• Net Income: $136 million for the second quarter, resulting in $0.61 per share.
• Capital Provision Assets: Over $3.6 billion, with non-YPF assets representing approximately $2.2 billion.
• Book Value Per Share: Over $11; Tangible Book Value just shy of $10.5.
• Net Realized and Unrealized Gains: Up 200% quarter over quarter and 17% year-to-date.
• Cash Receipts: Record of $310 million for the most recent quarter.
• Direct Realizations: $380 million, representing a 39% increase over the same period last year.
• New Commitments: Approximately $450 million year-to-date, consistent with previous years.
• Operating Expenses: Down 25% versus the same period last year.
• Cash and Securities: $629 million at the end of the third quarter.
• Leverage Levels: 0.8 times, well below any covenants and the stated maximum of 1.25 times.

• Warning! GuruFocus has detected 3 Warning Sign with BUR.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Burford Capital Ltd (NYSE:BUR) reported a strong third quarter with realizations more than doubling compared to the previous year.
• Net realized gains almost doubled, and the company brought in significant cash during the quarter.
• New commitments increased more than five times over the comparative period, indicating robust business activity.
• The company has brought in over half a billion dollars in cash year-to-date, contributing to meaningful liquidity.
• Burford's portfolio continues to produce substantial cash, with direct realizations increasing by 39% over the same period last year.

Negative Points

• The third quarter is typically slow due to the summer, which can impact new business as courts and lawyers are often less active.
• The YPF case remains a complex and ongoing litigation, with uncertainties around the timing and outcome of appeals and enforcement.
• The DOJ's recent filing against Burford's motion to seize Argentina's YPF shares adds complexity to the enforcement strategy.
• Operating expenses are down 25% year-over-year, but this is partly due to variations in unrealized gains and other accounting items.
• The company's leverage levels, while below covenants, require careful management as they prepare for upcoming debt maturities.

Q & A Highlights

Q: Has Argentina indicated that they're not willing to come to the table until the appeal is fully adjudicated? A: Christopher Bogart, CEO: We are constrained in discussing our discussions with Argentina. However, logically, it's unlikely that the government would resolve the case while active litigation is ongoing. The focus is on positioning ourselves well for when the litigation process concludes.

Q: When do you expect the oral arguments for the YPF case to be scheduled? A: Christopher Bogart, CEO: We don't have a date yet. The case was fully briefed by the end of August, making it eligible for oral argument. We expect it to be scheduled either later this year or early next year.

Q: Can you provide insights into the recent environment for deployments and new opportunities in your core business? A: Christopher Bogart, CEO: We engage in new business that may result in immediate or gradual deployments. We have $775 million in definitive commitments, expected to deploy over time. The business continues to deploy capital, and we maintain a fair amount of cash to meet these commitments.

Q: Could you discuss the competitive environment and new client wins in your core business? A: Christopher Bogart, CEO: The competitive environment remains robust. We are busy with a comparable amount of business, if not more, in terms of the number of investments. Activity is notable in antitrust, competition, and intellectual property spaces, driven by regulatory actions and client needs.

Q: Are there any regulatory or legislative changes that might affect litigation finance? A: Christopher Bogart, CEO: In the US, there's some pressure regarding disclosure of litigation funders, but no concerning regulatory activity. In the UK, a legislative fix is expected for a Supreme Court decision affecting litigation funding. In Europe, positive developments include directives facilitating group actions, which create opportunities for litigation finance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.