Litigation funder Burford Capital has been accused of manipulating its latest financial results, in yet another scathing attack on the firm by short seller Muddy Waters.

In a report released on Tuesday on Burford's 2019 financials, Muddy Waters alleges that the litigation funder used "reclassification" and "redefinition" in order to "inflate cash receipts, operating profit, and to otherwise present a misleading picture of the business".  

Last month, Burford released results that showed profits fell by 21% to $279.3 million from $354.8 million over the 12 months to December 2019. 

However, the short seller claims Burford's cash receipts in fact show a year-on-year decline of an additional 11.8%, and suggests the firm's operating profits are in fact 8% lower than the figure claimed. 

The outfit further accuses Burford of "padding" the results by changing certain definitions, suggesting its real "balance sheet deployments" actually declined in 2019 "by -35.5%, rather than the claimed -30.6%".

Claiming that it is "cutting through the new bullsh*t", Muddy Waters said: "We wonder whether all this goalpost movement was the real reason Burford delayed releasing its 2019 accounts."

It is Muddy Waters' second blistering attack on Burford's financial practices, with the firm last summer accusing the funder of being insolvent, calling it "a poor business masquerading as a great one".

That led the funder to claim that it had been the victim of "illegal market manipulation", and to ask a London court for judicial approval to obtain details from the London Stock Exchange about who was behind allegedly suspicious trading.

At that time Burford's London share price halved to around 700p. Since then it has slid further still. But the latest Muddy Waters report does not appear to have had such a strong effect, with shares recovering to roughly where they started the day as of 11.30am BST at 459p. The share price is almost 70% down on this time last 12 months ago.