Listed litigation funder Burford Capital has restored its dividend to pre-pandemic levels, following a ‘record’ year for its portfolio.
According to figures for the year ended 31 December 2020, the group saw asset realisations reach $608m, 72% higher than the previous year. Across the group, cash receipts rose to $1bn, with $519m generated by Burford-only. The funder described the figures as ‘robust’.
Operating profit dipped by 6% to $249m, however, reflecting ‘modestly higher general operating expenses’ together with the cost of managing funds where performance fees are expected to be earned in the future. Profit after tax fell from $212m in 2019 to $172m.
The funder has now restored its dividend to its pre-pandemic level of 12.5c per share. Subject to shareholder approval, a full dividend will be paid in June, despite the fact that an interim dividend was not paid in December 2020.
Sir Peter Middleton, chairman, said: ‘2020 was historic for both the scale of the global economic downturn as well as Burford’s record $337 million of realizations on its balance sheet from its core litigation finance portfolio.
‘Additionally, the board continued to implement its plan to evolve Burford’s corporate governance, appointing three highly skilled independent non-executive directors, including our first female board member. In October, we successfully added a New York Stock Exchange listing to the pre-existing London Stock Exchange quotation of our shares and bonds. On my retirement at our 2021 AGM, Steve Wilson will become chairman, in line with the company’s plan.’
In October, Burford reported that Covid-19 had hit profits in the first half of 2020, with profit before tax down 15% to £198m. Turnover fell by 12% to £218m in the same period.
The first lockdown also had a major impact on new business in the first half of 2020, with group-wide commitments down 74% to around £152m. However, the company said the litigation environment has ‘stabilised and pipeline is rebuilding’, with an expected surge in the volume of claims arising from the pandemic in the years to come.
Burford shares on the London Stock Exchange rose 1% to 602p on the announcement.