REG - Burford Capital Ltd - Statement concerning non-cash accrual
23/12/2021 07:00
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RNS Number : 5588W Burford Capital Limited 23 December 2021
22 December 2021
Released via Form 6-K on December 22, 2021 and queued for release via RNS upon
its reopening on December 23, 2021.
BURFORD CAPITAL STATEMENT CONCERNING NON-CASH ACCRUAL
Burford Capital Limited, the leading global finance and asset management firm
focused on law, today released the following statement.
On August 23, 2021, Burford announced that it would take a one-time, non-cash
charge to earnings in 2021 to reflect the potential future expense associated
with certain "carry" payments that may be payable to employees in connection
with future investment performance.
Burford has also previously advised that it will move to reporting under US
GAAP beginning with its financial statements for the current fiscal year.
Under US GAAP, Burford has determined that the legal finance one-time,
non-cash accrual announced in August will be applied to the 2019, 2020 and
2021 periods as opposed to being entirely recognized in 2021.
Upon further consideration of the relevant IFRS accounting treatment, we have
also determined that the legal finance one-time, non-cash accrual should have
been applied to 2019 and 2020 as well as 2021. There are no changes to the
amount of the total charge and thus no changes to Burford's balance sheet as
at June 30, 2021; this relates solely to the timing of recognition of the
accruals for estimates of the liabilities.
The tables below present the impacted line items from the consolidated
statement of comprehensive income and consolidated statement of financial
position italicized for the periods impacted along with each of the impacted
subtotals from those statements. The first table presents the data as
originally reported, the second table presents how the non-cash accrual is
recognized on both the originally reported and corrected bases, and the third
table presents the data on the corrected basis. These tables are unaudited.
FY 2019 HY 2020 FY 2020 HY 2021
Selected financial highlights - As originally reported: $'000 $'000 $'000 $'000
Operating expenses - general (78,402) (36,403) (86,589) (40,355)
Operating expenses - legal finance non-cash accrual - - (44,856)
Operating expenses - asset recovery non-cash accrual - - (34,083)
Operating expenses - case-related expenditures ineligible for inclusion in (11,246) (1,261) (4,841) (2,532)
asset cost
Operating expenses - equity and listing related (1,754) (4,000) (7,907) (697)
Operating profit/(loss) 265,146 208,381 248,933 (39,822)
Profit/(loss) for the period before tax 225,524 188,615 208,635 (67,530)
Profit/(loss) for the period after tax 212,107 151,451 171,698 (67,080)
Total comprehensive income/(loss) for the period 194,582 184,887 161,492 (76,546)
Other liabilities (51,430) (41,526) (66,099) (125,640)
Total liabilities (1,118,992) (925,300) (1,028,482) (1,650,813)
Total net assets 1,532,992 1,720,800 1,699,812 1,598,711
Reserves attributable to owners 923,038 1,108,760 1,087,593 986,771
Total shareholders' equity 1,532,992 1,720,800 1,699,812 1,598,711
FY 2019 HY 2020 FY 2020 HY 2021
Carry non-cash accrual recognition: $'000 $'000 $'000 $'000
As originally reported - - - (37,545)
Corrected basis (31,312) (10,233) (6,920) 687
FY 2019 HY 2020 FY 2020 HY 2021
Selected financial highlights - Corrected basis: $'000 $'000 $'000 $'000
Operating expense - general (78,402) (36,403) (86,589) (40,355)
Operating expenses - legal finance non-cash accrual (31,312) (10,233) (6,920) (6,624)
Operating expenses - asset recovery non-cash accrual - - - (34,083)
Operating expenses - case-related expenditures ineligible for inclusion in (11,246) (1,261) (4,841) (2,532)
asset cost
Operating expenses - equity and listing related (1,754) (4,000) (7,907) (697)
Operating profit/(loss) 233,834 198,148 242,013 (1,590)
Profit/(loss) for the period before tax 194,212 178,382 201,715 (29,298)
Profit/(loss) for the period after tax 180,795 141,218 164,778 (28,848)
Total comprehensive income/(loss) for the period 163,270 174,654 154,572 (38,314)
Other liabilities (82,742) (83,071) (104,331) (125,640)
Total liabilities (1,150,304) (966,845) (1,066,714) (1,650,813)
Total net assets 1,501,680 1,679,255 1,661,580 1,598,711
Reserves attributable to owners 891,726 1,067,215 1,049,361 986,771
Total shareholders' equity 1,501,680 1,679,255 1,661,580 1,598,711
FY 2019 HY 2020 FY 2020 HY 2021
Profit/(loss) per share - As originally reported: Cents Cents Cents Cents
Basic profit/(loss) per ordinary share 97 69 78 (31)
Profit/(loss) per fully diluted share 97 69 78 (31)
Basic comprehensive profit/(loss) per ordinary share 89 85 74 (35)
Comprehensive profit/(loss) per fully diluted share 89 84 73 (35)
FY 2019 HY 2020 FY 2020 H1 2021
Profit/(loss) per share - Corrected basis: Cents Cents Cents Cents
Basic profit/(loss) per ordinary share 83 65 75 (13)
Profit/(loss) per fully diluted share 82 64 75 (13)
Basic comprehensive profit/(loss) per ordinary share 75 80 71 (17)
Comprehensive profit/(loss) per fully diluted share 74 80 70 (17)
The Company will present three years of results reflecting these corrections
in its annual report on Form 20-F expected to be released in March 2022.
Given the error in reflecting the accrual, the following financial statements
previously issued by the Company should no longer be relied upon to the extent
inconsistent with the disclosure herein: (1) audited consolidated financial
statements as of and for the years ended December 31, 2020 and 2019 and (2)
unaudited condensed consolidated financial statements for the six-month
periods ended June 30, 2021 and 2020. The Audit Committee of the Company's
Board of Directors has taken this action which has been discussed with the
Company's independent registered public accounting firm, Ernst & Young
LLP.
Christopher Bogart, Burford's Chief Executive, commented: "This remains an
entirely non-cash matter; the same non-cash expense is simply being spread
across 2019 and 2020 instead of being entirely recognized in 2021. Indeed,
the outcome of this will be to improve our reported performance in 2021,
although there is no cash impact whatsoever."
For further information, please contact:
Burford Capital Limited
Robert Bailhache, Head of Investor Relations, EMEA and Asia - email +44 (0)20 3530 2023
(mailto:rbailhache@burfordcapital.com)
Jim Ballan, Head of Investor Relations, Americas - email +1 (646) 793 9176
(mailto:JBallan@burfordcapital.com)
Numis Securities Limited - NOMAD and Joint Broker +44 (0)20 7260 1000
Giles Rolls (NOMAD)
Charlie Farquhar / Jonathan Abbott (Joint Broker)
Jefferies International Limited - Joint Broker +44 (0)20 7029 8000
Graham Davidson
Tony White
About Burford Capital
Burford Capital is the leading global finance and asset management firm
focused on law. Its businesses include litigation finance
(http://www.burfordcapital.com/customers/litigation-finance/) and risk
management (http://www.burfordcapital.com/customers/risk-management/) , asset
recovery (http://www.burfordcapital.com/customers/asset-recovery/) and a wide
range of legal finance and advisory activities. Burford is publicly traded on
the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE:
BUR), and it works with companies and law firms around the world from its
principal offices in New York, London, Chicago, Washington, Singapore and
Sydney.
For more information, please visit www.burfordcapital.com
(http://www.burfordcapital.com) .
This communication shall not constitute an offer to sell or the solicitation
of an offer to buy any ordinary shares or other securities of Burford.
This release does not constitute an offer of any Burford fund. Burford Capital
Investment Management LLC ("BCIM"), which acts as the fund manager of all
Burford funds, is registered as an investment adviser with the U.S. Securities
and Exchange Commission. The information provided herein is for informational
purposes only. Past performance is not indicative of future results. The
information contained herein is not, and should not be construed as, an offer
to sell or the solicitation of an offer to buy any securities (including,
without limitation, interests or shares in the funds). Any such offer or
solicitation may be made only by means of a final confidential Private
Placement Memorandum and other offering documents.
Forward-looking statements
This announcement contains "forward-looking statements" within the meaning of
Section 21E of the US Securities Exchange Act of 1934 regarding assumptions,
expectations, projections, intentions and beliefs about future events. These
statements are intended as "forward-looking statements". In some cases,
predictive, future-tense or forward-looking words such as "aim", "anticipate",
"believe", "continue", "could", "estimate", "expect", "forecast", "guidance",
"intend", "may", "plan", "potential", "predict", "projected", "should" or
"will" or the negative of such terms or other comparable terminology are
intended to identify forward-looking statements, but are not the exclusive
means of identifying such statements. In addition, we and our representatives
may from time to time make other oral or written statements which are
forward-looking statements, including in our periodic reports that we file
with the US Securities and Exchange Commission, other information sent to our
security holders, and other written materials. By their nature,
forward-looking statements involve known and unknown risks, uncertainties and
other factors because they relate to events and depend on circumstances that
may or may not occur in the future. We caution you that forward-looking
statements are not guarantees of future performance and are based on
numerous assumptions and that our actual results of operations, including our
financial condition and liquidity and the development of the industry in which
we operate, may differ materially from (and be more negative than) those made
in, or suggested by, the forward-looking statements contained in this
announcement. Significant factors that may cause actual results to differ from
those we expect include those discussed under "Risk Factors" in our Annual
Report on Form 20-F filed with the US Securities and Exchange Commission on
March 24, 2021. In addition, even if our results of operations, including our
financial condition and liquidity and the development of the industry in which
we operate, are consistent with the forward-looking statements contained in
this announcement, those results or developments may not be indicative of
results or developments in subsequent periods.
Except as required by law, we undertake no obligation to update or revise the
forward-looking statements contained in this announcement, whether as a result
of new information, future events, a change in our views or expectations or
otherwise.
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