The Law Debenture Corporation (LWDB) H1 2024 earnings summary

Executive summary

• Delivered a 9.7% NAV total return (with debt and IPS at fair value) for H1 2024, outperforming the FTSE All-Share Index's 7.4% return.

• Share price total return was 7.7% for the half year, with 10-year share price total return at 137.2%.

• IPS business contributed 20% of NAV and funded 34% of dividends over the past decade.

• First interim dividend of 8.0p per share declared, up 4.9% year-over-year; 45-year record of maintaining or increasing dividends.

• Investment portfolio remains predominantly UK-focused (89%), with ongoing overweight to small and mid-cap companies.

Financial highlights

• Net assets at 30 June 2024: £1,120.6m (up from £1,048.3m at 31 Dec 2023).

• NAV per share at fair value: 857.88p (31 Dec 2023: 802.67p).

• Group profit for H1 2024: £82.0m (H1 2023: £16.5m), driven by £59.5m net gain on investments.

• Revenue return per share: 13.78p (H1 2023: 13.29p).

• Ongoing charges ratio: 0.48%, well below industry average.

Outlook and guidance

• Cautiously optimistic for H2 2024 and beyond, with focus on organic growth in IPS and continued investment in undervalued UK equities.

• Board intends to maintain or increase the 2024 total dividend relative to 2023 (32p per share).

• Positive on UK equities due to low valuations, expected interest rate cuts, and improved economic outlook.