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Burford Capital Reports First Quarter 2023 Financial Results

Burford Capital Limited (“Burford”), the leading global finance and asset management firm focused on law, today announces its unaudited financial results at and for the three months ended March 31, 2023 (“1Q23”).1 Burford’s report on Form 6-K for 1Q23, including unaudited condensed consolidated financial statements (the “1Q23 Quarterly Report”), is available on the Burford Capital website at http://investors.burfordcapital.com.

Christopher Bogart, Chief Executive Officer of Burford Capital, commented:

“We saw continued positive momentum in the first quarter of 2023 in the progression of our portfolio as court activity and legal processes further normalized in the aftermath of the Covid-19 pandemic. The breadth of the case activity pick-up was reflected in capital provision income, excluding our YPF-related assets, more than doubling to $185 million compared to 1Q22, comprising almost a sixfold increase in realized gains and 41% growth in unrealized gains. Fair value gains arising from the favorable summary judgment ruling in our YPF-related assets contributed to an extraordinary first quarter for total revenues, driving growth in capital provision income of 238% to reach nearly $500 million. As an indicator of ongoing portfolio activity, an additional 12 case milestones have occurred since our May 16 update when we had observed 28 milestones and expected 61 more through the remainder of the year.”

1 All 1Q23 figures in this announcement are unaudited and presented on a consolidated basis in accordance with the generally accepted accounting principles in the United States (“US GAAP”), unless otherwise stated. Definitions, reconciliations and information additional to those set forth in this announcement are available on the Burford Capital website and in the 1Q23 Quarterly Report (as defined above). In addition, Burford applied its revised valuation methodology for capital provision assets to its unaudited condensed consolidated financial statements at March 31, 2023 and for the three months ended March 31, 2023 and 2022 included in this announcement. As Burford has not previously issued quarterly financial statements, its unaudited condensed consolidated financial statements for the three months ended March 31, 2022 are not technically restated.

1Q23 highlights

New business

Group-wide new business

  • New commitments of $165 million, up 102% compared to 1Q22 (1Q22: $82 million)
  • Deployments of $129 million, up 1% compared to 1Q22 (1Q22: $128 million)

Burford-only capital provision-direct assets, representing assets capable of generating highest profits for our equity shareholders

  • New commitments of $101 million, up 130% compared to 1Q22 (1Q22: $44 million)
  • Deployments of $67 million, up 29% compared to 1Q22 (1Q22: $52 million)

Portfolio and liquidity

  • Group-wide portfolio grew to $6.6 billion at March 31, 2023 (December 31, 2022: $6.1 billion), due to significant fair value gains but also new deployments and undrawn commitments
  • Broad pick-up in portfolio activity, with capital provision income, excluding the YPF-related assets, more than doubling to $185 million compared to 1Q22
    • 464% increase in realized gains and 41% increase in unrealized gains compared to 1Q22
  • Fair value gains arising from the favorable summary judgment ruling in the YPF-related assets contributed to an extraordinary first quarter for total revenues
    • Burford-only carrying value of the YPF-related assets (both Petersen and Eton Park) increased to $1.0 billion at March 31, 2023 (December 31, 2022: $823 million)
  • Cumulative ROIC since inception from Burford-only capital provision-direct assets of 89% (December 31, 2022: 88%) and IRR of 29% (December 31, 2022: 29%)
  • Burford-only cash receipts of $97 million, up 66% compared to 1Q22 (1Q22: $59 million)
  • Burford-only cash and cash equivalents and marketable securities of $183 million at March 31, 2023 (December 31, 2022: $210 million)
    • Due from settlement of capital provision assets decreased 14% to $99 million at March 31, 2023 (December 31, 2022: $115 million, of which 17% was collected in cash in 1Q23)

Income

  • Total revenues increased 209% to $381 million (1Q22: $123 million), represented by a higher level of case activity and portfolio progression, including $192 million of fair value gains, net of third-party interests, in the YPF-related assets and $185 million of capital provision income excluding the YPF-related assets
  • Burford-only capital provision-direct realizations of $64 million (1Q22: $21 million) and realized gains of $36 million (1Q22: $10 million), with a single matter generating a realized gain of $27 million
  • Burford-only annualized capital provision-direct realized loss rate of 0.9% of average portfolio at cost in 1Q23 (2022: 1.0%)
  • Operating income increased 252% to $327 million (1Q22: $93 million), with significant growth in capital provision income compared to 1Q22, partially offset by third-party interests in the YPF-related assets fair value adjustments and higher total operating expenses due to increases in non-cash accruals in light of the positive performance of Burford’s share price, the increase in the carrying value of the YPF-related assets and the increase in the carrying value of a legacy asset recovery matter
  • Net income attributable to Burford Capital Limited shareholders increased 361% to $259 million (1Q22: $56 million)

Net income per ordinary and diluted share of $1.17 (1Q22: $0.25)

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