# Law Debenture Corporation Strong overall Group performance

- Link: https://www.directorstalkinterviews.com/law-debenture-corporation-strong-overall-group-performance/412806723
- Published: 2020-02-27T08:11:52+00:00
- Author: Giles Arbor

The **[Law Debenture](https://www.directorstalkinterviews.com/company/law-debenture-corporation-plc/lwdb.l)
Corporation plc** (LON:LWDB) has today published its results for the year ended 
31 December 2019.

Strong overall Group performance in 2019 with 50% increase in final dividend

**Group Highlights:**

 * 50% increase in proposed final dividend from 12.9 to 19.4 pence per share, a 
   step change
 * Dividend yield increased from 3.5% at the end of 2019 to 4.4%1
 * Moving to quarterly dividends, creating greater regularity and predictability
   around dividend payments
 * Share price total return for 2019 of 24.5%, generating more than £150m of value
   for our shareholders
 * Continued strong growth from the Independent Professional Services (IPS) business
   underpinned by initiatives from new management continues to support growing dividend
 * On-going charges remain low at 0.48% compared to the industry average of 1.04%
   2
 * £10,000 invested in Law Debenture ten years ago would be worth £31,780 as at 
   31 December 20193

**Investment Trust Highlights:**

 * NAV total return for the year with debt at par of 19.4%, compared to 19.2% returned
   by the benchmark FTSE All Share Index. This follows the portfolio being protected
   from around 40% of the overall benchmark decline in 2018
 * The trust has consistently outperformed its benchmark on longer term performance
   measures (3, 5 and 10 year outperformance):
 * Investment portfolio appreciated by over £100m in 2019
 * Net investment of £102m into UK stocks during the year to take advantage of comparatively
   low valuations
 * Revenue return for the investment portfolio increased by 67.6%, following change
   in expense allocation policy between income and capital, alongside significant
   additional portfolio dividend receipts

**Independent Professional Services (IPS) Highlights:**

 * Leading wholly owned independent provider of professional services which helps
   support dividend growth, a key differentiator to other investment trusts
 * Revenue increase of 7.5% (net of cost of sales) and earnings per share are up
   8.5% on prior period, reflecting consistent growth under new management team,
   funding a third of the increased 2019 full year dividend
 * Each of the three divisions continues to grow revenue, with particularly strong
   growth performance from Pensions and Safecall, the whistle blowing business
 * Fair value of the IPS business increased by 21% in 2019 to £122.3m6

**Longer Term Track Record:**

 * More than 130 years of value creation for shareholders
 * More than 40 years of increased or maintained dividends
 * More than 100% increase in dividend over last ten years
 * Annualised dividend growth of 7.9%7

> **Commenting, Robert Hingley, Chairman, said:**
> “Law Debenture seeks to combine long term capital growth and steadily increasing
> income. We moved to the AIC’s UK Equity Income sector in 2019 and are proposing
> a 50% increase in the final dividend for 2019. This significant uplift reflects
> the strong profit growth in both IPS and our investment portfolio in 2019 and 
> the strong reserves position.
> Long term income [sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news)
> is a key priority; the Group’s aim is to continue to deliver gradually increasing
> dividend payments in excess of inflation over time. Our differentiated business
> model allows increased flexibility in portfolio construction. We are confident
> that the proposed increase in dividend will not restrict Janus Henderson’s investment
> approach.”

> **Commenting, Denis Jackson, Law Debenture Corporation Chief Executive Officer,
> said:**
> “2019 was a very successful year for Law Debenture with a share price total return
> of 24.5%. The proposed step change in dividend has increased the trust to an attractive
> 4.4% dividend yield.
> Both the long and short-term performance of our investment portfolio remains strong.
> We have an excellent investment management team, who the Board is confident are
> well placed to continue to position the equity portfolio for future longer-term
> growth.
> We are encouraged that IPS has delivered on its ambitions with a second year of
> consistent high single digit profit growth, despite a challenging backdrop for
> capital market activity. Reflecting these improved earnings and growth prospects,
> the valuation of our IPS business increased by 21% in 2019.
> We remain in the early stages of a re-invigorated growth cycle and continue to
> see opportunities to grow revenue and earnings significantly over time. IPS has
> very attractive financial characteristics and we continue to invest in talent 
> and technology to take advantage of material market share opportunities. We are
> also alert to opportunities presented by acquisitions, where we believe we could
> utilise our balance sheet to accelerate growth in returns for our shareholders.”

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