Christopher Bogart, CEO, Burford Capital

AIM-listed litigation funder Burford has cancelled its final 2019 dividend and will reallocate bonus payments back into the business as it assures its investors that it has "more than sufficient" liquidity amid the COVID-19 pandemic.

The firm unveiled the measures in a stock exchange announcement on Thursday and said its CEO and CIO have committed to use their 2019 bonuses "to purchase Burford securities" once the company has released its results for the year ended 31 December 2019. 

The company intends to reallocate the capital otherwise intended for dividends and bonuses into financing the business, and will "maximise future opportunity" by deploying liquidity.

It added: "Burford's own liquidity is more than sufficient for its needs."

Like many businesses, Burford has moved to full remote working, prompted in part by one of its New York staff members contracting COVID-19, according to the firm's statement. 

Company CEO Christopher Bogart said in a statement: "All of us are having to adjust to a new reality with COVID-19, just as the courts are, and while near-term delays will certainly occur in our business as well as in our financial reporting, we have a great deal of optimism about what the future holds as businesses face an environment that is both dispute-heavy and liquidity-constrained." 

Following the Thursday morning announcement, Burford's share price bounced more than 6% to 404p.

Burford has had a tough 12 months, after more than $1.2 billion was wiped off its value when short seller Muddy Waters released a report criticising its accounting practices. In September, Burford asked the U.K. High Court for judicial approval to obtain details from the London Stock Exchange about who was behind an alleged market manipulation. The case continues.

Like Burford, a number of listed law firms have taken drastic measures in the hope of shielding themselves from the economic turmoil. Gateley cancelled its dividend payments, with The Ince Group following suit. Meanwhile, Knights has reduced its board member salaries by 30%, and has slashed the salaries of "all staff whose salaries are £30,000 or more" by 10%. 

Also on Thursday morning, Ince announced further changes in view of the pandemic, with new chairman David Furst – an accountant of more than 30 years' experience – and group financial controller Simon Oakes taking up the chief financial officer role, as Christopher Yates steps down. 

Further reading:

More UK Listed Firms Slash Salaries, Payouts to Halt COVID-19 Losses

Gateley Cancels Shareholder Payouts in Hedge Against COVID-19 Fallout