The Law Debenture Corporation p.l.c. today published its results for the half-year ended 30 June 2021
Group Highlights:
- 2021 dividend to be increased from 2020 level of 27.5 pence per share
- Dividend yield of 3.7% as quarterly dividend increased by 5.8%
- Investment Portfolio delivered strong positive returns outperforming the benchmark
- Independent Professional Services business (IPS) has entered its fourth consecutive year of both revenue and earnings per share growth.
- ~4 million new ordinary shares issued to existing and new investors, worth c. £29.2 million, exceeding £20 million target to refinance the acquisition of new Company Secretarial business. We continue to issue shares when the opportunity arises to generate value for the Trust
- Increase in the valuation of the IPS business by 10.1% year to date to £149.7m.
Investment Portfolio Highlights:
- NAV total return (with debt at par) for the six months grew 16.7% compared to 11.1% for the benchmark, FTSE Actuaries All-Share Total Return Index
- Material outperformance of the benchmark over one, three, five and ten years
- Net investors in the period, investing £36.4m (2020: £33m) to take advantage of attractive valuation opportunities
- On-going charges remain low at 0.50%1compared to the industry average of 1.02%2
|
|
YTD |
1 year |
3 years |
5 years |
10 years |
|
NAV total return debt at par3 |
16.7% |
41.7% |
27.5% |
75.6% |
167.5% |
|
NAV total return debt at fair value3 |
19.4% |
46.0% |
26.5% |
77.1% |
158.8% |
|
Share price total return4 |
10.9% |
50.0% |
42.6% |
85.5% |
184.0% |
|
FTSE Actuaries All-Share Index4 |
11.1% |
21.5% |
6.3% |
36.9% |
85.5% |
IPS Highlights:
- Wholly-owned independent provider of professional services, continues to provide a diversified and repeatable revenue stream for the dividend
- IPS enters its fourth consecutive year of growth with revenues increased by 18.2%5, Profit before tax of 6.1% and earnings per share by 5.0%6
- Acquired Company Secretarial business expected to strengthen capabilities and offer growth opportunities
Longer Term Track Record:
- 132 years of value creation for shareholders
- 116% increase in the dividend over the last 10 years
- 42 years of increasing or maintaining dividends to shareholders
- IPS revenues funded 36%7of dividends for the Trust over the preceding 10 years
Robert Hingley, Chairman, commented:
“Against a challenging economic backdrop, I am pleased to report that your company has continued to outperform its benchmark on a one, three, five and ten year basis. In addition, our IPS business experienced further strong financial performance. The business provides your company with a diverse steady income stream and its financial performance is not directly correlated with markets.
The board is committed to targeting both capital appreciation and steadily increasing the income for our shareholders. Subject to market conditions, our current intention is to increase the total 2021 dividend compared to the total 2020 dividend of 27.5 pence per ordinary share. We are confident that, in the long term, the combination of a robust equity portfolio and continued growth in our IPS business will deliver strong NAV total returns and attractive dividend growth.”
Denis Jackson, Chief Executive Officer, commented:
“We are pleased to report another period of strong financial performance – further outperformance by our Investment Portfolio while our IPS business has performed strongly, with revenue up 18.2% and profit before tax up 6.1%.
I am extremely grateful to my excellent colleagues who have been as diligent and hard working as ever during the first half of the year. We have invested significantly in our people, bolstering our team and widening our existing expertise, and have continued to provide a high quality client service from our new offices in London and Salford. We look forward to capturing the opportunities ahead.”