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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Litigation Capital Management Limited | LIT | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| -0.50 | -0.43% | 117.00 | 16:35:25 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 116.50 | 116.50 | 118.00 | 117.00 | 117.50 |
| Industry Sector |
|---|
| GENERAL FINANCIAL |
| Top Posts |
|---|
Posted at 03/4/2024 10:26 by mtioc Makinbuks/GallamarThanks. Agree, nub is FV and associated risks. I also question LCM's ability to deploy more capital at same historical returns. My forecasts are for lower returns. In fund II LCM currently deploying at $8m/commitment. At that level will have over 40 commitments versus 20 in fund I. They will need to do something different (unit size, case type, geography etc..). That said, as an investor you need to value the business. In my case, if I believe it is conservatively valued at £2.50 per share, but due to risk of error, FV risk or uncertainty, I may choose a 40% margin of safety, which would suggest buying up to £1.50. My point is the company could be more helpful re investors reaching those conclusions. [G. not sure I follow your valuation approach.] Note win rate point, but if there are proper forecasts, that is simply a variable that could be flexed (e.g. low, med and high cases). Not sure LCM returns are as reliant on others for a few cases. See p9 of latest presentation for return distributions. CEO trying to steer investors away from case news. With 53 investments and growing, it is a better appreciation of overall portfolio that will drive value rather than news flow. On capital allocation, the amounts are small and the company is clear they are "market signals" rather than genuine capital allocation decisions. That said, if you have the internal investment opportunities that LCM does, you should be clear why you are preferring others such as buying your own shares or dividends. Again, I question the lack of explanation rather than the decision. |
Posted at 03/4/2024 09:03 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 20/3/2024 14:06 by solonic Apparently Investors Chronicle has come up with a very supportive note. Anybody know what they're saying? |
Posted at 20/3/2024 11:32 by gallamar Will do.I want to clarify that really lit is a compounding story. 3rd party funds are a game changer giving 4x diversification and 2x returns. If the presentation can make investors look more forward i think it is powerful. I will also note the buy back benefits. 1. Stops people selling us down. They play with other stocks without buy back. 2. That we can use the buy back to really indicate the confidence of future nav. I think we really have 3 navs. 1. Spot nav. 90p and think about items at cost being moic of 2. So 108 2. View current portfolio as if completes. So looking at moic on investment in own investments and funds 3. Have investors consider when we are transforming to say 90% vs 50% today. The story should be of expecting 4x multiple on 90% of our reinvested funds |
Posted at 19/3/2024 19:11 by gallamar I am going to speak to patrick and mary later this week.They should have strongly pointed out. 1. Nav is 90p. 2. Within this maybe 18p is held at historical cost They should have encouraged investors to consider this in light of historical metrics. At 2x. Nav is 108 =90+ 18. This is a key key point Also half of our investment is in own investmens. We need to invite the shareholder to see these will roll off soon and think about a NAV under 3rd party funding. The whole power of 3rd party funds needs to be a central theme throughout the presentation. 1. Diversifying 2. Getting double return for same risk. 3. Our ability to do it where others cannot. 4. The operational leverage it will bring Basically link the dots more |
Posted at 19/3/2024 12:45 by mtioc Good presentation this morning, which I am sure will be on the website.Interesting market size/potential discussion, which I had not seen previously and is difficult to get for a nascent market. Robust justification of share buyback as materially below “intrinsic value”. First, current NAV per share of c. 90 pence which values existing investments at 2.0x rather than historic 2.8x realised (this reflects maturity profile etc..). Second, c. $220m of current commitments will drive NAV. Lastly, benefit of third-party funds not fully reflected. Current average fund investment delivers 4x to LCM due to performance fees on top of investment. In other words, current share price does not give value to historical returns for current investments, any value for undrawn commitments, material “embedded̶ Discussion on fair value. Apparently, c. $40m of current NAV is performance fees. This is a mechanical result: if one of 53 investments if valued at X then fee would be Y. Various cases mentioned, but emphasis on looking at portfolio. Management recognise news flow point, but consider in context of materiality. Apparently, they are considering a podcast. I am sure “The Rest is Litigation Finance” will be a winner. |
Posted at 27/9/2023 19:43 by someuwin Shares Investor Evening - Edinburgh - LIVE EVENTWednesday 25 October 2023 Come and join Shares and AJ Bell Media at their Edinburgh Investor Evening on Wednesday 25 October 2023 at the Radisson Blu Hotel, located in the heart of the historic Royal Mile. Our Edinburgh Live evening event provides an opportunity for Board Directors to make presentations and talk about their company's business plans to existing & potential new investors. During the event and afterwards over drinks and food, attendees will have the chance to get to know the companies better by talking one on one with the company directors. Companies presenting: Cohort (AIM: CHRT) is the parent company of six innovative, agile and responsive defence technology businesses providing a wide range of services and products for UK and international customers. It has headquarters in Reading, Berkshire and employs in total over 1,100 core staff there and at its other operating company sites across the UK, Germany, and Portugal. Cohort was admitted to London's Alternative Investment Market in March 2006. Custodian Property Income REIT (CREI) offers investors the opportunity to access a diversified portfolio of UK commercial real estate through a closed-ended fund that seeks to provide an attractive level of income and the potential for capital growth. Litigation Capital Management Limited (LIT) Established in 1998, we have assisted hundreds of companies and individuals in achieving significant recoveries from claims that, without us, would not have been pursued due to the associated costs and risks. LCM is one of the leading disputes funders globally, operating in a number of geographies. |
Posted at 21/9/2023 13:55 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." |
Posted at 19/9/2023 09:12 by someuwin Webinar at 11.00"As part of its commitment to engaging equally with all investors, LCM will also be hosting a webinar for investors at 11 a.m. BST on 19 September. If you would like to attend this presentation, please register using the following link: The presentation is open to all existing and potential shareholders. Investors who already follow LCM on the Investor Meet Company platform will automatically be invited." |
Posted at 30/8/2023 07:07 by someuwin 30 August 2023Litigation Capital Management Limited ("LCM" or the "Company") Notice of Results Litigation Capital Management Limited (AIM:LIT), an alternative asset manager specialising in dispute financing solutions internationally, will announce its results for the full year ended 30 June 2023 on Tuesday, 19 September 2023. A webinar presentation for analysts will take place at 9:30 a.m. BST on the day. Analysts wishing to attend should contact lcm@tavistock.co.uk to register. As part of its commitment to engaging equally with all investors, LCM will also be hosting a webinar for investors at 11 a.m. BST on 19 September. If you would like to attend this presentation, please register using the following link: The presentation is open to all existing and potential shareholders. Investors who already follow LCM on the Investor Meet Company platform will automatically be invited. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9am the day before the meeting or at any time during the event. |
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