Q1 2024 Earnings Summary
Reported on May 13, 2024 (Before Market Open)
Pre-Earnings Price$15.00Open (May 13, 2024)
Post-Earnings Price$15.00Open (May 13, 2024)
Price Change
$0.00(0.00%)
- The company's core balance sheet business, specifically the Burford-only capital provision direct business, drives the bulk of their profits, with a sustainable ongoing level of smaller deals and the potential for significant monetization transactions with large corporates, such as the $325 million transaction they executed last year with a Fortune 50 company.
- The management is encouraged by the level of interest from corporates, noting that in some industry segments, half of the participants are using or plan to use litigation finance in the near future, indicating a growing market for their services.
- Despite unpredictability in landing big deals due to long sales cycles, the company sees ongoing opportunities with large corporates, which could significantly impact the level of new business and profitability when such "chunky deals" land.
- Burford Capital does not provide guidance on future new business levels, making it difficult to predict future profitability and growth. ["Well, we don't guide on future anything, really, including future new business." [7]]
- The company's profitability heavily depends on securing large, unpredictable "chunky deals", and the timing and occurrence of these deals are uncertain due to long sales cycles. ["The level of business ... really depends on whether we have sort of 0, 1 or 2 big chunky deals." [7]; "...it's pretty unpredictable because the sales cycle on those deals is long..." ]
- There is uncertainty in forecasting future performance, as the company acknowledges difficulty in predicting how many significant deals will be secured, which may impact revenue and profitability. ["...it's hard for us to do that. And so, I don't have a good answer for you..." [7]]
- Commitments Outlook
Q: Will you maintain commitment levels similar to 2023?
A: Management doesn't provide guidance on future commitments but notes that new business levels depend on securing large deals, which are unpredictable due to long sales cycles. Last year, they completed a $325 million transaction with a Fortune 50 company, and such deals significantly impact results. They remain encouraged by the level of corporate interest.
Research analysts covering Burford Capital.