29th Jan 2025 11:07
(Alliance News) - Litigation Capital Management Ltd shares took a downturn after its disclosure that the latest half year was "a period of mixed results" with "fewer quality opportunities" in the short-term future.
The stock was trading 7.8% lower at 84.80 pence late on Wednesday morning in London.
Litigation Capital, a Sydney-headquartered provider of disputes finance solutions, said it expects to report a "modest" post-tax loss of around AUD8 million - approximately GBP4.0 million - for the first half ended December 31. This is against the previous year's AUD7.3 million profit, and after " accounting for operating expenses, finance costs, foreign exchange and tax".
During the half year Litigation Capital's realisations totalled AUD52 million against AUD14 million of invested capital, or an aggregate multiple of invested capital of 3.7x.
These consisted of four case wins and three losses, with realisations including Litigation Capital's "successful international arbitration claim brought against the Republic of Poland". It expects the realisations to contribute AUD4 million to its half-year total income.
Litigation Capital said its net debt totalled AUD40.1 million at December 31, up from AUD8.9 million one year prior, and that this mainly reflected increased investments to fund ongoing cases.
New commitments totalled AUD25 million, down on-year from AUD90 million as the first half "saw fewer quality opportunities meeting our rigorous investment criteria", Litigation Capital said. However, it added that "this ebb and flow of opportunities is not unusual".
"While the first half of FY25 has been a period of mixed results, we are pleased with the strong realisations achieved and the ongoing progress of our portfolio," commented Chief Executive Officer Patrick Moloney. "The high multiple on invested capital reflects the value we continue to generate from our disciplined approach to dispute financing.
"We remain confident in our ability to deploy capital effectively and to deliver attractive returns for our stakeholders as we move into the second half of the financial year."
By Emma Curzon, Alliance News reporter
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