Burford Capital Share Discussion Threads

[tomtrudgian] 28/3/2023 16:21

No they did not, and neither have they given the results for 2022 anyway. They gave a very helpful and considered update on FY business activity for 2022. They also explained the presentational changes that may or may not occur in FY 2023 or in FY 2024 and beyond.

The business activity review for 2022 also explained that the audited FY accounts would not be available for many weeks, and the reason for this. It is actually little to do with BUR, just that they are the only US listed litigation financier. The SEC and GAAP have still not concluded how auditors (not just Burford’s auditors EY) should be required to ‘fair value’ litigation assets.
Much will also depend upon when (and if) the US shareholders (currently 46%) exceed 50%, whereupon BUR will be a domestic US public company and further rules will apply from that date.

These are all presentational changes to the audited results, and IMO will likely increase the BUR share price. What they will never do is make the slightest difference to court judgements, cash received or the true worth of Burford.

[syoun2] 27/3/2023 18:27

Not sure if I missed it but did Burford give a reason for not notifying UK market ahead of results

[donald pond] 27/3/2023 10:32

I do think the solution is simple, which is to go to arbitration and agree a value for the non-cash element that Sysco have in their preferred settlement. And if it is a genuine arms length settlement it should be very close to Burfords estimated value of the case

[stentorian] 26/3/2023 18:25

Sysco will learn all about food processing when they get sliced and diced. Sysco will eat into their own share of the award and present it on a plate to BUR.

[alfredomega] 26/3/2023 17:01

Stentorian, Of course no, that was what Sysco intended. That's why I said they want to be very clever.

Obviously, Burford will sue them for contract breaching and for probably negotiating/getting an agreement behind their backs.

[stentorian] 26/3/2023 15:58

akfredomega, but Burford aren't playing the idiot here, Sysco are.

[donald pond] 26/3/2023 14:39

Surely the solution is to allow the settlement but for Burford to be paid according to the estimated value of the "relationship" part of the settlement.If I sued M&S and they agreed to pay be £1m and agreed to stock my product in all their shops for 5 years then the settlement is worth far more than £1m

[laughton] 24/3/2023 12:09

Exactly. Although it now seems to me that Sysco wants to come to a more amicable resolution in an attempt to retain those customers. Not something that Burford cares much about, nor should they.

[stentorian] 24/3/2023 09:12

Sysco should have used their own $140m to wage war on their customers.

[kuk1doh] 24/3/2023 08:36

Helpful update on Sysco from “Renegade̶1; on LSE. Seems to be going BURs way for now and interesting that Sysco talk of the importance of ongoing commercial relationships as a factor in their decision to settle for what Burford deem as a below par amount.


hxxps://cookcountyrecord.com/stories/640324421-sysco-burford-has-lied-to-the-world-about-controlling-lawsuits

[tomtrudgian] 22/3/2023 14:46

Thank you DP for your excellent contribution of 16 Mar amongst many others. In the few days since then, so much ‘capital’;, which ends up being just honestly ment promises, has failed.
I hope you will consider a further considered update in due course.

[planit2] 21/3/2023 20:04

Ok, very clumsily worded last paragraph there.
:)

[stentorian] 21/3/2023 12:19

Fantastic data in Burford's provided Capital Provision Portfolio Direct and Indirect

[donald pond] 21/3/2023 09:19

Fwiw other than the - in my view unhelpful - lumping together of balance sheet and group returns I find BURs results very straightforward. As I've said before, if a fund wins 300m it is nice, but it is much more relevant to know what the overall return on the funds is and when our performance fees kick in. Fund x has taken in £100m, has deployed it all and has generated £100m to date with £60m of deployments yet to conclude. A performance fee of 20% becomes payable on the excess after the fund has returned £120m to investors. That would be more helpful. Perhaps it is there somewhere. But compared to a software company capitalising R&D on a new programme, it's very clear

[williamcooper104] 21/3/2023 09:09

Yep Applies even to very simple property companies

[maddox] 21/3/2023 09:06

The idea that a set of financials would be so perfect that you'd not need to analyse them and come up with a personal view on whether the firm is good value or bad value is somewhat bizarre.

[donald pond] 21/3/2023 09:02

On that subject I see that in investor section of the website you can download case by case summaries of all matters (concluded or live). You used to have to ask for that

[donald pond] 20/3/2023 18:22

On the contrary, the reason investors can do their own valuation is due to the huge amount of info Burford make public

[tradertrev] 20/3/2023 17:31

"One last note, the fact investors do their own analysis of Burdord's (sic) worth illustrates the accounts are presently not fit for purpose."
This comment could equally be levelled at nearly every listed company!

[bbmsionlypostafter mk2] 20/3/2023 14:22

Bargepole.


"One last note, the fact investors do their own analysis of Burdord's worth illustrates the accounts are presently not fit for purpose."

[planit2] 20/3/2023 13:41

Thanks for the great posts above.

This is the situation that I see as most likely

SEC and accountants want to align the valuation more closely with modern fair value accounting methods. This makes them closer to how investors would value the assets and therefore company.

Burford, especially given their history, want to keep the current system of cash accounting up to the point where events make a market valuation more easy (and they then reluctantly up the value or reduce it).


I just can't see Burford winning in this case, there is too much weight against them. The SEC can't really make an exception for one industry and the ruling they come up with has to be future focused. Burford in their presentation admitted there will likely be some discounting back of a future value and I think their argument is to make this as small part of the equation as possible.

If the SEC dictate Burfords own modelling be used with a discount rate dependent on risk there could be a large uplift in asset value. It would then be up to markets to value each litigation finance company on how much they trust the particular company's models.

One last note, the fact investors do their own analysis of Burdord's worth illustrates the accounts are presently not fit for purpose.

[houseofpain1] 20/3/2023 11:25

Interesting comment/note from one of the UK analysts this morning. Agrees that Burford has erred on the side of accounting conservatism to date. Sees potential for a large uplift to NAV per share to c£10.50 based in part on the notion that Petersen should be uplifted at the 8% discount rate used in NY court awards. Also notes, as I and others have said, that this is all just noise in any event and irrelevant to cash flow.

[kuk1doh] 20/3/2023 11:02

Ah c’mon Serapuff… you can’t stop there. What was your actuarial valuation and at what share price would fair value be fully recognised? Genuinely interested in your analysis… always do my own. Thanks.

[serapuff] 20/3/2023 10:52

@tradertrev

yes, I'm surprised that this was brought up.

I'm an actuary, and the first thing I thought of looking through litigation finance companies is that the valuation of the assets is extremely similar to how I would calculate the embedded value for an insurance company, to the extent that I built embedded value models for the 3 listed companies (Omni, LIT and BUR), and invested in two of them (Lit and Bur), Lit a lot more substantially as it does not have the YPF risk (or upside) that Burford currently has.

They really can consider hiring actuaries to build their valuation models.