13th Sep 2023 13:13
(Alliance News) - Burford Capital Ltd on Wednesday said it had delivered its "strongest set" of interim financial results in the firm's history in the first half of 2023, as it reported surging profit and revenue.
The law-focused global finance and asset management firm reported pretax loss of USD11.3 million in the second quarter of 2023, widened from USD3.2 million in the previous year. Revenue totalled USD44.6 million, down slightly from USD47.5 million.
In the first half of the year, however, Burford reported pretax income of USD297.2 million, multiplied from USD73.2 million a year before, as half-year revenue jumped to USD425.5 million from USD170.6 million.
The company attributed the half-year revenue rise to higher capital provision income amid positive momentum in the progression of its portfolio.
Chief Executive Christopher Bogart noted this was the "strongest set of six-month financial results in Burford's history", noting that the firm's net income attributable to shareholders surged to USD238 million in the half from just USD7 million a year prior.
Bogart also noted that Burford's tangible book value per share stood at USD8.26 as at June 30, up 12% from USD7.36 as at December 31.
The company's portfolio grew to USD7.0 billion as at June 30 from USD6.1 billion as at December 31. Burford said this was due to "significant" fair value gains and growth in deployments and undrawn commitments.
Burford's consolidated fair value of capital provision assets increased to USD4.4 billion as at June 40 from USD3.7 million as at December 31.
Looking forward, CEO Bogart said: "Our new valuation methodology is sensitive to interest rate changes and thus higher rates during the first six months of 2023 were a headwind for the fair value of our core portfolio, especially during the second quarter, but these valuation movements are non-cash and unrealized and are expected to continue to fluctuate over time."
Back in May, Burford said its capital provision assets would be fair valued using an income approach. The income approach estimates fair value based on estimated, risk-adjusted future cash flows, using a discount rate to reflect the funding risk of deploying capital for funding capital provision assets, the company said.
Shares in Burford were down 4.0% at 1,263.23 pence on Wednesday afternoon in London.
By Heather Rydings, Alliance News senior economics reporter
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