Litigation Capital Manag... Share Discussion Threads

[tomps2] 18/3/2022 11:02

Litigation Capital Management (LIT) Half Year 2022 presentation

LCM’s CEO, Patrick Moloney and CFO, Mary Gangemi present the interim results for the period ended 31 December 2021, followed by Q&A.

Watch the video here:

Or listen to the podcast here:

[jackson83] 16/3/2022 17:52

looks like a lot cashed in after the good results on the spike to 113p's I dumped some at 111p and will wait to get back in after the expected selloff this week / next ...


possible 90p's top up as some are shorting this lol ....


keep selling / shorting as I require your cheap shares .. 80p I'm all in

never say never as no new news now

[bigbadaussiebear] 16/3/2022 10:26

Yep.. They are doing their best to spell it out for investors...

But unfortunately people are missing it..

Patrick was very clear that the sacking of Nick hasn't affected the business or its operations.

Getting very close to some significant cases harvesting...

[greenknight1] 16/3/2022 10:04

Investor presentation very good. It was recorded so I would recommend a watch.

[bigbadaussiebear] 16/3/2022 08:21

Man the register has become very tight... And I'm guessing all that volume yesterday gone to sticky hands...

Barely even traded today in 20 mins.. Day after results...

Pay up folks... This is going higher

[greenknight1] 15/3/2022 21:16

Investors webinar tomorrow morning

[enronhubbard] 15/3/2022 18:29

Anyone willing to paste the text of the Investors Chronicle article?

[greenknight1] 15/3/2022 17:34

Canaccord's litigation revenue estimates (A$100mn and $137mn for the 2021-22 and 2022-23 financial years, respectively). Big targets. I'd be over the moon with A$100mn this year!!

[knightlight] 15/3/2022 17:27

https://www.investorschronicle.co.uk/ideas/2022/03/15/primed-for-explosive-earnings-growth/

[bigbadaussiebear] 15/3/2022 14:22

Once the market has a sniff of the leverage from the funds management business coming through this stock is going to move very quickly..

I'll do some quick maths for you that haven't.

On the balance sheet model if LIT invested $10m in a case and made 150% ROI they make $15m gross profit

With the funds management model they can co invest that $10m at a rate of 1:4 which means they can leverage to $40m

Lets say that $40m gets the same return of 150% roic

So LIT get the $15m gross profit from their co investment + 30% performance fee of $9m

So they make $24m gross profit under the funds management model compared to $15m under the legacy model.

[williamcooper104] 15/3/2022 12:56

Bit silly to pay a divi given the cost of their debt (from memory it's low double digit)

[johnwig] 15/3/2022 11:14

I like the neutral tone when he deals with the vice-chairman's departure, but shows the strength going forward:

"In December 2021, I completed my relocation to London in a strategic move originally planned for 2020, in order to manage LCM's growth from our London office. This has brought our core executive team in one location, with LCM's CEO and CFO now both operating from our London office.

In December 2021, we also announced the departure of Nick Rowles-Davies from the business. From this point, I have been working with the investment managers at our London headquarters. Origination from the London office remains strong and our ability to capitalise on the pipeline ahead is unchanged."

P.S. I hope the English weather doesn't get him down. He is pretty impressive.

[bigbadaussiebear] 15/3/2022 10:49

Lots of cases about to be won soon...

Three direct investments resolved intra period with judgments awaiting payment or resolution of appeals.
Revenue yet to be recognised
 Four direct investments have had final hearings and are awaiting judgment or award
 Four direct investments have or are expecting final hearing dates scheduled before the end of 2022
 Six Fund I investments have final hearing dates scheduled before the end of 2022
 Two Fund I investments have had the final hearing and are awaiting an award

[hpcg] 15/3/2022 10:49

johnwig - yes, me too on that front, though I was able to increase substantially in that time so swings and roundabouts. I don't think they'll hit my revenue target of A$66m to be a year behind, but assuming they top A$50m as stated in the tax asset rate assessment then its closer to 18 months than 2 years. Costs are well under control. I have a nominal zero value for the asst management business still, which is crazy, but then I don't know how to value.

[djderry] 15/3/2022 10:38

Happy enough with the results.Granted,they are lumpy and that's the nature of litigation finance.With offices in lockdown,it was bound to have an impact.The language around the dismissal of NRD is cautious.There could well be a high profile case that is not in anyone's interests.
As I've often said,the number of applications should not be taken as a proxy for profits,it's the quality of them and the underwriting process that matters.
A minnow compared to Burford,which is my largest by far holding,but as Burford's average case size is over $20 million,I look to LCM to fish around in the lower part of the pond.
Also,it was the first time I heard about the U shape of investments,that more gets spent at the start ( which one would expect) and at the end,which is new to me.

[harijan] 15/3/2022 10:37

I continue to think it's a much better bet than BUR which is still beset by reputational problems and the Argie mess.

Our man dealt with his potential city slicker problem quickly and effectively. That's why the Aussies beat us at cricket, LOL!

[johnwig] 15/3/2022 10:27

Broadly speaking: steady as she goes. I suppose it was naive to think that bloody Covid would not affect the business. I'm not selling.

[bigbadaussiebear] 15/3/2022 09:36

The market is not valuing the asset management business which is about to start providing huge leverage through performance fees.

The business is still trading at similar market cap vs book value as it has during its listed life...

Collin St asset management understand the opportunity

When they are getting such huge returns on their capital it makes sense to aggressively re invest while scaling the business.

What you will see now going forward is revenue and profits increase rapidly while operating costs remain fixed..

[adamb1978] 15/3/2022 09:20

Agreed about a dividend greenknight. It can be relatively notional - 0.5% yield or something - but it would help funds invest given that some are not able to invest in zero yielding companies

[greenknight1] 15/3/2022 09:17

I think it will be a long time before they stop increasing the amount of capital invested - just look at BUR and the figures they invest. That said I would like to see a very conservative dividend reinstated at some point.

[greenknight1] 15/3/2022 09:15

https://www.lcmfinance.com/wp-content/uploads/2022/03/HY22-Interim-Results-Presentation.pdf

[adamb1978] 15/3/2022 09:06

Relative to what has happened to markets in recent months, LIT share price has outperformed in a large way.

That said, I do wonder what they need to do to get it moving more. At some point in the future when they're not increasing the amount of capital which they're investing in cases, they might need to start buying back shares

[bigbadaussiebear] 15/3/2022 08:29

I reckon Collin St fund is sitting on the bid mopping up loose stock..

[bigbadaussiebear] 15/3/2022 08:08

Added a few more

This stock is just a wealth transfer from impatient to patient.

[adamb1978] 15/3/2022 08:06

Results at a first glance look fine. Given what markets are like at the moment though, that doesnt necessarily mean much for where the share price might head today though