Edison reviews on The Law Debenture Corporation

RNS Number : 6589R

Law Debenture Corp PLC

01 March 2019

 

London, UK, 1 March 2019

Edison issues review on The Law Debenture Corporation (LWDB)

The Law Debenture Corporation (LWDB)'s NAV total return outperformed its benchmark FTSE All-Share Index in FY18, protecting investors from c 40% of the market decline. While returns for the year were negative, LWDB has performed well in absolute terms over three, five and 10 years to 31 January 2019, producing strong NAV and share price total returns under managers James Henderson and Laura Foll. The independent professional services (IPS) business, which makes up c 14% of LWDB's NAV on a fair value basis, performed strongly in its first full year under the new executive team of Denis Jackson (CEO) and Katie Thorpe (CFO), with 9% net revenue growth after seven years of broadly flat returns, contributing c 37% of LWDB's revenue earnings per share. With c 75% of LWDB's assets invested in the UK, a planned move from AIC Global to a UK sector should facilitate comparison with more similarly invested funds.

LWDB's current discount to cum-income NAV (with both debt and the IPS business at fair value) is 10.9%, which is broadly in line with recent history, and wider than the AIC Global, UK All Companies and UK Equity Income sector averages. While the market tends to apply a discount to trusts perceived to have 'complicating' factors, our view is that the important revenue contribution from IPS should support a narrower, not a wider discount. LWDB currently has net gearing of 3.0% and yields 3.2%, based on the FY18 total dividend, which was up 9.2% year-on-year.  

Click here to view the full report.

All reports published by Edison are available to download free of charge from its website

www.edisoninvestmentresearch.com

About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information please contact Edison:

Sarah Godfrey, [phone]

Gavin Wood, [phone]

[e-mail]

Learn more at www.edisongroup.com and connect with Edison on: 

LinkedIn        https://www.linkedin.com/company/edison-investment-research 

Twitter           www.twitter.com/Edison_Inv_Res 

YouTube       www.youtube.com/edisonitv 

 

END

 

 

NRAQFLFBKXFXBBE