Dividend Declaration

RNS Number : 0672J

Law Debenture Corp PLC

17 December 2020

 

The Law Debenture Corporation p.l.c.

Third Interim Dividend Announcement - Law Debenture remains confident of at least maintaining 2019 full year dividend level of 26.0p

· Declaring a third interim dividend of 6.5 pence per ordinary share payable in January 2021

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

· Dividend Yield is currently 4%

The UK economy has seen significant economic fluctuations in 2020, brought about by both the Covid-19 pandemic and the uncertainty over the outcome of Brexit negotiations.  Despite these significant headwinds, Law Debenture's unique structure has been beneficial, allowing our investment managers increased flexibility in portfolio construction at a time when other Equity Income Trusts may have been forced to chase yield.

We entered 2020 with the strongest reserves position1within the UK Equity Income sector² with the Group's  retained earnings of £62.5m³, and a professional services business that has funded 35% of our dividends to shareholders over the preceding 10 years4 and resulted in us having the strongest five-year dividend growth in our peer group 5 . As demonstrated by our H1 results, our Independent Professional Services business continues to show its resilience despite the challenging market conditions. 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.

It remains our intention to pay a dividend for the full year 2020 to be at least equal to the 2019 dividend of 26.0 pence per ordinary share. We have listened to our shareholders who are seeking regular, reliable income and recently transitioned to a quarterly dividend cycle. This comes at a time when the recipients of those dividends may be increasingly reliant on that income, particularly in light of the large number of quoted companies who have announced cuts to their dividends in order to protect the long term future of their businesses.

With this in mind, we have declared a third 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 January 2021 to shareholders registered at the close of business on 29 December 2020.  The Corporation's shares will go ex-dividend on 24 December 2020.  Based on the Corporation's current share price, that implies a dividend yield of 4%.⁶

Shareholders will be asked to vote on a final dividend to be paid in April 2021 at the Corporation's 2021 AGM. It continues to be the Board's current intention to recommend the final dividend payment be at least 6.5 pence per share. 

Law Debenture Corporate Services Limited

Corporate Secretary

17 December 2020

Contact:  

Tulchan Communications   

David Allchurch                                                               

[e-mail]

[phone]

About Law Debenture

Company History:

From its origins in 1889, Law Debenture has diversified to become a group with a unique range of activities in the financial and professional services sectors.  The group has two distinct areas of business.

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 globally, 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.

The Law Debenture Corporation p.l.c. is registered in England at 8^th Floor, 100 Bishopsgate, London EC2N 4AG, company registration number 30397.  The Law Debenture Corporation p.l.c. LEI number - 2138006E39QX7XV6PP21

¹ Investec Securities analysis from 30 March 2020, based on Group Revenue Return, including professional services fees.  

² AIC UK Equity Income Sector.

³ The Corporation's retained earnings were £62.5m as at 1 January 2020.

⁴ Calculated on an annualised basis on dividend payments in respect of accounting years between 1 January 2010 and 31 December 2019.

⁵ Peel Hunt Law Debenture Initiation of Coverage 5 October 2020

⁶ Based on closing share price on 16 December 2020 of 654.0 pence per share and a dividend of 26.0 pence per share.

 

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