# Burford Capital  Equity issue ensures growth is not adjourned

- Link: https://www.directorstalkinterviews.com/burford-capital-equity-issue-ensures-growth-is-not-adjourned/412759539
- Published: 2018-10-05T09:51:26+01:00
- Author: Charlotte Edwards

**[⌊Hardman & Co Report Report Downloads⌉⌊Hardman & Co Report Report Downloads⌉[Burford Capital**(
LON:BUR) has placed 10.41m new shares with institutional investors through an
 accelerated
bookbuild. The price per share was 1850p, making a total of £192.6m ($251.2m) raised
before expenses. The funding will be applied to business expansion, with new geographies
such as parts of the United States that have not been fully addressed yet, Australia
and Germany specifically mentioned as well as adding to the team in existing locations.
The announcement also mentions new products, which have been the topic of recent
press releases, and it is clear that Burford has every intention of pushing its 
growth further.

► **Issue**: The 10.41m shares represent approximately 5% of the share capital prior

to the issue. The issue was filled quickly and was oversubscribed. Burford priced
the offering at a 2.9% discount to the volume-weighted average share price since
the release of the interim results.

► **Future fundraisings**: While a fundraising was well flagged at the time of the

interim results, Burford’s sustained growth means that it will continue to require
capital to fund investments. The statement indicates that further debt and private
funds will be raised in the near future.

► **Valuation**: Hardman & Co has made minor adjustment to its earnings estimates,

with the most significant being the increased number of shares. The prospective 
2019 P/E of 22.0x is not excessive for a growth company, with a 22.3% RoE giving
strong metrics all round.

► **Risks**: The investment portfolio is still diversified, with exposure to more
than
 900 claims. However, it retains some very large investments, which means revenue
could be volatile. As the company matures, we would expect that to decrease, but
not to disappear. The Petersen case shows that this volatility is not simply a negative.

►** Investment summary**: Burford Capital has already demonstrated an impressive
ability
 to deliver good returns in a growing market while investing its capital
base. As the invested capital continues to grow, the litigation investment business
will continue to produce strong earnings growth.

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