Burford Capital Ltd on Thursday reported a turnaround in second-quarter earnings, but a soft start to the year meant numbers for the first-half were lower.
In its second quarter ended June 30, the litigation finance provider with offices in London, New York, and elsewhere, said revenue more than tripled to $159.7 million from $44.6 million a year ago. Net income swung to $53.7 million from a loss of $21.5 million.
Second-quarter gains did little to help Burford recover from the sharp revenue drop it had seen in the first-quarter, however. Revenue in the three months to March had dropped 88% to $44.3 million from $380.9 million a year prior.
In May Chief Executive Officer Christopher Bogart had said the decline reflected ‘variable timing of recognition we expect in our business’.
As a result, revenue at the six-month mark was $169 million, only half of the $382 million it reported last year. Net income at the half was $23.8 million, down 90% from $237.9 million.
The company said no individual asset contributed to the second quarter increase, instead pointing to ‘significantly higher capital provision income of $119 million’. It was more than triple the $35 million it reported last year.
Chief Executive Officer Bogart commented: ‘A series of case wins underline the lack of correlation between Burford’s cash flows and markets or the economy and demonstrate continued progression in our $7.4 billion Group-wide total portfolio. New business was also active with new commitments above our recent quarterly average.
‘As we’ve signaled, overall year-to-date results can’t compare with last year given the unrealized gains from the 2023 YPF win, but year-to-date net realized gains on our core portfolio were up 36%. After a typically sleepy first quarter, we are very pleased with the performance of the business in the second quarter and in the first half of 2024.’
In 2023, Burford had reported $543 million in unrealized gains due to its ownership of litigation rights in a $16.1 billion case related to Argentina’s 2012 nationalization of oil company YPF.
Burford shares closed down 1.5% at 979.00 pence each on Thursday in London
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