Burford Capital Limited

Hello and welcome to the Berthoud Capital first quarter 2023 results conference call. My name is Alex and I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, you can press star followed by one on your telephone keypad. If you'd like to withdraw your question, you may press star followed by two. I'll now hand it over to our host, Chris Bogart, CEO to begin. Please go ahead.

Thanks very much and hello everybody. Thank you again for joining us. It feels like we've been talking to you a lot lately. I think this is our third call in three months. And welcome to our very first ever set of quarterly results, all part of the journey towards a full U.S. listing with the New York Stock Exchange. I'm joined as usual by John Malo, the Chief Investment Officer, and Jordan Leach, the Chief Financial Officer. We are going to adopt the process of having these calls be, when we just do the quarterly numbers, having these, you know, given our propensity to talk, we'll try to be brisker for these quarterly calls than we have been for annual calls. And then happy to take whatever questions you all have. So I'm going to start on slide three. And, you know, I have to say this slide and our numbers in general really do speak for themselves. It was an extraordinary quarter and it reflected exactly what we have been saying about what we're seeing out there in the court system and in the market in which we operate. We have seen a return to normalcy in the court system. We've seen our backlog of cases moving through the courts and that's generating an increase in velocity. and that's translating into revenue. We've got numbers on the slide here that are consolidated numbers. As you know, those numbers get a little bit diluted by the fact that they include some consolidated funds. So let me just, for the sake of simplicity, frame Burford-only numbers for you. In other words, the portion of these numbers that accrues to Burford's equity shareholders like you and like me. And on a Burford-only basis, our revenue went up 214% to $315 million or so. And significantly, 125 million of that was from our portfolio, just the general operation of our portfolio, the return to normalcy. That's almost double what it was in the first quarter last year. And realized gains as part of that were up more than 250%. So setting aside YPF for a moment, just looking at the business ex-YPF, we're really pleased with what we're seeing in terms of portfolio activity, in terms of what we're seeing in terms of revenue generation. And then, of course, on March 31st, the last day of the quarter, we had the additional bonus of a strongly positive liability decision from the federal court in the YPF case that obviously caused an upward revaluation of that asset to some extent. And so in addition to that $125 million of Burford-only revenue, we've added about another $190 million from YPF. And those two numbers together resulted in that extraordinary outcome for the quarter. The portfolio at the same time is continuing to grow. And we'll talk in a minute about what we're seeing in terms of new business in the market. And Jordan will take you through liquidity and OPEX. But bottom line, we couldn't be happier with how the first quarter, our first ever reporting quarter, turned out, especially since the first quarter in this business can certainly have periods of historical slowness. We're going to jump around with these slides a little bit, and with that, Jordan's going to take you through slide four.

Thank you, Chris. Good morning, good afternoon to everyone on the call. A little bit of housekeeping, since this is our first time sharing quarterly results. So we want to make sure everyone understands the comparative periods. So on the income statement side, we're going to be comparing first quarter of 2023 to the first quarter of 2022. However, with respect to the balance sheet information, we are comparing the closing balance sheet at March 31st, 2023 to the year end balance sheet of 2022. This page highlights, I'm on slide four, this page highlights results for Burford only and consolidated information can be found in the reconciliations in the appendix of the deck. And also note that all of the information for each quarter is presented under the revised fair value approach, which we've previously discussed. As Chris mentioned, this was a good first quarter, driven by significant progress across the portfolio and further bolstered by the YPF case and the related assets. Our business is episodic, but we hope to impress upon you today the momentum we're seeing in addition to the progress from YPF. From a top-line perspective, total revenues were up more than 200%, driven by higher capital provision income, as well as improved asset management income. Realized gains were up more than 250%, But when you exclude YPF, unrealized gains were up 55%. Burford only net income was nearly $260 million, $1.17 per share. That's up more than 200 million or 92 cents per share compared to the first quarter of last year. And right now we sit at total equity just shy of 2 billion and a book value of $9.10. That's a quick preview of the numbers. We'll go deeper on some other pages, and I'll flip it back to Chris for slide five.