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Burford bounce boosts Woodford and Barnett

Shares in litigation finance provider surge, providing some relief to major fund manager backers Neil Woodford and Mark Barnett.

 
Burford bounce boosts Woodford and Barnett
 

Shares in Burford Capital (BURF) have surged after the litigation finance provider smashed expectations, with income and profit more than doubling in 2017.

The shares jumped 26% to £13.72, providing some welcome relief to major fund manager backers Neil Woodford and Mark Barnett, who are both enduring a tough run of poor performance.

Profit after tax was up 130% at $264.8 million (£190 million) while income rose 109% to $341.2 million.

Numis analyst Marcus Barnard said the results showed 'further strong growth' and were 'well ahead of expectations'.

'More importantly the company highlights how the exponential growth of recent years has allowed it to undertake better risk selection, lower binary risk on individual cases and more diversification, all of which we believe should give the scale to produce more predictable, less volatile results in future,' he said.

The strong results also surpassed Jefferies analyst Phil Dobbin's expectations.

'Burford continues to invest successfully, to report conservatively and to generate attractive returns,' he said.

'There is plenty of room for growth but high barriers to entry into its market, where it has established a leading position.'

Burford Capital is a major holding for Neil Woodford and ranks as the fourth biggest position in his Woodford Equity Income fund, at 3.8% of the portfolio.

The stock was a feature of his flagship fund at launch, over which time the shares have risen 11-fold. 

Woodford has been an investor in the business since 2009 when he was the biggest backer of its flotation on the Alternative Investment Market when at Invesco Perpetual.

His former employers Invesco Perpetual remain the biggest shareholders of the business, holding 19.8% of the shares, compared to Woodford's 10%.

The bulk of that stake is held by Woodford's former funds, the £4.7 billion Invesco Perpetual Income and £9.8 billion High Income  funds, now run by Barnett. The stock is the fourth largest position in both funds, representing 3.2% of the portfolio for both.

Shares in Barnett's Edinburgh (EDIN ) investment trust, which also has a 3.2% weighting to Burford, rose 6p to 648p on the news.

6 comments so far. Why not have your say?

Hank Elvis Dobbs (texan)

Mar 14, 2018 at 16:36

WELL DONE NEIL ..again

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Robroy

Mar 14, 2018 at 17:09

Well done Niel just get a few more like that and you will keep the pundits at bay ,I am sticking with him,why oh why is Lloyds bank still below 70 p

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FrankFrank

Mar 14, 2018 at 18:53

Hold your horses Woodford fans. He is still at the bottom of the table year today.

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Hank Elvis Dobbs (texan)

Mar 14, 2018 at 21:10

And so...?

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Robroy

Mar 14, 2018 at 21:18

When you invest in funds you have to be in for the long haul,short hauls are only good if you are dealing direct with shares,I believe he will come good ,he is just like most fund managers no one gets it right all the time,I’m in for another 5 yrs and we will see how he goes

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Jeremy Woodhouse

Mar 15, 2018 at 09:42

Is this a start of Woodford's financial "Houdini" act? I hope so.

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