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IMF Bentham shares on watch as half-year profit jumps

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The IMF Bentham Ltd (ASX: IMF) share price is one to watch today after the litigation funder’s half-year results release.

Why are IMF Bentham shares on watch?

IMF Bentham reported a 122% jump in half-year net profit after tax (NPAT) compared to the previous half.

The ASX group posted a $4.9 million NPAT compared to a $25.8 million loss in 2H 2019. This was largely thanks to a 624% jump in legal contract revenue to $142.8 million. IMF Bentham reported a total $152 million in proceeds for the first half of the year. 

There were some big operational highlights during the half including the largest ever individual investment by the group. 

I’d keep an eye on the IMF Bentham share price in early trade as investors mull over today’s result.

The group’s balance sheet has strengthened throughout the year with cash and receivables totalling $324.8 million compared to $226.1 million as at FY 2019 end. IMF Bentham’s net assets also jumped, climbing to $758.4 million versus $515.5 million in the prior half. 

On top of the strong financials, IMF Bentham saw funding applications jump from 516 to 581 in the first half of the year. The group’s investments also climbed 46% higher compared to FY 2019 to close at $622.1 million. 

These metric improvements have also been reflected in the IMF Bentham share price, which is up 52.70% in the last 6 months. 

IMF announced an interim dividend of 3.0 cents per share in today’s results, compared to no interim payout in previous periods. 

While the headline results are strong, they do include the contributions of IMF’s latest acquisition. 

In November 2019, IMF Bentham acquired Omni Bridgeway, a fellow litigation funder, to underpin its growth strategy. 

The purchase cost IMF $50.28 million in consideration to Omni Bridgeway shareholders late last year. 

Foolish takeaway

The headline numbers from IMF Bentham make its shares worth watching today, with investors weighing up those increases versus market expectations. 

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Returns as of 6th October 2020

Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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