Edison review on The Law Debenture Corporation

London, UK, 5 August 2020

Edison issues review on The Law Debenture Corporation (LWDB)

The Law Debenture Corporation (LWDB) has reported another strong set of results for its independent professional services (IPS) business in H120, with EPS growth remaining in the target mid- to high single-digit range despite a more challenging economic backdrop. With the trust's largely UK investment portfolio having been hit by the widespread stock market sell-off in February and March, IPS has provided a larger than average contribution to revenue returns. This means fund managers James Henderson and Laura Foll can continue to search for attractive total return opportunities in a broad range of sectors, while maintaining LWDB's focus on both capital appreciation and above-inflation dividend growth.

At 3 August 2020, LWDB's shares traded at a 4.2% premium to cum-income NAV (with debt and the IPS business at fair value). Recently the discount has been much narrower than historical averages (broadly in a range of c 7-9% over one, three, five and 10 years), which may reflect a degree of market reassessment of the trust, given the contribution of IPS to total revenues and the higher quarterly dividends. Based on the current share price, LWDB has a yield of 4.8%.

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