BUR.L - Earnings call transcript Q1 2024

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Operator

Thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Burford Capital First Quarter 2024 Financial Results Conference Call and webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator turn to now Executive Bogart, conference Officer. the will Christopher over Chief I begin conference. you your Christopher, may

Christopher Bogart

Thank much, you very and hello, everybody.

As here. Europe, calls efficient and hope, Burford's as it's spent with at of Quarterly of Chief investors from on day going beautiful Burford's these results, by short manner. said the to lovely do least be Jon in day and do really in these are we're today, before, you and and Continental slides joined groupings And a Burford's Licht, live fairly we we've to Jordan speak Officer. a Chief usual, quarters Jordan one themselves. Financial is, The where delighted investors for to us, what fact, for I Copenhagen here, coming Investment I'm Officer; in Molot, we have

little be give much general, then scale to operates years, that individual to talking think while much be happy not you I'll that, in not about when X-month of take So, questions, try and a to And on quarters, in you we'll The time your of we'll at happy business time. to the your commentary don't business, attention obviously we're quarters business. intervals. this pay of any the we take time I top just but to of too in in

as variability almost here. in first as you true it. quarters. read seeing think that's we into period-to-period call so, the and don't, lot we management you're And of what I'll ish as team, much And third of that get a dead just And a what especially

YPF later, because in the was useless. extraordinary win quarter, comes obviously that with any last first fair, which essentially year, of be comparisons to makes late Although quarter the quarter the

mixed do quarter. this you think, that's about a of But as would obviously, I characterize sort go who for those we I how to being want it. So, of think quarter-by-quarter,

there, the of ever cash above terrific the to you there's the performance, level discount happening solid that front, a that from On We lot first headwinds negative for average we've realized Jordan without When important accounting realizations cash quarter. reported. material will perfectly in highest the rate gains, on receipts in But I the the unrealized some quarter cash though, come had talk we the changes any including that point had that, there underline first in is all about. gains going case development. think is to

our average. So, our loss below historical meaningfully rate is still actually

us fundamentally was that look we our of on accounting So, basis, is and be it's business at well annoying cash total what than as level a when an double see for to the loss, printing more I brought expenses financing in that do obviously while at costs. I operating the a I cash

so, on as accounting cash an I perspective, that historically. this a have look even regard from doesn't as And some basis, though great as quarter successful

little I'll couple Slide of note just of bit, on sort to Slide read would just and your take my this Slide And move except that, that's a X. will to X. I that really you With So, X X a on things. leave expands own, largely I Slide on overall

are new can portfolio, do sets we're in of matters returns especially on still First, right on second, is can our us in and consistent with fourth generating with And done fiscal as quarter. activity hang where we've until that the this are we firms we fourth business. depend deal who And meet And with us, who common-sense basis. that's depressed a portfolio has sort efficient to on to quarter this a And sitting not what new deployments quarter of that just between quarter fourth to second, lots the through Slide hand these going first come just levels started And the X quarterly either literally, law and opportunities. And existed before wait liquidity get just now. as you with or around at first of year-end outset billing. their and of divergence deployments are crazy the shows in a this deployments, and calendar future And depend the deal we said you and whether sort the the law historically are sound, get of quarters see on about long reality terms Nobody business. year-end. that from I a quarters firms I repeat first the on enormous in business. well why of when third And swimming businesses factors, interesting you business. in one been Nobody up conclusion. the to this reporting other. on

do low entities, they lawyers sort December is scramble they most dollar slow notoriously that But because every pay of are and in bad billing. get and at calendar year can. bill firms what So, to are possibly they

And forth so, billing that January and keep turn then in and what robustly. February and happens they actively don't around on effort after is necessarily they put

factors on, see particularly at of good just bulk not again, that a realizations on that's coming the on there. high -- the last you news first we something right the quarter. X in high you focus And where assets. quarter-by-quarter level, that of the but on a that's were on where basis level, cash deployments And on Slide So, a see goes you one of of quarter is into it's of you above and And in were that slide, of that's here. a a sorry, only into well see there, that cash also year, Burford-only that high-returning we group-wide level top level again, basis activity, of again, first in I not that number portfolio business, the showing coming and is this shows you a the very the the basis. about

we're continued second in that pleased through so, half in lots are continue. And courts only seeing the COVID through we're velocity to And but fundamentally, We've we're last week. cases year, with of people with status to working first with see trial as backlogs. dealing not the into generated this continue the and portfolio had of filed it. how recently activity And had of We've happy cases ability the in as from newly portfolio our cash quarter. the

fairly quick through So, with that. a that, tour

to few me for it Let turn over slides. Jon a

Jonathan Molot

all, and Chris, you as Thanks, always, to joining. thanks for

active. on. As going There tons Chris portfolio says, is is very the

but in and that we've YPF of seen lot we've our move course, made to the knows And stayed quarter, the we the investments commenced the exciting through of that so, with enforcement fourth the that a lifted very it's was on Slide judgment have a quarter, pay system. lot cases, ongoing. stay and to we very judgment in and them in If September, during been first to, case people attention had enforceable hands of has the is part process the large everybody there's X, with full going final a judgment that that entered immediately turn

Court a the has the of appealed the plaintiffs is the of to addition, an Argentina entitled Park field, pellet the adverse Ypf from on, Petersen the exclusion we going to from XX% have the signing it case. is case. and from of and roughly second briefing the crossed circuit Appeals a there defendant for the proceeds XX% case proceeds as the reminder, Burford, Eton of A As

to Slide Turning X.

where business that producing final can not the that miss process and attractive cases largest those losses, size. And are settlements litigation as settlements continue it's the and the you the wins quarter-to-quarter, our both that And ends the losses, a fundamentals it's IRRs. in that see continue, adjudication Chris then said, and and for and returns of performance invested our matters at look investments. And the of within as go core the important category. of results our away plug results think business this see time overall, I wins, producing to that we when goes produced you sort up and combination on. can to far outstrip the you on just of adjudication, our are very look to capital fundamentals And number adjudication at the

just returns outsized asset we've the from and about just know losses we've what that returns I also the profile of If litigation out spend you also rate prior kind attractive the graphic And on see is large slide very, other process go those return the of here the contained, some showed are but you cases relatively producing what in that I or to quite on you then the loss past when the asymmetric more see got wins for confined to prior are that very can that it Slide mapped time XXX%. shows showed makes you adjudication, XX, can cases are a greater that turn I ROICs see lots low is asymmetric slide, chunk that to the in out the be don't need and than lays to of that whereas whereas that class. but a it, leads settlements, and you decent

over So, Jordan. with to will that, turn it I

Jordan Licht

cases. are to the going I'm afternoon mentioned summary judgment the Chris. Burford-only XXXX received regarding good shows of right positive Jon we of XX, the today. summary Page at and on Thanks, Good be to the Chris which difficult the on same that the year, everyone for last call March YPF and comparisons period on end morning, to a news given financials.

also talk it level have Chris the numbers negative revenue above And loss breakouts So, I'll normalize total, following as intangible right $XX slightly the book on in the with mentioned, $XX share material I'm $X.XX%. talk shown million the start provision including income key go management developments. by do about had going the negative that to Overall, no including more of XXXX. quarter from the The we Net that portfolio. period. more of are asset value development $XX, for per We'll impacted, here pages. value but into movements, was $XX.XX lots in saw to case expenses, and the was for those fair of there directly a then is income onetime touch detail the about of case just couple to various items the and per on capital at some nothing shy we Tangible page. income were of and a on share. greater In the were

deployed side, asset we On capital billion. Of $X.X are assets provision the cost. billion deployed $X.X at And approximately that YPF we're we've our that, the in of $X.X Of billion, $X.X to of billion the got fair approximately assets. assets. the uplift to IPS. value million relative value cost that number only the of $XXX in -- of This rest embedded excluding fair a have represents gain relative portfolio, XX%

quarter. lot of capital page to summary, income with $XX in details, with room in I'm first looking loss have run to increase move there's a breaks compared that's at loss So, We million more going which now. the provision a case were a into a the year's Page a all did, down to associated to lower. respect to This partial portfolio, in the Gross however, the larger QX sub components. number And realized associated realized last gains million. gains $X XX -- drove assets. with net a

little a me deeper go into Let that.

required to When is one to that, cross-collateralized loss we so we've from business, up do when cases. those do that described subcase our that look we as make multi-case our loses portfolios. are counterparty other So,

cash at efficient cash preventing outflows. the inflows capital So, and loss. one and basis, that measure look effective And deal, we cash very on as and in structures portfolio a we

each allocate subcase do in to the we that portfolio. some However, invested of capital

In this a case, loss lost, large even sub what And already recovered a realized profit, but book capital as and going portfolio-wide this loses, million first the that's subcase has some portfolio whole to basis. could successful. had amount, allocated the did, a a and though case we and now additional actually in the we all for on suffer and profit exactly quarter, in we So, we portfolio asset we of happened. portfolio incur a that our anticipate A don't in loss a asset. the from on portfolio from loss. in this forward We've back been case a particular, do that is $XX

the money. first in valuations also headwind to of financial points, broader Moving by I've are about and here an and about volatility doesn't also rate before, basis to would the expect resolution know represents any a $XX I how when discount the follows XX The saw are ultimate increase the and talked on there movements discount approximately portfolio. trends and that of value asset increase quarter, generally impacted valuations. see I've we time was movement rates in market and duration across This asset. talked accounting million instruments. quarters In that we rates, rate impact for

the we course, of we movement move of to focus is Of going to I'm management where and benefits see payout and with don't we in of and that movements the business. we business. balance anticipate income. sheet seeing significant actual our XX. the cash from cash-on-cash business, value resolution also wouldn't continues enjoy cash assets core $X the only not our assets, funds This a We This fluctuation. quarters with awards funds. which of receipts the overview the business to our receive on significant cash of to income augment meaning the of the assets, using perform we when management respect is did to the interim see this we asset fair to is the the asset Slide movement while book In business, million

the of that incremental majority partner wealth sovereign in this income BOF-C. for as performance our business we've with source by our overwhelming about partnership fee. think liquidity As is that balance the a of driven We sheet earns a discussed,

on XX% new that reminder, nearly basis. of commitments pro a takes a of the As approximately BOF-C pure rata all

are that by the for revenues time first some Moving which a associated some and flat value in other to comp expenses that expenses, the a remained driven I'm or fourth Page incentive spent share-based incentive quarter. accounting at as benefits, this reminder, year's to expenses XX, moment. are annual bonuses like represents fair for various the movements quarter to of movement which year Annual of shift down, different discretionary with we're when Main total gets last are We period, generally talking period. items. going looking components about finalized from salary comp, employees, in of same and XX% the accruals expenses only and last represents year-over-year. onetime lot and -- a Overall, comp our the

spoken we've and earn-outs accrual the expense of asset and for the one business. One that of had that We legacy purchase effective to was that mentioned lines the that there's the for related about recovery is all historically purposes only it item long-term line accruals. be into and incentive don't thus changes arrangement, collapsed believe with again, asset we those are left in material in that Reminder we that there'll line any the compensation the as expenses future. that associated

paid incentive cash comp only legacy line and the So, when the from the or out long-term asset cash recovery receive investment. the goes the only were door we only our out the

this if asset, from approximately see significantly at last million. are for fourth down especially expenditures You'll year, we looked and are This inclusion that in was the have that reduced trend -- case-related in period-over-period. quarter, the ineligible $X

Chris now, figure. which that to of our I'm see XX, time. right only is a going that cash we're year, to Page over liquidity this point We to due $XXX pointed that receivables. close as would on in very But out securities well liquidity down position from far, volatility as to $XXX,XXX. move or page. some million half Now with this and over expect million so settlement at another sit and as we of strong of $XXX leverage

$XX pulling that the in from deeper, breadth came than a million Just came with different producing the cash though, that assets $XXX each. receipts of that of assets of previous bit one to million points individual X little go from on a slides, more --

took schedule. And the like had we issuing the June on number. of X robust Earlier high-yield XXX done the at issue advantage the to Focused original inside depth on a million basis points issuance. market, our and debt that yield we of XXXX earlier. add-on that in in $XXX So, breadth months quarter, just latter

believe of You back-end always August see, a leverage covenant of you put maximum and rest leverage. think equity. guess, is our our due lot we see that liquidity year, receipts we target, about, until with of we're is that doesn't our the as to about about last now, that end be the well you needs, X.XXx how I a on maximum what significantly talked capacity Earlier and can on this cash anticipated debt I we get as XXXX. we're next expenditures well the at come a managing not portfolio. necessarily as levels, debt year, as out well side threshold. right-hand that's prudent But to within as and We our of Right asked the maturity debt, the within loaded. X.Xx and The the see well can clear, our

stop I'll Chris. to that, with hand So, back it and there

Christopher Bogart

XX have. that driver business portfolio Slide uncorrelated door the by of associated world lot reemphasize being reported only when brand and respondents us the course, but this means seen And least, business. a that same points described, where discussed are, continues process. enforcement the identified together brand value have from desirable, the meaningful that making Then, Those levels as just just to The assets, Jordan which does Jordan. of finance our And tries they last year return business. every firm, origination business no other robustly. is out up the platform, being returns before, far, litigation is causes and as to And that way as we to YPF to them, core last Jon are we as a our already a asset the the slide Thanks, value forward market-leading through powering the additional you. we as capital by or we the really, are we management have created, sum pull the put their words, were you've in finally, keep of leader. about with the first to survey key the litigation perform of portfolio to the which are in category. In

in generally, a if the that, we first and would look cash with very sum, And mixed year you performance questions. But strong busy quarter So, quarter. -- your on and this for not welcome us for appreciate quarter-by-quarter any basis, at us. a that's that active but quarter this a just all this support,

Operator

you. Thank

the will question-and-answer [Operator begin now Instructions]. We session.

Your Alex comes from the with phone over Berenberg. first question Bowers

Alexander Bowers

one for Just me.

of we aiming year, grew wide, $X.X of achieve? kind XXXX, for you of kind we a this guess, to toÂ beÂ thatÂ sortÂ of similar In kind expect under I similar of sort levels guess, sort rest terms look expectations billion Are commitments level would million, saw I of of, you to the kind forward moved? of looking the into $XXX of still level, or this the year just what

Christopher Bogart

do. future guide anything, really, But couple new that new we of Well, we a future go me level of business. business don't comment that driving on things on the into let including

And are a so, of couple there here. points

about get nearly group-wide we obviously of that is. do while the asked You business, there as is that a that activity remunerative business a group-wide of people not core report us the are we our basis. a sheet in And do portion on business as so group-wide sense balance can overall to

predicting group-wide for is, activity think really in terms of but I not showing future So, overall, useful again, profitability. useful

with other the whether period sustainable X any that depends will X a period, continue and deals. we've of XX in what example a whether of we million said to the an of have sort last large business, category In sort whether take or on profits. on level unpredictable the level What impact level period relationship do transaction or $XXX the cycle have a they business will in, finance provision of that a have as significant look because that period, any then corporates on do that Fortune that of of year it's us. in for new chunky a one you transaction long, case is drives the We and the those and the of saw transactions with deals sheet fairly is pretty The trend do. continues litigation company. in period X, those question significant business that's land? before smaller by is out. the of with words, to and year, ongoing a them, a doing of be and we at that of core it's we especially sort And big usually our And with that we bulk monetization balance pretty deals Burford-only you business If direct write start capital quarter sales smaller really sort we the

it's us the the banker M&A blockbusters So, to little investment It's an like bit for rest year. that they're a difficult. for do predict to in deals hard that. mix, the but are of It's how going asking be many to

that have good by I And so, a you, corporates. we encouraged remain that of I don't have for answer the from interest except level

the look In you market. of participants at segments. you in future. pretty of half litigation just are say regularly release days, in do level plan industry coming they not-too-distant going research certain interest couple it's industry see to either fact, days from certain know, numbers next of or probably out you'll we so There the And do using segments industry of to already they're another is there as are, interesting now, to of just -- to release you're just a and we, where couple the that research legal see commission that the when finance in in the in especially see that

Operator

are there web questions? any phone no Rob, have this time. questions currently at We

Robert Bailhache

There is not.

done, a of have keeping an event. good think, but brief promise to job we So, check-in too quarters very not a our I of making big

phone the I any of us. come wrap that other absence for either that's have and lines, I the in, the a there, on or questions their in webcast see entity think So, on

talking that you a we few much as with very right? time to support you and -- always, to you to those to numbers, months. your After, And your And all always June Burford. your of other may here we're So, thank anything. in questions thank you look any for forward you talk for very much and offline have happy answer

Operator

you disconnect. your Thank concludes today's call. conference This participation, and you may for now

Burford Capital Limited (BUR) 13 May 242024 Q1 Earnings call transcript