Law Debenture Corp PLC · LSE:LWDB
Law Debenture — Shareholder Meeting (April 2022)
17 slides from Law Debenture's shareholder meeting presentation, April 2022
Slide 1: April 2022
April 2022 1
Slide 2: Law Debenture's investment proposition
Law Debenture’s investment proposition A proud history Consistent dividend growth IPS enables greater flexibility in portfolio holdings 133 years of value creation 43 years of increasing or for shareholders maintaining dividends to IPS accounts for 18% of the 2021 NAV but has funded 36% of sharehold
Slide 3: Law Debenture: A highly differentiated and unique business model
1. Law Debenture: A highly differentiated and unique business model Total Shareholder Return Investment Portfolio Independent Professional Services (IPS) ~ 82% NAV ~ 18% NAV • Equity portfolio managed by James • Trusted, professional, independent third Henderson and Laura Foll of Janus party provide
Slide 4: Investment Portfolio: Outperformance over 1, 3, 5 and 10 years
2. Investment Portfolio: Outperformance over 1, 3, 5 and 10 years 1 year 3 year 5 year 10 year % % % % NAV total return1 (with debt at par) 23.1 49.3 59.7 199.2 NAV total return1 (with debt at fair value) 25.1 47.3 59.4 187.7 FTSE Actuaries All-Share Index Total Return2 18.3 27.2 30.2 110.7 Share pr
Slide 5: Investment Portfolio: Dividend performance over 1, 3, 5 and 10 years
3. Investment Portfolio: Dividend performance over 1, 3, 5 and 10 years 5
Slide 6: IPS: What Professional Services businesses make up IPS?
4. IPS: What Professional Services businesses make up IPS? Pensions Corporate Trust Corporate Services The longest established and A leading independent Highly regarded range of largest provider of independent corporate trustee across outsourced solutions to pension trustees in the UK international
Slide 7: IPS: Revenue Breakdown
5. IPS: Revenue Breakdown • Diverse mix of revenue streams has held up well in the light of COVID-19. TOTAL IPS FAIR VALUE • IPS business provided 36% of Group Earnings per Share in 2021 • Objective of mid to high single digit organic growth delivered in 2020 and 2021 against the backdrop of COVID-1
Slide 8: IPS: In Summary
6. IPS: In Summary • Favourable cash generating characteristics: – High margins and high return on capital. – Proven track record of delivery of mid-to-high single digit growth. – Approximately 2/3 of revenues are highly repeatable. – Strong free cash flow offers bolt-on/cash reinvestment opportunit
Slide 9: Investment Portfolio: Investment approach
7. Investment Portfolio: Investment approach • UK weighting (82% • Investment objective: long term capital growth in real terms and portfolio) has potential steadily increasing income. tooutperform: • Selective, bottom-up approach, deliberately diversified by sector • UK has lagged global and geogra
Slide 10: Investment Portfolio: Drivers of short-term outperformance
8. Investment Portfolio: Drivers of short-term outperformance Calendar year 2021 stock attribution Largest absolute contributors to Largest absolute detractors from performance over 1 year: performance over 1 year: 1. Royal Mail 1. AFC Energy 2. Applied Materials 2. Ceres Power 3. BP 3. Simec Atlant
Slide 11: Investment Portfolio: Drivers of long-term outperformance
9. Investment Portfolio: Drivers of long-term outperformance Largest stock contributors to relative Key drivers of outperformance: performance over 5 years: • Ability to hold zero/low dividend yield shares (eg Ceres 1. Ceres Power Power, ITM Power) 2. British American Tobacco (not held) • Ability to
Slide 12: Investment Portfolio: ESG integration
10. Investment Portfolio: ESG integration ESG seen as an investment opportunity - identifying companies with ‘ESG tailwinds’ Accsys GM/Stellantis/Toyota Plant Healthcare Technologies Anglo American Ricardo Directly IP Group ITM Power addressing Underappreciated the issues Bacanora enablers BP/Shell
Slide 13: Investment Portfolio: Current positioning
11. Investment Portfolio: Current positioning Source: Law Debenture. Portfolio as of 31 December 2021 13
Slide 14: Investment Portfolio: Where are we adding?
12. Investment Portfolio: Where are we adding? • The UK: – £55mn (net) invested in the UK portfolio in 2021 – Continues to trade at a valuation discount to other developed equity markets. – Recent portfolio takeover activity helps validate our view (eg Blue Prism, Meggitt, RSA) • Purchasing well-man
Slide 15: Investment Portfolio: Conclusion
13. Investment Portfolio: Conclusion • The IPS business and the portfolio being managed under the same Trust ‘umbrella’ allows greater breadth in the investible universe and underpins the Trust’s income for shareholders. • As portfolio managers we need to take full advantage of this flexibility rela
Slide 16: Law Debenture's investment proposition
Law Debenture’s investment proposition A proud history Consistent dividend growth IPS enables greater flexibility in portfolio holdings 133 years of value creation 43 years of increasing or for shareholders maintaining dividends to IPS accounts for 18% of the 2021 NAV but has funded 36% of sharehold
Slide 17: Janus Henderson Investors contact and important information
Janus Henderson Investors 201 Bishopsgate, London EC2M 3AE Tel: 020 7818 1818 Fax: 020 7818 1819 Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved. Past performance is not a guide to future performance. The