£897m market cap
743p last close
LWDB’s investment 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 broad UK stock market through investing in a diversified portfolio of mainly UK equities with some international holdings. The IPS business provides a regular flow of income, which augments the dividend income from the equity portfolio.
The Law Debenture Corporation (LWDB) made the most of its structure in 2020, with the revenue contribution from its independent professional services (IPS) business – which saw another year of strong growth – helping to overcome a shortfall in portfolio income after widespread UK dividend cuts, and driving an unanticipated 5.8% increase in the total FY20 payout. NAV total returns for the year ended 31 December were modestly positive, compared with double-digit declines for many UK Equity Income peers. The diversity of the underlying IPS businesses means CEO Denis Jackson is sanguine about prospects even in uncertain market conditions, while fund managers James Henderson and Laura Foll will continue to capitalise on the investment freedom the IPS income contribution provides.