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LWDB Law Debenture Corporation Plc

795.00
1.00 (0.13%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Law Debenture Corporation Plc LSE:LWDB London Ordinary Share GB0031429219 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  1.00 0.13% 795.00 794.00 796.00 799.00 795.00 795.00 182,117 16:35:23
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Unit Inv Tr, Closed-end Mgmt 133.36M 75.15M 0.5730 13.89 1.04B
Law Debenture Corporation Plc is listed in the Unit Inv Tr, Closed-end Mgmt sector of the London Stock Exchange with ticker LWDB. The last closing price for Law Debenture was 794p. Over the last year, Law Debenture shares have traded in a share price range of 720.00p to 829.00p.

Law Debenture currently has 131,165,549 shares in issue. The market capitalisation of Law Debenture is £1.04 billion. Law Debenture has a price to earnings ratio (PE ratio) of 13.89.

Law Debenture Share Discussion Threads

Showing 76 to 92 of 150 messages
Chat Pages: 6  5  4  3  2  1
DateSubjectAuthorDiscuss
08/9/2020
15:42
Law Debenture uses Covid market falls
to position for future dividend growth

7 September 2020 investmentweek.co.uk

By David Brenchley
Twitter: @davidbrenchley
New additions to Law Debenture’s
equity portfolio, bought during the
Covid-19 market turmoil, should
“increase the yield of the portfolio
in two years’ time”, according to
manager James Henderson.
Henderson told Investment Week
the trust is using gearing in order to
“position for a recovery in earnings
and dividends”.
The manager is able to look
through dividend cuts due to Law
Debenture’s unique structure, which
combines this equity investment
portfolio with a professional services
business, which historically accounts
for 35% of the trust’s dividend
distribution, he added.
“We have been buying things at low
levels, a lot of which do not yield at
the moment but will come onto the
dividend list in the next two or three
years,” Henderson explained.
“We are able to look through things
and not be overly worried about the
dividend payments from companies
today because I think the best value
opportunities are often the ones that
are off the dividend list and [other
UK equity income fund managers]
have to kick out because they are not
paying a dividend.
“The overall effect of this will be
to increase the yield of the portfolio
in two years’ time, [although]
we are doing this because these
are cheap companies trading
below book [value] that offer real
opportunity.”
Henderson bought shares in
Marks & Spencer for the first time
since he began running the trust.
He said the retailer was “really
using this slowdown to focus on
their business and ask themselves
some very hard questions about
their role”.
The firm said it would not
distribute cash to shareholders for
the year to 31 March 2021, but most
sell-side analysts expect it to reinstate
its dividend within two or three years.
Elsewhere, Henderson had added
some of the big life companies such
as Aviva, which he described as “very
sound value at the moment”.
Law Debenture’s structure,
unique in the UK equity income
sector, has allowed Henderson
to stray from chasing yield, with
the trust’s IPS business remaining
robust and generating healthy cash
to return to investors. Reserves of
£62.5m help, too.
As a result, Henderson is able to
hold some higher growth names,
such as renewable energy companies
Ceres Power and ITM, and have
international exposure. Ceres
and ITM were two of the biggest
contributors to 2020’s performance,
while Microsoft, which has now
exited the portfolio, has contributed
over a longer time period.
Law Debenture has materially
outperformed Henderson and
Laura Foll’s other offering in the


UK Equity Income sector, Lowland,
in 2020, losing 13.2% compared to
Lowland’s 32.1%.
With a swathe of companies
and, in turn, investment trusts and
funds cutting dividends, chairman
Denis Jackson said it was “at this
point in the cycle… we think
we are supposed to sing as an
investment proposition”.
“We have always said our
professional services businesses
had strong elements of countercyclicality to them and we are
demonstrating that,” he reasoned.
“And we have always said, because
we have got that, that allows James
to differentiate himself.”
IPS is made up of three separate
components: a pensions business,
which provides services including
on governance to pension
trustees; a corporate trust
business, which acts as a bond
trustee and provides services
both pre- and post-issue; and
a corporate services business,
which provides company
secretarial and whistleblowing
services to firms.
The business as a whole saw
revenue growth of 6.5% and
earnings per share rise 6.6% in
its half-year ended 30 June 2020.
While the corporate services
business saw a 4% decline in
growth in H1, the pensions and
corporate trust divisions grew by
14.5% and 11.6% respectively.
Jackson sees tailwinds for
all three businesses, with the
pensions side having seen 50%
compound growth in the past
three years. Pensions are likely to
undergo a professionalisation in
governance similar to that seen
in corporations over the past few
decades, Jackson explained.
Further, the corporate trust
division has seen an uptick in
business, with many companies
tapping debt markets for new
or follow-on issuance due to
the pandemic.
Finally, he continued, the
whistleblowing services are likely
to be in-demand as corporates
become more concerned about
employees’ well-being and look to
provide channels to raise issues.
Jackson said: “18 months ago,
the guidance we gave is we would
look to grow this business by
between 5% and mid-single digits.
To have done that in the face of
such extraordinary economic
conditions, we are really pleased
with. And we think we could kick
on significantly from there.”
Law Debenture told investors
its dividend, which has moved to
a quarterly payout, would likely
be held at 26p per share, a yield of
around 5%, for the full-year. The
move means it has not had

davebowler
21/8/2020
08:51
They have just uploaded two factsheets in a row: June and July.

Always funny to see how the mood changes from one month to the next:
June: Ceres Power was the best investment ever.
July: Ceres Power was the worst detractor ever.

One can pick that up when reading the two updates in one go. If the June one had been published earlier, I doubt I would have noticed. :)

vacendak
31/7/2020
12:30
Good half-year report.

A technical decision, but at long last they get in line with everybody else:

"In light of continued market volatility, we will be providing a daily NAV to the market from the start of August. This is another step in our journey of increasing transparency for our shareholders."

I mean, they hold highly liquid/traded stuf, so why the weekly only update so far?
It is not as if it were Private Equity.

vacendak
15/7/2020
13:27
Any other ITs (obviously other than Lowland) with relatively higher yield and similar growth rate?
redponza
07/7/2020
16:35
Bought a slice of it yesterday, as a "UK Income" type (80% of it is UK).
I used to pile in BHI, but this one is bigger, with a smaller spread and with 35% of the dividend coming from their own business, it seems more reassuring in the long term.

vacendak
11/6/2020
10:46
Dividend Declaration -

First Interim Dividend Announcement - Law Debenture Dividend Yield Hits 4.9%

-- Moving to quarterly dividends, creating greater regularity and predictability around dividend payments

-- Declaring a first interim dividend of 6.5 pence per ordinary share payable in July 2020

-- Further interim dividends of 6.5 pence per ordinary share expected in October 2020 and in January 2021

-- Board's current intention for the full year 2020 dividend to be at least equal to 2019 dividend of 26.0 pence per share

The Corporation declared, and our shareholders overwhelmingly approved, a 50% increase in our final dividend payment for 2019 earlier this year. This step change in dividend brought our dividend yield from 3.5% for the year ended 31 December 2018 to 4.0% for the year ended 31 December 2019(1) . The 2019 full year dividend per share was 26.0p (up 37.6%).

With significant turmoil in global markets as a result of the Covid-19 pandemic, a large number of quoted companies have cut their dividends in order to protect the long term future of their businesses. This is happening at a time when the recipients of those dividends may themselves be increasingly reliant on that income. The great advantage of the investment trust structure is the ability to retain a portion of income received each year in order to smooth dividends in times of market stress.

With that backdrop, the unique advantage of the Law Debenture structure has never been more evident. We approach 2020 with a professional services business that has funded 35% of dividends for the investment trust over the preceding 10 years and group retained earnings of GBP62.5m(2) . The combination of this diversification of income and the strength of our reserves provides us with a genuine competitive advantage over other equity income trusts when forming our dividend policy.

We also announced we were moving to a structure of quarterly dividends. We felt paying quarterly dividends would help to provide our shareholders with greater regularity of dividend income, which we hoped would prove attractive to new and existing shareholders. This has proved timely, as yield becomes increasingly scarce and shareholders' cash flows constricted.

With that back drop, the Corporation is delighted to declare a first interim dividend of 6.5 pence per ordinary share in respect of the year ending 31 December 2020. This dividend will be paid on 28 July 2020 to shareholders registered at the close of business on 26 June 2020. The Corporation's shares will go ex-dividend on 25 June 2020. Based on the current share price, that implies a dividend yield for the Law Debenture share of 4.9%(3)

We intend to pay two further interim dividends of 6.5 pence per ordinary share in October 2020 and January 2021. Shareholders will be asked to vote on a final dividend to be paid in April 2021 at the Corporations 2021 AGM. It is the Board's current intention to recommend the final dividend payment be at least 6.5 pence per share.

speedsgh
26/3/2020
10:07
The Law Debenture Corporation p.l.c.

Net Asset Value as at 20 March 2020

The Law Debenture Corporation p.l.c. announces that its Net Asset Value ("NAV") with borrowings at par and including the fair value of IPS business(1) on 20 March 2020 was 486.05 pence per share (cum income), which excludes the proposed 2019 final dividend of 19.40p as the shares went ex-dividend on 12 March. With the Corporation's long term debt stated at fair value, the NAV was 466.15 pence per share (cum income). The mid-market price at the close of business on 20 March 2020 was 431.00 pence per share. The final dividend will be paid, subject to shareholder approval, on 16 April 2020 to holders on the register at the record date of 13 March 2020.


Net Asset Value Excluding Income Including Income
(pence) (pence)
NAV with debt at par 483.08 486.05
---------------- ----------------
NAV with debt at fair value 463.18 466.15
---------------- ----------------

davebowler
22/3/2020
15:47
Many of UK investment trusts jumped about 10-15% from the Thursday intra-day
lows.

That may be rapidly unwound this week?.

essentialinvestor
21/3/2020
11:17
Some of the fat one day % gains accros many IT's may be rapidly reversed next week.
essentialinvestor
20/3/2020
19:01
I took £4.24 for yesterday's buy. Also had a small amount of ASEI yesterday and sold those at 4.095.
essentialinvestor
20/3/2020
18:56
Index shuffling, often affects co's not involved as money gets reallocated.
spectoacc
20/3/2020
17:28
up 15%
why?

brwo349
19/3/2020
16:22
Had a few today, also some IVI.


Traded a few LWI, as it moves about a fair bit during volatility.
LWI was in small quantities unfortunately, could not get a decent sized lot on this morning's drop.

essentialinvestor
17/3/2020
21:00
One of many @EI ;) In fairness, some of LWDB's holdings rallied well today. Doubt their professional services business has increased in value tho.

There should come a time - always is - when the discounts hugely gap out, and that's our time to buy. Equity income funds with narrowing discounts are not appealing in this market. Divis getting cut, co's going bust, nothing being produced soon.

spectoacc
17/3/2020
19:05
And a very small if any % 0 discount given that NAV calculation is out of date?.
essentialinvestor
09/3/2020
07:48
And remind me what all these equity income funds are up to their eyeballs in? Oh yes - oil majors.

LWDB's largest holdings:

RDSA
RIO
GSK
BP
HSBC

I'd say 4 of those are in for an absolute mullering.

spectoacc
28/2/2020
15:24
New Edison research note...

Step change in dividend supported by IPS income -

The Law Debenture Corporation (LWDB) saw a NAV total return of 17.9% (cum-fair) in FY19, with its share price total return of 24.5% comfortably outstripping the broad UK stock market. As well as a c 25% increase in portfolio income, LWDB’s independent professional services (IPS) businesses saw another year of good growth, providing important support for a step change in the annual dividend payment (+37.6%, with the final dividend up 50%, and moving to quarterly dividends from FY20). Portfolio managers James Henderson and Laura Foll continue to find attractive investment opportunities, particularly among unloved UK domestic stocks, while CEO Denis Jackson sees growth potential across the IPS businesses as a result of increased market focus on environmental, social and governance (ESG) issues...

speedsgh
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