Company Announcements

8 July 2022

Litigation Capital Management Limited

(LCM or the Company)

Market Update

Litigation Capital Management Limited (AIM:LIT), a leading alternate asset manager of disputes financing solutions, provides a market update for the twelve month period to 30 June 2022 ("FY 2022").

Based on unaudited management accounts the Group expects to report positive growth in its financial performance compared to the comparative period covering the twelve months to 30 June 2021 ("FY 2021"), this is despite previously reported disruption and delay in justice systems. FY 2022 gross revenue is expected to be approximately 25% higher than FY 2021, with adjusted operating profit approximately 15% higher. Cash held at period end is A$29m and total assets under management increased to A$414m. A decrease in overall applications during the period reflected disrupted trading conditions, however commitments were broadly in line with the prior year, indicating progress on improving the quality of applications.  

The Company had two material investments move into future financial periods. Whilst such delays are diminishing, they are still present in our portfolio. The financial performance of those investments will not be adversely impacted by the delay indeed it may be enhanced. As previously disclosed, this is purely a timing issue and is not an indication of LCM's current or future financial performance, nor should it be taken as a direct move of such cases into the following period forecasts as the collective portfolio and timing of resolutions is continually assessed based on how investments are progressing through either the court or arbitral cycle.

The degree of complexity in investments made by the Company means that whilst LCM has extensive experience in the provision of disputes funding and finance products to the market, that accurate forward forecasting is exceptionally difficult to achieve. It requires the financier to predict accurately when a particular investment, or portfolio of investments, will come to a conclusion either through a negotiated settlement of the dispute or an adjudication by a court or tribunal. Secondly, it requires the financier to predict the quantum of such a resolution, either as a negotiated settlement or as an award by the court or tribunal. Given the myriad of possible outcomes in respect of an investment in a dispute, it is not reasonable or responsible to provide market guidance.

Patrick Moloney, Chief Executive Officer, commented: "I'm pleased with our resilient performance for the second half of the financial year, despite continued challenging external conditions, in which we have maintained our level of commitments alongside growing our assets under management.

"Noting that the average life of these investments is historically 27 months, as our investments become larger and more complex, we expect the investment period to increase to between 36 and 42 months.

"With the current market instability and uncertainty, we remain very confident in LCM's growth prospects."

Enquiries

NOTES TO EDITORS

Litigation Capital Management (LCM) is a global provider of disputes finance.  LCM provides capital and risk management services into the disputes market including insolvency, commercial disputes, arbitral disputes, class actions and corporate portfolios.

LCM has an unparalleled track record, driven by effective project selection, active project management and robust risk management.

Current 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

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.