REG - Litigation Cap. Mgmt - Judgment in Funded Case and Trading Update

Litigation Capital ManagementAnnouncement

19/06/2025 07:00

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RNS Number : 4712N  Litigation Capital Management Ltd  19 June 2025

19 June 2025

 

Litigation Capital Management Limited

("LCM" or the "Company")

 

Judgment in Funded Case and Trading Update

 

Litigation Capital Management Limited ("LCM" or the "Company"), an alternative
asset manager specialising in dispute financing solutions internationally,
announces that the High Court in London has delivered a judgment in a
commercial litigation matter funded by LCM (the "Judgment"). This announcement
also includes a trading update for the financial year ending 30 June 2025.

 

Funded Case Judgment

The Judgment found against LCM's funded party.  The investment was co-funded
alongside Fund I.  LCM contributed £3.4m (A$7.2m) of its own capital with a
further £8.2m (A$17.2m) invested from Fund I.  As at 31 December 2024, the
investment was recorded at a fair value of £5.0m (A$10.1m) on LCM's balance
sheet.  Adverse costs risk is covered by ATE insurance.  LCM is currently
reviewing the judgment and assessing potential next steps alongside the funded
party and legal representatives.

 

Trading Update

In the second half of the financial year, the number of realisations has been
modest with two successful investments and two unsuccessful investments in the
period.  These realisations in the second half exclude the Judgment noted
above and the previously announced Queensland Electricity, Quintis and the
commercial arbitration claim; all of which are either subject to appeal
processes or considering appeal options.

 

 Period  Realisations (A$m)  Invested Capital (A$m)   MOIC multiple
 H1 25   52                  14                       3.7x
 H2 25   3                   5                        0.6x
 FY25    55                  19                       2.9x

 

Note:  Invested Capital reflects LCM's investment into the 13 concluded
investments.  It excludes Queensland Electricity, Quintis, the commercial
arbitration and the UK litigation matter referenced above.

 

Net debt is expected to be approximately A$73m at 30 June 2025 (FY24: A$8.9m),
reflecting continued deployment into active cases and modest cash inflows
during the period.

 

LCM has received strong interest in Fund III from both existing and new
investors.  In light of uncertainty surrounding potential tax changes in the
US litigation finance market, as well as political developments affecting
certain institutional investors, notably US university endowments, LCM
considers it prudent to temporarily pause active marketing of Fund III.
While LCM has no direct exposure to US tax proposals, maintaining optionality
in how we respond to further developments allows us to position the business
advantageously as the external environment becomes clearer. We anticipate
resuming marketing for Fund III in late 2025 or early 2026 and we remain
flexible.

 

In light of this pause, and reflecting the Board's focus on balance sheet
discipline following the recently announced trial losses, new commitments for
FY25 are expected to be approximately A$80 million (FY24: A$270 million).

 

Management will provide a strategic update with the full year results in
September, reflecting on recent developments and outlining the Company's
forward priorities.  This will include an assessment of the current
portfolio, which contains a range of investments at different stages,
including several larger matters that have the potential to positively impact
future financial performance in a meaningful way.

 

Patrick Moloney, CEO of LCM commented: "This has been a challenging period for
LCM, marked by a small number of adverse case outcomes. While the recent trial
losses are clearly disappointing, we are actively applying the lessons learned
to further strengthen our investment and risk processes. As shareholders would
expect, we analyse in detail the reasons for any adverse judgment LCM
receives.  I look forward to sharing those insights with our investors at
our  full year results presentation.  Fund III marketing has been
temporarily paused for the reasons noted but we retain flexibility to
recommence that process.  We are very pleased with the interest and
enthusiasm shown to date by key investors. Our long-term confidence in the
fundamentals of the dispute finance sector, and in LCM's differentiated model,
remains intact."

 

 

Enquiries

 

 Litigation Capital Management
 Patrick Moloney, Chief Executive Officer

 David Collins, Chief Financial Officer

 Cavendish (Nomad and Joint Broker)                         Tel: 020 7523 8000
 Jonny Franklin-Adams and Isaac Hooper (Corporate Finance)

 Tim Redfern and Jamie Anderson (Corporate Broking)

 Canaccord Genuity (Joint Broker)                           Tel: 020 7597 5970
 Bobbie Hilliam

 

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.

 

LCM has an unparalleled track record driven by disciplined project selection
and robust risk management.

 

Currently headquartered in Sydney, with offices in London, Singapore and
Brisbane, LCM listed on AIM in December 2018, trading under the ticker LIT.

 

www.lcmfinance.com (http://www.lcmfinance.com)

 

 

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