Litigation Capital Management Limited (AIM:LIT), a leading international alternative asset manager of disputes financing solutions, is pleased to announce its unaudited interim results for the half year ended 31 December 2021, delivering a significant improvement on the prior year.
Operations
| · | US$150m Global Alternative Returns Fund (“GAR”), now fully committed and achieved within the two year mandated commitment period |
| · | Completed US$200m first close of second Fund – Global Alternative Returns Fund II (“Fund II”) with targeted close of US$300m well progressed and expected to complete during FYH2 |
| · | Resolution of previously announced direct investment delivered strong returns with a ROIC of 261% and IRR of 199%1 |
| · | Portfolio of direct investments well progressed with three investments resolved and awaiting payment or resolution of appeals, four direct investments had final hearings and are awaiting judgment and four direct investments have or expect hearing dates scheduled before end of 2022 |
KPIs
| Total assets under management increased to A$343m at 31 December 2021 and A$386m by 8 March 2022 | |
| 196 applications received during the period vs 266 in H121. A further 89 applications received in the two month period to 28 February 2022, demonstrates an acceleration in momentum and return to normal operating conditions | |
| Investment commitments of A$25m during the period, down on the prior period commitment of A$67m which was skewed by a large construction portfolio investment which was consequently scaled down due to a sale and change in ownership of the funded party | |
| Total invested capital during the period was A$31.5m vs A$39.7m in H121 | |
| Improved performance – cumulative 162% ROIC and IRR of 79% over the past 10 and a half years (inclusive of third party unless otherwise stated) |
Financials
| Gross profit of A$13.9m (H121: A$5.4m) | |
| Adjusted profit before tax A$7.5m (H121: A$0.2m loss) | |
| Statutory profit before tax of A$4.0m (H121: A$1.4m loss) | |
| Cash of A$43.5m at 31 December 2021 (A$30.3m exclusive of third party interests) | |
| Cash receipts from the completion of litigation investments of A$20.6m, up 94% on the prior year* | |
| Total equity of A$94.3m* | |
| *exclusive of third party fund consolidation |
Post period events and outlook
| · | Mary Gangemi, CFO, appointed to the Board bringing extensive and valuable experience |
| · | LCM continues to build out the platform and extend both its own balance sheet commitments and fund management business. |
metrics based on final AUD cashflows
Commenting on the results, Patrick Moloney, CEO of Litigation Capital Management, said: “We have achieved great progress during the period despite disruption as a result of COVID-19 lockdowns and unprecedented restrictions in the areas we operate.
“I am pleased with the progress in our Fund Management business, which is now well established, with our first US$150m Fund now fully committed and the US$200m first close of Fund II with a final close target of US$300m by the period end. Equally, our portfolio of direct investments has performed well given the difficult external circumstances impacting our industry, with a number of ongoing investments resolved and awaiting payment, or awaiting judgment in the second half.
“As conditions normalise and with the core executive team now in place in our London office, LCM is now in a stronger position to grow both divisions, enabling us to access greater amounts of capital and facilitate the expansion of our portfolio of investments. The countercyclical nature of our industry suggests that economic and market conditions at present, represent a growing opportunity for the Company which will be realised over the long-term. We look to the second half and beyond with optimism and confidence.”
An overview of the interim results from Patrick Moloney, CEO is available to view on this link: https://bit.ly/LIT_H122_overview_video.
The accompanying results presentation is available on LCM’s website:
https://www.lcmfinance.com/shareholders/investor-presentations-results/
The Interim Financial Report is available at:
https://www.lcmfinance.com/shareholders/annual-reports-financial-reports/
