REG - Litigation Cap. Mgmt - Interim results for the HY ended 31 December 2025
31/03/2026 07:00
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RNS Number : 6829Y Litigation Capital Management Ltd 31 March 2026
31 March 2026
Litigation Capital Management Limited
("LCM" or the "Company")
Interim results for the half year ended 31 December 2025
Litigation Capital Management Limited, an alternative asset manager
specialising in dispute financing solutions internationally, today announces
its interim results for the half year ended 31 December 2025.
Commenting on the results, Patrick Moloney, CEO of Litigation Capital
Management, said: "The first half of this financial year has been the most
challenging period in LCM's history. We experienced a number of large case
losses which resulted in a significant financial loss for shareholders. In
September 2025 we commenced a Strategic Review to explore all options for
restoring LCM's balance sheet strength and realising value for shareholders.
The Strategic Review is now approaching a conclusion and we will communicate
its outcome to shareholders as soon as we are able to."
LCM will be hosting a webinar for investors today at 9.00 a.m. The
presentation is open to all existing and potential shareholders. If you would
like to attend this presentation, please register using the following link:
https://www.investormeetcompany.com/litigation-capital-management-limited/register-investor
(https://www.investormeetcompany.com/litigation-capital-management-limited/register-investor)
The accompanying results presentation is available on LCM's website:
https://www.lcmfinance.com/investors/investor-presentations-results
(https://www.lcmfinance.com/investors/investor-presentations-results)
The Interim Financial Report is available at:
https://www.lcmfinance.com/investors/investor-presentations-results
(https://www.lcmfinance.com/investors/investor-presentations-results%20)
Enquiries
Litigation Capital Management
Patrick Moloney, Chief Executive Officer
David Collins, Chief Financial Officer
Cavendish (Nomad and Broker) Tel: 020 7220 0500
Jonny Franklin-Adams and Isaac Hooper (Corporate Finance)
Ella Bedford (Corporate Broking)
NOTES TO EDITORS
Litigation Capital Management (LCM) is an alternative asset manager
specialising in disputes financing solutions internationally, which operates
two business models. The first is direct investments made from LCM's permanent
balance sheet capital and the second is third party fund management. Under
those two business models, LCM currently pursues three investment strategies:
Single-case funding, Portfolio funding and Acquisitions of claims. LCM
generates its revenue from both its direct investments and also performance
fees through asset management.
Currently headquartered in Sydney, with offices in London, Singapore, Brisbane
and Melbourne, LCM listed on AIM in December 2018, trading under the ticker
LIT.
www.lcmfinance.com (http://www.lcmfinance.com)
Chief Executive's Statement
The half year to 31 December 2025 proved exceptionally difficult for
Litigation Capital Management Limited ("LCM" or the "Company"). A series of
large case losses has led to substantial financial losses for shareholders.
Such outcomes underline the binary and concentrated risks that are fundamental
to litigation finance, where just a few high-value investments can produce
disproportionately adverse results when they meet unfavourable judgments.
These results mark a significant departure from LCM's long-term track
record-one built on disciplined case selection, rigorous portfolio management,
and the consistent delivery of positive cumulative returns over many years.
LCM is not alone in grappling with these difficulties. Many of our peers have
encountered comparable pressures in recent years, and several have ceased
operations as a result. These widespread challenges make it evident that the
industry must make fundamental changes to strengthen risk assessment, refine
portfolio construction, and, in turn, deliver improved returns to capital
providers.
To address our challenges, we have taken the following actions:
· Launched a Strategic Review in September 2025 to explore all
options for restoring LCM's balance sheet strength and realising value for
shareholders.
· Secured debt covenant waivers from our lender, providing
operational flexibility and stability while longer-term solutions are pursued.
· Undertaken a comprehensive re-underwriting of the existing case
portfolio, with targeted decisions applied to challenged investments,
including selective exits, to protect remaining value and reduce future risk
exposure.
The Strategic Review continues as the Board's central priority. This process
is advancing steadily, with the Board fully committed to identifying and
executing the most appropriate path forward in the interests of all
stakeholders.
We remain deeply grateful for the patience and ongoing support of our
shareholders, lenders, and other stakeholders during this challenging period.
The Company will issue further updates in due course, particularly regarding
the conclusion and outcome of the Strategic Review.
Patrick Moloney
Chief Executive Officer
31 March 2026
Directors' Report
The Directors of Litigation Capital Management Limited (LCM) present their
report together with the half-year financial report of the consolidated entity
consisting of LCM and its subsidiaries (collectively LCM Group or the Group)
for the six month period ended 31 December 2025 and the auditors' review
report thereon.
1. Directors
The Directors of LCM at any time during or since the end of the financial
period are set out below:
Jonathan Moulds
Patrick Moloney
Dr David King
David Collins
2. Company Secretary
Anna Sandham was appointed Company Secretary of LCM in September 2016. Anna is
an experienced company secretary and governance professional with over 20
years' experience in various large and small, public and private, listed and
unlisted companies. Anna has previously worked for companies including AMP
Financial Services, Westpac Banking Corporation, BT Financial Group and NRMA
Limited. Anna holds a Bachelor of Economics (University of Sydney), Graduate
Diploma of Applied Corporate Governance (Governance Institute of Australia)
and is a Chartered Secretary.
3. Principal activities
LCM is a global provider of disputes finance and risk management services.
Headquartered in Sydney, with offices in London, Singapore, Brisbane and
Melbourne, LCM listed on AIM in December 2018, trading under the ticker LIT.
4. Operating and financial review
Overview of the LCM Group
LCM is a company limited by shares and was incorporated on 9 October 2015. LCM
was admitted to trade on the Alternative Investment Market (AIM) of the London
Stock Exchange on 19 December 2018 under the ticker LIT. LCM was formerly
listed on the Australian Securities Exchange (ASX) between 13 December 2016
and 21 December 2018.
Its registered office and principal place of business is Level 12, The Chifley
Tower, 2 Chifley Square, Sydney NSW 2000, Australia.
Operations
LCM operates its business through a series of wholly owned subsidiaries. The
principal activity of those subsidiaries is the provision of litigation
finance and risk management associated with individual and portfolios of
disputes. LCM currently operates two business models. The first is direct
investments made from LCM's balance sheet capital. The second is funds
and/or asset management. Under those two business models, LCM currently
pursues three investment strategies. Those strategies are as follows:
Single‐case funding: The first and currently largest strategy, is
single‐case funding. That is, the investment in a single dispute. This
is a strategy that LCM has maintained since its inception (through its
predecessor company) 25 years ago. Currently, a large proportion of LCM's
investments are in single‐case investments.
Portfolio funding: The second strategy pursued by LCM is portfolio funding.
That is, the provision of a portfolio based funding solution to law firms,
insolvency practitioners or corporates. It involves the provision of a
financing solution and risk management tools for a bundle of separate
disputes. LCM's particular focus with respect to that strategy is the
provision of corporate portfolio financing.
Acquisitions of Claims: The third strategy, in its early stages of evolution,
is the investment in smaller disputes (typically insolvency‐based) through
the acquisition or assignment of the underlying cause of action. LCM generates
its revenue through acquiring a cause of action and pursuing a recovery or
award as principal.
Review of financial performance
The statutory loss for the Group after adjusting for income tax amounted to
$107,767,000 (31 December 2024: $8,353,000). Operating loss before tax is
$111,672,000 (31 December 2024: $7,952,000).
Cash on balance sheet was $23,601,000 as at 31 December 2025 (30 June 2025:
$18,447,000). Of this, $22,207,000 relates to third-party cash which is
restricted cash as it relates to balances held within the fund investment
vehicles which have been consolidated with the Group numbers (30 June 2025:
$9,582,000). Cash generated during the period from the resolution of
investments was $1,428,000 (31 December 2024: $56,402,000).
The Directors do not recommend a dividend in respect of the period ended 31
December 2025.
5. Matters subsequent to the end of the financial period
On 12 January 2026, the Group announced a positive development in its
international arbitration claim against the Republic of Poland, where the
Singapore court rejected Poland's application to set aside the Energy Charter
Treaty award.
On 2 February 2026, the Group announced an increase in its credit facility
together with an extension of the debt covenant waiver from its lender.
On 11 March 2026, the Group announced that its funded party had been
successful in the High Court of Australia in a trademark dispute claim in
which LCM had invested A$3.3 million. The matter will now proceed to the Full
Court for the quantification of costs and damages.
On 17 March 2026, the Group announced that an adverse judgment had been
delivered in an Australian commercial litigation claim funded by the Group
with A$1.4 million of shareholder capital. The Group is reviewing the judgment
and considering its options.
The Strategic Review, which was commenced in September 2025, continues to
progress.
6. Lead Auditor's independence declaration
The Auditor's independence declaration as required under section 307C of the
Corporations Act 2001 is included in LCM's financial statements.
7. Rounding of amounts
LCM is of a kind referred to the Australian Securities and Investments
Commission Corporations (Rounding in Financial/Directors' Reports) Instrument
2016/191, relating to 'rounding-off'. Amounts in this report have been rounded
off in accordance with that Instrument to the nearest thousand dollars, or in
certain cases, the nearest dollar.
Signed in accordance with a resolution of directors, pursuant to section
306(3)(a) of the Corporations Act 2001.
Mr Jonathan Moulds
Chairman
31 March 2026
Consolidated statement of profit or loss and other comprehensive income
For the period ended 31 December 2025
Consolidated
31 Dec 2025 31 Dec 2024
Note $'000 $'000
Income
Net realised gain on investments 4 (26,540) 93,439
Net unrealised gain/(loss) on investments 4 (99,191) (67,650)
Movement in financial liabilities related to third-party interests in 4 51,098 (18,382)
consolidated entities
Litigation service revenue 4 - -
Litigation service expense 5 (31,126) -
Total income/(loss) (105,759) 7,408
Expenses
Employee benefits expense 5 (4,412) (6,688)
Depreciation expense 5 (36) (47)
Corporate expenses 5 (1,606) (2,577)
Fund administration expense 5 (545) (1,313)
Foreign currency gains/(losses) 5 686 (4,735)
Total operating expenses (5,913) (15,360)
Operating loss (111,672) (7,952)
Finance costs 5 (4,604) (3,710)
Loss before income tax expense (116,276) (11,662)
Income tax benefit 6 8,509 3,309
Loss after income tax expense (107,767) (8,353)
Other comprehensive income
Items that may be subsequently reclassified to profit and loss:
Movement in foreign currency translation reserve (1,383) 8,620
Total comprehensive income for the period (109,150) 267
Loss for the period is attributable to:
Owners of Litigation Capital Management Limited (107,767) (8,353)
(107,767) (8,353)
Total comprehensive income for the period is attributable to:
Owners of Litigation Capital Management Limited (109,150) 267
(109,150) 267
Cents Cents
Basic loss per share 7 (104.73) (8.09)
Diluted loss per share 7 (104.73) (8.09)
The above Consolidated Statement of Profit or Loss and Other Comprehensive
Income should be read in conjunction with accompanying Notes to the Financial
Statements.
Consolidated statement of financial position
For the period ended 31 December 2025
Consolidated
31 Dec 2025 30 Jun 2025
Note $'000 $'000
Assets
Cash and cash equivalents 8 23,601 18,447
Trade receivables 9 1,786 1,786
Due from resolution of financial assets 10 87,003 88,201
Contract costs 11 19,037 47,988
Investments 12 203,729 287,735
Property, plant and equipment 129 135
Intangible assets 410 439
Other assets 1,357 827
Total assets 337,052 445,558
Liabilities
Trade and other payables 13 23,672 10,508
Tax payable/(refund) (26) (6)
Employee benefits 1,183 1,115
Borrowings 14 93,790 77,747
Financial liabilities related to third-party interests in consolidated 15 206,046 226,538
entities
Deferred tax liability 6,777 15,286
Total liabilities 331,442 331,188
Net assets 5,610 114,370
Equity
Issued capital 16 61,286 60,634
Reserves 7,192 8,838
Retained earnings (62,868) 44,899
Parent interest 5,610 114,370
Total equity 5,610 114,370
The above Consolidated Statement of Financial Position should be read in
conjunction with accompanying Notes to the Financial Statements.
Consolidated statement of changes in equity
For the period ended 31 December 2025
Issued capital Treasury shares Retained earnings Share based payments reserve Foreign currency translation Total equity
Consolidated $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 July 2024 69,674 3,556 615 188,941
(5,396) 120,492
Loss after income tax expense for the period - - (8,353) - - (8,353)
Other comprehensive income for the period - - - - 8,620 8,620
Total comprehensive income for the period - - (8,353) - 8,620 267
Equity Transactions:
Share-based payments (note 20) - 590
- - - 590
Dividends paid (note 17) - - (2,680) - - (2,680)
Treasury shares acquired (note 16) - (4,458) - - - (4,458)
Cancellation of treasury shares (note 16) (9,854) 9,854 - - - -
LSPs exercised and purchased by EBT (note 16) (860) - - - - (860)
(10,714) 5,396 (2,680) 590 - (7,407)
Balance at 31 December 2024 58,960 - 4,146 181,800
109,459 9,235
Issued capital Treasury shares Retained earnings Share based payments reserve Foreign currency translation Total equity
Consolidated $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 July 2025 60,634 - 3,094 114,370
44,899 5,744
Loss after income tax expense for the period - - (107,767) - - (107,767)
Other comprehensive income for the period - - - - (1,383) (1,383)
Total comprehensive income for the period - - (107,767) - (1,383) (109,150)
Equity Transactions:
Share-based payments (note 20)
652 - - (264) - 389
652 - - (264) - 389
Balance at 31 December 2025 61,286 - 2,830 5,610
(62,868) 4,361
The above Consolidated Statement of Changes in Equity should be read in
conjunction with accompanying Notes to the Financial Statements.
Consolidated statement of cash flows
For the period ended 31 December 2025
Consolidated
31 Dec 2025 31 Dec 2024
Note $'000 $'000
Cash flows from operating activities
Proceeds from litigation contracts 1,428 56,402
Payments for litigation contracts (40,059) (78,310)
Payments to suppliers and employees (7,249) (10,152)
Income tax paid - (28)
Net cash used in operating activities (45,880) (32,088)
Cash flows from investing activities
Payments for property, plant and equipment - (3)
Payments for intangibles - (179)
Refund/(payment) of security deposits 14 (1)
Net cash from/(used in) investing activities 14 (182)
Cash flows from financing activities
Payments for treasury and loan shares - (5,318)
Dividends paid 17 - (2,607)
Proceeds from borrowings 14 15,666 -
Repayments of borrowings 14 - (11,358)
Payments of finance costs (2,696) (3,186)
Payments of placement fees related to third-party interests - (835)
Contributions from third-party interests in consolidated entities 15 38,145 40,626
Distributions to third-party interests in consolidated entities 15 - (24,572)
Net cash from/(used in) financing activities 51,116 (7,250)
Net decrease in cash and cash equivalents 5,250 (39,519)
Cash and cash equivalents at the beginning of the period 18,447 68,113
Effects of exchange rate changes on cash and cash equivalents (95) 1,991
Cash and cash equivalents at the end of the period 8 23,601 30,585
The above Consolidated Statement of Cash Flows should be read in conjunction
with accompanying Notes to the Financial Statements.
Notes to the financial statements
31 December 2025
Note 1. General information
The financial statements cover Litigation Capital Management Limited (the
'Company') as a Group consisting of Litigation Capital Management Limited and
the entities it controlled at the end of, or during, the period (referred to
as the 'Group'). The financial statements are presented in Australian dollars,
which is Litigation Capital Management Limited's functional and presentation
currency.
Litigation Capital Management Limited was admitted onto the Alternative
Investment Market ('AIM') on 19 December 2018.
Litigation Capital Management Limited is a for profit publicly listed company
limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Level 12, The Chifley Tower
2 Chifley Square
Sydney NSW 2000
A description of the nature of the Group's operations and its principal
activities are included in the Directors' report, which is not part of the
financial statements.
The financial statements were authorised for issue, in accordance with a
resolution of Directors, on30 March 2026. The Directors have the power to
amend and reissue the financial statements.
Note 2. Material accounting policies
These consolidated financial statements are general purpose financial
statements for the interim reporting period ended 31 December 2025 and have
been prepared in accordance with the Corporations Act 2001 and Australian
Accounting Standard AASB 134 Interim Financial Reporting. Compliance with AASB
134 ensures compliance with International Financial Reporting Standard IAS 34
'Interim Financial Reporting'.
These interim financial statements do not include all the notes of the type
normally included in annual financial statements. Accordingly, these financial
statements are to be read in conjunction with the annual report for the year
ended 30 June 2025 and any public announcements made by the Company during the
interim reporting period.
Basis of preparation
The principal accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting period, unless
otherwise stated.
Accounting standards and interpretations
The accounting policies adopted are consistent with those followed in the
preparation of the Group's annual consolidated financial statements for the
year ended 30 June 2025.
New and amended accounting standards and interpretations issued but not yet
effective
The new and amended standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the Group's financial statements that
the Group reasonably expects will have an impact on its disclosures, financial
position or performance when applied at a future date, are disclosed below.
• Amendment to IFRS 9 and IFRS 7 - Classification and Measurement of
Financial Instruments
• IFRS 18 Presentation and Disclosure in Financial Statements
• IFRS 19 Subsidiaries without Public Accountability: Disclosures
• IFRS S1, General requirements for disclosure of sustainability-related
financial information
• IFRS S2 Climate-related disclosures
The Group intends to adopt these new and amended standards and
interpretations, if applicable, when they become effective. The Group has not
listed other standards and interpretations which are issued but not yet
effective, as they are not expected to impact the Group.
Historical cost convention
The financial statements have been prepared under the historical cost
convention.
Critical accounting estimates
The critical accounting judgements, estimates and assumptions that have been
applied in the preparation of the interim consolidated financial statements
are consistent with those followed in the preparation of the Group's annual
report for the year ended 30 June 2025.
Going concern
The financial statements have been prepared on the going concern basis, which
contemplates continuity of normal business activities and the realisation of
assets and discharge of liabilities in the normal course of business.
The Company is currently reliant on covenant waivers from its lender, funds
managed by Northleaf Capital Partners (Canada) Ltd. To date, these waivers
have been forthcoming and have covered the quarters ending 30 June 2025, 30
September 2025 and 31 December 2025 (with extensions granted progressively,
the most recent extending coverage to 15 April 2026).
The lender has continued to provide these waivers while the Company has been
conducting a Strategic Review process, announced on 15 September 2025, with
the objective of restoring the Company's financial strength. This review is
evaluating a range of options to strengthen the balance sheet and is being
undertaken in constructive dialogue with the lender, who has also been
evaluating the options available to it as lender.
While the Company's lender has been supportive in granting covenant waivers to
date, any further extensions or amendments that may be required in future
periods will remain subject to the outcome of its own evaluation, the
intentions of the Company's lender which may change at any time and any
actions taken as a result thereof.
After considering the Company's forecasts, stress testing, available
mitigating actions (including progress under the Strategic Review), and having
regard to the inherent risks associated with the binary nature of the
Company's investment model, the Directors have concluded that a material
uncertainty exists which may cast significant doubt on the Company's ability
to continue as a going concern.
The material uncertainty primarily relates to the Company's ability to
maintain ongoing compliance with its debt covenants or to continue to obtain
the necessary waivers from its lender in light of the result of the
evaluations referred to above. The Directors have a reasonable expectation
that the Company will continue to receive the necessary support from its
lender to allow it to continue in operational existence for the foreseeable
future. Accordingly, the financial statements have been prepared on a going
concern basis, whilst noting the material uncertainty described above.
However, these events and conditions indicate that a material uncertainty
exists which may cast significant doubt on the Company's ability to continue
as a going concern, and therefore the entity may be unable to realise its
assets and discharge its liabilities in the normal course of business and at
the amounts stated in the financial report. The financial report does not
include any adjustments relating to the amounts or classification of recorded
assets or liabilities that might be necessary if the Company does not continue
as a going concern.
Note 3. Segment information
For management purposes, the Group is organised into two operating segments
comprising the operations of Litigation Capital Management Limited and its
wholly owned subsidiaries ("LCM") and the Group's fund structures ("Fund").
LCM
The LCM column includes the 25% co-investment in the Funds, Balance Sheet
investments (ie, 100% investment by LCM) and corporate operations.
Fund I & II
This comprises LCM Global Alternative Returns Fund and LCM Global Alternative
Returns Fund II and their entities as disclosed in note 27 of the annual
report for the year ended 30 June 2025. AASB 10 Consolidated Financial
Statements requires the Group to consolidate fund investment vehicles over
which it has exposure to variable returns from the fund investment vehicles.
As a result, third party interests in relation to the Funds have been
consolidated in the financial statements. The Fund column includes the 75%
co-investment in the litigation funding assets and costs of administering the
funds.
The following tables reflect the impact of consolidating the results of the
Funds with the results for LCM to arrive at the totals reported in the
consolidated statement of profit or loss and other comprehensive income,
consolidated statement of financial position and consolidated statement of
cash flows.
Consolidated Statement of Comprehensive Income
31 December 2025 31 December 2024
LCM Fund Consolidated LCM Fund Consolidated
$'000 $'000 $'000 $'000 $'000 $'000
Income
Net realised gain on investments (13,105) (13,434) (26,540) 37,429 56,010 93,439
Net unrealised gain/(loss) on investments (61,496) (37,694) (99,191) (32,750) (34,899) (67,650)
Movement in financial liabilities related to third-party interests in - 51,098 51,098 - (18,382) (18,382)
consolidated entities
Litigation service revenue - - - - - -
Litigation service expense (31,126) - (31,126) - - -
Total income/(loss) (105,728) (30) (105,759) 4,679 2,729 7,408
Expenses
Employee benefits expense (4,412) - (4,412) (6,688) - (6,688)
Depreciation expense (36) - (36) (47) - (47)
Corporate expenses (1,606) - (1,606) (2,577) - (2,577)
Fund administration expense - (545) (545) (835) (478) (1,313)
Foreign currency gains/(losses) 110 575 686 (2,484) (2,251) (4,735)
Total operating expenses (5,943) 30 (5,913) (12,632) (2,729) (15,360)
Operating loss (111,672) - (111,672) (7,952) - (7,952)
Finance costs (4,604) - (4,604) (3,710) - (3,710)
Loss before income tax expense (116,276) - (116,276) (11,662) - (11,662)
Income tax benefit 8,509 - 8,509 3,309 - 3,309
Loss after income tax expense (107,767) - (107,767) (8,353) - (8,353)
Other comprehensive income for the period, net of tax (1,383) - (1,383) 8,620 - 8,620
Total comprehensive income for the period (109,150) - (109,150) 267 - 267
Consolidated statement of financial position
31 December 2025 30 June 2025
LCM Fund Consolidated LCM Fund Consolidated
$'000 $'000 $'000 $'000 $'000 $'000
Assets
Cash and cash equivalents 1,394 22,207 23,601 8,865 9,582 18,447
Trade & other receivables 1,786 - 1,786 1,786 - 1,786
Due from resolution of financial assets 21,852 65,151 87,003 28,824 59,377 88,201
Contract costs 19,037 - 19,037 47,988 - 47,988
Financial assets at fair value through profit or loss 76,150 127,579 203,729 124,839 162,896 287,735
Property, plant and equipment 129 - 129 135 - 135
Intangible assets 410 - 410 439 - 439
Other assets 1,309 48 1,356 1,174 (347) 827
Total assets 122,067 214,985 337,052 214,050 231,508 445,558
Liabilities
Trade and other payables 14,733 8,939 23,672 5,538 4,970 10,508
Tax payable (26) - (26) (6) - (6)
Employee Benefits 1,183 - 1,183 1,115 - 1,115
Borrowings 93,790 - 93,790 77,747 - 77,747
Third-party interests in consolidated entities - 206,046 206,046 - 226,538 226,538
Deferred tax liability 6,777 - 6,777 15,286 - 15,286
Total liabilities 116,458 214,985 331,442 99,680 231,508 331,188
Net assets 5,610 - 5,610 114,370 - 114,370
Consolidated Statement of Cash Flows
31 December 2025 31 December 2024
LCM Fund Consolidated LCM Fund Consolidated
$'000 $'000 $'000 $'000 $'000 $'000
Cash flows from operating activities
Proceeds from litigation contracts 1,415 13 1,428 29,227 27,176 56,402
Payments for litigation contracts (15,535) (24,524) (40,059) (35,372) (42,938) (78,310)
Payments to suppliers and employees (6,298) (951) (7,249) (9,579) (573) (10,152)
Income tax paid - - - (28) - (28)
Net cash from/(used in) operating activities (20,419) (25,461) (45,880) (15,752) (16,335) (32,088)
Cash flows from investing activities
Payments for property, plant and equipment - - - (3) - (3)
Payments for intangibles - - - (179) - (179)
Refund/(payment) of security deposits 14 - 14 (1) - (1)
Net cash used in investing activities 14 - 14 (182) - (182)
Cash flows from financing activities
Payments for treasury shares - - - (5,318) - (5,318)
Dividends paid - - - (2,607) - (2,607)
Proceeds from borrowings 15,666 - 15,666 - - -
Repayments of borrowings - - - (11,358) - (11,358)
Payments of finance costs (2,696) - (2,696) (3,186) - (3,186)
Payments of placement fees related to third-party interests - - - (835) - (835)
Contributions from third-party interests in consolidated entities - 38,145 38,145 - 40,626 40,626
Distributions to third-party interests in consolidated entities - - - - (24,572) (24,572)
Net cash from/(used in) financing activities 12,971 38,145 51,116 (23,304) 16,054 (7,250)
Net decrease in cash and cash equivalents (7,435) 12,684 5,250 (39,238) (281) (39,519)
Cash and cash equivalents at the beginning of the period 8,865 9,582 18,447 53,024 15,089 68,113
Effects of exchange rate changes on cash and cash equivalents (36) (59) (95) 1,082 909 1,991
Cash and cash equivalents at the end of the period 1,394 22,207 23,601 14,868 15,717 30,585
Note 4. Income
31 Dec 2025 31 Dec 2024
LCM Fund Consolidated LCM Fund Consolidated
$'000 $'000 $'000 $'000 $'000 $'000
Net realised gain on investments
Recoveries on resolved investments 1,094 - 1,094 51,461 97,783 149,244
Reversal of performance fees previously recognised (6,623) 6,623 - - - -
Capital invested on resolved investments (7,577) (20,057) (27,635) (14,032) (41,772) (55,804)
(13,105) (13,435) (26,540) 37,429 56,010 93,439
Net unrealised gain/(loss) on investments
Fair value removal on concluded investments 2,325 7,063 9,389 (34,002) (37,641) (71,643)
Fair value write down on case losses under appeal (60,351) (39,107) (99,458) (10,986) (6,228) (17,214)
Fair value movement on pre-hearing/trial ongoing investments(1) (3,283) (5,185) (8,468) 6,859 18,314
11,455
Foreign exchange movement on fair value (188) (465) (654) 783 2,111 2,894
(61,496) (37,694) (99,191) (32,750) (34,899) (67,650)
Total gain/(loss) on investments (74,602) (51,129) (125,731) 4,679 21,111 25,789
Movement in financial liabilities related to third-party interests in - 51,098 51,098 - (18,382) (18,382)
consolidated entities
Total income/(loss) (74,602) (31) (74,633) 4,679 2,729 7,408
Realised gains relate to amounts where litigation risk has concluded and
amounts are expected to be received by LCM. Unrealised gains or losses relate
to the fair value movement of assets and liabilities associated with
litigation contracts. The gain and loss related to third party interests in
consolidated entities represents realised and unrealised gains and losses that
relate to third party funded proportions from LCM controlled entities.
Litigation service
Consolidated
31 Dec 2025 31 Dec 2024
$'000 $'000
Litigation service revenue - -
Litigation service expense (31,126) -
(31,126) -
Major service lines
Revenue attributable to LCM - -
Attributable to third party interests - -
- -
Geographical regions
Australia - -
- -
Litigation service revenue relates to an individual litigation asset which
resolved during the period and had a contract duration of more than 4 years.
Note 5. Profit/(loss) before tax
Consolidated
31 Dec 2025 31 Dec 2024
$'000 $'000
Profit/(loss) before income tax expense includes the following specific
expenses:
Employee benefits expense
Salaries & wages 3,342 5,074
Non-Executive directors' fees 180 239
Superannuation and pension 119 156
Share based payments expense 389 495
Other employee benefits & costs 383 725
4,412 6,688
Depreciation
Plant and equipment 6 16
Intangible assets 30 31
36 47
Corporate expenses
Corporate & secretary expenses 130 247
General & Administrative Expenses 57 123
Insurance 96 215
Marketing & Advertising 21 68
Occupancy Costs 455 462
Other expenses 28 38
Professional fees 397 711
Travel & entertainment expenses 101 465
Business development expenses 13 248
Strategic review costs 309 -
1,606 2,577
Fund administration expense
General administration expenses 545 478
Placement fees - 835
545 1,313
Foreign currency gains/(losses)
Realised foreign exchange loss 2,006 703
Unrealised foreign exchange gain (2,692) 4,032
(686) 4,735
Finance costs
Net interest on borrowings 4,475 3,257
Net finance costs of third-party interests - -
Other finance costs 129 453
4,604 3,710
Note 6. Income tax expense
Consolidated
31 Dec 2025 31 Dec 2024
$'000 $'000
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense (116,276) (11,662)
At the Group's statutory income tax rate of 30% (Dec 2024: 30%) (34,883) (3,499)
Tax effect amounts which are not deductible/(taxable) in calculating taxable
income:
Foreign tax rate adjustments 1,391 819
Share-based payments (63) 76
Other assessable income (212) -
Other non-deductible expenses 14,391 368
Unrealised foreign exchange - -
Change in tax rate - -
Adjustment in respect of income tax 7,599 -
Adjustment in respect of deferred tax of previous years 3,267 -
Utilisation of carried forward tax losses - (1,073)
Income tax expense / (benefit) (8,509) (3,309)
Note 7. Loss per share
31 Dec 2025 31 Dec 2024
$'000 $'000
Loss after income tax (107,767) (8,353)
Loss after income tax attributable to the owners of Litigation Capital (107,767) (8,353)
Management Limited
Number Number
Weighted average number of ordinary shares used in calculating basic earnings 102,903,962 103,190,317
per share(1)
Adjustments for calculation of diluted earnings per share:
Amounts uncalled on partly paid shares - -
Options over ordinary shares - -
Weighted average number of ordinary shares used in calculating diluted 102,903,962 103,190,317
earnings per share
(1) Weighted average number of ordinary shares on issue during the year,
excludes treasury shares held
Cents Cents
Basic loss per share (104.73) (8.09)
Diluted loss per share (104.73) (8.09)
Dilutive potential shares which are contingently issuable are only included in
the calculation of diluted earnings per share where the conditions are met. As
at 31 December 2025, there were 2,111,672 shares calculated for inclusion in
diluted earnings per share, however these were not included due to their
anti-dilutive effect.
Note 8. Cash and cash equivalents
Consolidated
31 Dec 2025 30 Jun 2025
$'000 $'000
Cash at Bank 1,394 8,865
Cash of third-party interests in consolidated entities 22,207 9,582
23,601 18,447
Cash of third-party interests in consolidated entities is restricted as it is
held within the fund investment vehicles on behalf of the third-party
investors in these vehicles. The cash is restricted to use cashflows in the
litigation funding assets made on their behalf and costs of administering the
fund.
Note 9. Trade receivables
Consolidated
31 Dec 2025 30 Jun 2025
$'000 $'000
Due from litigation service 1,786 1,786
1,786 1,786
As at 31 December 2025, trade receivables are expected to be settled within 12
months after the Balance Sheet date.
Allowance for expected credit losses
The Group has recognised a loss of $nil (Jun 2025: $nil) in profit or loss in
respect of the expected credit losses for the period ended 31 December 2025.
Note 10. Due from resolution of investments
31 Dec 2025 30 Jun 2025
LCM Fund Consolidated LCM Fund Consolidated
$'000 $'000 $'000 $'000 $'000 $'000
At start of period 28,824 59,377 88,201 3,980 - 3,980
Recoveries on resolved investments (note 4) 1,094 - 1,094 49,672 94,105 143,777
Reversal of performance fees previously recognised (note 4) (6,623) 6,623 - - - -
Reimbursement of deployed capital 126 13 139 901 - 901
Proceeds from litigation funding assets (1,220) (13) (1,233) (23,686) (31,136) (54,821)
Foreign exchange gain (350) (849) (1,198) (2,043) (3,592) (5,635)
Balance as at end of period 21,852 65,151 87,003 28,824 59,377 88,201
Note 11. Contract costs - litigation contracts
31 Dec 2025 30 Jun 2025
$'000 $'000
Litigation contracts - ongoing 10,383 39,786
Litigation contracts - under appeal 8,654 8,202
19,037 47,988
There are a small number of legacy investments which are still being recorded
under AASB 15 Revenue from Contracts with Customers due to the timing the
contracts were entered into. These are expected to resolve in the short to
medium term.
Reconciliation of litigation contract costs
Reconciliation of the contract costs at the beginning and end of the current
period and previous financial year are set out below:
31 Dec 2025 30 Jun 2025
$'000 $'000
Balance at 1 July 47,988 42,072
Additions during the period 2,175 11,384
Realisations of contract assets (31,126) (5,468)
Balance as at end of period 19,037 47,988
Additions during the year relate to matters that progressed to trial, which
required significant investment in their final stages.
The Group has recognised impairment losses of $nil (June 2025: $5,468) in
profit or loss on contract costs for the period ended 31 December 2025.
Note 12. Investments
31 Dec 2025 30 Jun 2025
LCM Fund Consolidated LCM Fund Consolidated
$'000 $'000 $'000 $'000 $'000 $'000
At start of period 124,839 162,896 287,735 202,913 262,300 465,213
Deployments 22,613 26,878 49,491 35,969 60,165 96,134
Capital realised during the period (note 4) (7,577) (20,057) (27,635) (27,485) (72,649) (100,134)
Fair value removal on concluded investments (note 4) 2,325 7,063 9,389 (49,020) (44,997) (94,017)
Fair value write down on case losses under appeal (note 4) (60,351) (39,107) (99,458) (44,536) (41,773) (86,309)
Fair value movement on pre-hearing/trial ongoing investments (note 4) (3,283) (5,185) (8,468) (6,824) (21,292) (28,115)
Foreign exchange movements (2,416) (4,908) (7,324) 13,820 21,142 34,962
Balance as at end of period 76,151 127,579 203,729 124,839 162,896 287,735
Investments are financial instruments that relate to the provision of capital
in connection with legal finance. The Group fund through both direct
investments as well as using third party capital via a fund management model.
The table above sets forth the changes in litigation funding assets at the
beginning and end of the relevant reporting
periods.
Note 13. Trade and other payables
Consolidated
31 Dec 2025 30 Jun 2025
$'000 $'000
Trade payables 23,512 10,227
Other payables 159 281
23,672 10,508
Note 14. Borrowings
Consolidated
31 Dec 2025 30 Jun 2025
$'000 $'000
Borrowings 93,790 77,747
93,790 77,747
Reconciliation of borrowings of LCM:
31 Dec 2025 30 Jun 2025
$'000 $'000
Balance 1 July 77,747 61,917
Proceeds from borrowings 15,666 25,039
Non-cash interest and borrowing costs capitalised 4,214 -
Repayment of borrowings - (12,864)
Payments for borrowing costs (694) (487)
Non-cash borrowing costs (2,185) -
Net accrued interest (3) 5
Amortisation 419 611
Refinance - foreign exchange movements - 1,522
Foreign exchange movements (1,374) 2,005
93,790 77,747
On 2 December 2024, LCM refinanced its credit facility with Northleaf Capital
Partners for an initial amount of US$75,000,000, AUD equivalent of
$112,442,000(1) (the "Facility"), with a potential to upsize by a further
US$75,000,000 (total US$150,000,000, AUD equivalent $224,885,000).
Interest is calculated by reference to the applicable currency benchmark,
being the US Federal Funds Rate for USD drawings, the Bank Bill Swap Reference
Rate (BBSY) for AUD drawings, and SONIA for GBP drawings (with fallback to the
Bank of England base rate), together with a 5.25% margin.
The Facility has an overall term of four years and is secured against LCM's
assets. As at 31 December 2025, LCM's outstanding utilisation amounted to
US$13,032,000 on the initial credit facility, an AUD equivalent of
$19,538,000(1).
LCM agreed to various debt covenants including a minimum effective net
tangible worth, borrowings as a percentage of effective net tangible worth,
minimum liquidity, a minimum consolidated EBIT and a minimum multiple of
invested capital on concluded contract assets over a specified period.
LCM incurred costs in relation to arranging the Facility of $3,671,000 which
were reflected transactions costs and will be amortised over the 4 year term
of the borrowings. As at 31 December 2025, $3,337,000 of these loan
arrangement fees remained outstanding.
1 Converted at the functional currency spot rates of exchange at the
reporting date
Note 15. Financial liabilities related to
third-party interests in consolidated entities
31 Dec 2025 30 Jun 2025
$'000 $'000
Balance 1 July 226,538 264,950
Proceeds - capital contributions from Limited Partners 38,145 67,106
Payments - distributions to Limited Partners - (33,959)
Movement on financial liabilities related to third-party interests in (51,098) (90,133)
consolidated entities (note 4)
Non-cash movements in third-party assets and liabilities (6,811) 9,705
Foreign exchange movements (728) 8,869
Balance as at end of period 206,046 226,538
Note 16. Equity - issued capital
31 Dec 2025 30 Jun 2025 31 Dec 2025 30 Jun 2025
Shares Shares $'000 $'000
Ordinary shares - fully paid 103,136,382 102,690,913 62,147 61,494
Ordinary shares - loan share plan and Employee Benefit Trust 11,144,917 11,590,384 (860) (860)
114,281,297 114,281,297 61,287 60,634
31 Dec 2025 30 Jun 2025
Movements in ordinary share capital Shares $'000 Shares $'000
Balance at 1 July 102,690,913 61,494 104,118,534 69,990
Options exercised 445,467 652 740,764 1,359
Share Buy-Back Programme (treasury shares) - - (2,168,385) -
Treasury shares cancelled - - - (9,854)
Balance at period end 103,136,380 62,147 102,690,913 61,494
Movements in ordinary shares issued under loan share plan ('LSP') and held by
Employee Benefit Trust:
31 Dec 2025 30 Jun 2025
Shares $'000 Shares $'000
Balance at 1 July 11,590,384 (860) 12,331,148 -
Options exercised (445,467) - (666,547) -
LSPs exercised - - (858,736) -
LSPs purchased by EBT - - 784,519 (860)
Balance at period end 11,144,917 (860) 11,590,384 (860)
Reconciliation of ordinary shares issued under LSP:
31 Dec 2025 30 Jun 2025
Total shares allocated under existing LSP arrangements with underlying LSP 6,550,366 6,642,872
shares (note 20)
Less shares allocated under existing LSP arrangements without underlying LSP (128,961) (221,467)
shares (note 20)
Shares held by LCM Employee Benefit Trust for future allocation under employee 4,723,512 5,168,979
share and option plans
11,144,917 11,590,384
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the
proceeds on the winding up of the Company in proportion to the number of and
amounts paid on the shares held. The fully paid ordinary shares have no par
value and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy
shall have one vote and upon a poll each share shall have one vote.
Ordinary shares - under loan share plan ('LSP')
The Company has an equity scheme pursuant to which certain employees may
access a LSP. The acquisition of shares under this LSP is fully funded by the
Company through the granting of a limited recourse loan. The shares under LSP
are restricted until the loan is repaid. The underlying options within the LSP
have been accounted for as a share-based payment. Refer to note 20 for further
details. When the loans are settled the shares are reclassified as fully paid
ordinary shares and the equity will increase by the amount of the loan repaid.
Ordinary shares - held by Employee Benefit Trust
The Employee Benefit Trust ('EBT') holds performance related shareholdings
awarded to former executive which did not vest. The Trust holds 4,723,512
shares which remain unallocated as at 31 December 2025 (June 2025: 5,168,979).
Ordinary shares - partly paid
As at 31 December 2025, there are currently 1,433,022 partly paid shares
issued at an issue price of $0.17 per share. No amount has been paid up and
the shares will become fully paid upon payment to the Company of $0.17 per
share. As per the terms of issue, the partly paid shares have no maturity date
and the amount is payable at the option of the holder.
Partly paid shares entitle the holder to participate in dividends and the
proceeds of the Company in proportion to the number of and amounts paid on the
shares held. The partly paid shares do not carry the right to participate in
new issues of securities. Partly paid shareholders are entitled to receive
notice of any meetings of shareholders. The partly paid shareholders are
entitled to vote in the same proportion as the amounts paid on the partly paid
shares bears to the total amount paid and payable.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to
continue as a going concern, so that it can provide returns for shareholders
and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
Capital is regarded as total equity as recognised in the statement of
financial position.
In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
The capital risk management policy remains unchanged from the 30 June 2025
Annual Report.
Note 17. Equity - dividends
31 Dec 2025 30 Jun 2025
$'000 $'000
Ordinary dividend paid (December 2025: nil, June 2025: 1.25 cents) - 2,680
Franking credits
The franking credits available to the Group as at 31 December 2025 are $5,000
(June 2025: $5,000).
Note 18. Fair value measurements
The fair value measurements used for all assets and liabilities held by the
Group listed below are level 3:
Assets 31 Dec 2025 30 Jun 2025
Litigation funding assets $'000 $'000
APAC 87,831 81,220
EMEA 115,898 206,515
Total Level 3 assets 203,729 287,735
Liabilities
Financial liabilities related to third-party interests in consolidated 206,046 226,538
entities
Total Level 3 liabilities 206,046 226,538
Refer note 12 for movements in level 3 assets and note 15 for movements in
level 3 liabilities. There were no transfers into or out of level 3 during the
period ended 31 December 2025.
As at 31 December 2025, the financial liability due to third-party interests
is $206,046,000 (June 2025: $226,538,000), recorded at fair value as
represented in note 15. Amounts included in the consolidated statement of
financial position represent the fair value of the third-party interests in
the related financial assets and the amounts included in the consolidated
statement of profit or loss and other comprehensive income represent the
third-party share of any gain or loss during the period, see note 3.
Sensitivity of Level 3 Valuations
The Group's fair value policy provides for ranges of percentages to be applied
against the risk adjustment factor to more than 159 discrete objective
litigation events. The tables below set forth each of the key unobservable
inputs used to value the Group's LFA assets and the applicable ranges and
weighted average by relative fair value for such inputs.
The Group implemented a new valuation methodology for LFA assets during the
year ended 30 June 2023. LFA assets are fair valued using an income approach
which is the technique adopted for LFA Assets. Under the income approach,
future cash flows associated with; cash out flows, including investments and
deployments, and cash inflows such as settlements or resolutions, are
converted to a single current (discounted) amount, reflecting current market
expectations about those future amounts. That is, the amount that could
reasonably be expected to be paid to acquire the asset at that point in time.
In developing our framework we also looked to Industry peers for alignment in
methodology, the benefit being that adopting a similar methodology provides a
level of comparability. Similar to industry peers, the framework developed
applied probabilities based on observable milestones for each investment
within the portfolio as well as making informed assumptions around inputs such
as discount rates, timing and risk factors, all of which are considered Level
3 inputs. In cases where cash flows are denominated in a foreign currency,
forecasts are developed in the applicable foreign currency and translated to
AUD dollars.
A Discounted Cash Flow approach is then applied to each underlying investment
on an individual basis to arrive at a net present value of the future expected
cash flows.
The cash flow forecast is updated each reporting period, based on the best
available information on progress of the underlying matter at the time. These
objective events could include, among others:
- Stage of the investment
- ongoing developments
- progress
- recovery or sovereign risk
- legal team expertise
- other factors impacting the expected outcome
Each reporting period, the updated risk-adjusted cash flow forecast is then
discounted at the then current discount rate to measure fair value. The
discount rate includes an applicable risk-free rate and credit spread to
incorporate both market and idiosyncratic asset-class risk.
The Group's fair value policy provides for ranges of percentages to be applied
against the risk adjustment factor to more than 159 discrete objective
litigation events. The tables below set forth each of the key unobservable
inputs used to value the Group's LFA assets and the applicable ranges and
weighted average by relative fair value for such inputs.
31 December 2025
Item Valuation technique Unobservable Input(1) Min Max Weighted average
Litigation funding asset Discounted cash flow Discount rate 9.6% 10.6% 10.11%
Duration (years) 2.50 8.08 5.44
Adjusted risk premium (50%) 80% (6%)
Adjusted risk premium - case milestone Min(2) Max(2) ( ) Weighted average % of portfolio(3)
Pre-commencement & commenced 0% 0% 0% 51%
Pleadings 0% 10% 4% 6%
Discovery & evidence 10% 20% 14% 15%
Significant ruling or other objective event prior to trial court judgment 20% 65% 50% 1%
Settlement 90% 90% 0% 0%
Trial court judgment or tribunal award (100%) 75% (39%) 9%
Appeal judgment (100%) 80% (32%) 14%
Enforcement (50%) 80% (20%) 4%
30 June 2025
Item Valuation technique Unobservable Input(1) Min Max Weighted average
Litigation funding asset Discounted cash flow Discount rate 10.2% 10.9% 10.6%
Duration (years) 2.42 7.67 5.45
Adjusted risk premium (60%) 80% 10%
Adjusted risk premium - case milestone Min(2) Max(2) ( ) Weighted average % of portfolio(3)
Pre-commencement & commenced 0% 0% 0% 56%
Pleadings 0% 10% 2% 9%
Discovery & evidence 10% 20% 15% 10%
Significant ruling or other objective event prior to trial court judgment 20% 65% 64% 6%
Settlement 90% 90% 0% 0%
Trial court judgment or tribunal award (100%) 75% (22%) 8%
Appeal judgment (100%) 80% (46%) 8%
Enforcement 80% 80% 80% 3%
1 Minimum and maximum within each cohort represent the actual adjusted risk
premiums applied in the period
2 Percentage of portfolio represents the percentage of the book within the
cohort
Note 19. Contingent liabilities
Potential clawback of Fund 1 performance fees
The Group is entitled to receive performance fees when investment returns of
the Funds exceed specified performance thresholds. These performance fees are
calculated by reference to realised investment outcomes and are distributed
before the final outcome of all investments within the fund is known.
In certain circumstances, fund documentation provides a mechanism under which
performance fees previously distributed may be required to be returned. This
is intended to ensure that, over the life of the fund, performance fees
ultimately retained by the Group are aligned with the overall performance of
the fund and the outcomes achieved for investors. Any requirement to return
performance fees is conditional on specific future events. As a result, the
existence and timing of any obligation to repay performance fees is uncertain.
The Group has assessed its potential exposure having regard to the contractual
terms of the fund documentation, and based on current information and
reasonable assumptions, should the relevant conditions arise and a repayment
be required, the amount of performance fees that could potentially be subject
to clawback is estimated to range between approximately $12 million and $17
million.
In forming this estimate, the Group has considered the current status of the
Fund's remaining investments and historic performance, however the outcome
remains dependent on future events not wholly within the Group's control.
Under-insured adverse costs exposure
In certain jurisdictions, litigation funding arrangements entered into by the
Group include undertakings to meet adverse costs awarded to the successful
party in the event that funded litigation is unsuccessful. The occurrence and
quantum of any adverse cost award is inherently uncertain and dependent on the
outcome of litigation proceedings, and accordingly it is not possible to
predict whether or when such costs may be incurred.
The Group maintains adverse costs insurance arrangements (commonly referred to
as after-the-event or ATE insurance) which mitigate the financial impact of
adverse cost awards. While these arrangements substantially reduce the Group's
exposure, a residual risk may exist in respect of adverse cost awards that may
not be fully covered by insurance.
The recent outcome in the Queensland Electricity class action (a funded matter
where the claim was unsuccessful and adverse costs were quantified by the
Federal Court of Australia in late 2025 at approximately A$32.4 million in
total) highlighted the potential for ATE insurance to be insufficient to fully
cover such awards in certain cases, resulting in a material uninsured exposure
for the Group and/or relevant fund investors. In light of this development,
the Group has undertaken a comprehensive review of its other currently funded
investments to reassess the adequacy of existing ATE insurance arrangements
and the potential residual risks of under-insurance across the portfolio.
As at the reporting date, based on the Group's assessment of its currently
funded investments, the potential exposure to adverse costs not covered by
insurance remains contingent on the outcome of litigation matters and cannot
be reliably predicted or measured with sufficient certainty for recognition as
a provision. Based on current information and reasonable assumptions, should
one or more funded matters be unsuccessful and adverse cost awards be made
which are not fully covered by insurance, the Group estimates that the
potential under-insured adverse cost exposure for LCM could range between
approximately A$4 million and A$8 million.
In forming this assessment, the Group has considered the status of funded
proceedings, applicable insurance arrangements (including policy limits and
any lessons from recent cases such as the Queensland Electricity class
action), historical experience, jurisdictional factors, and the inherent
uncertainties in litigation outcomes.
Note 20. Share-based payments
The share-based payment expense for the period was $389,000 (December 2024:
$590,000).
Loan Funded Share Plans ('LSP')
As detailed in note 16, the Group has an equity scheme pursuant to which
certain employees may access a LSP. The shares under LSP are issued at the
exercise price by granting a limited recourse loan. The LSP shares are
restricted until the loan is repaid. Options under this scheme can be granted
without an underlying LSP share until they have been exercised and on this
basis, do not form part of the Group's issued share capital. The underlying
options have been accounted for as a share-based payments. The options are
issued over a 1-3 year vesting period. Vesting conditions include satisfaction
of customary continuous employment with the Group and may include a share
price hurdle.
During the period the Group granted nil (June 2025: nil) shares under the LSP.
Set out below are summaries of shares/options granted under the
LSP:
31 December
2025
Grant date Expiry date Exercise Balance at the start of the period Granted Exercised Expired/ Balance at the end of the period
Price
forfeited/
other
04/12/2017 04/12/2027 $0.60 2,000,000 - - - 2,000,000
19/11/2018 25/11/2028 $0.47 1,595,058 - - - 1,595,058
03/12/2018 03/12/2028 $0.89 100,000 - - - 100,000
01/11/2019 01/11/2029 £0.7394 918,694 - - - 918,694
13/10/2020 13/10/2030 £0.6655 458,224 - - - 458,224
27/10/2021 27/10/2031 £1.06 1,349,429 - - - 1,349,429
27/10/2021 27/10/2031 £1.06 99,037(1) - - (5,452) 93,585(1)
27/10/2021 27/10/2031 £1.14 122,430(1) - - (87,054) 35,376(1)
6,642,872 - - (92,506) 6,550,366
(1)Options granted without an underlying LSP share until exercised ie, do not
form part of the Group's issued share capital
Deferred Bonus Share Plan ('DBSP')
The Company has in place a DBSP. Options granted under the DBSP reflect past
performance and are in the form of nil cost options and will vest in three
equal tranches from the date of issue and are subject to continued employment
over the three year period.
In addition, the Options granted under the DBSP are subject to malus and
clawback provisions. In the event of a change of control of the Company,
unvested awards will vest to the extent determined by the Board, taking into
account the proportion of the period of time between grant and the normal
vesting date that has elapsed at the date of the relevant event.
During the period the Group granted nil (June 2025: 532,235) options under the
DBSP.
Set out below are summaries of options granted under the DBSP:
31 December 2025
Grant date Expiry date Exercise Balance at the start of the period Granted Exercised Expired/ Balance at the end of the period
Price
forfeited/
other
07/10/2022 07/10/2032 $0.00 434,967 - (183,661) (66,764) 184,542
04/10/2023 04/10/2033 $0.00 547,832 - (125,478) (89,335) 333,019
04/10/2024 04/10/2034 $0.00 532,235 - (136,328) (20,416) 375,491
1,515,034 - (445,467) (176,515) 893,052
Executive Long Term Incentive Plan ('LTIP')
The Company has in place an Executive LTIP. Options granted under the LTIP in
the form of nil cost options and are subject to performance conditions which
require the growth of Funds under Management ('FuM') over a five year
performance period.
During the period, all LTIPs lapsed as the performance conditions were not
satisfied.
31 December 2025
Grant date Expiry date Exercise Balance at the start of the period Granted Exercised Expired/ Balance at the end of the period
Price
forfeited/
other
07/10/2022 07/10/2032 $0.0000 5,671,516 - - (5,671,516) -
5,671,516 - - (5,671,516) -
Note 21. Events after the reporting period
On 12 January 2026, the Group announced a positive development in its
international arbitration claim against the Republic of Poland, where the
Singapore court rejected Poland's application to set aside the Energy Charter
Treaty award.
On 2 February 2026, the Group announced an increase in its credit facility
together with an extension of the debt covenant waiver from its lender.
On 11 March 2026, the Group announced that its funded party had been
successful in the High Court of Australia in a trademark dispute claim in
which LCM had invested A$3.3 million. The matter will now proceed to the Full
Court for the quantification of costs and damages.
On 17 March 2026, the Group announced that an adverse judgment had been
delivered in an Australian commercial litigation claim funded by the Group
with A$1.4 million of shareholder capital. The Group is reviewing the judgment
and considering its options.
The Strategic Review, which was commenced in September 2025, continues to
progress.
Directors' Declaration
In the directors' opinion:
· the attached financial statements and notes comply with the
Corporations Act 2001, Australian Accounting Standards and other mandatory
professional reporting
requirements;
· the attached financial statements and notes comply with
International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in note 2 to the financial statements;
· the attached financial statements and notes give a true and fair
view of the consolidated entity's financial position as at 31 December 2025
and of its performance for the period ended on that date;
· there are reasonable grounds to believe that the company will be
able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of
directors.
On behalf of the
directors
Director
Dated this 31st day of March 2026
-end-
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Copyright 2019 Regulatory News Service, all rights reservedRecent news on Litigation Capital Management
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