Law Debenture ( LWDB)

[BullDog]

Very satisfying to see what I believe is an all time high here of 818p per share. Had a few months in the doldrums but has come back very nicely. My best acquisition in the last year or two.

Thanks. A bit of a shame that as I was thinking of swapping my holding in Alliance for Law Debenture. For all its superstructure in terms of its managers and stockpickers its results are no more than reasonable since the change was made. As I read somewhere, that is probably because the stockpickers cannot afford to go very far out on a limb since if it goes wrong they will be chopped by Willis Towers Watson. Mind you, every dog has its day. (I am not suggesting that Law Debenture is a dog)

Dod

Yes, LWDB is looking reassuringly expensive at the moment. Lucky I got in at 500p. I gave up on Alliance over 30 years ago and never regretted the decision for a moment. Same with Witan.

[richfool]

Law Debenture Annual Financial Report:

The Law Debenture Corporation p.l.c.

25 February 2022

Strong track record for consistent long-term outperformance and dividend growth continues

The Law Debenture Corporation p.l.c. ("Law Debenture") today published its results for the year ended 31 December 2021.

Group Highlights

· NAV total return with debt and IPS at FV for 2021 of 25.1%, outperforming the FTSE Actuaries All-Share Index by 6.8%

· Another year of strong performance from the Independent Professional Services business (IPS) with profit before tax up by 9.1% and valuation up 32.4% 2 to £166m

· The capital structure has been reviewed to support further investment, resulting in the issuance of 4.5 million new ordinary shares at a premium to NAV, to existing and new investors, with net proceeds of £32.9m. Two tranches of long-term debt, with a total value of £50m, were also issued, with an average coupon of 2.54%

· Continued low ongoing charges of 0.50%, compared to the industry average of 1.05%

· Winner of Investment Week's UK Income Sector Investment Trust of the year

Dividend Highlights

· 2021 FY dividends increased by 5.5% to 29.0 pence per ordinary share (2020: 27.5p)

· Dividend yield of 3.7% i , Q4 dividend of 8.375 pence per ordinary share

· 13.8% CAGR in dividends over last four years

https://www.investegate.co.uk/law-deben ... 00087884C/

[Dod101]

Law Debenture Annual Financial Report:

The Law Debenture Corporation p.l.c.

25 February 2022

Strong track record for consistent long-term outperformance and dividend growth continues

The Law Debenture Corporation p.l.c. ("Law Debenture") today published its results for the year ended 31 December 2021.

Group Highlights

· NAV total return with debt and IPS at FV for 2021 of 25.1%, outperforming the FTSE Actuaries All-Share Index by 6.8%

· Another year of strong performance from the Independent Professional Services business (IPS) with profit before tax up by 9.1% and valuation up 32.4% 2 to £166m

· The capital structure has been reviewed to support further investment, resulting in the issuance of 4.5 million new ordinary shares at a premium to NAV, to existing and new investors, with net proceeds of £32.9m. Two tranches of long-term debt, with a total value of £50m, were also issued, with an average coupon of 2.54%

· Continued low ongoing charges of 0.50%, compared to the industry average of 1.05%

· Winner of Investment Week's UK Income Sector Investment Trust of the year

Dividend Highlights

· 2021 FY dividends increased by 5.5% to 29.0 pence per ordinary share (2020: 27.5p)

· Dividend yield of 3.7% i , Q4 dividend of 8.375 pence per ordinary share

· 13.8% CAGR in dividends over last four years

https://www.investegate.co.uk/law-deben ... 00087884C/

I am not a holder but it is interesting that they have raised more capital, not a huge amount in either shares or debt but interesting all the same.

They talk of an industry average of 1.05% for ongoing charges. Presumably that is correct but I think it ought to be broken down between different types of trust. After all a trust primarily investing in some Far East spot is likely to have higher charges than a run of the mill UK trust investing primarily in the UK market. Just to emphasise their low costs, it might have been helpful if they had reduced their charges on the back of the new capital raised.

Dod

[BullDog]

Thanks for the update. Law Deb continues to be a firm favourite of mine. I wouldn't buy at the moment. I am not sure if we'll see a share price firmly in the 500's again here though. That's where I was buying. Onwards and upwards.

[UncleEbenezer]

I am not a holder but it is interesting that they have raised more capital, not a huge amount in either shares or debt but interesting all the same.
Dod

Many ITs routinely issue more capital when trading at a premium. Just as they'll buy back when at a discount without being in difficulties.

Another old friend of yours and mine, Scottish Mortgage, was issuing sometimes multiple RNS notices per week about new capital when the good times were rolling there.

[Dod101]

I am not a holder but it is interesting that they have raised more capital, not a huge amount in either shares or debt but interesting all the same.
Dod

Many ITs routinely issue more capital when trading at a premium. Just as they'll buy back when at a discount without being in difficulties.

Another old friend of yours and mine, Scottish Mortgage, was issuing sometimes multiple RNS notices per week about new capital when the good times were rolling there.

' The capital structure has been reviewed to support further investment, resulting in the issuance of 4.5 million new ordinary shares at a premium to NAV, to existing and new investors, with net proceeds of £32.9m. Two tranches of long-term debt, with a total value of £50m, were also issued, with an average coupon of 2.54%'

I know very well that ITs often issue additional shares when the shares move to a premium but if you read the above carefully, that is not what that excerpt from the RNS is saying. Not only are they issuing more shares (at a premium) but also additional borrowings, to support further investment.

It is that latter point that I picked up on, 'to support further investment'. I do not interpret that as 'routinely issuing more capital (sic) when trading at a premium'.

Dod

[UncleEbenezer]

It is that latter point that I picked up on, 'to support further investment'. I do not interpret that as 'routinely issuing more capital (sic) when trading at a premium'.

Dod

Well, I do.

When an IT issues more capital, I would certainly hope it's for further investment. Alternatives I can think of look a whole lot more shady.

[Dod101]

It is that latter point that I picked up on, 'to support further investment'. I do not interpret that as 'routinely issuing more capital (sic) when trading at a premium'.

Dod

Well, I do.

When an IT issues more capital, I would certainly hope it's for further investment. Alternatives I can think of look a whole lot more shady.

OK. I see a subtle difference between issuing more shares 'to support further investment' and issuing more shares as a discount control mechanism, especially when accompanying it with the raising of further debt.

Incidentally a company does not issue more capital, that is done by investors; the company issues more shares.

Dod

[richfool]

Noticed this, an amendment to the dividend amount:

8 April 2022
Amendment: Annual General Meeting Poll Results

The Law Debenture Corporation p.l.c. notes an amendment to the announcement of its Annual General Meeting Poll Results , dated 7 April 2022 (the "original announcement"). Such amendment relates to resolution 3 where the final dividend had been incorrectly stated. It has now been updated to reflect the correct amount at 8.375p. There have been no other changes to the table containing the poll results as stated in the original announcement.

https://www.investegate.co.uk/law-deben ... 34228539H/

[richfool]

Law Debenture Half Yearly Results:

Law Debenture Corp (LWDB)
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Print Annual reports
Friday 29 July, 2022
Law Debenture Corp
Half-year Report
RNS Number : 1663U
Law Debenture Corp PLC
29 July 2022

The Law Debenture Corporation p.l.c. today published its results for the half-year ended 30 June 2022

Resilience, continued outperformance and dividend growth against the backdrop of turbulent global markets

Group Highlights:

· NAV total return with debt and Independent Professional Services (IPS) at FV for H1 2022 of -4.0%

· Another period of strong performance from IPS with profit before tax up by 5.9% and valuation up 4.9% to £178.4m

· The Group has issued 3.8 1 million new ordinary shares at a premium to NAV, to existing and new investors, with net proceeds of £30.4m to support ongoing investment

· Continued low ongoing charges of 0.48 2 %, compared to the industry average of 1.09 3 %

· Winner of Investment Week's UK Income Sector Investment Trust of the year for 2021


Dividend Highlights
· Declared a first interim dividend of 7.25 pence per ordinary share, paid in July 2022, representing an increase of 5.5% over the prior year's first interim dividend

· It is the Board's intention for each of the first three interim dividends for 2022 to be equivalent to a quarter of Law Debenture's total 2021 dividend of 29.0 pence per ordinary share. Performance and growth in Independent Professional Services business (IPS) continues to support the Board's intention to maintain or increase the total dividend in 2022

· Dividend yield of 3.8%4

· 13.8% CAGR in dividends over the last four years5

Investment Portfolio Highlights:

· Material outperformance of the benchmark over three, five and ten years

· Strong long term record with Share price total return over 10 years of 180.8% (FTSE All-Share: 94.6%) and of 808.9% over 25 years (FTSE All-Share: 312.5%)

· Revenue return from the portfolio of £16.9m (June 2021: £10.2m), representing growth of 65.6%

https://www.investegate.co.uk/law-deben ... 00101663U/

[richfool]

Extract from an AIC article:

FTSE destroyer
Either way, the interims extend the 133-year-old company’s record of beating the UK stock market. Over five years to June its underlying net asset value (NAV) advanced 34.8% (with debt at par) and by 40.6% (with debt at fair value). That trounced the 17.8% from the FTSE All-Share and underpinned a 58.2% total return to shareholders.

The much higher shareholder return reflects the trust’s re-rating by investors. Five years ago the shares stood at a discount of around 10% below NAV, but today stand at a 2% premium above asset value. The revival demonstrates the improved financial performance from IPS since chief executive Denis Jackson (above) took charge in December 2017, and the more recent rebound in the ‘value’ style shares held by Henderson and Foll.

As of yesterday, Law Debenture stood second out of 23 trusts in the AIC UK Equity Income sector with a 10-year total shareholder return of 185%, again well ahead of the UK stock market’s 98%.

The interims underlined Law Debenture’s appeal as a reliable dividend generator with IPS accounting for 19% of assets but over a third of its income. Net revenues from the pensions and trustee businesses grew 11.3% to £21.67m and jumped over 65% to £16.9m from the UK-focused shares portfolio.

This puts the ‘dividend hero’ on track to pay a 44th year of consecutive rising payouts covered by earnings. It declared this year’s first quarterly dividend in May, lifting it 5.5% to 7.25p per share. It also holds revenues reserves equal to last year’s payout of 29p per share and at last night’s close offered a 3.8% yield, having grown dividends by nearly 14% a year since 2018.

Looking ahead, IPS should be well positioned even in a tough recession, with Jackson telling Citywire, ‘we should be pretty resilient if the wheels do come off’. Two thirds of its administrative operations in corporate pensions, trusts and bonds is recurring business, much of it on inflation-linked contracts.

While a freeze in bond issuance proved a challenge for the corporate trust business last year, revenues recovered 5% in the first half and could rise further if an economic downturn leads to company bankruptcies and a spike in activity in Law Debenture’s role as ‘middleman’ between borrowers and investors.

https://www.theaic.co.uk/aic/news/cityw ... orst-blows

Better than a tracker.

[monabri]

https://www.investegate.co.uk/law-deben ... 22522134B/

Dividend Announced.

Second Interim Dividend Announcement

· Declaring a second interim dividend of 7.25 pence per ordinary share payable in October 2022, representing an increase of 5.5% over the prior year's second interim dividend.

· It is the Board's intention for each of the first three interim dividends for 2022 to be equivalent to a quarter of Law Debenture's total 2021 dividend of 29.0 pence per ordinary share.

The combination of IPS' steady income and our strong reserves allows Law Debenture to continue its 44-year track record of maintaining or increasing its dividend payments.

This dividend will be paid on 27 October 2022 to shareholders on the register at close of business on 7 October 2022. The Corporation's shares will go ex-dividend on 6 October 2022.

[monabri]

https://www.investegate.co.uk/law-deben ... 36048925J/

"Third Interim Dividend Announcement

· Declaring a third interim dividend of 7.25 pence per ordinary share payable in January 2023, representing an increase of 5.5% over the prior year's third interim dividend.

· It is the Board's intention for each of the first three interim dividends for 2022 to be equivalent to a quarter of Law Debenture's total 2021 dividend of 29.0 pence per ordinary share.

The combination of IPS' steady income and our strong reserves allows Law Debenture to continue its 44-year track record of maintaining or increasing its dividend payments.

This dividend will be paid on 26 January 2023 to shareholders on the register at close of business on 23 December 2022. The Corporation's shares will go ex-dividend on 22 December 2022. "

[monabri]

Final dividend declared 28th Feb 2023 - dates & dividend below.

https://www.investegate.co.uk/law-deben ... 10293072R/


"Multiple award wins and share price outperformance over 1, 3, 5 and 10 years

The Law Debenture Corporation p.l.c. ("Law Debenture" or the "Company") releases its results for the year ended 31 December 2022.

Highlights:

-Share price total return marginally outperformed the FTSE Actuaries All-Share Index with a total return of 0.4% for 2022.

-NAV total return with debt and Independent Professional Services ("IPS") business at fair value for FY 2022 of 0.6% (-6.8% with debt at par).

-Another period of consistent performance from IPS with net revenue increasing by 8.6%, profit before tax up by 8.1% and valuation up 18.7% to a record £201.7 million.

-The Company issued 5.2 million new Ordinary Shares at a premium to NAV during 2022, to existing and new investors, with net proceeds of £41.4 million to support ongoing investment.

-Continued low ongoing charges of 0.49%1, compared to the industry average of 1.04%2.

-Winner of Investment Week's UK Equity Income Investment Trust of the Year for 2022 (second year running); winner in UK Equity - Active category at the AJ Bell Fund and Investment Awards 2022 and winner for Best Investment Trust for Income at the 2022 Shares Awards."


- 2022 full year dividend increased by 5.2% to 30.5 pence per Ordinary Share (2021: 29.0 pence per Ordinary Share).-

- Dividend yield of 3.7% (based on our closing share price of 827 pence on 24 February 2023) , proposed Q4 dividend of 8.75 pence per Ordinary Share."


XD 9th March
Pay 13th April
Dividend 8.75p

source: https://www.dividenddata.co.uk/ex-divid ... hTerm=LWDB

[ian56]

1st quarter dividend declaration:

viewtopic.php?f=31&t=39281

[richfool]

Law Debenture's Half Year Report:

The Law Debenture Corporation p.l.c. today published its results for the half-year ended 30 June 2023

Solid overall performance in difficult market conditions

Group Highlights:

· Net asset value (NAV) total return with debt and Independent Professional Services (IPS) business at fair value (FV) for H1 2023 delivered a modest outperformance of 4.0% compared to our benchmark, the FTSE All-Share Index, at 2.6%. With debt at par the return was 2.2%.

· IPS profit before tax up by 8.5% and valuation up 4.4% to £210m (compared to 30 December 2022).

· Since the publication of The Law Debenture Corporation p.l.c.'s (Law Debenture) Annual Report in February 2023, Law Debenture has issued 2 million new ordinary shares at a premium to NAV (to existing and new investors) with net proceeds of £16.6m to support ongoing investment.

· Continued low ongoing charges of 0.48%, compared to the UK Equity Income industry average of 1.07%.

Winner of Investment Week's UK Equity Income Investment Trust of the Year for 2022 (second year running); winner in UK Equity - Active category at the AJ Bell Fund and Investment Awards 2022 and winner for Best Investment Trust for Income at the 2022 Shares Awards.

Dividend Highlights:

· Declared a first interim dividend of 7.625 pence per ordinary share, paid in July 2023, representing an increase of 5.17% over the prior year's first interim dividend.

· It is the Board's intention for each of the first three interim dividends for 2023 to be equivalent to a quarter of Law Debenture's total 2022 dividend of 30.5 pence per ordinary share. Performance and growth of the IPS business continues to support the Board's intention to maintain or increase the total dividend in 2023.

· Dividend yield of 3.8% based on our closing share price of 812 pence on 26 July 2023 (with a relatively strong reserves position).


Overall Highlights:

· Modest outperformance (with debt and IPS at FV) in first half of 2023.

· Long-term outperformance of the benchmark over three, five and ten years.

· Strong long-term record with share price total return over 10 years of 129.3% (FTSE All-Share: 78%).

· Total dividend income from the portfolio of £19.3m (June 2022: £18.4m).

https://www.investegate.co.uk/announcem ... rt/7660528

My largest UK G&I holding.

[monabri]

https://www.investegate.co.uk/announcem ... t-/8057212

"The Law Debenture Corporation p.l.c. ("Law Debenture" or the "Company") releases its results for the year ended 31 December 2023."

Share price total return marginally outperformed the FTSE Actuaries All-Share Index with a total return of 8.1% for 2023.

NAV total return with debt and Independent Professional Services ("IPS") business at fair value for FY 2023 of 9.4% (8.9% with debt at par), outperforming index at 7.9%.

Another good performance from IPS, with net revenue increasing by 11.8%, profit before tax up by 10.5% and valuation up 6.3% to £185 million (excluding net assets).

The Company issued c.3 million new Ordinary Shares at a premium to NAV during 2023, to existing and new investors, with net proceeds of c.£24.2 million to support ongoing investment.

Continued low ongoing charges of 0.49%1, compared to the industry average of 1.20%.

2023 full year dividend expected to increase by 4.9% to 32.0 pence per Ordinary Share (2022: 30.5 pence per Ordinary Share)



Final Dividend 9.125p
XD 7th March 2024
Paid 11th April 2024

[richfool]

Edison's Report on Law Debenture:

29 February 2024

The Law Debenture Corporation — One plus one equals three

FY23 results for The Law Debenture Corporation (LWDB) show this well-proven, rare combination of a UK investment trust and the cash-generative professional services operating business (IPS) continuing to generate strong results. Performance was ahead of the broad UK equity market benchmark, within which IPS growth was just above the upper end of its mid- to high-single digit growth target and DPS was increased by 4.9%. The results build on LWDB’s long-term record of outperformance versus the benchmark and peers and above average DPS growth.

LWDB has generated significant outperformance over multiple time periods versus its broad UK equity benchmark and its peer group within the AIC UK equity income sector.

LWDB’s unique structure is a significant factor in this performance. IPS is a well-diversified, resilient and growing business, relatively insensitive to short-term economic and market fluctuations, the operational fair value of which has increased by 139% since 2017. While it accounts for 20% of fair value net asset value (NAV) its strong cash generation has funded 34% of trusts’ dividends over the past 10 years. In turn, this provides the portfolio managers with much greater freedom to balance the requirements for immediate income with the goal of growing capital values over time. They have the flexibility to avoid higher-yielding stocks they deem unattractive and invest in attractive lower- or non-yielding stocks, with greater growth potential or significant, identifiable recovery potential. While this investment approach means that LWDB is not the highest paying constituent in the UK equity income sector, DPS growth is strong, increasing by an average 11.1% pa over the past five years, well ahead of the narrow peer group average of 2.0%.

The portfolio is 88% invested in UK equities, of which c 50% is in larger companies and the balance in small- and mid-cap companies. UK equity valuations are very low in absolute and relative terms. The LWDB prospective P/E is less than 10x and the portfolio yield is the highest since 2008, with much better cover. The investment managers see strong opportunities across the market but particularly in heavily sold domestic earners, especially among smaller stocks. They expect the UK economy will continue to perform better than expected as interest rates begin to fall and real income rebuilds. Regardless, they are focused on companies rather than the economy and identify many good quality, well-managed businesses, with strong prospects or recovery potential that is far from reflected in their valuations.

NOT INTENDED FOR PERSONS IN THE EEA

Highly differentiated and unique business model

LWDB comprises two distinct but complementary parts, differentiating it from other investment trusts, and underpinning its long-term performance. Alongside its investment portfolio (c 80% of NAV), it includes IPS, a leading provider of independent professional services (c 20%). IPS is a highly profitable, resilient, growing and cash-generative business comprising a diversified range of operations and income streams, significantly based on recurring income from structurally supported sectors, and others that provide attractive returns but with increased market sensitivity. As well as creating capital growth for LWDB, it generates income for dividends well above its share of NAV. In an often-challenging environment, IPS profits before tax have increased by a compound 8.7% pa over the past five years, and have funded around one-third of LWDB’s dividends. Over the same period the operational fair value of IPS has more than doubled its valuation.

The portfolio has been consistently managed over many years by James Henderson (lead manager since 2003) and Laura Foll (since 2011) from Janus Henderson Investors. Their investment mandate is focused on both income and capital growth, and they highlight the positive impact that IPS has on meeting these goals. The consistently high level of IPS cash flow enables them the flexibility to run a multi-cap portfolio that includes a blend of stocks that can deliver more immediate income with those that can grow sales, earnings and dividends faster over time. This provides a wider pool of opportunities from which to build a diversified portfolio and avoids the need to ‘chase yield’. Stock selection is selectively bottom-up with a strong valuation overlay and aims to identify market-leading, high-quality companies that are undervalued at the point of purchase. The portfolio is concentrated in UK stocks (c 88% of the total) and is highly diversified (c 150 stocks) to manage risks to capital and aid consistency of performance.

https://www.edisongroup.com/research/on ... ree/33292/

Disc: I hold and recently topped up.