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Litigation Capital Management (LIT :84.5p) has announced a mixed pre-close trading update that prompted major downward revisions in full-year earnings forecasts. Although the provider of litigation financing is transitioning towards an asset management model and expanding the business into the US, the largest legal finance market in the world, it is still exposed to the lumpiness and timing of court settlements.

In the six months to 30 December 2024, LCM concluded four case wins and incurred three case losses including a class action claim in which it had invested A$25mn (£12.5mn) to support the funded party, users of electricity in Queensland. So, although LCM made aggregate realisations of A$52mn, or 3.7 times capital invested (A$14mn), it was only A$4mn above the carrying valuation of the cases in the accounts. In addition, fair valuation movements on ongoing cases contributed a small A$1mn gain, so after accounting for operating expenses, foreign exchange movements and tax, the group expects to report a post-tax loss of A$8mn.