Listed litigation funder Burford Capital today reported a $72m (£55m) loss for 2021 – the first in its history – but the US-based business said it nonetheless had an ‘excellent’ year with group-wide new commitments of $1.1bn (£840m).
Net loss attributable to ordinary shares in the year to 31 December 2021 was $72m, down from profit of $165m the previous year, but within the net loss of $70m-$80m forecast last month. Total turnover also dropped from $359m in 2020 to $152m, which the company said reflects ‘slow case progress, in part due to Covid-linked disruption’.
Income from operations was also significantly down, from $239m to $6m, but the funder was bullish and pointed to ‘record-breaking’ levels of new business in 2021 which saw new commitments of $1.1bn – up from $758m – and deployments of $841m, an increase from $595m the previous year. Burford also announced a ‘total annual dividend of 12.5c per share’ which is payable in June, subject to shareholder approval.
Chairman Hugh Steven Wilson accepted it ‘may seem odd’ to say the funder had an ‘excellent’ year, but said that it is ‘a matter of timing’. He said: ‘We wrote significant new core legal finance business in 2021. Even in an era of slower case progress, we generated significantly more cash than needed to cover all of our expenses.’
Wilson added that ‘Burford ended the year with substantial liquidity and strong access to capital’ and pointed to yesterday’s announcement of a new $360m private fund, which will focus on ‘lower risk, lower return pre-settlement litigation investments’.
Christopher Bogart, Burford’s chief executive officer, said: ‘To write more than $1bn of new commitments during a pandemic is a significant achievement.’ He added: ‘Though it was a slower year for realized gains, contributing to our 2021 loss, there were few adverse developments to cause either realized or unrealized losses and the portfolio remains well positioned.
‘The slow pace we are experiencing is a timing issue, not one affecting our view of the ultimate realizable value of the portfolio and its potential to create significant shareholder value, and no client has discontinued a single matter due to these delays. We are optimistic about the portfolio’s future potential.’
Shares in Burford Capital on the London AIM market slipped 3% to 719.50p on the news, before recovering to 726p.
This article is now closed for comment.