Litigation Capital Management Limited (LIT) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to Litigation Capital Management Annual General Meeting. I now hand over the proceedings to your Chair, Mr. Jonathan Moulds. Thank you, and over to you, sir.

Thank you very much. As you just heard, I'm Jonathan Moulds, I'm the Chair of Litigation Capital Management. I have pleasure in welcoming you to the LCM's 2021 Annual General Meeting this year. LCM are holding an online meeting. Given the current travel restrictions, I regret that I'm having to attend this meeting from the U.K. We have a quorum of shareholders and I'm pleased to declare this meeting open. Firstly, I'd like to introduce you to my fellow directors, so Patrick Moloney, of course, our CEO, Managing Director; Dr. David King, who is with Patrick in Sydney; Nick Rowles-Davies who is attending the meeting from the U.K.; and Gerhard Seebacher who is attending the meeting from the U.S. Also present are our Chief Financial Officer, Mary Gangemi attending from the U.K.; and Geoff Edwards, our auditor from BDO attending from Adelaide. Geoff will be available to answer any questions you may have about the conduct of the audit. So to start this, I'm going to ask Patrick to give shareholders a brief update on the company's activities. So over to you, Patrick.

Thank you. Look, I don't propose to go into detail. All shareholders have had the benefit of me presenting to them with respect to our full year results recently. I'll touch upon some of the highlights and then we can move on with the meeting. We've had a very strong year, both financially and in terms of growth. We have increased our adjusted profit compared to the previous year by 47%. We've had an increase in applications by 10%, notwithstanding the disrupted year consequent upon COVID. We have increased our total investments in assets under management to $336 million compared to $250 million at the close of the previous financial period. Year-on-year increase of putting our capital to work has been substantial. The increase for this financial year was 69%, a remarkable achievement, given the circumstances, again, the disruption consequent on COVID. We have committed our first fund to now above 90%. And we've also done a first close with respect to our second fund, raising USD 200 million with an aim to achieve a $300 million close early in the new year. We've maintained our track record in terms of performance. And in terms of financial metrics, we've achieved our 10-year mark, an IRR of 78% and a return on invested capital of 153%. We have also, during the financial period in place, increased the flexibility of our capital structure by introducing a capital facility, which again was all done during a pretty disrupted year. I don't propose to really go through much more than that in terms of what we've achieved during the current year other than to touch upon those highlights. So I'll hand back to you, Jonathan, but more than happy to answer any questions that shareholders may have.

Well, thank you, Patrick, for that. We'll now move to the formal part of the meeting. I'll take the notice of the meeting dated 22nd October 2021 as read. All resolutions at the meeting today will be determined via poll. Shareholders attending online can cast their vote online at any time. Do please refer to the online meeting guide or use the helpline specified if you do need assistance with that process. I'll put each resolution to the meeting in turn, and shareholders will be given the opportunity to ask questions or make a comment in relation to that resolution. And then, of course, the vote will be taken. I'll also provide an opportunity for shareholders to ask general questions after all the resolutions have been considered. I do encourage shareholders attending online who wish to ask a question to send their questions through as soon as possible, obviously, given the format. So I'll now move to the formal business of the meeting. The 2021 annual report contains the financial report, directors' report and the independent auditor's report. A copy of the annual report is available on the company's website. The financial statements have been audited by BDO and approved by the directors. This item is the receipt and consideration of the reports of LCM. It is not a resolution that requires a vote. I will take the reports as read and would like to take any general questions or comments about the reports or questions, comments for the auditor. Are there any questions or discussion on this item?

Chair, there are no questions or discussion on this item.

Thank you. We'll now move to the resolutions on the notice of meeting. So the first resolution, Resolution 1 of the meeting relates to my election, so of course, I will temporarily stand down as Chair of the meeting and hand the Chair over to Dr. David King.

Thank you, Jonathan. As Jonathan mentioned, Resolution 1 is the reelection of Jonathan Moulds as a director of LCM. Are there any questions about Jonathan's reelection?

Chair, there are no questions about this resolution.

Thank you. The proxies received are shown on the screen. They should be visible to you. There's no discussion, I'll now put this resolution to the meeting. Please now record your vote. [Voting]

And with that, I'll hand back the Chair of the meeting to Jonathan.

Thanks, Dave. The next item of business is the reelection of David King as a director of the company. Are there any questions about Dave's reelection?

Chair, there are no questions about this resolution.

The proxies received are shown on the screen. If there's no further discussion, no discussion, I now put this resolution to the meeting. Please now record your vote. [Voting]

The next resolution is the reelection of Gerhard Seebacher as a director of the company. Again, I will ask, are there any questions about Gerhard's reelection as a director?

There are no questions on this resolution, Chair.

Thank you. The proxies received are shown on the screen. There's no discussion, I now put this resolution to the meeting. Please now record your vote. [Voting]

Resolution 4 is the reelection of Nick Rowles-Davies as a director of the company. Are there any questions about Nick's reelection?

There are no questions on this resolution, Chair.

There's no discussion. I now put this resolution to the meeting. Please now record your vote. [Voting]

Resolution 5 is seeking approval for the appointment of BDO Audit Pty Ltd as the company's auditor. Are there any questions about this resolution?

Chair, there are no questions about this resolution.

The proxies received are shown on the screen. If there's no discussion, I now put this resolution to the meeting so please now record your vote. [Voting]

Resolution 6 is seeking approval for the disapplication of preemptive rights under the constitution. Are there any questions about this resolution?

Chair, there are no questions about this resolution.

The proxies received are shown on the screen. If there's no discussion, I now put this resolution to the meeting. Please now record your vote. [Voting]

So that concludes the formal part of the meeting. The vote -- the poll will close 5 minutes after the end of the meeting. Please submit your online votes now if you haven't already done so. I would like to now invite any other questions or general comments about the company. Have we received any questions or would anybody like to ask a question?

Chair, there are no questions online at the moment.

Okay. Well, so I think everyone's had a chance to put those questions forward and heard from Patrick. So there are no further questions, that does conclude the business of this meeting. So I now declare the meeting closed and thank you for attending and, of course, for your continued support of LCM. Thank you.

Thank you.