Law Debenture Corporation plc (LON:LWDB) today published its results for the half-year ended 30 June 2019.
Group Highlights:
· Interim dividend of 6.6p per share announced (2018: 6.0p), a 10% increase
· Share price total return for the six months of 12.1%
· Solid performance from the Independent Professional Services (IPS) business continues to support dividend growth
· Ongoing charges remain low at 0.43% compared to the industry average of 1.13%1
· £10,000 invested in Law Debenture ten years ago would be worth £36,050 as at 30 June 20192
Investment Trust Highlights:
· NAV total return for the six months was 10.3%, compared to 13.0% returned by the benchmark FTSE All Share Index
· The trust has consistently outperformed its benchmark on longer term performance measures:
| 6 months | 3 years | 5 years | 10 years | |
| NAV total return3 | 10.3% | 38.9% | 40.0% | 224.9% |
| FTSE Actuaries All-Share Index4 | 13.0% | 29.5% | 35.8% | 167.1% |
· The UK remained the central focus of the portfolio, key positive contributors included Dunelm, Johnson Service Group and Marshalls
Independent Professional Services (IPS) Highlights:
· Leading wholly owned independent provider of professional services, a key differentiator to other investment trusts
· Revenue increase of 6.9% (net of cost of sales) and profit after tax of 8.9% on prior period, reflecting consistent growth under new management team in the face of difficult financial market conditions
· Each of the three divisions continues to grow revenue, with particularly strong performance from the Pensions and Safecall, the whistle blowing business
· Fair value of the IPS business increased by 10.7% on prior period to £115.6m
Longer Term:
· 130 years of value creation for shareholders
· 40 years of increased or maintained dividends
· 60% increase in dividend over last ten years5
· Annualised dividend growth of 4.8%5
Commenting, Denis Jackson, Chief Executive Officer, said:
“In the first half of 2019, against a difficult market backdrop, with capital markets hampered in Europe by uncertainty over Brexit and globally by fears over escalating trade wars, the IPS business was able to increase revenue by 6.9% (net of cost of sales) and revenue return per share by 8.9%. Over that same period, the fair value of the IPS business increased by 10.7%.
We remain focussed on execution for the second half of this year, as we aim to deliver further growth against this difficult back drop. We are confident that we have an excellent investment management team and that our combined businesses are well placed for future longer term growth.”
Commenting, Robert Hingley, Chairman, said:
“Your company has had a good start to 2019. Our investment trust’s long term performance remains ahead of its benchmark on a three, five and ten year basis. Our IPS business has built on the success of 2018, delivering on our commitment to shareholders of mid to high single digit growth.
Law Debenture was admitted to the FTSE 250 on 1 April 2019, facilitated in part by continued long-term capital growth. May saw the repositioning of the trust from the AIC’s Global sector to the UK Equity Income sector, reflecting the fact that Law Debenture has for many years had a predominantly UK portfolio. We believe this move will make comparisons of relative performance easier for shareholders.”
1 Ongoing charges are for the year ended 31 December 2018. Law Debenture ongoing charges have been calculated based on data held by Law Debenture. Industry average data was sourced from The Association of Investment Companies industry (excluding 3i) as at 28 June 2019
2 Calculated on a total return basis assuming dividend re-investment between 30 June 2009 and 30 June 2019
3 NAV is calculated in accordance with the Association of Investment Companies (AIC) methodology, based on performance data held by Law Debenture including fair value of IPS business and long term borrowings
4 Source: Bloomberg
5 Calculated on an annualised basis on dividend payments made by accounting year between 30 June 2009 and 30 June 2019
