Burford Capital Limited (LON:BUR), a leading global finance and investment management firm focused on law, announced today its financial results for the year ended 31 December 2017.
Financial Highlights [1]
· Net profit after tax up 130% to $264.8 million (2016: $115.1 million)
o Operating profit up 132% to $289.0 million (2016: $124.4 million)
o 37.4% return on equity (2016: 21.1%)
· Income up 109% to $341.2 million (2016: $163.4 million), driven by 127% increase in income from investments to $318.2 million (2016: $140.2 million)
o Realized gains from investments also more than doubled
o 20 different investments contributed to 2017’s realized net gains
o Unrealized gains remained generally consistent with prior year levels at 53% of income
(2016: 54%) and 36% of investments (2016: 31%) notwithstanding Petersen impact
· Strong growth in earnings per share, up 126% to 127¢ (2016: 56¢)
· Record investment recoveries; robust organic cash generation of $362 million (2016: $230 million)
· 20% increase in annual dividend proposed, to total FY17 dividend of 11.0¢ per share (2016: 9.15¢); final dividend of 7.95¢ payable on 22 June 2018 with record date of 1 June 2018
· Persistent demand for Burford’s capital reflected in record new investment commitments of $1.34 billion (2016: $378 million), sowing seeds for future profits
o Burford now has $3.3 billion invested in and available for investment in legal finance in a widely diversified portfolio
· Assets under management in Burford’s investment management business increased to $1.7 billion (2016: $1.3 billion) and additional fundraising anticipated in 2018
· Active start to 2018, with $128.5 million committed to 12 new investments in the first two months of the year compared to a single $1 million investment in the same period last year
· Secondary market sale of Teinver investment agreed in March 2018 for $107 million in cash – a $94.2 million investment gain and a 736% return on invested capital.
Sir Peter Middleton, Chairman of Burford Capital Limited, commented:“Burford has experienced another record year, its eighth consecutive year of significant growth. Burford continues to lead its growing and evolving industry and looks forward to continuing to innovate to meet its clients’ ever-expanding needs. The Board is grateful for the continued support of our shareholders and bondholders and is delighted to propose another increase in the dividend.”
Christopher Bogart, Chief Executive Officer of Burford, added:“The past year saw an explosion of demand for Burford’s capital from clients around the world, including from our expansions into Asia and Europe. We met that demand by raising incremental capital on our balance sheet and by making robust use of our new investment management business. We grew our team by 23 people so that we now field a team of more than 90, including more than 40 experienced lawyers, and we have by far the largest capital base in the business. We are excited to continue to lead the legal finance industry into the future.”
[1] Figures for income, operating profit, profit before tax and profit after tax in this release exclude the impact of amortisation of intangible asset and non-recurring acquisition costs relating to the acquisition of GKC Holdings, LLC, investment banking and brokerage fees and also exclude third-party interests in consolidated funds and are shown to assist in understanding the underlying performance of the Company. Without those adjustments, profit after tax would have been $249.3 million, and the increase over 2016 would have been 129%.
