 2023 and have been prepared in accordance with the Corporations Act 2001 and Australian Accounting Standard AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.   These interim financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2023 and any public announcements made by the Company during the interim reporting period.   Basis of preparation The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated.   New or amended Accounting Standards and Interpretations adopted The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current period.   Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.   Historical cost convention The financial statements have been prepared under the historical cost convention.   Critical accounting estimates The critical accounting judgements, estimates and assumptions that have been applied in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual report for the year ended 30 June 2023.   Operating segments Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.   Note 3 Restatement of comparative   As disclosed in the 30 June 2023 Annual Report, the Group reassessed its classification of the funding of its litigation funding agreements, which resulted in the majority of the Group's litigation funding assets now being recognised under AASB 9. Under this change, litigation funding agreements and third-party interest in consolidated entities are accounted for as financial instruments under AASB 9 Financial Instruments.   As a result of implementing this accounting for litigation funding agreements for relevant contracts, the Group has restated the Consolidated statement of profit or loss and other comprehensive income for the period ended 31 December 2022 for comparative purposes.   The restatement of each of the affected financial statement line items for the prior periods, as follows:   Impact on consolidated statement of profit and loss and other comprehensive income (increase/(decrease) in profit)   31-Dec-23 $'000 Income   Litigation service revenue (4,699) Litigation service expense 3,558 Net gains/(losses) on financial assets at fair value through profit or loss 18,479 Movement in financial liabilities related to third-party interests in consolidated entities (8,409) Total expenses (1,801) Income tax expense (1,897) Net impact on profit for the period 7,128 Attributable to: Equity holders of the parent 7,128 Other comprehensive income 1,583 Net impact on total comprehensive income for the period 8,711   Impact on basic and diluted earnings per share (EPS) (increase/(decrease) in EPS)   Earnings per share Cents Basic, profit for the period attributable to ordinary equity holders of the parent 4.90 Diluted, profit for the period attributable to ordinary equity holders of the parent 4.90   Consolidated statement of cashflows The change did not have a net impact on the Group's operating, investing and financing cash flows but did require some change to components within each cash flow class.   Note 4 Income     Restated 31-Dec-23 31-Dec-22 $'000 $'000 Realised gains on litigation assets 10,866 (34) Realised performance fees 8,776 - Fair value adjustment during the period, net of previously recognised unrealised gains transferred to realised gains 2,381 6,168 Foreign exchange gains (437) 1,006 Total income from litigation assets attributable to LCM 21,586 7,140 Gain on financial assets related to third-party interests in consolidated entities 30,843 11,339 52,429 18,479 Loss on financial liabilities related to third-party interests in consolidated entities (30,546) (8,409) Total income from litigation assets 21,883 10,070   Total income from litigation assets attributable to LCM represents realised and unrealised gains that relate to LCM's funded proportion of litigation contracts. The gain and loss related to third party interests in consolidated entities represents realised and unrealised gains and losses that relate to third party funded proportions  from LCM controlled entities. Realised gains relate to amounts where litigation risk has concluded and amounts are expected to be received by LCM. Unrealised gains or losses relate to the fair value movement of assets and liabilities associated with litigation contracts.   Note 5 Segment Information   The Group's operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.   The Directors have determined that there is one operating segment. The information reported to the CODM is the consolidated results of the Group. The segment result is as shown in the statement of profit or loss and other comprehensive income. Refer to statement of financial position for assets and liabilities.   Note 6 Profit before tax   Restated   31-Dec-23 31-Dec-22   $'000 $'000 Profit before income tax expense includes the following specific expenses: Employee benefits expense   Salaries & wages 4,530 3,841 Directors' fees 228 196 Superannuation and pension 147 138 Share based payments expense 463 308 Other employee benefits & costs 570 276 5,938 4,759 Depreciation   Plant and equipment 42 20 Intangible assets 38 60 80 80 Interest on borrowings (note 14) 5,340 3,536 Finance costs of third-party interests - 140 Other finance costs 202 200 5,543 3,876 Fund administration expense   General administration expenses 483 289 Set-up expenses - 73 Placement fees 991 777 1,474 1,139   Fund administration expenses relates to costs associated with the setup and administration of the LCM Global Alternative Returns Funds which are wholly attributable to the third party interest in consolidated entities. Leases   Short-term lease payments 451 379   Adjusted operating profit   Adjusted operating profit excludes non-operating expenses which includes items which are considered unusual, non-cash or one-off in nature.   Non-operating expenses Management have opted to separately present these items as it better reflects the Groups underlying performance. Non-operating expenses includes the following items:   Share based payments expense 463 308 Other transaction costs 15 38 Litigation fees - 225 Other expenses 51 42 Fund administration expenses 991 777 Total non-operating expenses 1,520 1,391   Note 7 Income tax expense   Restated   31-Dec-23 31-Dec-22   $'000 $'000 Numerical reconciliation of income tax expense and tax at the statutory rate   Profit before income tax expense 8,935 (3,803) At the Group's statutory income tax rate of 25% (2022: 25%) 2,234 (951) Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Foreign tax rate adjustments (24) (33) Share-based payments 116 77 Change in tax rate (684) (630) Income tax expense / (benefit) 1,642 (1,537)   Statutory tax rate of 25% is applicable to Australian entities with aggregated turnover below $50 million for the period ended 31 December 2023. The Group's turnover is expected to be above the threshold of $50 million in the future reporting periods which will attract a statutory tax rate of 30%. As a result, recognition of deferred tax asset is made by applying a 30% statutory rate instead of the lower 25% tax rate.   Note 8 Cash and cash equivalents   31-Dec-23 30-Jun-23 $'000 $'000 Cash at Bank 30,121 82,973 Investment securities held for liquidity purposes 40,130 - Cash of third-party interests in consolidated entities 17,450 21,484 87,701 104,457 Cash of third-party interests in consolidated entities is restricted as it is held within the fund investment vehicles on behalf of the third-party investors in these vehicles. The cash is restricted to use cashflows in the litigation funding assets made on their behalf and costs of administering the fund.   Note 9 Due from resolution of financial assets   31-Dec-23 30-Jun-23 $'000 $'000 At start of period (as restated as at 1 July 2022) 11,873 24,340 Transfer from realisation of litigation funding assets 77,891 150,447 Proceeds from litigation funding assets (72,164) (192,623) Foreign Exchange gain/(losses) 1,830 29,708 Balance as at end of period 19,430 11,873   Note 10  Litigation Funding assets at fair value through profit or loss   31-Dec-23 30-Jun-23 $'000 $'000 At start of period (as restated as at 1 July 2022) 391,410 296,980 Deployments 15,187 30,756 Deployments - third-party interests 16,345 58,293 Realisations of litigation funding assets (77,891) (150,447) Income for the period 52,429 136,638 Foreign exchange gains/(losses) (6,469) 19,191 Balance as at end of period 391,011 391,410 Litigation funding assets at fair value through income statement 173,766 165,768 Litigation funding assets at fair value through income statement - third-party interests 217,245 225,642 Total litigation funding assets 391,011 391,410   Litigation Funding assets are financial instruments that relate to the provision of capital in connection with legal finance. The Group fund through both direct investments as well as using third party funders via a Fund model. The table above sets forth the changes in LFA assets at the beginning and end of the relevant reporting periods.   Note 11 Contract costs - litigation contracts       31-Dec-23 30-Jun-23   $'000 $'000 Contract costs - litigation contracts 39,377 37,277   There are a small number of legacy investments which are still being recorded under AASB 15 Revenue from Contract with Customers due to the timing the contracts were entered into. These are expected to resolve in the short to medium term.   Reconciliation of litigation contract costs Reconciliation of the contract costs at the beginning and end of the current period and previous financial year are set out below:         31-Dec-23 30-Jun-23   $'000 $'000 Balance at 1 July   37,277 31,783 Additions during the period   2,305 5,495 Realisations of contract assets   (206) - Balance as at end of period   39,377 37,277           The Group has recognised impairment losses of $nil (2022: $nil) in profit or loss on contract costs for the period ended 31 December 2023.   Note 12 Trade and other payables         31-Dec-23 30-Jun-23   $'000 $'000 Trade payables   4,976 7,001 Other payables   414 534   5,390 7,535     Note 13 Employee benefits       31-Dec-23 30-Jun-23   $'000 $'000 Annual Leave   654 623 Long Service Leave   334 283   988 906   Note 14 Borrowings         31-Dec-23 30-Jun-23   $'000 $'000 Borrowings   59,783 68,976   59,783 68,976       Reconciliation of borrowings of third-party interests in consolidated entities: 31-Dec-23 30-Jun-23 $'000 $'000 Balance 1 July - 14,494 Repayment of borrowings - (14,848) Net accrued interest - (17) Amortisation of borrowing costs - 34 Other non-cash items - 336 Balance as at end of period - - Reconciliation of borrowings of LCM: 31-Dec-23 30-Jun-23 $'000 $'000 Balance 1 July 68,976 54,915 Proceeds from borrowings - 9,636 Repayment of borrowings (8,139) - Payments for borrowing costs (58) (256) Net accrued interest (713) - Amortisation 764 2,441 Other non-cash items (1,047) 2,241 Balance as at end of period 59,783 68,976   On 22 February 2021, LCM entered into a credit facility with Northleaf Capital Partners for an aggregate amount of US$50,000,000, AUD equivalent of $75,017,517 1 (the "Facility"). The Facility carries interest together with a profit participation, capped at 13% per annum. The Facility has an overall term of four years and is secured against LCM's assets. As at 31 December 2023, LCM has nil outstanding utilisation. Borrowings have a maturity date of February 2025.   LCM agreed to various debt covenants including a minimum effective net tangible worth, borrowings as a percentage of effective net tangible worth, minimum liquidity, a minimum consolidated EBIT and a minimum multiple of invested capital on concluded contract assets over a specified period. There have been no defaults or breaches related to the Facility during the year ended 31 December 2023. Should LCM not satisfy any of these covenants, the outstanding balance of the Facility may become due and payable.   LCM incurred costs in relation to arranging the Facility of $1,649,000 which were reflected transactions costs and will be amortised over the 4 year term of the borrowings. As at 31 December 2023, $622,000 of the loan arrangement fees remained outstanding.   1 Converted at the functional currency spot rates of exchange at the reporting date   Note 15 Financial liabilities related to third-party interests in consolidated entities   31-Dec-23 30-Jun-23 $'000 $'000 Balance 1 July (243,990) (142,180) Proceeds - capital contributions from Limited Partners (11,010) (74,980) Payments - distributions to Limited Partners 35,717 94,373 Loss on financial liabilities related to third-party interests in consolidated entities (note 4) (30,546) (111,953) Other non-cash items, including foreign exchange gain/loss 5,104 (9,250) Balance as at end of period (244,726) (243,990)   Note 16 Equity - issued capital   31-Dec-23 30-Jun-23 31-Dec-23 30-Jun-23 Shares Shares $'000 $'000 Ordinary shares - fully paid 106,445,388 106,613,927 69,674 69,674 Ordinary shares - under loan share plan 12,331,148 12,586,405 - - 118,776,536 119,200,332 69,674 69,674 Movements in ordinary share capital Date Shares $'000 Balance 30 June 2022 106,613,927 69,674 Balance 30 June 2023 106,613,927 69,674 Options exercised 31 October 2023 87,993 - Options exercised 23 November 2023 167,264 - Shares bought back during the period Various (423,796) - 31 December 2023 106,445,388 69,674   As announced on 5 October 2023, the Group commenced a share buyback programme in respect of its ordinary shares up to a maximum consideration of A$10.0 million from the date of this announcement.   Movements in ordinary shares issued under loan share plan ('LSP'): Date Shares $'000 Balance 30 June 2022 12,586,405 - Balance 30 June 2023 12,586,405 - Options exercised 31 October 2023 (87,993) - Options exercised 23 November 2023 (167,264) - 31 December 2023 12,331,148 -   Reconciliation of ordinary shares issued under LSP:   31-Dec-23 30-Jun-23 Total shares allocated under existing LSP arrangements with underlying LSP shares (note 22) 7,890,408 7,890,408 Less shares allocated under existing LSP arrangements without underlying LSP shares (note 22) (221,467) (221,467) Shares held by LCM Employee Benefit Trust for future allocation under employee share and option plans   4,917,464 4,917,464 Exercise of options during the period held by the LCM Employee Benefit Trust   (255,257) - 12,331,148 12,586,405   Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital.   On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.   Ordinary shares - under loan share plan ('LSP') The Company has an equity scheme pursuant to which certain employees may access a LSP. The acquisition of shares under this LSP is fully funded by the Company through the granting of a limited recourse loan. The shares under LSP are restricted until the loan is repaid. The underlying options within the LSP have been accounted for as a share-based payment. Refer to note 22 for further details. When the loans are settled the shares are reclassified as fully paid ordinary shares and the equity will increase by the amount of the loan repaid.   Ordinary shares - partly paid As at 31 December 2023, there are currently 1,433,022 partly paid shares issued at an issue price of $0.17 per share. No amount has been paid up and the shares will become fully paid upon payment to the Company of $0.17 per share. As per the terms of issue, the partly paid shares have no maturity date and the amount is payable at the option of the holder.   Partly paid shares entitle the holder to participate in dividends and the proceeds of the Company in proportion to the number of and amounts paid on the shares held. The partly paid shares do not carry the right to participate in new issues of securities. Partly paid shareholders are entitled to receive notice of any meetings of shareholders. The partly paid shareholders are entitled to vote in the same proportion as the amounts paid on the partly paid shares bears to the total amount paid and payable.   Treasury shares As at 31 December 2023, there were 423,796 treasury shares (December 2022: nil). Treasury shares comprises shares bought back from shareholders which are held by Canaccord on behalf of the Company and classified as treasury shares.   Capital risk management The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.   Capital is regarded as total equity as recognised in the statement of financial position.   In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.   The capital risk management policy remains unchanged from the 30 June 2023 Annual Report.   Note 17 Equity - dividends   31-Dec-23 31-Dec-22 $'000 $'000 Final unfranked ordinary dividend (December 2023: 2.25 cents, December 2022: nil) 4,966 - Franking credits The franking credits available to the Group as at 31 December 2023 are estimated to be $338,000 (December 2022: $338,000).   Note 18 Fair value assessment   The fair value measurements used for all assets and liabilities held by the Group listed below are level 3:   Assets 31-Dec-23 30-Jun-23 Litigation funding assets $'000 $'000 APAC 111,090 158,836 EMEA 279,923 232,574 Total Level 3 assets 391,014 391,410 Liabilities Financial liabilities related to third-party interests in consolidated entities 244,726 243,990 Total Level 3 liabilities 244,726 243,990   Refer note 10 for movements in level 3 assets. There were no transfers into or out of level 3 during the period ended 31 December 2023.   Sensitivity of Level 3 Valuations   The Group's fair value policy provides for ranges of percentages to be applied against the risk adjustment factor to more than 159 discrete objective litigation events. The tables below set forth each of the key unobservable inputs used to value the Group's LFA assets and the applicable ranges and weighted average by relative fair value for such inputs.   31 December 2023   Item Valuation technique Unobservable Input Min Max     Litigation funding asset Discounted cash flow Discount rate 12.80% 12.80% Duration (years) 0.08 5.01 Adjusted risk premium 0% 85% Min Max     Significant ruling or other objective event prior to trial court judgment 40% 80% Trial court judgment or tribunal award 0% 85% Appeal judgment 0% 85% Settlement 70% 85% Enforcement 75% 85% Other 0% 45%   At each reporting period, the Group reviews the fair value of each litigation funding asset in connection with the preparation of the consolidated financial statements. A fair value of 10% higher or lower, while all other variables remain constant, in financial assets at fair value through profit or loss would have increased or decreased the Group's income and net assets by $39,101,000 as at 31 December 2023 (30 June 2023: $39,141,000). Similarly, a fair value of 10% higher or lower, while all other variables remain constant, in financial liabilities at fair value through profit or loss would have increased or decreased the Group's income and net assets by $24,473,000 as at 31 December 2023 (30 June 2023: $24,399,000).   Note 19 Contingent liabilities   The majority of the Group's funding agreements contain a contractual indemnity from the Group to the funded party that the Group will pay adverse costs awarded to the successful party in respect of costs incurred during the period of funding, should the client's litigation be unsuccessful. The Group's position is that for the majority of litigation projects which are subject to funding, the Group enters insurance arrangements which lessen or eliminate the impact of such awards and therefore any adverse costs order exposure.   Note 20 Third-party interests in consolidated entities   AASB 10 Consolidated Financial Statements requires the Group to consolidate fund investment vehicles over which it has exposure to variable returns from the fund investment vehicles. As a result, third party interests in relation to the Funds have been consolidated in the financial statements.    As at 31 December 2023, the financial liability due to third-party interests is $244,726,000 (June 2023: $243,990,000), recorded at fair value as represented per Note 3. Amounts included in the consolidated statement of financial position represent the fair value of the third-party interests in the related financial assets and the amounts included in the consolidated statement of profit or loss and other comprehensive income represent the third-party share of any gain or loss during the period. Third-party interests exclude the 25% co-investment made by Litigation Capital Management Limited and its wholly owned subsidiaries ("LCM"). The third-party interests in the Funds carry an entitlement to receive an 8% soft return hurdle. Upon satisfaction of the third-party interests soft return hurdle, LCM is entitled to performance fees as fund manager on the basis of a deal by deal waterfall. The residual net cash flows are to be distributed 25% to LCM and 75% to the third-party interests until a IRR of 20% is achieved by the third-party interests, thereafter the net residual cash flows are distributed 35% to LCM and 65% to the third-party interests.   The following tables reflect the impact of consolidating the results of the Funds with the results for LCM to arrive at the totals reported in the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position and consolidated statement of cash flows. The Fund column in the table below presents the interests of third-party investors comprising both the investment in the litigation funding assets made on their behalf and costs of administering the funds.  The LCM column includes the 25% co-investment in these litigation contracts.   Restated 31 December 2023 31 December 2022 Consolidated Statement of Comprehensive Income LCM Fund Consolidated LCM Fund Consolidated $'000 $'000 $'000 $'000 $'000 $'000 Income   Gain on financial assets at fair value through profit or loss 21,586 30,843 52,429 7,140 11,339 18,479 Movement in financial liabilities related to third-party interests in consolidated entities - (30,546) (30,546) - (8,409) (8,409) Total income from litigation assets 21,586 297 21,883 7,140 2,930 10,070 Interest income 331 91 421 5 - 5 Expenses Employee benefits expense (5,938) - (5,938) (4,759) - (4,759) Depreciation expense (80) - (80) (80) - (80) Corporate expenses (1,960) - (1,960) (1,863) (845) (2,708) Finance costs (5,543) - (5,543) (3,736) (140) (3,876) Fund administration expense (991) (483) (1,474) (777) (362) (1,139) Foreign currency gains/(losses) 1,530 95 1,625 267 (1,583) (1,316) Total expenses (12,982) (388) (13,369) (10,948) (2,930) (13,878) Profit/(loss) before income tax expense 8,935 - 8,935 (3,803) - (3,803)   Analysed as:   Adjusted operating profit 15,998 - 15,998 1,324 - 1,324 Non-operating expenses (1,520) - (1,520) (1,391) - (1,391) Finance costs (5,543) - (5,543) (3,736) - (3,736) Profit/(loss) before income tax expense 8,935 - 8,935 (3,803) - (3,803) Income tax expense (1,642) - (1,642) 1,537 - 1,537 Profit/(loss) after income tax expense 7,293 - 7,293 (2,266) - (2,266)     Other comprehensive income for the period, net of tax (101) - (101) 310   310 Total comprehensive income for the period 7,192 - 7,192 (1,956) - (1,956)   31 December 2023 30 June 2023 Consolidated statement of financial position LCM Fund Consolidated LCM Fund Consolidated   $'000 $'000 $'000 $'000 $'000 $'000 Assets   Cash and cash equivalents 70,251 17,450 87,701 82,973 21,484 104,457 Trade & other receivables 1,838 - 1,838 2,209 - 2,209 Due from resolution of financial assets 7,520 11,909 19,430 11,873 - 11,873 Financial assets at fair value through profit or loss 173,766 217,245 391,011 165,768 225,642 391,410 Contract costs 39,377 - 39,377 37,277 - 37,277 Property, plant and equipment 182 - 182 211 - 211 Intangible assets 333 - 333 356 - 356 Other assets 1,180 - 1,180 1,032 78 1,110 Total assets 294,447 246,604 541,051 301,699 247,204 548,903 Liabilities   Trade and other payables 3,511 1,879 5,390 4,321 3,214 7,535 Tax payable 7,770 - 7,770 7,769 - 7,769 Employee Benefits 988 - 988 906 - 906 Borrowings 59,783 - 59,783 68,976 - 68,976 Third-party interests in consolidated entities - 244,726 244,726 - 243,990 243,990 Deferred tax liability 37,032 - 37,032 36,259 - 36,259 Total liabilities 109,085 246,604 355,689 118,231 247,204 365,435 Net assets 185,362 - 185,362 183,468 - 183,468   A financial liability at fair value through the income statement is recognised in the parent entity in relation to the transactions entered into with certain Fund structures to support the financing of LFAs. These arrangements fail the derecognition principles in IFRS 9 and represents the net share of the overall LFA at fair value apportioned to the Funds.   Restated 31 December 2023 31 December 2022 Consolidated Statement of Cash Flows LCM Fund Consolidated LCM Fund Consolidated $'000 $'000 $'000 $'000 $'000 $'000 Cash flows from operating activities   Profit/(loss) after income tax expense for the period 7,293 - 7,293 (2,266) - (2,266) Adjustments for: Gain on financial assets at fair value through profit or loss (21,586) - (21,586) (7,140) - (7,140) Depreciation and amortisation of intangibles 80 - 80 80 - 80 Share-based payments 463 - 463 308 - 308 Finance costs reclassified to financing activities 5,543 - 5,543 3,736 167 3,904 Income tax expense 1,642 - 1,642 (1,537) - (1,537) Exceptional items (144) - (144) (39) - (39) Fund costs reclassified to financing activities 991 - 991 777 - 777 Other, including foreign exchange rate movements (1,122) - (1,122) (842) (5,045) (5,887) Change in operating assets and liabilities: Proceeds from resolution of financial assets 33,214 38,950 72,164 20,082 1,722 21,804 Decrease/(increase) in trade and other receivables 608 - 608 (2,189) - (2,189) (Funding) of financial assets (15,187) (16,345) (31,531) (18,520) (31,579) (50,099) (Increase) in contract costs - litigation contracts (2,305) - (2,305) (2,938) - (2,938) Decrease/(increase) in financial assets 780 - 780 432 - 432 (Decrease)/Increase in trade and other payables (809) (1,336) (2,145) 109 (50) 59 (Decrease)/Increase in employee benefits 81 - 81 (22) - (22) Income Tax paid (868) - (868) - - - (Increase) in other assets (161) - (161) 604 - 604 Net cash from/(used in) operating activities 8,515 21,270 29,785 (9,364) (34,785) (44,149) Cash flows from investing activities Payments for property, plant and equipment (13) - (13) (22) - (22) Payments for intangibles (15) - (15) (34) - (34) Refund/(payment) of security deposits 13 - 13 (12) - (12) Net cash used in investing activities (15) - (15) (69) - (69) Cash flows from financing activities Payments for treasury shares (796) - (796) - - - Dividends paid (4,966) - (4,966) - - - Repayments of borrowings (8,139) - (8,139) - (14,494) (14,494) Payments of finance costs (5,752) - (5,752) (3,350) (132) (3,482) Payments of transaction costs related to third-party interests (991) - (991) (777) - (777) Contributions from third-party interests in consolidated entities - 11,010 11,010 - 45,298 45,298 Distributions to third-party interests in consolidated entities - (35,717) (35,717) - - - Net cash (used in)/from financing activities (20,644) (24,707) (45,351) (4,127) 30,672 26,545 Net increase/(decrease) in cash and cash equivalents (12,144) (3,437) (15,581) (13,560) (4,113) (17,673) Cash and cash equivalents at the beginning of the period 82,973 21,484 104,457 29,253 20,711 49,964 Effects of exchange rate changes on cash and cash equivalents (578) (597) (1,175) 880 228 1,108 Cash and cash equivalents at the end of the period 70,251 17,450 87,701 16,573 16,826 33,399   Note 21 Earnings per share   31-Dec-23 31-Dec-22 $'000 $'000 Profit after income tax 7,293                                                 (2,266) Profit after income tax attributable to the owners of Litigation Capital Management Limited 7,293                                                 (2,266)     Number Number Weighted average number of ordinary shares used in calculating basic earnings per share 106,606,481                                 106,613,927 Adjustments for calculation of diluted earnings per share:   Amounts uncalled on partly paid shares 1,309,066                                      - Options over ordinary shares 6,597,884                                       - Weighted average number of ordinary shares used in calculating diluted earnings per share 114,513,431                                 106,613,927     Cents Cents Basic earnings per share 6.84 (2.13) Diluted earnings per share 6.37 (2.13)   Dilutive potential shares which are contingently issuable are only included in the calculation of diluted earnings per share where the conditions are met.   Note 22 Share-based payments   The share-based payment expense for the period was $463,000 (December 2022: $308,000).   Loan Funded Share Plans ('LSP')   As detailed in note 16, the Group has an equity scheme pursuant to which certain employees may access a LSP. The shares under LSP are issued at the exercise price by granting a limited recourse loan. The LSP shares are restricted until the loan is repaid. Options under this scheme can be granted without an underlying LSP share until they have been exercised and on this basis, do not form part of the Group's issued share capital. The underlying options have been accounted for as a share-based payments. The options are issued over a 1-3 year vesting period. Vesting conditions include satisfaction of customary continuous employment with the Group and may include a share price hurdle.   During the period the Group granted nil (December 2022: nil) shares under the LSP.   Set out below are summaries of shares/options granted under the LSP:   December 2023   Grant date Expiry date Exercise Price Balance at the start of the period  Granted  Exercised  Expired/ forfeited/ other Balance at the end of the period 04/12/2017 04/12/2027 $0.60 2,000,000 2,000,000 31/08/2018 31/08/2028 $0.77 411,972 411,972 19/11/2018 25/11/2028 $0.47 1,595,058 1,595,058 03/12/2018 03/12/2028 $0.89 100,000 100,000 01/11/2019 01/11/2029 £0.7394 1,432,753 1,432,753 13/10/2020 13/10/2030 £0.6655 616,520 616,520 27/10/2021 27/10/2031 £1.06 1,512,638 1,512,638 27/10/2021 27/10/2031 £1.06 99,037 99,037 1 27/10/2021 27/10/2031 £1.14 122,430 122,430 1 7,890,408 - - - 7,890,408   1 Options granted without an underlying LSP share until exercised ie, do not form part of the Group's issued share capital     Deferred Bonus Share Plan ('DBSP')   The Company has in place a DBSP. Options granted under the DBSP reflect past performance and are in the form of nil cost options and will vest in three equal tranches from the date of issue and are subject to continued employment over the three year period.   In addition, the Options granted under the DBSP are subject to malus and clawback provisions. In the event of a change of control of the Company, unvested awards will vest to the extent determined by the Board, taking into account the proportion of the period of time between grant and the normal vesting date that has elapsed at the date of the relevant event.   During the period the Group granted 771,911 (December 2022: 1,132,692) options under the DBSP.   Set out below are summaries of options granted under the DBSP:   December 23   Grant date  Expiry date  Exercise Price Balance at the start of the period Granted Exercised Expired/ forfeited/ other Balance at the end of the period 07/10/2022 07/10/2032 $0.00 1,132,692 - (255,257) - 877,435 04/10/2023 04/10/2033 $0.00 - 771,911 - - 771,911 1,132,692 771,911 (255,257) - 1,649,346   Executive Long Term Incentive Plan ('LTIP')   The Company has in place an Executive LTIP. Options over ordinary shares in the capital of the Company ("Ordinary Shares") are issued to recipients under the LTIP plan. The options set out above have been granted under the LTIP in the form of nil cost options and are subject to performance conditions which require the growth of Funds under Management ('FuM') over a five year performance period. The performance conditions associated with the options are set out below:   (1)  50% vesting on reaching a minimum of FuM of US$750m; and (2)  100% vesting on reaching FuM of US$1bn.    The vesting date of options granted is the later of: (1)   the third anniversary of the Grant Date; (2)   the satisfaction of the Performance Condition; or (3)   the date of any adjustment under the Plan rules of the Plan at the Boards discretion.   Any awards made to the participants are subject to a five year holding period from the grant date. In the event of a change of control of the Company, unvested awards will vest to the extent determined by the Board, taking into account the proportion of the period of time between grant and the normal vesting date that has elapsed at the date of the relevant event and the extent to which any performance condition has been satisfied at the date of the relevant event.   During the period the Group granted nil (December 2022: 5,671,516) options under the LTIP.   Set out below are summaries of shares/options granted under the LTIP:   December 2023   Grant date Expiry date Exercise Price Balance at the start of the period Granted Exercised Expired/ forfeited/ other Balance at the end of the period 07/10/2022 07/10/2032 $0.0000 5,671,516 - - - 5,671,516 5,671,516 - - - 5,671,516   For the options under LSP granted during the current period, the valuation model inputs used in the Black-Scholes pricing model to determine the fair value at the grant date, are as follows:   Grant date  Expiry dat e  Share price at grant date Exercise price Expected volatility Dividend yield Risk-free interest rate Fair value at grant date 1 04/10/2023 04/10/2033 £0.98 £0.00 35.00% 1.10% 3.79% $1.820 1 AUD amount. GBP equivalent £0.952   The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.   Note 23 Events after the reporting period   In the Directors' opinion, no matter or circumstance has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future years.

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