Interim Results

PRESS RELEASE 30 July 2003 THE LAW DEBENTURE CORPORATION p.l.c. The Law Debenture Corporation p.l.c. today released to the London Stock Exchange its Interim Report for the six months ended 30 June 2003, highlights of which are as follows: * NAV per share up by 6.9% for the six months compared to 4.1% increase in the FTSE Actuaries All Share Index. * Gross revenue increased by 6.0%. * Trustee services profit before tax increased by 8.2%. * Earnings per share increased by 11.1%, but this rate of increase is unlikely to be continued for the year as a whole. * Interim dividend maintained at 2.66p per share. Final dividend expected to be at least maintained. A copy of the preliminary announcement is attached. Full copies of the Interim Report can be obtained from the company at the above address or from the website www.lawdeb.co.uk. For enquiries please contact: Caroline Banszky Managing Director (020) 7696 5902 PRELIMINARY ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2003 (unaudited) The Directors recommend an interim dividend of 2.66p on the ordinary shares for the six months to 30 June 2003. The unaudited results for the period were as follows: Consolidated Statement of Total Return 2003 2002 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital gains/ _______- - 12,157 12,157 _______- (12,689) (12,689) losses from investments UK Dividends 3,936 - 3,936 3,662 - 3,662 Special Dividends - - 261 261 Overseas Dividends 1,089 1,089 1,102 1,102 Income from securities 123 _______ 123 66 _________ 66 5,148 12,157 17,305 5,091 (12,689) (7,598) Bank Deposit Interest 311 311 362 362 Trustee & other fee 6,893 - 6,893 6,276 - 6,276 income Underwriting commission & 141 _______- 141 55 ________- 55 other income Gross revenue & capital 12,493 12,157 24,650 11,784 (12,689) (905) losses Administrative Expenses (6,090) _______- (6,090) (5,901) _________- (5,901) Return, including profit 6,403 12,157 18,560 5,883 (12,689) (6,806) on ordinary activities before interest payable and taxation Interest payable (1,226) ______- (1,226) (1,226) _________- (1,226) Return, including profit 5,177 12,157 17,334 4,657 (12,689) (8,032) on ordinary activities before taxation Taxation (534) _______- (534) (481) _________- (481) Return, including profit 4,643 12,157 16,800 4,176 (12,689) (8,513) on ordinary activities after taxation Dividends on ordinary (3,114) _______- (3,114) (3,110) _________- (3,110) shares Transfer to reserves 1,529 12,157 13,686 1,066 (12,689) (11,623) Return per Ordinary share 4.0 10.4 14.4 3.6 (10.9) (7.3) (pence) Management Commentary Performance Over the six months to 30 June 2003, our net asset value per share increased by 6.9% compared to a rise of 4.1% in the FTSE Actuaries All-Share Index. Gross revenues rose by 6% in the first six months of the year. Earnings per share rose by 11.1% but this rate of increase is unlikely to be achieved for the year as a whole. Dividends The Board has declared an interim dividend for the year ending 31 December 2003 of 2.66p (2002: 2.66p) per share payable on 9 September 2003 to shareholders on the register on 8 August 2003. Barring unforeseen circumstances, the directors expect to recommend that the final dividend will at least equal that paid in respect of 2002. Investment trust Following a low point in March, equities generally have enjoyed a vigorous bounce. The second quarter of this year was the best one since the fourth quarter of 1999. The global equity market has been led by cyclical consumer goods, information technology and financials. These are the areas that were most heavily sold down. There is much uncertainty, however, as to the strength of the economic recovery, which has an unhealthy dependence on an already overstretched US consumer. Meanwhile valuations, though much more reasonable than at the top of the bull market, are not low by historical standards. The UK appears to offer relatively good value. The competitive Far Eastern economies should be well placed to take advantage of any global upturn, while the longer term structural problems in Continental Europe mean growth there will be harder to achieve. For this reason during the period our exposure to European equities was reduced and the Far East was increased. Trustee and related services Trustee and related revenue rose by 9.8% compared with the first half of 2002. Profit before tax was £1,627,000 compared with £1,504,000 for the previous half year, an increase of 8.2%. Once again, it has been a difficult start to the year in the international capital markets and activity levels continue to be low. Nevertheless, we have been busy both in dealing with the management of existing work and in taking on new transactions. New schemes on which we are currently working include standard bond asset backed issues, medium-term note programmes and more bespoke transactions in the corporate finance arena. We continue to provide a diverse range of services and to promote the advantages of the trustee concept in the commercial environment. We continue to be involved in a number of insolvencies and restructurings, including British Energy. Certain instances have yielded further opportunities where a new trustee role has been created. Marconi, which was mentioned in the year end operating review, is such a case with both our London and New York offices having taken on additional roles under the refinancing arrangements. Our corporate services business, which is complementary to our core trustee business, continues to grow. Our expertise in managing complex voting structures is well known by the market and we have a continuing involvement in the well publicised Carnival Corporation/P&O Princess Cruises Plc dual listed company merger. Recently we were selected as the independent third party, exercising votes on a discretionary basis in certain circumstances, in the proposed merger between Clearnet and the London Clearing House. The uncertainties surrounding company pension schemes continue to provide opportunities for our pension trustee business. We have had a strong flow of enquiries in the current year and we are hoping to stimulate further interest through our new brochure. Our recent appointments have included the pension schemes of the subsidiaries of two major oil companies. Group Net Assets 30 June 2003 30 June 2002 31 December 2002 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Fixed Assets Tangible 1,397 1,221 1,264 Investments 244,024 282,356 232,313 Other investments 567 _______- ________- 245,988 283,577 233,577 Current Assets Debtors 8,912 11,262 8,997 Short term cash investments 12,969 14,190 10,490 Bank balances & short term 6,609 3,650 9,013 deposits 28,490 29,102 28,500 Current (12,195) (14,910) (13,860) liabilities Net current assets 16,295 14,192 14,640 Total assets less current 262,283 297,769 248,217 liabilities Long term liabilities (48,966) (48,813) (48,649) Net Assets 213,317 248,956 199,568 Net Assets per share 182.2p 212.9p 170.5p Analysis of the Investment Portfolio By Geographical Location (£`000) United North Europe Japan Pacific Total Kingdom America Investments 01 166,839 14,865 33,867 6,650 10,092 232,313 Jan Purchase 9,953 8,684 107 - 1,816 20,560 Sales proceeds (9,471) (6,594) (5,039) - - (21,104) Appreciation 7,726 1,244 1,525 474 1,286 12,255 Valuation 30 June 175,047 18,199 30,460 7,124 13,194 244,024 % of Total 71.7 7.5 12.5 2.9 5.4 100.0 By Sector As at As at 30 Jun 2003 31 Dec 2002 Resources 12.1 12.4 Basic Industries 5.8 5.6 General Industrials 4.7 4.8 Cyclical Consumer Goods 0.6 0.5 Non-Cyclical Consumer Goods 17.1 19.4 Cyclical Services 13.7 14.9 Non-Cyclical Services 5.6 4.9 Utilities 2.9 3.1 Information Technology 1.3 0.8 Financials 36.2 33.6 100.0 100.0 Group cash flow statement For the six months 30 June 2003 30 June 2003 30 June 2002 £'000 £'000 £'000 £'000 Net cash inflow from 6,503 4,947 operating activities Servicing of Finance Debenture interest paid (1,225) (1,225) Bank interest paid _____(1) ______(1) (1,226) (1,226) Tax (13) (126) Financial Investment Purchase of investments (21,110) (30,346) Sales of investments 21,104 29,196 (6) (1,150) Fixed Assets Purchases (263) (96) Payment of Ordinary Dividend (4,960) (4,953) Management of Liquid resources Decrease/increase in short (2,479) 1,974 term deposits and investments Financing Proceeds of increase in share 63 209 capital Decrease in cash for period (2,381) (421) The interim dividend will be paid on 9 September 2003 to ordinary shareholders on the share register at 8 August 2003. By order of the board Law Debenture Corporate Services Ltd Secretary Copies of this interim report are available from the Corporation's Registered Office, and at www.lawdeb.com.

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