Burford’s 2019 financials use reclassification, redefinition to inflate cash receipts, operating profit, and to otherwise present a misleading picture of the business. Cutting through the new bullshit, we adjust Burford’s cash receipts to show a YoY decline of -11.8%. We also adjust reported 2019 operating profit lower by approximately -8%. Burford manipulated its 2019 vintage “Direct” return recoveries up 13x by reclassifying a complex strategy case into Direct – after the end of the fiscal year. In 2019, Burford changed its definitions of deployments and realizations by including hedging in them for the first time. Removing this misleading padding (i.e., using the previous definition), balance sheet deployments actually declined in 2019 by – 35.5%, rather than the claimed -30.6%. Realizations, as previously defined, show a decrease – 22.9%, versus the reported -14.2%.
We wonder whether all this goalpost movement was the real reason Burford delayed releasing its 2019 accounts.
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