Listed funder Litigation Capital Management (LCM) today announced a 17% drop in profit before tax last year, though it pointed to ‘higher-quality applications’ for finance and growth in its asset management business.

The AIM-listed company said statutory profit before tax for the year ending 30 June 2022 was A$10.7m (£6.3m) inclusive of third-party interests, down from A$12.9m (£7.6m) in the last 12 months. The figure was A$12.9m exclusive of third-party interests, down from A$13.1m (£7.7m).

LCM also said that applications fell by 23% to 442 last year but that ‘commitments remained stable’, with $104m (£91m) of commitments last year compared to $109m (£95.3m) in the previous year.

‘This generally indicates that the quality of applications is beginning to improve, which is pleasing given it is one of LCM’s longer-term strategic objectives,’ the company told the stock market. ‘In terms of application numbers and commitments generally, we were very pleased to achieve that result given the level of disruption to our normal business practices during the financial period.’

LCM – which has offices in London, Australia and Singapore – said its assets under management grew by 23% from A$336m (£197m) to A$414m (£242.8m) last year, which has increased to A$452m (£265.1m) by the end of August.

The company said its asset management business is ‘the key part of the future of LCM given it allows us to leverage our capital extremely effectively and build scale’.

LCM also noted that its chief executive Patrick Moloney relocated to London in the fourth quarter of 2021 to capitalise on ‘the significant opportunities presented by the UK market and continental Europe’.

‘The combination of a stronger London-based presence and a strong [Asia and Pacific] presence positions the company well for further market developments as litigation finance becomes much more widely accepted not just as a litigation tool but one of appropriate risk management,’ it added.

Moloney said: ‘Reflecting on the past year navigating the impacts of Covid-related restrictions, I am delighted with the growth achieved and particularly with the significant progress in our asset management business and total assets under management now at A$452m.

‘With our core executive team now based in the London office, much greater access to capital and market conditions which are most conducive to increasing demand for disputes funding, we are exceptionally well placed for the year ahead.’

LCM’s shares dipped from yesterday’s close of 74.30p to just above 70p in this morning’s trading, before recovering to 72p by 1pm.