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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
|
|
|---|---|---|---|---|---|
| 1.00 | 0.87% | 116.50 | 67,540 | 16:35:25 |
| Bid Price | Offer Price | High Price | Low Price | Open Price | |
|---|---|---|---|---|---|
| 115.50 | 116.50 | 116.00 | 115.50 | 116.00 | |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| - |
| Last Trade Time | Trade Type | Trade Size | Trade Price | Currency |
|---|---|---|---|---|
| 16:35:25 | UT | 1,500 | 116.50 | GBX |
| Date | Time | Source | Headline |
|---|---|---|---|
| 08/11/2024 | 07:06 | UK RNS | Litigation Capital Management Ltd Holding(s) in Company |
| 08/11/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 07/11/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 06/11/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 05/11/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 04/11/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 01/11/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 31/10/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 30/10/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Transaction in Own Shares |
| 30/10/2024 | 07:00 | UK RNS | Litigation Capital Management Ltd Exercise of Awards |
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 |
|---|---|---|---|
| 13/11/2024 | 11:30 | A newer, freer thread but only for honest posters. | 1,527 |
| 09/10/2024 | 06:56 | :: LITIGATION CAPITAL MANAGEMENT | 1,884 |
| 07/2/2023 | 09:08 | peepol whu kant spel shudnt right hedders.... | 194 |
| 26/5/2022 | 12:54 | LIT | 167 |
| 25/5/2021 | 12:54 | 50% growth year after year after year | 46 |
| Trade Time | Trade Price | Trade Size | Trade Value | Trade Type |
|---|---|---|---|---|
| 16:35:25 | 116.50 | 1,500 | 1,747.50 | UT |
| 15:51:28 | 115.50 | 381 | 440.06 | AT |
| 15:51:28 | 115.50 | 612 | 706.86 | AT |
| 15:51:25 | 116.00 | 3,455 | 4,007.80 | AT |
| 15:51:19 | 115.98 | 500 | 579.88 | O |
| Top Posts |
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Posted at 11/11/2024 07:33 by nchanning Poland appealing jurisdiction , unlikely to succeed . I guess extra draw down on litigation finance to contest appeal , and extra time mean a larger MOIC for LIT |
Posted at 22/10/2024 09:51 by makinbuks Gallamar, the buy back is totally ineffective. LIT does not have surplus capital and therefore should not be seeking to return cash to shareholders. It is a misguided attempt to support the share price. Different if they win some big cases, pay off the debt and genuinely have cash left over in excess of their commitments re fund 2 and their plans for fund 3 and a USA expansion. They are doing buybacks only because they are pressured to by their expensive London advisors |
Posted at 23/9/2024 14:26 by maddox Hi NChanning,Yep that's the way I see it and if we're able self-fund the 25% commitments, avoiding expensive debt, then we'll be growing the profitability very nicely as the overheads decline as a proportion of revenue. There is no escaping the variability in financial reporting - driven by case conclusion timing - so share price volatility is a given. It would be good to see this addressed by an explicit policy on buy-backs to discourage too deep a discount to NAV. I'd also like to see a return to case conclusion reporting. This newsflow was a great shop window into the business model performance and maintaining shareholder interest. Regards Maddox |
Posted at 15/8/2024 12:19 by williamcooper104 Boris and Liz have their share of blame But LITs share price is around where was before it weakened its balance sheet with buybacks (that's from memory; I'll stand corrected if anyone looks closely at it) As I said when they announced it, they risked increasing their cost of equity by increasing leverage negating the benefits of reducing the share count I was out at just over 100p, looking to re-start a position |
Posted at 08/6/2024 11:11 by mtioc I read the Zeus note.Anything that raises LITs profile and explains an unusual business to a wider audience should be welcome. Robin Savage is an experienced analyst who has been at Zeus since 2015 and was formerly at Canaccord (LIT’s current broker). Given that, I was a bit disappointed. Most of the note, if you are being polite, was a “representatio Zeus positions LIT as an emerging fund management business that should be valued on a NAV rather than earnings basis. As the company can control the quality of its assets, but not the timing of realization, I suspect this is correct in theory, but most will always look at the earnings too. Initially, I was confused by the “algebraically For me, the new or interesting bits were: • Commitments: 2023-£140m, 24-£150m, 25-£167m and 26-£173m • Realizations: 2023-70, 24 – 40, 25 – 33 and 26 – 42 • Tax rate: 25% versus 10% for Guernsey listed Burford • First North American investment (suspect Canada) I agree with Citiwolf: the assumptions seem very conservative or pedestrian. I wonder if these were sense checked with the company. All recent company presentations have anticipated a significantly increased deployment rate over the next few years. The potential tax rate gain from moving offshore is far more material than shaving a few basis points off of a low debt quantum. The analyst was a bit disparaging about the LCM balance sheet business, but appeared to fail to realize that it funds all the admin costs because the funds do not have a management fee. As CW points out (and is noted in the note), the legacy assets held at cost are not valued. The analyst did not comment on the fund management quality of earnings where it is all derived from enhanced performance rather than management or other fees. The analyst also did not appear to appreciate the uniqueness of a successful litigation operation/franchise. These take longer and cost more to build than most other private capital businesses (e.g. you could create a profitable private credit fund in year but would take at least five to create a profitable litigation funder). Overall, while helpful, it could have been much better. Like others, I suspect we will need to wait a while for the share price to reflect underlying value. |
Posted at 03/6/2024 20:14 by citywolf1 Only had a fairly quick read so far but the forecast/valuation section is garbage imv. LIT reported net income of 34.6m and 31.5m for the two previous financial years. This report forecasts net income for the next three FY periods to be 12m (FY24), 16.6m (FY25) and 24.4m (FY26).Well if those numbers prove to be accurate you may as well sell up now because this share is be going nowhere. Fortunately I think it is nonsense. Just do the maths... LIT has 229m of balance sheet/coinvest commitments and 119m of these are in cases that are already over 2 years old. Of these, 40m are held at cost and the rest are valued at c.2x. You would expect all those older cases to realise sometime in the next 3 periods which if historical performance is anything to go by the direct cases should be producing c.2.5-3x moic and the coinvest cases 4-6x moic with performance fees. The cashflows should be be very significant and far higher than they have assumed in their cashflow forecasts. Ironicly most of the share price returns they assume (see robsy2 post below) are driven by a multiple re-rating assumption. They seem to have missed the point that the shares are unlikely to re-rate if profits are falling per their forecasts |
Posted at 03/4/2024 08:03 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 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 07:41 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 12:55 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." |
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