Burford Capital surges as profit jumps 130%

Burford Capital rocketed on Wednesday as the AIM-listed finance and investment management company reported a 130% jump in full-year net profit as income surged.

In the year to the end of December 2017, Burford, which focuses on law, saw net profit rise to $264.8m from $115.1m the year before, with operating profit up 132% to $289m and income 109% higher at $341.2m. This was driven by a 127% increase in income from investments to $318.2m.

Earnings per share were up 126% to 127 cents and the company lifted its annual dividend by 20% to give a total dividend for the year of 11 cents per share, versus 9.15 cents the year before.

Assets under management in Burford's investment management business rose to $1.7bn from $1.3bn and the company said it had an "active" start to 2018, with $128.5m committed to 12 new investments in the first two months of the year versus a single $1m investment in the same period a year ago.

Chairman Peter Middleton said: "Burford has experienced another record year, its eighth consecutive year of significant growth. Burford continues to lead its growing and evolving industry and looks forward to continuing to innovate to meet its clients' ever-expanding needs. The board is grateful for the continued support of our shareholders and bondholders and is delighted to propose another increase in the dividend."

Meanwhile, chief executive officer Christopher Bogart said the company had experienced "an explosion of demand" for its capital from clients around the world.

"We met that demand by raising incremental capital on our balance sheet and by making robust use of our new investment management business. We grew our team by 23 people so that we now field a team of more than 90, including more than 40 experienced lawyers, and we have by far the largest capital base in the business. We are excited to continue to lead the legal finance industry into the future."

Berenberg said the results were "well ahead" of market expectations and are confirmation of both the huge demand for the company's capital and that it is able to deploy it profitably at larger scale.

"We remain confident that despite increased competition, Burford can defend its competitive advantage and continue to grow, with both Hong Kong and Singapore offering potentially lucrative new markets. It is also in the process of setting up a new insurance business that will target low-volume, high-value deals," it said.

At 1000 GMT, the shares were up 23% to 1,346p.