Burford Capital(US:BUR)2023-09-13 17:59Financial Data and Key Metrics Changes - The company reported earnings of $1.07 in the first half of 2023, with a book value per share of $8.87, indicating strong financial performance [9] - Cash receipts for the first half of 2023 reached $247 million, significantly higher than $99 million for the same period last year [43] - Burford-only capital provision assets exceeded $3 billion, marking the highest level in the company's history, with an equity position just shy of $2 billion [11] Business Line Data and Key Metrics Changes - Capital provision income increased considerably in the first half of 2023 compared to the same period in 2022, approaching double the previous year's figures [31][67] - The company achieved record levels of trailing 12-month realizations at $475 million, reflecting a larger portfolio generating more cash realizations [35] - The asset management business saw cash receipts double year-to-date compared to the previous year, reaching $23 million [42] Market Data and Key Metrics Changes - The company noted a significant increase in new business activity, with over $1 billion of new business in both the previous two years and more than $0.5 billion in the first half of 2023 [46] - The portfolio size has grown to $7 billion, indicating a strong market position and potential for future revenue generation [25][72] Company Strategy and Development Direction - The company is optimistic about the potential of AI to improve business efficiency and open new opportunities, having been active in this area for years [7][8] - The management emphasized the importance of maintaining a strong cash basis for operations rather than focusing solely on accounting metrics, indicating a long-term strategic approach [47][73] - The company aims to leverage its expertise in litigation finance to continue expanding its market presence and capitalize on the evolving legal industry [76] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges of litigation, emphasizing that it often takes longer and costs more than expected, but expressed confidence in the company's ability to navigate these challenges [6][19] - The company is positioned well within the competitive landscape, with management noting that competitors have faced headwinds, allowing Burford to maintain its market leadership [90][106] - The management expressed excitement about the future, highlighting the significant growth potential in the legal finance industry [75][111] Other Important Information - The SEC has completed its review of the company with no further comments, indicating a positive regulatory environment [27] - The company redeemed its 2024 issuance right after the quarter-end, maintaining strong leverage levels well below covenant limits [44] Q&A Session Summary Question: What was the outcome of the exercise to check the percentage of shares held by U.S. shareholders? - The percentage of U.S. shareholders is in the high 40s, just under 50%, meaning the company will remain a foreign private issuer for fiscal 2023 [51][78] Question: Are you seeing any changes in competition and pricing? - The competitive dynamic remains stable, with no significant changes noted. The company continues to compete effectively without sacrificing quality or return levels [84][90] Question: What is the impact of the YPF ruling on the company's competitive position? - The YPF ruling has enhanced the company's brand recognition and competitive position, leading to increased interest from corporate clients [111] Question: Can you discuss the collectability leverage from a sovereign nation like Argentina? - The company refrained from discussing specifics on collectability, emphasizing that such details could be detrimental to shareholder interests [116][122]