@Portfolio This popped up on my radar this morning courtesy of...

@Portfolio

This popped up on my radar this morning courtesy of the updated profit guidance announcement, but i've had it on my watchlist since you alerted me to it a few months back on the IMF thread.

It's a prima facie interesting play - current market cap (at time of writing this post) of $23m, versus 31 March 2017 pro forma equity of: $16.6m (31 Dec) - $1.1m (cash used in 3Q) + $2.4m (3q investment in litigation) - $0.7m (capitalized cost of 22 Feb matter) = ~$17.2m. Pro forma 31 March litigation asset is ($10.4m + $2.4m - $0.7m) = ~$12m. I like LCA's track record and i also like their lean cost structure relative to size of litigation book (versus our friends over at IMF who seem to be very quick at adding overhead but much slower at growing the litigation book....)

The big question mark here for me is, do they have enough cash to avoid raising equity in the next 3-6 months? It seems like they have no access to debt facilities, 31 March cash was $3.9m but estimated cash burn in 4Q was $3.8m. Where is the cash going to come from now that some settlements have pushed from FY17 to FY18 - do you have a view on this?

Cheers