Law Debenture Half Year Results 2024: Leading UK Equity income sector performer over short, medium and longer term with another good overall performance

Highlights

• Net asset value (NAV) total return with debt and Independent Professional Services (IPS) business at fair value (FV) for H1 2024 delivered a performance of 9.7% compared to our benchmark, the FTSE All-Share Index, at 7.4%. With debt at par the return was 9.6%.
• Share price total return marginally outperformed the FTSE Actuaries All-Share Index with a total return of 7.7% for H1 2024.
• Another good performance from IPS with revenue up 8.8%, profit before tax up by 9.2% and valuation up 4.9% to £221m (compared to 30 December 2023).
• Continued low ongoing charges of 0.48%, compared to the industry average of 1.21%.

Winner 2023 Investment Company of the Year Awards in November, in association with the AIC, in the UK Income category for the third year running.

Winner in the Active-Income category for the second year in a row at the September's 2023 AJ Bell Investment Awards.

Law Debenture has delivered a solid overall first half performance and succeeded in its aim to provide a steadily increasing income for our shareholders whilst achieving long-term capital growth in real terms. The market backdrop has been relatively supportive though within the investment trust sector, there has been a widening of discounts. Against this background, we are pleased that IPS has shown continued good growth and that, overall, we have outperformed our benchmark. We are confident that the combination of a well positioned equity portfolio and continued growth in our IPS business will deliver attractive long-term returns for our shareholders.

Robert Hingley, Chairman

Dividend Highlights

Declared a first interim dividend of 8.0 pence per ordinary share, paid in July 2024, representing an increase of 4.9% over the prior year's first interim dividend.

It is the Board's intention for each of the first three interim dividends for 2024 to be equivalent to a quarter of Law Debenture's total 2023 dividend of 32.0 pence per ordinary share. Continued good performance and growth of the IPS business supports the Board's intention to maintain or increase the total dividend in 2024.

Dividend yield of 3.6% based on our closing share price of 889 pence on 24 July 2024.

Total dividend income from the portfolio of £19.9m (June 2023: £19.3m).

IPS Highlights

Wholly-owned independent provider of professional services. Accounts for 20% of H1 2024 NAV but has funded approximately 34% of dividends in the last 10 years.1

IPS enters its seventh consecutive year of consistent mid to high single digit growth with net revenues of £26.2m (June 2023: £24.1m) up 8.8% with profit before tax up by 9.2% (compared to 30 June 2023).

Longer Term Record

135 years of history with a long-term track record of value creation for shareholders.

Long-term NAV (at FV) outperformance of the benchmark over one, three, five and ten years.

Strong long-term record with share price total return over 10 years of 137.2% (FTSE All-Share: 77.8%).

£10,000 invested in Law Debenture ten years ago would be worth £23,720 as at 30 June 20242.

Over 45 years of increasing or maintaining dividends to shareholders.

YTD %	1 year %	3 years %	5 years %	10 years %
NAV total return (with debt at par)3	9.6	16.2	16.5	48.7	113.2
NAV total return (with debt at fair value) 3	9.7	15.0	25.8	61.1	125.5
FTSE Actuaries All-Share Index Total Return4	7.4	13.0	23.9	30.9	77.8
Share price total return4	7.7	14.7	26.8	78.0	137.2
Change in Retail Price Index5	2.0	2.7	27.1	33.4	50.8

Against a backdrop of continued macroeconomic uncertainty and elevated interest rates, Law Debenture has delivered a good overall performance in the first half of 2024. Our portfolio managers have performed well in absolute and relative terms and continue to believe an undervalued UK stock market offers investors the opportunity to own resilient, cash-generative and well-managed businesses at attractive valuation multiples. The income from the IPS business offers our portfolio managers greater flexibility in their investment selection, helping set Law Debenture apart from other UK equity income trusts. Law Debenture is resilient by design and has demonstrated strong performance over the short, medium and longer term. Though there are a number of geopolitical issues to monitor and the near-term economic outlook is not without its challenges, we are confident that our ongoing investment in IPS leaves it well positioned for medium-term growth in-line with our mid to high single percentage target.

Denis Jackson, Chief Executive Officer

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 a leading provider of independent professional services, built on three excellent 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.