Litigation Capital Manag... Share Discussion Threads

[l2b] 25/7/2022 03:26

Suncorp Super class action - one of the delayed cases hit important milestone.

The resolution terms are out - agreed by both parties - awaiting CA member acceptance & court approval.

Key term: LCM to receive $15.7m (refer section 20 parts a, b & c)
- being $7.5m refund in costs plus $8.2m return
- i.e. >100% return again

CA Member acceptance due by 31-Aug and court approval 22-Sep

www.supremecourt.justice.nsw.gov.au/Documents/Class%20Actions/Suncorp%20Super%20-%20Quirk/52.19_193556-2020.07.21-Notice%20of%20Proposed%20Settlement.pdf

[waterfall city] 18/7/2022 12:52

For some context when you read Burfords last 2021 report where they reported there first ever loss solely due to court delays, Lits update showing revenue and profit growth seems a decent performance in the circumstances.

[bigbadaussiebear] 15/7/2022 10:14

Morons selling to Insiders...

I have a feeling it won't be the last time he buys either...

[robsy2] 15/7/2022 08:40

He just keeps buying significant amounts of shares. This has to be a very bullish sign. Foes anyone know him? If so, call him up and get his thoughts.

[spectoacc] 15/7/2022 08:23

"Litigation Capital Management Limited (AIM:LIT), a leading international alternative asset manager of disputes financing solutions, announces that on 14 July 2022 Jonathan Moulds, Chairman of the Company, purchased 250,000 ordinary shares in the capital of the Company ("Ordinary Shares") at a price of 87.4 pence per Ordinary Share.


Following the above purchase, Mr Moulds has an interest in 2,330,000 Ordinary Shares, which represents 1.95 per cent. of the issued share capital of the Company."

[maddox] 13/7/2022 13:11

Hi 74tom,

The case timescales to completion are inherently uncertain - and due to their value are going to have a material impact on any single period's results. Making an accurate forecast on this basis is thus virtually impossible.

So, we are likely to see significant over/under performance against Broker forecasts almost every period. Mr Market is thus likely to lurch from depression to jubilation on a regular basis.

[74tom] 08/7/2022 11:29

Last point around the tone of this mornings commentary; Cannacord had forecast gross revenues of A$100.4m as recently as 15th March, so clearly the commentary couldn’t be too upbeat. This suggests that the 2 major cases that missed the cut off are worth ~A$55m / £31m or 26p a share. So regardless of future case lengths the drop this morning was ridiculous.

[74tom] 08/7/2022 10:59

I mean 27 months is 2.25 years, 36 months is 3 years, 42 is 3.5, so cases are expected to take 33-55% longer to settle, nowhere near a doubling…

The fact your banging that drum suggests you’re trolling rather than trying to provide constructive opinion, either that or you don’t know how many months there are in a year?

[adae] 08/7/2022 10:56

"Adae 16 Jun '22 - 16:34 - 1281 of 1301
0 1 1
The director buys appear to have ended, Chairman was buying at over £1 recently."


riverman77 is spot on - a case taking 4 years rather than 2 years isn't going to make double the gain. And the delays in the court system aren't reducing, they're still increasing currently. Barrister strikes aren't helping, nor will a recession.

Doesn't make LIT a bad company - but a lot of rose-tinted glasses on here, trying to ignore the fact they've basically warned this morning.

[bigbadaussiebear] 08/7/2022 10:55

Thanks for the extra shares at 78p this morning...

[74tom] 08/7/2022 10:49

So LIT post record gross revenue & adjusted operating profit, grow AUM by 23% and have a pipeline of cases nearing settlement yet some decide to sell on a 15% drop? Honestly, why were you invested here in the first place?

Buy side order book is strengthening - 100k at 84p and 111k at 85p, nothing on the sell side at all so it wouldn’t surprise me to see it finish up. Those that sold in the 70’s have been robbed.

[riverman77] 08/7/2022 10:49

I know that delays shouldn't effect absolute returns (the return on invested capital) but IRRs are an annualised measure. If an investment takes 4 years instead of 2 years it would need to deliver a significantly higher return on invested capital in order to achieve the same IRR. I'm not sure that's the case, but happy to be corrected if you think otherwise.

The reason I am focused on this, is that a lower IRR would mean that it would take a lot longer for the company to really scale up and start generating the big profits that surely will eventually come. It's just a question of whether this happens quite quickly in (2 years) or takes longer (perhaps 5 years or longer).

[bigbaggy] 08/7/2022 10:36

They have “said” that greenknight but they haven’t shown it. Yet, at least.

[leadixon] 08/7/2022 10:34

i'm with greenknight, the AUM is going up, cases finalising merely moved to the right and as the portfolio keeps to build with active cases, over time those completing in year with go up. The IRR makes it clear that we ourselves would get these type of returns ourselves, so need patience with the share. As long as you have a diverse portfolio then you're fine, if you've stacked up on this single share for a home run you're in the wrong game.

[greenknight1] 08/7/2022 10:27

It doesn't lower the IRR. They have stated (as previously) that any case lasting longer than expected usually results in an increase in claim. Whilst duration may increase so will the IRR also.

[riverman77] 08/7/2022 10:16

Yes I fully understand that. Although slower case resolution would surely lead to lower IRRs and hence the ability of the fund to rapidly compound returns.

[johnwig] 08/7/2022 09:59

Couldn't resist a big nibble at 73p......

[greenknight1] 08/7/2022 09:54

But they haven't disappeared. The portfolio size is the true measure of value here.

[riverman77] 08/7/2022 09:53

I think the disappointment (for me at least) is that large director buys suggested that some big case wins were about to be announced. Long term I am still pretty positive on these, but feels like could be waiting a long time for anything to happen.

[greenknight1] 08/7/2022 09:34

Not sure why people are disappointed here. This beast by its very nature has lumpy revenue. This only means that we will have a period which seriously outperforms. Though people understood that about LIT.

[greenknight1] 08/7/2022 09:30

LIT have clearly stated multiple times that the case duration will increase to this level. Not sure how you missed that.

[riverman77] 08/7/2022 09:28

The big director buying certainly indicated that some positive news was to be expected here, so slightly surprised that there's nothing to cheer about, at least for the moment. As with BUR it feels like an interminable wait for anything to actually happen

Have a small position here, but debating if there's really any point in holding this as well as BUR (where I have a much bigger position). BUR is the acknowledged market leader, but not clear exactly what LIT bring to the table and they feel a bit sub-scale.

[adamb1978] 08/7/2022 09:20

Certainly need patience here, but its cheap. Will be interesting to see whether directors add more as they did around the 90p-100p level at the start of the year

[makinbuks] 08/7/2022 09:18

presentations from management around a year ago were emphasising the maturity of the portfolio and the 27 month metric. Confidence has been lost in that. So far LIT has been a consistent in over promising and under delivering. Like many i hold on for the jam tomorrow. Very disappointing