The Law Debenture Corporation p.l.c.
today published its results for the half-year ended 30 June
2024
Leading UK Equity income
sector performer over short, medium and longer term with another
good overall performance in H1 2024
Group Highlights:
· Net
asset value (NAV) total return with debt and Independent
Professional Services (IPS) business at fair value (FV) for H1 2024
delivered a performance of 9.7% compared to our benchmark, the FTSE
All-Share Index, at 7.4%. With debt at par the return was
9.6%.
· Share price total return marginally outperformed the FTSE
Actuaries All-Share Index with a total return of 7.7% for H1
2024.
·
Another good performance from
IPS with revenue up 8.8%, profit before tax up by 9.2% and
valuation up 4.9% to £221m (compared to 30 December
2023).
· Continued low ongoing charges of 0.48%, compared to the
industry average of 1.21%.
|
YTD
%
|
1 year
%
|
3 years
%
|
5 years
%
|
10 years
%
|
NAV
total return (with debt at par)1
|
9.6
|
16.2
|
16.5
|
48.7
|
113.2
|
NAV
total return (with debt at fair value)
1
|
9.7
|
15.0
|
25.8
|
61.1
|
125.5
|
FTSE Actuaries All-Share Index Total
Return2
|
7.4
|
13.0
|
23.9
|
30.9
|
77.8
|
Share price total return2
|
7.7
|
14.7
|
26.8
|
78.0
|
137.2
|
Change in Retail Price Index3
|
2.0
|
2.7
|
27.1
|
33.4
|
50.8
|
· Winner 2023 Investment Company of the Year Awards in November,
in association with the AIC, in the UK Income category for the
third year running.
·
Winner in the Active-Income
category for the second year in a row at the September's 2023 AJ
Bell Investment Awards.
Dividend Highlights:
· Declared a first interim dividend of 8.0 pence per ordinary
share, paid in July 2024, representing an increase of 4.9% over the
prior year's first interim dividend.
· It is
the Board's intention for each of the first three interim dividends
for 2024 to be equivalent to a quarter of Law Debenture's total
2023 dividend of 32.0 pence per ordinary share. Continued good
performance and growth of the IPS business supports the Board's
intention to maintain or increase the total dividend in
2024.
· Dividend yield of 3.6% based on our closing share price of 889
pence on 24 July 2024.
· Total
dividend income from the portfolio of £19.9m (June 2023:
£19.3m).
IPS
Highlights:
· Wholly-owned independent provider of professional services.
Accounts for 20% of H1 2024 NAV but has funded approximately 34% of
dividends in the last 10 years.4
·
IPS enters its seventh
consecutive year of consistent mid to high single digit growth with
net revenues of £26.2m (June 2023: £24.1m) up 8.8% with profit
before tax up by 9.2% (compared to 30 June 2023).
Longer Term Record:
· 135
years of history with a long-term track record of value creation
for shareholders.
· Long-term NAV (at FV) outperformance of the benchmark over
one, three, five and ten years.
· Strong long-term record with share price total return over 10
years of 137.2% (FTSE All-Share: 77.8%).
· £10,000 invested in Law Debenture ten years ago would be worth
£23,720 as at 30 June 20245.
· Over
45 years of increasing or maintaining dividends to
shareholders.
Robert Hingley, Chairman, said:
"Law Debenture has delivered a solid
overall first half performance and succeeded in its aim to provide
a steadily increasing income for our shareholders whilst achieving
long-term capital growth in real terms. The market backdrop has
been relatively supportive though within the investment trust
sector, there has been a widening of discounts. Against this
background, we are pleased that IPS has shown continued good growth
and that, overall, we have outperformed our benchmark. We are
confident that the combination of a well positioned equity
portfolio and continued growth in our IPS business will deliver
attractive long-term returns for our shareholders."
Denis Jackson, Chief Executive Officer,
commented:
"Against a backdrop of continued
macroeconomic uncertainty and elevated interest rates, Law
Debenture has delivered a good overall performance in the first
half of 2024. Our portfolio managers have performed well in
absolute and relative terms and continue to believe an undervalued
UK stock market offers investors the opportunity to own resilient,
cash-generative and well-managed businesses at attractive valuation
multiples. The income from the IPS business offers our portfolio
managers greater flexibility in their investment selection, helping
set Law Debenture apart from other UK equity income trusts. Law
Debenture is resilient by design and has demonstrated strong
performance over the short, medium and longer term. Though there
are a number of geopolitical issues to monitor and the near-term
economic outlook is not without its challenges, we are confident
that our ongoing investment in IPS leaves it well positioned for
medium-term growth in-line with our mid to high single percentage
target."
Past performance is not a guide to future performance. The
value of an investment and any income from it is not guaranteed and
may go down as well as up and investors may not get back the amount
invested.
1 NAV is
calculated in accordance with the Association of Investment
Companies (AIC) methodology, based on performance data held by Law
Debenture including the fair value of the IPS business and
long-term borrowings.
2 Source: Refinitiv.
3 Source: Office for National
Statistics.
4 Calculated for the 10 years ended
31 December 2023.
5 Calculated on a total return basis
assuming dividend re-investment between 30 June 2014 and 30 June
2024.
THE LAW DEBENTURE CORPORATION P.L.C.
AND ITS SUBSIDIARIES
HALF YEARLY REPORT FOR THE SIX MONTHS
TO 30 JUNE 2024 (UNAUDITED)
Financial summary
|
Six months
|
Six
months
|
Twelve
months
|
|
30 June
2024
|
30 June
2023
|
31
December 2023
|
|
£000
|
£000
|
£000
|
Net Asset Value - with debt and IPS
at fair value*
|
1,120,611
|
1,009,140
|
1,048,304
|
Total Net Assets per the statement of
financial position
|
913,156
|
812,578
|
854,229
|
|
Pence
|
Pence
|
Pence
|
NAV per share at fair
value1,2*
|
857.88
|
775.92
|
802.67
|
Revenue return per share:
|
|
|
|
Investment portfolio
|
13.78
|
13.29
|
22.41
|
Independent professional
services
|
5.22
|
4.803
|
11.02
|
Group revenue return per
share
|
19.00
|
18.09
|
33.43
|
Capital return/(loss) per
share
|
43.78
|
(5.26)
|
24.47
|
Dividends per
share4
|
8.00
|
7.625
|
32.00
|
Share price
|
845
|
767
|
801
|
|
%
|
%
|
%
|
Ongoing
charges5*
|
0.48
|
0.48
|
0.49
|
Net gearing*
|
12
|
13
|
13
|
Premium/(discount)*
|
(1.50)
|
(1.15)
|
(0.21)
|
1 Please refer below for calculation of NAV.
|
2 NAV is calculated in accordance with the AIC methodology,
based on performance data held by Law Debenture including the fair
value of the IPS business and long-term borrowings.
|
3 Revenue per share is calculated using the weighted average
shares in issue as at 30 June 2024.
|
4 The second interim dividend is not due to be announced until
September 2024 and has not been factored in the calculation
presented. The Board have indicated their intention to pay three
interim dividends of 8.0p in respect of 2024, each representing a
quarter of the total 2023 dividend declared of 32.0p. The final
dividend will be declared in February/March 2025.
|
5 Ongoing charges are calculated based on AIC guidance, using
the administrative costs of the investment trust and include the
Janus Henderson investment management fee, charged at an annual
rate of 0.30% of the NAV of the investment portfolio. There is no
performance related element to the fee.
|
* Items marked "*" are alternative
performance measures (APM). For a description of these measures,
see page 155 of the annual report and financial statements for the
year ended 31 December 2023.
|
Half yearly management report
Introduction
I am pleased to report that The Law
Debenture Corporation p.l.c. (Law Debenture) has delivered another
solid performance against a relatively subdued macroeconomic
backdrop, with global interest rates remaining at relatively
elevated levels as Central Banks seek to bear down on inflationary
pressures.
Despite this backdrop, the
combination of our well-diversified portfolio and another good
performance from our Independent Professional Services (IPS)
business has enabled Law Debenture to marginally outperform our
benchmark, the FTSE Actuaries All-Share Index. This delivered a
7.4% total return over the six-month period, while Law Debenture's
Net Asset Value (NAV), with debt and IPS at fair value, delivered a
return of 9.7%. With debt at par, our NAV delivered a return of
9.6%.
Our Investment Managers continue to
build on their successful long-term record of outperformance
against our benchmark, the FTSE Actuaries All Share Index, and
drivers of their performance are covered in detail in their report.
Our IPS business is now well into its seventh year of consistent
mid-to-high single-digit growth, with net revenue up 8.8% and
profit before tax up 9.2%.
Our IPS business accounts for 20% of
Law Debenture's NAV, but has funded approximately 34% of dividends
over the past decade. As a result, our Investment Managers have
increased flexibility in selecting what they feel are strong
business models and attractive valuation opportunities, which we
believe will continue to position the equity portfolio for future
longer-term growth.
Dividend
We are pleased to continue building
on our 45-year record of maintaining or increasing dividends. We
recently declared a first interim dividend of 8.0 pence per
ordinary share, representing an increase of 4.9% over the prior
year's first interim dividend. This highlights the benefits of
IPS's income streams, as well as Law Debenture's strong revenue
reserves.
This dividend was paid on 4 July
2024 to shareholders on the register at close of business on 31 May
2024. Based on the closing share price on 24 July 2024 of 889
pence, the dividend yield per Law Debenture share is
3.6%1.
Over the last 10 years, we have
increased the dividend by 113%2 in aggregate, which
compares favourably with our sector peers.
It is the Board's current intention
to recommend that the total dividend in relation to 2024 maintains
or increases the total 2023 dividend of 32 pence per ordinary
share. Our shareholders will be asked to vote on the final dividend
at our AGM in 2025.
Independent Professional Services
DIVISION
|
Net
revenue1
|
Net
revenue1
|
Growth
|
|
30 June
2024
|
30 June
2023
|
2023/2024
|
|
£000
|
£000
|
%
|
Pensions
|
8,957
|
8,597
|
4.2%
|
Corporate Trust
|
6,434
|
5,818
|
10.6%
|
Corporate Services
|
10,837
|
9,693
|
11.8%
|
Total
|
26,228
|
24,108
|
8.8%
|
1 Revenue shown is net of cost of sales.
|
Corporate Trust
Following the volatile interest rate
and inflation backdrop since the pandemic and the spike in energy
prices, economic conditions in our main markets were much more
stable in the first half of 2024, and we are pleased to report
revenue growth of 10.6%.
Capital Markets deal activity is a
key driver of new business growth and, having been a Bond Trustee
since our inception 135 years ago, we have seen many market peaks
and troughs. A year ago, new issuance levels were at their lowest
since 2014 and capacity in this area was being reduced by all the
major banks.
As interest rates and inflation
stabilise and economic growth returns, there are encouraging signs
that Corporates have increased confidence to invest in their
businesses. Deal activity, albeit off a low base, has increased and
Debt Capital Markets issuance levels in Europe were up 16% in the
first half of the year (Source: Dealogic). While not a record
period for appointments, we have nonetheless benefited from the
increased activity. Highlights include acting as trustee on bonds
issued by Centrica and Santander. In addition, our strong
reputation in the Japanese convertible bond market served us well,
closing six such transactions so far this year.
As previously noted, the strength of
our Corporate Trust business lies in its diversified revenue
streams, some elements of countercyclicality and a linkage of our
annual fee income to inflation.
Our Escrow product continues to
build its reputation for quality of service and flexibility. An
escrow solution allows two commercial parties to transact with a
trusted independent entity in the middle, ensuring payments are
only made once certain conditions of the transaction have been met
by both sides prior to completion. Corporate M&A is important
to us and deal volumes in Europe, up 35% (Source: Dealogic) in the
first half of the year, provided us with increased
opportunities.
Pensions escrows are also an
important market given the increased number of surpluses that have
emerged following the return of inflation and interest rates to
more normalised levels. We are increasingly active too in
Litigation, Real Estate, Sporting/Live Entertainment Events and
supporting various law firms who no longer provide escrow
services.
Post-issue work, when a bond issuer
runs into financial difficulty, can lead to counter-cyclical
incremental revenues for us. When bonds default, the workflow, risk
and revenue profiles of our role can materially change. A key duty
of the bond trustee is to be the legal creditor of the issuer on
behalf of the bondholders. Our role in such default situations
requires material incremental work that, given a favourable
outcome, can lead to significant additional income. However,
defaults can often take years to play out and the results are
uncertain.
Most of the debt capital markets
transactions on our books, built up over many decades, have
contractual inflation-linked fee increases for our services. As
inflation spiked in late 2022, this fed through to our revenues. In
turn, as inflation has fallen, this has placed downward pressure on
the rate of growth of these contracted revenues.
We have invested in three additional
transaction managers (two of whom are lawyers) to join our new
business team in the first half and increased our investment in
business development activity. We are confident that this business
will continue to produce solid returns for our shareholders over
time.
Pensions
The first half of 2024 continued to
demonstrate the importance of effective pension scheme trusteeship
and governance. Many schemes have reported improved funding
positions, resulting in increased interest in buy-in/buy-out
strategies as well as corporate sponsors working with trustees to
consider the viability of running pension schemes with a surplus on
a long-term basis. The changing nature of pension issues underlines
the value in having independent professional pension support. This
includes growing interest from scheme trustees in a corporate sole
trustee approach, addressing succession planning, resource
constraints and the need for specialist skills.
The long-awaited release of the
General Code from the Pensions Regulator has also encouraged more
schemes to look at their governance and risk management. The
increased regulatory requirements mean that there is a need for
more expertise and relevant experience from professional trustees
and governance executives to help manage schemes properly and
effectively.
With the change in government, it is
likely that there will continue to be reforms to workplace pension
schemes which will require further consideration and action. There
may also be a more comprehensive review of the pension landscape.
Previous reviews led to substantial changes which companies and
pension scheme board needed help to navigate. It is very likely
that further support will be needed.
We had a solid first half of 2024,
winning new clients with wins for the Trustee business across DB,
DC and CST. Following strong growth in 2023, Ireland continued to
have a pleasing number of wins across DB, DC and transfers into DC
MasterTrusts.
We continue to recruit into our
Manchester Pensions team, with our footprint in the Northwest
increasing substantially. Our outsourced governance team, Pegasus,
continues to provide excellent support to corporate sole trustee
clients and resource relief to in-house teams. There has also been
an increase in project work.
Overall, Pensions revenues for the
H1 were £9.0m. YOY net revenue growth H1 2024 v H1 2023 is
4.2%.
Corporate Services
Our Corporate Services businesses
reported net revenue growth of 11.8%.
Service of
Process
This remains our business which has
the least recurring revenues and is most dependent on global
macro-economic factors and activity in capital markets. Major
economies, such as the UK and US, allow overseas businesses to sign
legal documents subject to their laws, provided that they have
either a registered address or appointed agent for service of
process in the governing jurisdiction. We act as the agent for
service of process to thousands of clients from all over the world
each year.
The greater the amount of global
economic activity and capital markets new issuance, the greater the
demand for our product. Given the improving conditions in primary
capital markets, return to economic growth in major economies and
improved economic outlook more generally, as would be expected,
Service of Process revenues picked up nicely in the first half of
2024.
Corporate Secretarial
Services (CSS)
Our CSS business remains a work in
progress. At the time of acquisition just over three years ago, we
noted that this business was not "cost out" but "cost in". The
business was "non-core" to the seller and we found that it had
materially underinvested in technology, infrastructure, people,
skills and training. Successfully addressing these issues has taken
longer, and cost more, than we had originally planned and there
remains more work to do. Nonetheless, we have made real progress.
Many of our key performance indicators (KPIs) have improved,
including customer satisfaction, contract renewal and staff
turnover. We continue to invest in automating our processes and
have put in place new contracts and service level agreements with
our clients. We have increased our staffing levels by 50%,
established clear KPIs, and implemented training and career
progression frameworks.
Overall, we now believe that we have
laid the foundations for longer-term success. Our focus is now
turning towards growing our client footprint and our market share
in this growing market.
Revenues in this business remained
broadly flat in H1 2024.
Structured
Finance
This business provides accounting
and administrative services to special purpose vehicles (SPVs).
Typical buyers of our services are asset managers, hedge funds and
challenger banks. They use SPV structures to warehouse and provide
long-term funding for real assets. Examples include credit card
receivables, mortgages, real estate and aircraft leases.
We saw healthy levels of enquiry,
new business wins and solid revenue growth in the first half of the
year. Of particular note is the growth in Private Credit as an
asset class. Typical buyers of our Structured Finance product are
active in this growing market. Pension and Endowment funds have
demand for quality assets where they can obtain an illiquidity
premium for term financing. Interest rates appear to have
stabilised off a higher base yield (approx. 4-5%) in most major
markets compared to close to zero from 2009 to 2021. Post the
Global Financial Crisis, Commercial Banks generally are smaller
users of their balance sheets to provide capital to their clients,
particularly where capital rules may be onerous. Investment Banks
have identified these demand/supply drivers and are committing
substantial capital and resourcing to Private Credit.
Safecall
We achieved record levels of
reports, new business wins and revenues in the first half of the
year. Whistleblowing remains at the centre of major news stories.
Consequently, product awareness continues to grow. Politicians from
all sides are promoting new legislation and regulatory standards
across most developed markets.
Among our achievements in H1 were
the roll-out of a new investigations management software and the
appointment of a Head of Training to accelerate revenue growth: as
the number of whistleblowing reports rises, clients have demanded
the tools and knowledge to manage cases effectively and
efficiently.
The outlook for this business is
bright.
Central overview
While refreshing our five-year
strategic plan last year, we challenged ourselves on the
operational requirements to underpin our growth.
For some time now, we have been
striving to bring our historically disparate collection of
businesses together as 'One Law Debenture' and, accordingly have
invested steadily in areas such as culture, HR, IT, Finance and our
office spaces.
Having put these foundations in
place, we are now preparing ourselves for more wholesale business
transformation. We aspire to change the way we work internally
while protecting our ability to serve our clients in a bespoke and
nimble way. The first steps have been taken to streamline
processes, use technology to drive straight-through processing of
invoices, systemise management information and enhance our control
environment.
The five-year transformation to our
Target Operating Model will see investment in our people, systems,
processes and controls to allow us to scale as a single operating
business. After a spike, we expect to see a slowdown in the rate of
growth of our operational costs as we use technology more
effectively, and an increase in fee earning colleagues' capacity to
serve their clients as we improve engagement transparency and
reduce their administrative load. We will have more insightful
management information to drive decisions and improve client
experience, and be able to respond to our key performance
indicators quicker. We will continue to invest in technology to
allow us to scale our business efficiently, minimising the need to
increase central costs over time.
Environmental, Social and Governance (ESG)
Our 2023 Annual Report gives a
detailed review of our ESG commitments and progress to
date.
Highlights for the half-year centre
around our continued commitment to diversity and inclusion. We were
delighted to improve even further our rankings in the FTSE 250
Women Leaders' Review, not only maintaining our first-place
position in the Financial Services sector, but moving in to first
place overall.
Having been shortlisted last year in
the inaugural INSEAD Alumni Balance in Business Awards, this year
we were thrilled to win in two categories, Trailblazer Exco and
Direct Reports, as well as the Overall Board, Exco and Direct
Reports. Other short listed companies included a number of our
clients and market leaders such as Lloyds Banking Group, M&S
and HSBC.
We have seen the positive impact of
focus on gender balance in our business and, now that we have made
such pleasing progress, 2025 and beyond will see us broadening our
DE&I focus towards wider inclusion topics.
Outlook
We believe that the combination of
IPS with the investment portfolio is a unique and well-diversified
model and I am cautiously optimistic about the Group's progress in
the second half of 2024 and beyond, though the near-term economic
outlook is not without its challenges.
We continue to look for
opportunities to grow IPS through organic investment in some of our
fastest-growing businesses. We are encouraged by good new business
momentum and continue to invest in operational fitness, talent, and
technology to ensure we gain market share and maintain longer-term
growth in line with our mid-to-high single percentage
target.
Our Investment Managers continue to
invest in what they feel is a differentiated selection of
high-quality businesses with competitive advantage and good
long-term growth prospects. We are confident that their disciplined
approach of buying at attractive entry point valuations will
continue to deliver over the longer-term for our shareholders. The
Board supports their view that the UK stock market continues to
offer investors the opportunity to own resilient, cash-generative
and well-managed business models that are well positioned to
produce attractive longer-term returns.
Denis Jackson
Chief Executive
25 July 2024
1 Based on the total dividend paid in relation to 2023 of 32.0p
per share.
|
2 Based on the period 2013 to 2023.
|
Investment managers' report
Overview
The Trust has modestly outperformed
in the first six months of the year, rising 9.7% (NAV total return
with debt at FV), compared to 7.4% for the FTSE All-Share Index,
our benchmark. The earnings for the period were 13.8p, with the
investment trust portfolio holdings contributing 73% of the total
earnings. Despite a subdued economic backdrop, companies held in
the portfolio in aggregate made reasonable operating progress.
Amongst the larger companies this progress has been rewarded with
share appreciation. The banking sector in particular saw share
prices rise as a result of earnings upgrades. Many of the smaller
company holdings are also making operational progress but investor
interest in them remains low. The lack of interest creates
opportunities to buy good companies at low share prices. We have
been using the period to refresh the portfolio, reflected in eight
new UK holdings purchased in the first half of the year. The belief
that valuations are low was reinforced by the high level of
proposed and successful takeover activity as companies used the low
valuations to make approaches to buy other companies. There have
been recommended offers for IDS (Royal Mail), Hipgnosis Song Fund
and DS Smith, while there were rejected offers for Anglo American,
XP Power and Direct Line.
Activity
During the six months we maintained
our historically high weight in UK equities (89% as at the end of
June). Despite a positive return (for both the FTSE All-Share
benchmark and this portfolio) during the six months, UK equities
continue to trade at a large valuation discount relative to
overseas peers (see graph below). This persistent discount is
something we are seeing evidenced in the number of takeover
approaches. As a result of what we see as a compelling valuation
opportunity, we have maintained the level of gearing during the
period, ending June at 12% relative to 13% at calendar year
end.
Within the UK equities portfolio
there were new purchases in the six months including global insurer
Beazley, supermarket Sainsbury and office owner Great Portland
Estates. There were also additions to several existing holdings
including building materials suppliers Ibstock and Marshalls,
medical device producer Smith & Nephew and BT. There is no end
market commonality to these purchases, but in all cases we think
they are making operational progress that is not reflected in their
current valuation.
These purchases were funded by sales
including IDS (previously Royal Mail), which was sold after the
takeover offer was recommended by the Board. We also sold the
position in Hipgnosis Songs Fund following the takeover approach.
Elsewhere we have taken profits in some 'recovery' names that have
performed well including Rolls-Royce and Marks & Spencer. In
both cases we continue to hold a position but have taken some
profits in recognition that there has been an earnings recovery and
the valuation has risen from low levels.
Performance review
In the years following Brexit it has
often been smaller, domestically focussed businesses that have
underperformed the UK market. Therefore, while UK equities as a
whole trade on a valuation discount to overseas, beneath this there
is a subset of domestic businesses where sentiment and performance
has been weakest. Meanwhile many of these businesses are making
good operational progress, which in our view is yet to be reflected
in their valuation. For this reason we have been gradually shifting
the portfolio in the direction of these smaller businesses, adding
to positions including AFC Energy, Castings and ITM Power. This is
reflected in what is now a sizeable 'overweight' position in small
and medium sized companies, as shown in the table below (comparing
the second and third columns).
|
Law Debenture portfolio
weight
(%)
|
FTSE All-Share benchmark
weight (%)
|
Index total return
(%)
|
FTSE 100
|
47.1
|
84.4
|
7.9
|
FTSE 250
|
22.6
|
13.5
|
4.8
|
FTSE Small Cap
|
6.2
|
2.1
|
6.7
|
FTSE AIM All-Share
|
9.3
|
-
|
1.1
|
Source: Janus Henderson Investors,
Factset, Morningstar. Weights for portfolio and benchmark as at end
of June 2024 (note the weights do not add up to 100% because of the
overseas weight and some UK shares held outside of these indices).
Index total return for 6 months to end June 2024.
|
The top five absolute contributors
to performance during the six months were:
Stock
|
£000
Appreciation
|
%
Appreciation
|
Rolls-Royce
|
18,541
|
49.8
|
Barclays
|
6,780
|
35.8
|
NatWest
|
5,940
|
41.7
|
DS Smith
|
3,796
|
36.7
|
Boku
|
3,356
|
36.4
|
Source: Performance data held by Law
Debenture based on market prices.
|
It is notable that three of the top
five best performers during the six months were banks. At the end
of last year, the expectation was that interest rates would reduce
quickly and meaningfully as 2024 progressed. This proved overly
optimistic. While inflation has come down, it has come down more
slowly than forecast, meaning UK interest rates have (for now)
remained flat. This 'higher for longer' interest rate environment
benefits the banks in their lending margins, while loan losses
remain historically low. This combination led to earnings upgrades
at a time when bank valuations were low and the shares performed
well as a result. Elsewhere Rolls-Royce also performed well
following further earnings upgrades, helped by cost savings as well
as an ongoing recovery in flying hours.
The top five largest detractors
during the six months were:
Stock
|
£000
Depreciation
|
%
Depreciation
|
Vanquis Banking Group
|
(3,764)
|
(61.2)
|
Oxford Nanopore
Technologies
|
(2,926)
|
(57.6)
|
Rio Tinto
|
(2,408)
|
(11.0)
|
Spectris
|
(2,097)
|
(26.2)
|
Halfords
|
(1,918)
|
(29.6)
|
Source: Performance data held by Law
Debenture based on market prices.
|
There is little commonality to the
detractors during the six months, with the exception that in the
current market environment there is an unwillingness to pay for
'blue sky' scenarios. This has impacted the small holdings in
Oxford Nanopore (gene sequencing) and Surface Transforms (ceramic
brakes for electric vehicles). In both companies there have been
operational setbacks but the end market potential remains large. In
the case of consumer lender Vanquis, the shares fell as a result of
higher than expected costs leading to earnings downgrades. The
valuation remains very low relative to its potential returns but
there is a high degree of market scepticism following
disappointments. Under a new management team we do not think the
valuation reflects the potential for turnaround and have maintained
the holding.
Income
Dividend income received from the
portfolio rose modestly in the first half of the year, totalling
£19.9m compared to £19.3m in the same period last year. As a
reminder the largest contributor to income within the Trust remains
the IPS business, which allows us as portfolio managers to invest
across the breadth of the UK (and global) equity markets, including
in companies that do not currently pay a dividend. As we have often
seen in recent years, a number of the best performers during the
first half were those with low or no dividends (such as
Rolls-Royce), which we were able to hold in size due to the
benefits of the combined structure.
Outlook
Companies have been faced with an
assortment of challenges in recent years. Many of them are now
receding. The 'cost of living crisis' has partially eased, with
wage increases now outstripping inflation. The problem in supply
chains originating from Covid and then rippling out are mainly
solved. The uncertainties around trade as a result of Brexit are
clearer. The rise in interest rates is over and they are likely to
come down later in the year. A reduction in rates will stimulate
economic activity as investment projects go ahead and the resulting
pick up in sales will improve corporate profitability. When
turnover improves it is often the case company operating margins
expand. The extent of the operational gearing is often a positive
surprise to investors. All of this creates a good background for
investors in equities. It will be happening at a time that UK
valuations judged by historic norms are very low. The cocktail of
falling interest rates, low valuations, economic growth and
disciplined company behaviour is an exciting mix. Therefore, we
remain positive on the outlook for UK equities, and the gearing
level of the Trust reflects this. The improved prospects for UK
companies should also help lead to further sustainable dividend
growth.
After the period end, the Labour
party had a resounding victory in the General Election. It does not
alter our investment approach of focussing on individual companies,
however the new government's emphasis on economic growth may
benefit UK companies that are closely tied to the broader economy,
such as the construction sector.
James Henderson and Laura Foll
Investment Managers
25 July 2024
Sector distribution of portfolio by value
|
30 June
2024
|
31
December 2023
|
Oil and gas
|
10.6%
|
10.3%
|
Basic materials
|
5.4%
|
6.0%
|
Industrials
|
25.5%
|
25.6%
|
Consumer goods
|
8.7%
|
7.8%
|
Health care
|
5.5%
|
6.0%
|
Consumer services
|
11.3%
|
10.4%
|
Telecommunications
|
2.2%
|
1.9%
|
Utilities
|
3.6%
|
3.1%
|
Financials
|
25.4%
|
27.4%
|
Technology
|
1.8%
|
1.5%
|
Geographical distribution of portfolio by
value
|
30 June
2024
|
31
December 2023
|
United Kingdom
|
88.8%
|
88.2%
|
North America
|
3.6%
|
3.2%
|
Europe
|
6.3%
|
7.4%
|
Japan
|
1.3%
|
1.2%
|
Calculation of net asset value (NAV) per
share
Valuation of our IPS business
Accounting standards require us to
consolidate the income, costs and taxation of our IPS business into
the Group income statement below. The assets and liabilities of the
business are also consolidated into the Group column of the
statement of financial position below. A segmental analysis is
provided below of these accounts, which shows a detailed breakdown
of the split between the investment portfolio, IPS business and
Group charges.
Consolidating the value of the IPS
business in this way fails to recognise the value created for
shareholders by the IPS business. To address this, the NAV
performance we have published for the Group, since December 2015,
has included a fair value for the standalone IPS
business.
The current fair value of the IPS
business is calculated based on historical earnings before
interest, taxation, depreciation and amortisation ('EBITDA') for
the second half of 2023, and the EBITDA for the half year to 30
June 2024, with an appropriate multiple applied.
The calculation of the IPS valuation
and methodology used to derive it are included in the previous
annual report at Note 13 on page 135. In determining a calculation
basis for the fair valuation of the IPS business, the Directors
have taken external professional advice from PwC LLP. The multiple
applied in valuing IPS is from comparable companies sourced from
market data, with appropriate adjustments to reflect the difference
between the comparable companies and IPS in respect of size,
liquidity, margin and growth. A range of multiples is then provided
by PwC from which the Board selects an appropriate multiple to
apply. The make-up of our IPS business is unique meaning we do not
have a like for like comparator group to benchmark ourselves
against. Historically our core comparators have been Sanne Group,
Intertrust, Link Administration Holdings and JTC. However, Sanne,
Intertrust and more recently, Link Administration have been
acquired and are no longer listed. Given only JTC
continues to be publicly listed, PwC have also considered the
wider, less comparable companies listed below, but only to broadly
assess market movements in the relevant and complimentary service
sectors. The table below shows a summary of performance of our
comparators:
Company
|
Revenue
LTM*
(£m)
|
LTM
EV/EBITDA
30 June
2024
|
Revenue
CAGR FY20
-
LTM
2024
|
EBITDA
margin LTM
|
Law Deb IPS
|
55
|
10.5x
|
12.4%
|
32.0%
|
SEI Investments Company
|
1,554
|
13.4x
|
5.9%
|
25.6%
|
SS&C Technologies Holding,
Inc
|
4,414
|
10.1x
|
6.6%
|
33.6%
|
EQT Holdings Limited
|
88
|
14.2x
|
13.4%
|
24.3%
|
Perpetual Limited
|
702
|
8.7x
|
26.5%
|
20.8%
|
JTC PLC
|
257
|
18.2x
|
22.3%
|
28.0%
|
Begbies Traynor Group plc
|
129
|
6.3x
|
16.4%
|
16.4%
|
Christie Group plc
|
66
|
14.1x
|
11.8%
|
-0.2%
|
* LTM refers to the trailing 12
months 'results' which are publicly available. Source: Capital
IQ.
|
The multiple selected for the
current period is 10.5x, which is broadly in line with the mean
multiple of the comparator group. The multiple selected is
consistent with that used at both the half year and year end of
2023.
It is hoped that our initiatives to
inject growth into the IPS business will result in a corresponding
increase in valuation over time. As stated above, management is
aiming to achieve mid to high single digit growth in 2024. The
valuation of the IPS business has increased by £129m (142%) since
the first valuation of the business as at 31 December
2015.
Valuation guidelines require the
fair value of the IPS business be established on a stand-alone
basis. The valuation does not therefore reflect the value of Group
tax relief from the investment portfolio to the IPS
business.
In order to assist investors, the
Company restated its historical NAV in 2015 to include the fair
value of the IPS business for the last ten years. This information
is provided in the annual report within the 10 year
record.
Long-term borrowing
The methodology of fair valuing all
long-term borrowings is to benchmark the Group debt against A rated
UK corporate bond yields.
Calculation of NAV per share
The table below shows how the NAV at
fair value is calculated. The value of assets already included
within the NAV per the Group statement of financial position that
relates to IPS is removed (£52.1m) and substituted with the
calculation of the fair value and surplus net assets of the
business (£221.1m). The fair value of the IPS business has
increased by 4.9% due to a combination of higher surplus net assets
being available and a higher EBITDA. An adjustment of £38.4m is
then made to show the Group's debt at fair value, rather than the
book cost that is included in the NAV per the Group statement of
financial position. This calculation shows NAV fair value for the
Group as at 30 June 2024 of £1,120.6m or 857.88 pence per
share:
|
30 June
2024
|
31
December 2023
|
|
£000
|
Pence per
share
|
£000
|
Pence per
share
|
Net
asset value (NAV) per Group statement of financial
position
|
913,156
|
699.06
|
854,229
|
654.07
|
Fair valuation of IPS: EBITDA at a
multiple of 10.5x (31 December 2023: 10.5x)
|
193,211
|
147.91
|
185,063
|
141.70
|
IPS net assets attributable to IPS
valuation
|
27,923
|
21.38
|
25,729
|
19.70
|
Fair
value of IPS business
|
221,134
|
169.29
|
210,792
|
161.40
|
Removal of IPS net assets included in
Group net assets
|
(52,064)
|
(39.86)
|
(49,956)
|
(38.25)
|
Fair
value uplift for IPS business
|
169,070
|
129.43
|
160,836
|
123.15
|
Debt fair value adjustment
|
38,385
|
29.39
|
33,239
|
25.45
|
NAV
at fair value
|
1,120,611
|
857.88
|
1,048,304
|
802.67
|
|
|
|
|
|
|
£000
|
%
|
£000
|
%
|
NAV
attributable to IPS
|
221,134
|
20
|
210,792
|
20
|
See commentary for the breakdown of
the assets already included in the NAV per the financial
statements.
The Financial Statements NAV at fair
value calculated above differs to the published NAV at fair value
for 28 June 2024 (half year NAV released by RNS on 1 July 2024). As
such, please see below for a reconciliation:
Reconciliation of published NAV to results
NAV:
|
£000
|
Pence per
share
|
Performance NAV cum income with debt
at fair value
|
1,115,635
|
854.07
|
Reconciliation of shareholders' funds to net
assets:
|
|
|
Performance NAV
|
(916,436)
|
(701.57)
|
Financial Statements NAV
|
913,156
|
699.06
|
Revised IPS valuation uplift:
|
|
|
Performance NAV (valuation per 31
December 2023)
|
(160,836)
|
(123.13)
|
Financial Statements NAV
|
169,070
|
129.43
|
Revised Fair Value of Debentures:
|
|
|
Performance NAV
|
(38,363)
|
(29.37)
|
Financial Statements NAV
|
38,585
|
29.39
|
Total NAV at fair value per results
|
1,120,611
|
857.88
|
Group income statement
for the six months ended 30 June 2024
(unaudited)
|
30 June
2024
|
30 June
2023
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
UK dividends
|
18,322
|
-
|
18,322
|
16,005
|
-
|
16,005
|
UK special dividends
|
-
|
1,432
|
1,432
|
-
|
-
|
-
|
Overseas dividends
|
1,552
|
-
|
1,552
|
3,291
|
-
|
3,291
|
Overseas special dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
Dividends received from
subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
Total dividend income
|
19,874
|
1,432
|
21,306
|
19,296
|
-
|
19,296
|
Interest income
|
397
|
-
|
397
|
440
|
-
|
440
|
Independent professional services
fees†
|
30,178
|
-
|
30,178
|
27,174
|
-
|
27,174
|
Other income
|
562
|
-
|
562
|
393
|
-
|
393
|
Total income
|
51,011
|
1,432
|
52,443
|
47,303
|
-
|
47,303
|
Net gain/(loss) on investments held
at fair value through profit or loss
|
-
|
59,528
|
59,528
|
-
|
(3,285)
|
(3,285)
|
Total income and capital gains/(losses)
|
51,011
|
60,960
|
111,971
|
47,303
|
(3,285)
|
44,018
|
Cost of sales
|
(4,062)
|
-
|
(4,062)
|
(3,141)
|
-
|
(3,141)
|
Administrative expenses
|
(20,687)
|
(1,318)
|
(22,005)
|
(19,391)
|
(1,045)
|
(20,436)
|
Operating profit/(loss)
|
26,262
|
59,642
|
85,904
|
24,771
|
(4,330)
|
20,441
|
Finance costs
|
|
|
|
|
|
|
Interest payable
|
(818)
|
(2,454)
|
(3,272)
|
(818)
|
(2,454)
|
(3,272)
|
Profit/(loss) before taxation
|
25,444
|
57,188
|
82,632
|
23,953
|
(6,784)
|
17,169
|
Taxation
|
(631)
|
-
|
(631)
|
(625)
|
-
|
(625)
|
Profit/(loss) for the period
|
24,813
|
57,188
|
82,001
|
23,328
|
(6,784)
|
16,544
|
Return per ordinary share (pence)
|
19.00
|
43.78
|
62.78
|
18.09
|
(5.26)
|
12.83
|
Diluted return per ordinary share
(pence)
|
18.98
|
43.77
|
62.75
|
18.08
|
(5.26)
|
12.82
|
† IPS fees are presented gross.
Please refer to Note 6 on page 28 of the half year report for a
reconciliation to the net revenue.
|
Group statement of comprehensive income
for the six months ended 30 June 2024
(unaudited)
|
30 June
2024
|
30 June
2023
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
Profit/(loss) for the period
|
24,813
|
57,188
|
82,001
|
23,328
|
(6,784)
|
16,544
|
Foreign exchange (loss) on
translation of foreign operations
|
(390)
|
(217)
|
(607)
|
-
|
(168)
|
(168)
|
Total comprehensive income/(loss) for the
period
|
24,423
|
56,971
|
81,394
|
23,328
|
(6,952)
|
16,376
|
Group statement of financial position
as at 30 June 2024
(unaudited)
|
Unaudited
|
Unaudited
|
Audited
|
|
30 June
2024
|
30 June
2023
|
31
December 2023
|
|
£000
|
£000
|
£000
|
Non-current assets
|
|
|
|
Goodwill
|
19,009
|
19,010
|
19,006
|
Property, plant and
equipment
|
2,265
|
1,838
|
2,267
|
Right-of-use asset
|
3,727
|
4,584
|
4,131
|
Other intangible assets
|
2,948
|
2,971
|
3,034
|
Investments held at fair value
through profit or loss
|
1,000,911
|
918,221
|
965,226
|
Retirement benefit asset
|
7,597
|
7,973
|
7,440
|
Total non-current assets
|
1,036,457
|
954,597
|
1,001,104
|
Current assets
|
|
|
|
Trade and other
receivables
|
30,988
|
18,363
|
21,496
|
Contract assets
|
15,558
|
9,576
|
8,604
|
Cash and cash equivalents
|
27,260
|
33,520
|
31,439
|
Total current assets
|
73,806
|
61,459
|
61,539
|
Total assets
|
1,110,263
|
1,016,056
|
1,062,643
|
Current liabilities
|
|
|
|
Trade and other payables
|
5,585
|
18,865
|
22,553
|
Lease liability
|
792
|
964
|
1,025
|
Corporation tax payable
|
1,773
|
1,718
|
2,198
|
Other taxation including social
security
|
2,330
|
2,376
|
1,842
|
Contract liabilities
|
14,039
|
6,139
|
8,000
|
Total current liabilities
|
24,519
|
30,062
|
35,618
|
Non-current liabilities and deferred income
|
|
|
|
Long-term borrowings
|
163,911
|
163,931
|
163,889
|
Contract liabilities
|
2,373
|
3,151
|
2,403
|
Deferred tax liability*
|
1,788
|
1,344
|
1,788
|
Lease liability
|
4,516
|
4,990
|
4,716
|
Total non-current liabilities
|
172,588
|
173,416
|
172,796
|
Total net assets
|
913,156
|
812,578
|
854,229
|
Equity
|
|
|
|
Called up share capital
|
6,557
|
6,530
|
6,557
|
Share premium
|
107,110
|
102,812
|
107,110
|
Own shares
|
(3,926)
|
(4,180)
|
(3,926)
|
Capital redemption
|
8
|
8
|
8
|
Translation reserve
|
2,659
|
2,687
|
2,659
|
Capital reserves
|
751,247
|
655,463
|
694,276
|
Retained earnings
|
49,501
|
49,258
|
47,545
|
Total equity
|
913,156
|
812,578
|
854,229
|
Total equity pence per share†
|
696.03
|
624.78
|
651.13
|
* The deferred tax liability has been
re-classified as non-current to align with the disclosure
requirements outlined in IAS 1.56.
|
† Please refer to page 20 of the half
year report for calculation of total equity pence per
share.
|
Group statement of cash flows
for the six months ended 30 June 2024
(unaudited)
|
Unaudited
|
Unaudited
|
Audited
|
|
30 June
2024
|
30 June
2023
|
31
December 2023
|
|
£000
|
£000
|
£000
|
Cash
flows from operating activities (before dividends received and
taxation paid)
|
3,112
|
3,603
|
11,268
|
Cash dividends received
|
20,057
|
17,958
|
32,964
|
Taxation paid
|
(770)
|
-
|
-
|
Cash
generated from operating activities
|
22,399
|
21,561
|
44,232
|
Investing activities
|
|
|
|
Acquisition of property, plant and
equipment
|
(274)
|
(191)
|
(874)
|
Acquisition of right of use
assets
|
-
|
-
|
-
|
Expenditure on intangible
assets
|
(303)
|
-
|
(54)
|
Purchase of investments (less cost of
acquisition)
|
(91,809)
|
(51,631)
|
(98,934)
|
Sale of investments
|
102,107
|
21,130
|
62,093
|
Interest received
|
397
|
-
|
1,197
|
Cash
flow from investing activities
|
10,118
|
(30,692)
|
(36,572)
|
Financing activities
|
|
|
|
Interest paid
|
(3,272)
|
(3,272)
|
(6,544)
|
Dividends paid
|
(32,470)
|
(21,236)
|
(40,518)
|
Payment of lease liability
|
(623)
|
(629)
|
(1,272)
|
Proceeds of increase in share
capital
|
-
|
19,913
|
24,237
|
Purchase of own shares
|
-
|
(1,052)
|
(798)
|
Net
cash flow from financing activities
|
(36,365)
|
(6,276)
|
(24,895)
|
Net
(decrease)/increase in cash and cash equivalents
|
(3,848)
|
(15,407)
|
(17,235)
|
Cash and cash equivalents at
beginning of period
|
31,439
|
49,559
|
49,559
|
Foreign exchange (losses)/gains on
cash and cash equivalents
|
(311)
|
(632)
|
(886)
|
Cash
and cash equivalents at end of period
|
27,260
|
33,520
|
31,439
|
Group statement of changes in equity
as at 30 June 2024
(unaudited)
|
Share
capital
|
Share
premium
|
Own
shares
|
Capital
redemption
|
Translation reserve
|
Capital
reserves
|
Retained
earnings
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
Balance at 1 January 2024
|
6,557
|
107,110
|
(3,926)
|
8
|
2,659
|
694,276
|
47,545
|
854,229
|
Profit/(loss) for the
period
|
-
|
-
|
-
|
-
|
-
|
57,188
|
24,813
|
82,001
|
Foreign exchange
|
-
|
-
|
-
|
-
|
-
|
(217)
|
(390)
|
(607)
|
Total comprehensive profit/(loss) for the
period
|
-
|
-
|
-
|
-
|
-
|
56,971
|
24,423
|
81,394
|
Issue of shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Dividend relating to 2023
|
-
|
-
|
-
|
-
|
-
|
-
|
(11,971)
|
(11,971)
|
Dividend relating to 2024
|
-
|
-
|
-
|
-
|
-
|
-
|
(10,496)
|
(10,496)
|
Total equity at 30 June 2024
|
6,557
|
107,110
|
(3,926)
|
8
|
2,659
|
751,247
|
49,501
|
913,156
|
Group segmental
analysis
† Please refer to Note 6 on page 28
of the half year report for a breakdown of net revenue by
department.
|
The capital element of the income
statement is wholly attributable to the investment
portfolio.
Principal risks and uncertainties
The principal Group risks include
investment performance and market risk, cyber and technology risk
and IPS concentration risk. ESG considerations are our emerging
risk.
These top risks are explained along
with mitigating actions in the Risk Management section of the
Annual Report for the year ended 31 December 2023. In the view of
the Board these risks and uncertainties are as applicable to the
remaining six months of the financial year as they were to the
period under review. As part of ongoing risk management to identify
new risks and developments, the Board continues to review and
assess risks, uncertainties and impacts during the course of the
year.
Related party transactions
There have been no related party
transactions during the period which have materially affected the
financial position or performance of the Group. During the period,
transactions between the Corporation and its subsidiaries have been
eliminated on consolidation. Details of related party transactions
are given in the notes to the annual accounts for the year ended 31
December 2023.
Directors' responsibility statement
We confirm that to the best of our
knowledge:
· the condensed set of financial statements have been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the UK and gives a true and fair view of the assets, liabilities,
financial position and profit of the Group as required by DTR
4.2.4R;
· the
half yearly report includes a fair review of the information
required by:
(a)
DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the current financial year and their impact
on the condensed set of financial statements; and a description of
the principal risks and uncertainties for the remaining six months
of the year; and
(b) DTR
4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period.
On behalf of the Board
Robert Hingley
Chairman
25 July 2024
Past performance is not a guide to future performance. The
value of an investment and any income from it is not guaranteed and
may go down as well as up and investors may not get back the amount
invested.
Notes to the condensed consolidated financial
statements
1.
Basis of preparation
The condensed set of financial
statements included in this half yearly financial report has been
prepared in accordance with International Accounting Standards
(IASs) in conformity with the requirements of the Companies Act
2006 and in accordance with International Financial Reporting
Standards (IFRS) as adopted and endorsed by the UK.
The financial resources available
are expected to meet the needs of the Group for the foreseeable
future. The financial statements have therefore been prepared on a
going concern basis.
The Group's accounting policies
during the period are the same as in its 2023 annual financial
statements, except for those that relate to new standards effective
for the first time for periods beginning on (or after) 1 January
2024, and will be adopted in the 2024 annual financial
statements.
2.
Presentation of financial information
The financial information presented
herein does not amount to full statutory accounts within the
meaning of section 435 of the Companies Act 2006 and has neither
been audited nor reviewed pursuant to guidance issued by the
Auditing Practices Board. The annual report and financial
statements for 2023 have been filed with the Registrar of
Companies. The independent auditor's report on the annual report
and financial statements for 2023 was unqualified, did not include
a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying the report, and did not contain
a statement under section 498(2) or (3) of the Companies Act
2006.
3.
Calculations of NAV and earnings per share
The calculations of NAV and earnings
per share are based on:
NAV: shares at end of the period
130,626,088 (30 June 2023: 130,057,740; 31 December 2023:
130,602,252) being the total number of shares on issue, 568,279 (30
June 2023: 577,809; 31 December 2023: 589,640) less shares acquired
by the ESOT in the open market.
Income: average shares during the
period 130,615,834 (30 June 2023: 128,924,615; 31 December 2023:
129,785,836) being the weighted average number of shares on issue
after adjusting for shares held by the ESOT.
4.
Listed investments
Listed investments are all traded on
active markets and as defined by IFRS 13 are Level 1 financial
instruments. As such they are valued at unadjusted quoted bid
prices. Unlisted investments are Level 3 financial instruments.
They are valued by the Directors using unobservable inputs
including the underlying net assets of the instruments.
5.
Note to the statement of cash flows
The presentation of the cash flow
statement has been updated in line with that in the 2023 annual
report. As such, this note accompanies the statement of cash flows
above.
|
Unaudited
|
Unaudited
|
Audited
|
|
30 June
2024
|
30
June
2023
|
31
December 2023
|
|
£000
|
£000
|
£000
|
Operating profit/(loss) before
interest and taxation
|
85,507
|
20,441
|
82,125
|
Adjust for non-cash flow items:
|
|
|
|
(Gains)/losses on
investments
|
(59,528)
|
3,285
|
(37,379)
|
Movement in amortised cost of
borrowings
|
22
|
22
|
(20)
|
Depreciation of property, plant and
equipment
|
276
|
149
|
403
|
Depreciation of right-of-use
assets
|
405
|
456
|
891
|
Amortisation of intangible
assets
|
499
|
379
|
892
|
(Increase)/decrease in
receivables
|
(2,307)
|
(1,060)
|
(3,221)
|
(Decrease)/increase in
payables
|
(7,559)
|
(950)
|
2,027
|
Decrease/(increase) in deferred
income
|
6,009
|
91
|
1,204
|
(Decrease)/increase in other taxation
payable
|
2
|
(679)
|
(1,290)
|
Normal pension contributions in
excess of cost
|
(157)
|
(573)
|
(1,400)
|
Dividends receivable
|
(20,057)
|
(17,958)
|
(32,964)
|
Cash
flows from operating activities (before dividends received and
taxation paid)
|
3,112
|
3,603
|
11,268
|
6.
Breakdown of net revenue per department
The table below illustrates a
breakdown of net revenue per department:
|
Gross
Revenue
|
Cost of
sales
|
Net Revenue
|
|
30 June
2024
|
30 June
2023
|
31 Dec.
2023
|
30 June
2024
|
30 June
2023
|
31 Dec.
2023
|
30 June
2024
|
30 June
2023
|
31 Dec.
2023
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
Pensions
|
8,980
|
8,630
|
17,459
|
23
|
(33)
|
(63)
|
8,957
|
8,597
|
17,396
|
Corporate Trust
|
8,079
|
6,800
|
16,043
|
1,645
|
(982)
|
(3,570)
|
6,434
|
5,818
|
12,473
|
Corporate Services
|
13,119
|
11,744
|
25,041
|
2,282
|
(2,051)
|
(4,401)
|
10,837
|
9,693
|
20,640
|
Total IPS income
|
30,178
|
27,174
|
58,543
|
3,950
|
(3,066)
|
(8,034)
|
26,228
|
24,108
|
50,509
|
7.
Investments
A full list of investments is
included on the website each month.
8. Half yearly report
2024
The 2024 half yearly report will be
available on the website shortly via the following link:
https://www.lawdebenture.com/investment-trust/shareholder-information/annual-reports-and-half-yearly-reports
Registered office:
8th Floor, 100 Bishopsgate, London,
EC2N 4AG Telephone: 020 7606 5451
(Registered in England - No.
00030397)
LEI number -
2138006E39QX7XV6PP21