Burford Capital Share Discussion Threads

[tracy_moore] 31/8/2019 06:48

trident530 Aug '19 - 23:04 - 12476 of 12480
0 3 1
One has the feeling that it was with some reluctance he bought a few back a couple of weeks ago. Boots were not filled.

LOLOL what a vivid imagination,do you think he was tied to a chair with a gun held to his head while he purchased shares ? Full marks for an imaginative attempt at a de-ramp though.

[henchard] 31/8/2019 00:52

Bogart: "We love what we do and intend to keep on doing it."

I wonder how history will judge that statement.

[williamcooper104] 30/8/2019 23:37

Adnan I'm not arguing that there's plenty of liquidity But management have never said that from now on in all will be self funding They acknowledged the need for new capital by saying that they could raise a bond So at some point (and probably not in the next few months) they will need new capital (unless growth fails of which of course would be a different issue but still a problem)

[henchard] 30/8/2019 23:11

Quite so trident5 - a toe of a toe sock rather than a boot might be a way to visualise it.

[trident5] 30/8/2019 23:04

One has the feeling that it was with some reluctance he bought a few back a couple of weeks ago. Boots were not filled.

[henchard] 30/8/2019 22:46

Ozz,

Don't forget Molot bagged £58m last year from offloading shares at 1,350p.

21 March 2018
Christopher Bogart and Jonathan Molot ... have respectively sold approximately 4.4 million and approximately 4.3 million ordinary shares in Burford, one-third of their holdings ... at a price of 1350 pence per share.

[ozzmosiz] 30/8/2019 22:06

So you think Molot would risk over £7m of his own money to try and raise the share price That is a nuts questions.

[scubadiverr] 30/8/2019 18:47

XLMedia for one. I'd like to know of others

[galatea99] 30/8/2019 18:29

"HL misses the mark as it sells Burford amid short attack
By Jessica Tasman-Jones, 30 Aug 19

Platform shouldn’t have needed Muddy Waters to point out issues it was concerned about"

"7IM senior investment manager Peter Sleep said the issues raised by Hargreaves Lansdown had been evident before the Muddy Waters note.

Sleep said: “The corporate governance, valuation issues, cash flow and Argentina issues were always there and if they had done their work, HL should not need Muddy Waters to point them out, but it feels like HL analysis had missed the mark.”

Sleep said Muddy Waters’ analysis of the Napo Pharmaceuticals interlude had been more revealing, although Hargreaves did not reference this in its note.

That episode had implicated Invesco manager Mark Barnett, although he has denied the allegations via his employer, and name checked Neil Woodford, something Muddy Waters was accused of doing for headlines."

"Burford first provided financing for the case against the Argentine government in 2015.

It was appointed by the Spanish bankruptcy courts after the nationalisation of an Argentine energy company sent a 25% shareholder in the business insolvent. Repsol, which had held a 50% stake, has already reached a $5bn settlement with the government.

In June, Burford valued its the Petersen vs Argentina case at $1bn although it currently has 61.25% of its original entitlement due to transactions on the secondary market.

The complexity of the business and questions over its approach to valuation had already been raised before the Muddy Waters attack, with Canaccord Genuity slashing its target price for the company in April over concerns about Burford’s return on capital calculations."

[adnan17] 30/8/2019 18:07

Every time they say something, the naysayers find something new.

For example the naysayers said they have all this debt to repay in 2022. Burford then said we have $400m cash.

Then the naysayers said "ah but you have all these commitments to make". And my analysis shows that after paying $80m for operating expenses and $40m for interest they have $280m left over. Surely that is enough to pay for the committed cases.

The naysayers said but you don't have cash to grow the business. But its up to them how many new cases they take on. They don't have to take on any more. They can do zero for the next few years and wait until the existing cases reach conclusion and build up a larger cash buffer. Maybe from $400m to $800m-$1000m.

Doesn't matter what they say the naysayers always find something.

Wish they would put this level of scrutiny on any other business. The western world would collapse.

[adnan17] 30/8/2019 18:03

Winsome - all the points you raise have been addressed previously. All they will be doing is repeating themselves.

1. They have provided details of cashflows in the half year report. They then said they have $400m of cash.

2. For years they have talked about how they progress through cases. And the cash received. Another place to read is page 34 of the half year report. It shows that in 2018 they had "transfers from realisations to receivables" of $627,718,000. Of that they collected in cash "Proceeds Received" $595,540,000. They had no write-offs in 2018.

3. Similarly in the first half of 2019 they had "transfers from realisations to receivables" of $316,909,000 and they received $227,365,000. They also wrote off $3,083,000

Don't see how they are being arrogant. Just repeating themselves endlessly. All those questions have been answered for the last few years on endless conference calls, investor reports, roadshows. Those figures show that they receive cash from the wins. So what else are they supposed to say - maybe show the cash in dollar bills and do a video conference?

Maybe the only question they could answer "in more detail" is the Napo case. But given that part of the Settlement was "confidential", would they be breaching the conditions.

[clocktower] 30/8/2019 18:01

Some of the BoD`s buys are not looking very good and have been poorly timed it seems. Were they buying just to try to force the share price up, as failure to make further statements leaves one wondering why they will not update the market and only raises further concerns that are more likely to rock the market and hit small investors.

[winsome] 30/8/2019 17:45

William, its inconceivable they won't publish something to calm investors' nerves after all the noise this past week. Surely at least a trading update and comment on current cash flow or something to say they'll be releasing a detailed report soon on accounting concerns that investors and likes of HL are expressing (even if the concerns are unfounded). To not do so would smack of arrogance or real concern but I'm giving them the benefit of the doubt for another week or so. Such detail on their fair value/unrealised gains and future cash flow needs for growing investments is not a quick thing to put together. But at least a statement saying they intend to do something would be minimum requirement.

[adnan17] 30/8/2019 17:45

Henchard - not sure, I guess we can just stick to the $400m figure that they stated in their response to MW. But could be slightly higher now.

[adnan17] 30/8/2019 17:43

William - the $400m is available for all purposes, working capital, paying dividends, redeeming debt/interest. So lets go through it.

1. Investing in new cases is part of working capital. They are not obliged to invest in NEW cases.

2. They are obliged to invest in cases that they have already committed to. This is an unknown figure. But I'm sure $400m covers it.

3. Operating expenses (paying staff, paying for offices, paying electricity bills, etc) are $80m a year

4. Paying interest is $40m a year.

5. They don't have to pay dividends.

So if I take $400m then deduct $80m and a further $40m for interest, I'm left with $280m. Surely that $280m is sufficient to fund the cases that THEY HAVE FUND because of EXISTING COMMITMENTS.

6. Within a year, surely they will win further cases, hence surely the cash position will rise if they don't fund any NEW business. They could just not fund any NEW business for a year to increase the Cash amount.

They do not have to fund any new business. There is no obligation.

Hence, I'm not sure if I am missing something.

[williamcooper104] 30/8/2019 17:17

Why would Bur announce anything next week (unless there's real new news)

[henchard] 30/8/2019 17:17

adnan,

"you can then also add "Cash Management Investments", which are investments in short term debt instruments. So adding $358.5m + $43.8m gives $402.3m."

In the MW response, BUR stated the $400m was specifically "cash and cash equivalents". "Cash management investments" is a separate line on the balance sheet.

It's a minor quibble. Taking into account the $126m cash from receivables post-half-year-end, it suggests BUR has added around $40m to "cash and cash equivalents" since 30 June, and still may have $43.8m in "cash management investments".

In other words, on my interpretation, BUR's position is actually stronger than on your interpretation :) ... and I'm bearish on the stock, due to a number of other factors.

[williamcooper104] 30/8/2019 17:15

The $400m is cash - just one part of working capital - and not necessarily same thing as free cash for new investments But still it's a good sign - and Bur clearly has some room to go before it needs more capital It's a risk - but it wouldn't be top of my concerns (which would be the degree to which Peterson skews results)

[winsome] 30/8/2019 17:13

HL summed up the current state of play pretty well. Two sides to every story and they chose the middle.

Well, if BUR don't issue something meaningful next week I'd be amazed. Only possible reason for not doing so are that they are more focussed on an imminent private equity buyout or they don't have anything better for investors. Next week will be interesting.

Have to laugh at the share price crowd. BUR make more profit in 1 month (excl unrealised gains) than Optibiotix will ever make in it's short lifetime. But they want you to sell BUR and buy Optibiotix. Laughter inducing! I see a MW style report coming on that company soon.

[sbb1x] 30/8/2019 16:59

What was the lowest buy in today chaps....

[wardy333] 30/8/2019 16:55

Thought you had already won it,,,