The Law Debenture Corporation p.l.c. Annual Results: Another year of capital growth and steadily increasing income

Leading UK Equity income sector performance

2024 Highlights

• Share price total return outperformed the FTSE Actuaries All-Share Index with a total return of 15.9% for 2024, compared with 9.5%.
• NAV total return with debt and Independent Professional Services ("IPS") business at fair value for FY 2024 of 13.6% (13.2% with debt at par).
• A solid performance from IPS, with net revenue increasing by 6.2% and valuation up 5.1% to £194.5 million (excluding net assets).
• Underlying IPS profit before interest and tax up 6.4%. Statutory revenue profit before interest and tax of £15.0m down by 0.5%, owing to non-recurring costs of £1.0 million.
• The Company issued 1.4 million new Ordinary Shares at a premium to NAV during 2024, to existing and new investors, with net proceeds of £12.4 million.

Long-term outperformance

• Consistent share price and NAV (with IPS and debt at fair value) outperformance of the benchmark over one, three, five and ten years.
• Strong long-term performance record, with share price total return outperforming FTSE Actuaries All-Share by 45.9% over 5 years which compares well with key sector peers.

Dividend Highlights

• Proposed 2024 dividend increase of 4.7% to 33.5 pence per Ordinary Share (2023: 32.0 pence per Ordinary Share) compared to Group revenue return per share of 33.48 pence.
• Dividend yield of 3.8% (based on our closing share price of 884 pence on 11 March 2025).
• Over the last 10 years, we have increased the dividend by 113.4% in aggregate (7.9% CAGR), reflecting strong IPS cashflow and good Portfolio performance.
• We have a strong reserve position, and the Board is confident in achieving continued growth of dividends over time, building on our record of 46 years of increasing or maintaining dividends to shareholders.

Investment Portfolio Highlights

• Net capital gain on investments of £76.3 million (December 2023: £37.4 million).
• Revenue from the portfolio of £34.7m (December 2023: £33.5 million).
• Total ongoing charges of 0.51%1 compared to the industry average of 1.05%2.

IPS Highlights

• The Company's wholly-owned provider of professional services is a key differentiator to other investment trusts and offers additional portfolio flexibility.
• Accounts for c.19% of 2024 NAV but has funded approximately one-third of dividends paid by the Company in the last 10 years.
• IPS has now delivered seven consecutive years of mid to high single digit underlying growth, with a 5 year underlying PBIT CAGR of 7.3%.
• 2024 valuation of £194.5 million (excluding net assets), up 83.6% since 2019.
• Non cash goodwill impairment of £17.0 million on the 2021 acquisition of CSS.

Awards

• Winner in the Active-Income category for the third year in a row at the 2024 AJ Bell Investment Awards.

• Winner of the Best for Long-Term Income award at the QuotedData awards.

• Recognised by the AIC as an “ISA Millionaire” performer

Robert Hingley, Chairman, said:

I am pleased with the progress Law Debenture has made in 2024. The share price total return of around 16% was ahead of the benchmark and includes a further increase in our full-year total dividend of 4.7%. With an 113% increase in our dividend over the last ten years and a long-term record of benchmark outperformance, Law Debenture remains well positioned with a clear long-term focus. The Board and our investment managers remain confident in our future prospects, due to the diversified and resilient nature of our Portfolio and the good growth potential for IPS.

Denis Jackson, Chief Executive Officer, commented:

2024 has been another creditable year of operational and financial progress for Law Debenture. We are proud to have delivered continued share price outperformance as well as our 46th year of maintaining or increasing dividends. We were especially pleased to be recognised by the AIC as an “ISA Millionaire” performer, identifying Law Debenture as one of fifty investment trusts which would have turned a full annual ISA allowance into over £1 million between 1999 and 2024. Our investment managers have constructed a diversified portfolio of strong, well-managed businesses making Law Debenture resilient by design and capable of delivering attractive capital returns and further increases in dividends. The combination of IPS with the investment portfolio offers additional flexibility in stock picking and is a well-proven and differentiated model. I remain optimistic about the Company's prospects for 2025 and beyond.

Investment Portfolio

Our portfolio of investments is managed by James Henderson and Laura Foll of Janus Henderson Investors.

Our objective is to achieve long-term capital growth in real terms and steadily increasing income. The aim is to achieve a higher rate of total return than the FTSE Actuaries All-Share Index Total Return through investing in a diversified portfolio of stocks.

Independent Professional Services

We are one of the leading providers of independent professional services, built on three foundations: our Pensions, Corporate Trust and Corporate Services businesses. We operate internationally, with offices in the UK, New York, Ireland, Hong Kong, Delaware and the Channel Islands.

Companies, agencies, organisations and individuals throughout the world rely upon Law Debenture to carry out our duties with the independence and professionalism upon which our reputation is built.

The Law Debenture Corporation
Denis Jackson, Chief Executive Officer	Isla Pickering, Chief Financial Officer	Trish Houston, Chief Operating Officer
+44 (0)20 7606 5451

 

Teneo (Financial PR)
Jo Blackshaw / Oliver Bell
+44 (0)20 7260 2700	lawdeb@teneo.com