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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Litigation Capital Management Limited | LSE:LIT | London | Ordinary Share | AU000000LCA6 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Shares Traded | Last Trade
|
|
|---|---|---|---|---|---|
| 0.00 | 0.00% | 109.00 | 35,308 | 10:38:01 |
| Bid Price | Offer Price | High Price | Low Price | Open Price | |
|---|---|---|---|---|---|
| 106.50 | 108.00 | 110.00 | 109.00 | 109.00 | |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| - |
| Last Trade Time | Trade Type | Trade Size | Trade Price | Currency |
|---|---|---|---|---|
| 10:34:03 | AT | 13,540 | 109.00 | GBX |
| Date | Time | Source | Headline |
|---|---|---|---|
| 16/4/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 12/4/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 11/4/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 10/4/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 09/4/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 08/4/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 05/4/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 03/4/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 28/3/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 27/3/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
Litigation Capital Manag... (LIT) Share Charts1 Year Litigation Capital Manag... Chart |
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1 Month Litigation Capital Manag... Chart |
Intraday Litigation Capital Manag... Chart |
| Date | Time | Title | Posts |
|---|---|---|---|
| 04/4/2024 | 17:49 | A newer, freer thread but only for honest posters. | 1,356 |
| 19/3/2024 | 14:08 | :: LITIGATION CAPITAL MANAGEMENT | 1,865 |
| 07/2/2023 | 09:08 | peepol whu kant spel shudnt right hedders.... | 194 |
| 26/5/2022 | 13:54 | LIT | 167 |
| 25/5/2021 | 13:54 | 50% growth year after year after year | 46 |
| Trade Time | Trade Price | Trade Size | Trade Value | Trade Type |
|---|---|---|---|---|
| 09:34:03 | 109.00 | 13,540 | 14,758.60 | AT |
| 09:33:25 | 109.16 | 15,000 | 16,374.00 | O |
| 08:35:33 | 110.00 | 307 | 337.70 | AT |
| 07:26:51 | 109.00 | 1,460 | 1,591.40 | AT |
| 07:26:51 | 109.00 | 5,000 | 5,450.00 | AT |
| Top Posts |
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Posted at 04/4/2024 09:55 by mtioc DB, Not sure I agree. When buying anything, including your own shares, there is a sensible price and one that is not. The alternative potential uses of that capital are also relevant. If LCM can compound capital at over 70%, the share price needs to be attractive for a buyback to be a good use of capital.Noted re facts etc.., but, for me, the purpose of the BB is to improve understanding rather than opine - too much of that elsewhere (e.g. Citywolf's excellent point re cash drag above that I had completely missed). Glad it is simple and obvious to you, I suspect it is a bit more of a struggle for the rest of us! |
Posted at 03/4/2024 09:26 by gallamar Onr thing that might help. If you worry about downside risk.Think of a coin toss game. If you win you get 2.5 if you loose you pay 1. If you simulate this even with a 70pct win rate it is very profitable. You may get some losses but the wins more that make up for them. The decks did say 27m years ago. But that was before covid locked down the courts for 1 year. We also now invest in larger cases as we invest using 3rd party funds. The time factor imo is fine because performance fees double your returns. I think share buy backs are great. It makes it safer to buy. In stocks with no buy back.the share price can drop 20pct on 30k of daily selling. Here it does not as the company scoops it all up!. If you think in statistical terms of a coin toss this is a great business |
Posted at 03/4/2024 09:03 by mtioc Over the last few days, I reviewed the latest LIT release and materials. In particular, the appendices of the last investor presentation provide an excellent summary of the firm’s current position. Parts have been presented before, but, as far as I am aware, not with summaries and durations. This is a tricky business to understand, but the team cannot be accused of being opaque.This led me to reflect on my valuation. While inexact, I would discount my conservatively estimated future value to a present (net asset) value. I had a go, but this was nothing better than an electronic “back of an envelope,” which will inevitably have omissions and errors. My guestimate (lots of assumptions on assumptions etc.. so DYOR), after opex deductions, was broadly as follows: • Deployed capital (own and 3rd party fee): £1.20/share (currently c. £0.9/share) • Committed but not deployed (as above): £1.60/share (I included the whole of Fund II, which should be committed this year) • “Expected̶ • Asset manager/LP: £0.3/share (Cost of hiring/retaining team in 3 jurisdictions, track record/reputation, proven “blue chip” fund raising ability. Others are struggling to replicate. This could be a material undervaluation) The “Committed but not deployed” is possibly aggressive, but even if that was discounted/“ch I would be interested in others’ views on valuation approaches, particularly re Burford. I think LCM differs, positively and negatively, due to scale, matter diversity, lack of US presence and narrower range of activities (e.g. no enforcement). Sometimes analysts have referred to multiples of NAV, which I do not understand. Litigation funders should all now have FV models, with cash flow for each investment, which could be adapted to provide projections, using pro-formas for future investments. With apologies for repetition, but I do not think we should be guessing about how the management view their business’s intrinsic value. They are using shareholders’ funds to buy back shares, so they should articulate how they are valuing those purchases. This would include the prices at which they believe the shares are cheap and those that are too expensive, together with the basis of valuation. It is not enough to simply say the shares are "obviously cheap". Simon Wolfson (CEO of Next) is the best UK example of a clearly expressed buyback policy. They should also get their financial adviser to review and to publish their own valuation. Valuation clarity and guidance would do more to drive the share price than some other initiatives. |
Posted at 19/3/2024 12:45 by mtioc Good presentation this morning, which I am sure will be on the website.Interesting market size/potential discussion, which I had not seen previously and is difficult to get for a nascent market. Robust justification of share buyback as materially below “intrinsic value”. First, current NAV per share of c. 90 pence which values existing investments at 2.0x rather than historic 2.8x realised (this reflects maturity profile etc..). Second, c. $220m of current commitments will drive NAV. Lastly, benefit of third-party funds not fully reflected. Current average fund investment delivers 4x to LCM due to performance fees on top of investment. In other words, current share price does not give value to historical returns for current investments, any value for undrawn commitments, material “embedded̶ Discussion on fair value. Apparently, c. $40m of current NAV is performance fees. This is a mechanical result: if one of 53 investments if valued at X then fee would be Y. Various cases mentioned, but emphasis on looking at portfolio. Management recognise news flow point, but consider in context of materiality. Apparently, they are considering a podcast. I am sure “The Rest is Litigation Finance” will be a winner. |
Posted at 04/12/2023 13:21 by maddox Hi Makinbuks,They are reducing the Debt Facility as well as paying a dividend and share buy-back. So, LIT appear to have sufficient cash in-hand, or in-view with forthcoming case conclusions, to fund new cases, pay-down debt, buy back shares and pay a dividend! The significance of this appears to be lost in an argument about should they put their cash here or there - when they can do the lot (to various degrees). Having suffered the withholding tax - I'm now much preferring buy-backs over dividends as a means of returning value to shareholders. IMHO LIT is transforming into the cash machine that an IRR of c.75% suggests it should be. It'll take a while for Mr Market to appreciate this as the share price fall back signifies - investors seeking share price confirmation - will be holding off buying in. Once Mr Market realises that a p/e of 6.4 is ridiculous this will re-rate. |
Posted at 01/10/2023 08:41 by mtioc LCM’s capital allocation decisions should be viewed in the context of its unusual ability to potentially compound incremental capital at a 70% IRR.Debt I am sure LCM did their best at the time. Credit providers probably deem litigation finance higher risk on the criteria that drive credit models: probability of default and loss given default. In the UK, a few litigation funders did not survive Covid (especially those with a more retail focused model). The underlying assets are esoteric and illiquid, with a limited secondary market. I am not surprised that in the difficult days of February 2021, LCM had to pay top of the market range. It appears to be SOFR (a US dollar overnight rate, currently 5.3% vs US$ LIBOR of 5.8%). LCM were smart enough to cap the total return to 13%. It appears LCM can redeem the loan (i.e. any call protection has expired). LCM are looking at a retail bond that may reduce the cost of debt, but may be a lot of hassle compared to private credit providers like Northleaf. The key point is that if you can compound at 70%, within reason, your debt interest rate is pretty irrelevant and, if LCM has investment opportunities, it should be increasing not reducing debt. Dividend I think the management acknowledge that the proposed dividend is not a logical allocation of capital. Their rationale appears to be that it is small (a few million AUS$), potentially encourages some institutional investors (for unexplained reasons) and is a “reward” for shareholders. The reward is not clear to me. If a higher rate tax payer, a UK shareholder receiving AUS$100 of dividend (paid out of LCM’s post tax earnings) may receive AUS$55. AUS$100 compounded at 70% over five years produces $1,420 (14x). For obvious reasons, I wish they would stop “rewardingR Share Buyback I support this. For reasons discussed above, LCM appears far below any reasonable estimate of intrinsic value. That said, if a company introduces a buyback programme, it should state how it is valuing its purchase (of its own shares) with shareholders' capital. In other words: when would it buy its shares, and more importantly, when wouldn’t it? Particularly given LCM's ability to invest incremental capital at such high rates. Very few companies do this. Simon Wolfson, CEO at Next plc, does so very well. This leads to my major issue with LCM is its market, rather than shareholder, communication. There are no forecasts and I appreciate it is very difficult business to forecast (realisations in particular). I have not seen any broker reports that attempt to explain or value the business by alternative methods (NAVx,DCF etc..). There is a “read across” to Burford but there are scale, size and return differences. When I looked at LCM, the best resource was this BB (again, many thanks to the remarkably well-informed other posters). The company needs to get better institutional quality market communications (e.g. kick its brokers to produce a proper note) if it wants to attract institutional shareholders and drive the share price. |
Posted at 21/9/2023 13:55 by someuwin A robust outlook makes this legal stock a buyA cash-rich provider of litigation financing has reported record results and could deliver another year of growth September 19, 2023 By Simon Thompson * Net profit up 145 per cent to record A$21.8mn (£11.3mn) * EPS of 29.5ยข (15.4p) * NAV up 27 per cent to A$124.3mn * 2.25p a share final dividend declared Litigation Capital Management (LIT:117p), a provider of litigation financing, has reported record results buoyed by settlements from its directly held portfolio as well as bumper fees earned from third-party funds. The performance of both the group and the fund interests made for a good read. The third-party funds delivered A$70.2mn (£36.5mn) of post-tax profit and a hefty $24.6mn of performance fees for LCM, which receives 25 per cent of profit on each fund investment over a soft hurdle rate of 8 per cent. The group also earns an outperformance return fee of 35 per cent over an internal rate of return (IRR) of 20 per cent, so providing an attractive income stream to complement realisations from its own directly held portfolio. Over the past three years, LCM has delivered a cumulative return on invested capital (RoIC) of 208 per cent and internal rate of return (IRR) of 76 per cent, a key reason why outside investors want a slice of the action. Earlier this year, the group’s second Global Alternative Returns Fund (GARF) raised A$291mn of commitments. The outlook for deployment of the capital is increasingly positive. Strong trading outlook Chief executive Patrick Maloney predicts a significant rise in the number of appointments of external administrators and liquidators in insolvency, which will translate into increased litigation funding applications in the future. That is of particular benefit to LCM given its long history of funding disputes arising from insolvency and restructuring. Maloney also highlights a tightening and contraction of the competitive landscape in the litigation finance industry across several markets, including the UK, US and Canada. Having built LCM's expertise and capacity in the London market, as well as having access to capital through its funds management business, the well-funded group is well-placed to capitalise on tighter industry conditions. In addition, Maloney pointed out that LCM is “seeing more opportunities in the market and expects to materially achieve commitments in the second fund”. This will position LCM well for launching its third fund, aiming to exploit the high-quality investment opportunities that underpin generations of value and cash to both fund investors and LCM’s shareholders. Furthermore, as the group continues to grow, the operational leverage of the business means that it should deliver even greater profitability and cash generation given that higher activity levels will not need to be matched with proportionate increases in overall costs. It’s a positive narrative and one well-supported by a raft of successful case settlements in the past year that led to bumper profit for both third-party fund investors and LCM shareholders. It also explains why the board has announced a A$10mn share buyback programme alongside a 2.25p-a-share final dividend, and is planning a fixed-income investor roadshow to attract investors for a London-listed sterling retail bond to take advantage of investment opportunities. Re-rating set to continue The news has been well-received with LCM’s share price hitting a 12-month high around 121p post results, up from 87p when I last suggested buying over the summer (‘Litigation funders LCM and RBG digest court ruling, 27 July 2023). House broker Investec is working on new forecasts to take into account the group’s transition to IFRS-9 fair-value accounting, but analysts had previously forecast a 66 per cent rise in adjusted pre-tax profit of A$47.7mn. Trading on a 12-month trailing price/earnings (PE) ratio of 7.5, offering a 2 per cent dividend yield and an delivering eye-catching return on invested capital, the shares remain a buy." |
Posted at 20/9/2023 13:09 by nchanning Think Lu is right that growth in LIT's share price will track growth in book value until LIT reaches the new level at which a broad range of institutions would be allowed to invest in small caps which is now 500m or maybe even higher for something as esoteric and risky (at least in perception ) as LIT . That's just the reality of the UK small caps market now . That should still mean compounding at 20-30% annually until the institutions push LIT to a big premium to book value |
Posted at 19/7/2023 10:42 by 74tom Maddox, I strongly disagree with your view & the financial statements of BUR back up why.On p42 of their Q1 quarterly they break down the split between deployed costs & unrealised gains, both on a consolidated basis & BUR only basis; Total Burford Capital Limited equity / book value at 31/03/23 was $1.992b. Of this $1.395b was from unrealised gains ($959m YPF, $435m everything else). If they switched to cost accounting then Burford only equity would plunge to $597m / £461m ($556m / £430m on a consolidated basis). So their current market cap values of £2.08b values them at ~4.5x book value. Further, the balance sheet would look incredibly fragile with $1.26b of bond related debt looming over everything else. I do not think there is a chance they would trade where they do using a cost accounting framework. Also, the deployed cost of none YPF cases at 31/03 was $1.5b which is ~£5.30 per share, so I've no idea where you are getting $19 from. I know this is accurate because had they lost YPF then the remainder of their cases still underpinned their share price pre the March 31st verdict, which made the risk reward back then remarkably good. Pre yesterday's update, LIT traded at 2.1x it's 31/12 shareholder equity of A$85.5m / £45m. So even if it traded on the 4.5x BUR rating which you believe is way below true value, the market cap would sit at £180m / £1.51. And that is of course ignoring the record performance in H2. By my estimates the full year results will show a growth in shareholder equity to ~A$125m / £65m, at the same 4.5x BUR ratio this would see a market cap of £292m / £2.45. In reality I suspect LIT will re-rate to somewhere in the middle of their current lowly rating of 2.1x and the 4.5x of BUR, which would be ~£1.80. Cost accounting may be prudent and simple on the face of it, but on it's own it over emphasises debt & under emphasises cases that have been won or are in the process of finalising the quantum of an award & which undoubtedly have a monetary value which could be realised via a third party sale if necessary. Besides, BUR do give the best of both worlds by disclosing the deployed cost & the incremental unrealised FV gain. Should LIT do the same then not much will change from present, except that investors will be able to value them against BUR & other peers on a level playing field. |
Posted at 04/7/2023 12:54 by 74tom In my view it's evidence that a business can create tangible value that drives share price performance - that comes from investment returns + disciplined cost management, you have to have both over a consistent period of time in my view. If good returns get eaten up by bonuses or an expensive new office then the market won't reward top line performance.As to Omni, I just can't understand why they've got 8 funds all with seemingly different, complex structures. Unless you know the specifics of each fund then you can't reconcile the balance sheet impact of each settlement. Have they simply been chasing EPV (Estimated Portfolio Value)? Which is a pumped up figure that appears to include the total value of the cases under management, unadjusted for the economic ownership of OBL / the Funds? Where do you think LIT should be valued in comparison? If OBL were at £670m market cap last autumn having reported an equity loss of A$45m in FY22 on turnover of A$89m and will likely report an even bigger loss for FY23, surely LIT should be at least 25% of their pre crash market cap? I.e. a share price of £1.40. You could easily argue they should be at a higher ratio than that based on the performance metrics you posted & the fact LIT are far more leveraged to fund returns. |
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