Litigation-finance firm Burford Capital (BUR: AIM) has delivered a record set of full year results which showed that not only can it continue to grow, but it can increase margins at the same time.
Group revenues for the year to December 31 were $420.4m, an increase of 23% on the previous year, with investment income rising 22% to $389.5m.
However returns on invested capital on its core litigation finance portfolio, net of losses, were 85% compared with 76% the previous year.
Also the number of ‘realised gains’ or cases settled in Burford’s favour increased from 20 to 26 last year.
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The demand for litigation finance doesn’t seem to be slowing either with another $1.3bn of ‘investment commitments’ last year, similar to 2017’s total.
As chief executive Christopher Bogart explained, Burford had a lot to prove last year. ‘The big question was whether 2017’s explosive growth was a one-time anomaly. These results show that it was not.
‘Burford has committed $2.6bn to new investments in just the last two years, more than twice its lifetime cumulative commitment level prior to that time’.
Shares have eased back after their initial 9% pop but are still trading up 5% on the day at £19.20.
Burford is a running Great Idea in Shares. You can read our investment analysis here.
Disclaimer: the author owns shares in Burford Capital.
