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Burford Capital says lower balance sheet gains to weigh on profit; new commitments rise to record

By BFN News | 09:10 AM | Monday 03 February, 2020


Burford Capital reported that new fund commitments rose to a record in 2019, led by 'strong' demand for its offerings in the litigation finance space. But the company also warned that lower balance gains would hurt annual profit. New commitments rose 34% to $1.6bn in 2019 on-year, with commitments in its core litigation finance business growing 30% to $854m. Commitments in its asset recovery business increased 43% to $89m, reflecting the 'growing prominence of that business and the high demand for asset recovery solutions globally among corporate clients,' the company said. 'Balance sheet net realised gains and unrealised gains for 2019 are expected to be lower than in 2018,' the company said. 'While this will have an impact on net income and profit for 2019, Burford's policy is to manage litigation outcomes for optimal shareholder value rather than to its financial year end.' 'This approach has already been vindicated with January 2020 seeing litigation successes that would trigger unrealised gains and, if ultimately affirmed and paid, would generate more than $150m in profits across the Group and more than $100m in balance sheet profits from a single month's activity, it added. 'Had January's events occurred in December, Burford's 2019 results would have been materially higher as Burford would have been obliged to take a meaningful portion of those future expected profits into income immediately.' At 9:10am: (LON:BUR) Burford Capital Ltd share price was -10.75p at 619.75p Story provided by StockMarketWire.com

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