Law Debenture Corp PLC · LSE:LWDB
Law Debenture — Shareholder Meeting (April 2019)
25 slides from Law Debenture's shareholder meeting presentation, Apr 11, 2019
Slide 1: AGM Presentation April 2019
AGM Presentation April 2019 ——S- lCUuelCUE al Q
Slide 2: Agenda
Agenda 1. The Law Debenture Model 2. Group Highlights 3. Investment Portfolio 4. Independent Professional Services 5. Conclusion
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 Trust Independent Professional Services (IPS) • Equity portfolio managed by James • Trusted, professional and third party Henderson of Janus Henderson, assisted by provider: Laura Foll • Pensions
Slide 4: 2. Group Highlights – Katie Thorpe, CFO
2. Group Highlights – Katie Thorpe, CFO
Slide 5: Group Highlights – Year Ended December 2018: Investment Trust
2. Group Highlights – Year Ended 31 December 2018 Investment Trust Highlights: • NAV total return for the year was -5.8%, compared to -9.5% returned by the benchmark FTSE All-Share Index • The portfolio has been sheltered from ~40% of market decline • The trust has consistently outperformed its benc
Slide 6: Consistently outperforming benchmark on one, three, five and ten year metric
2. Group Highlights – Year Ended 31 December 2018 Consistently outperforming benchmark on one, three, five and ten year metric 1 year 3 years 5 years 10 years NAV total return1 -5.8% 27.3% 30.4% 199.0% FTSE Actuaries All-Share Index Total -9.5% 19.5% 22.1% 138.3% Return2 Share price total return2 -1
Slide 7: Group Highlights – Dividend
2. Group Highlights – Year Ended 31 December 2018 Dividend: • Total proposed dividend of 18.90p per share for 2018 (2017: 17.30p), a 9.2% increase • Annualised dividend growth of 4.5%1 over 10 years • Reserves position remains strong with retained earnings of £50m at the end of 2018 1 Calculated on
Slide 8: Group Highlights – Independent Professional Services
2. Group Highlights – Year Ended 31 December 2018 Independent Professional Services: • Strong performance from the business continues to support dividend growth • Revenues increased 9.0% to £29.6m (2017: £27.1m) following strong performance from all three divisions • Normalised earnings per share in
Slide 9: 3. Investment Portfolio – James Henderson, Laura Foll & Charlotte Greville
3. Investment Portfolio – James Henderson, Laura Foll & Charlotte Greville Janus Henderson
Slide 10: 3. Investment portfolio
3. Investment portfolio • Aim to achieve a better return than the FTSE All Share • Stock picking decisions made on a valuation based approach • Overseas holdings bring exposure to opportunities that cannot be found in the UK stock market • The equity portfolio is expected to provide good dividend gr
Slide 11: The UK represents a value opportunity relative to history
The UK represents a value opportunity relative to history The UK market performed roughly in line with The UK market underperformance since EU the world over the long term up until the EU referendum referendum 170 450 UK UK 160 World ex UK World ex UK 400 150 350 140 300 130 250 120 200 110 150 100
Slide 12: The UK represents a value opportunity relative to history
The UK represents a value opportunity relative to history FTSE All Share – 20 year dividend yield 6 5.5 5 % 4.5 4 3.5 3 2.5 2 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Datastream, as at 29th March 2019 12
Slide 13: Dividend yield of 3.3% vs. global trust sector of 1.4%
Dividend yield of 3.3% vs. global trust sector of 1.4% 20 Dividend per share 18 16 14 12 10 8 6 4 2 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Janus Henderson Investors, AIC, as at 31st December 2018 13
Slide 14: Portfolio Sector breakdown at December 2018
Portfolio Sector breakdown at 31 December 2018 Sector weightings (%) Financials 27.6 26.6 Industrials 24.8 10.8 Oil & Gas 10.8 12.9 Consumer Services 7.4 11.1 Health Care 8.9 8.0 Basic Materials 7.3 7.6 Consumer Goods 4.5 15.6 Technology 3.7 Weight % 1.2 Utilities 3.6 Benchmark Weight % 2.6 Telecomm
Slide 15: Recent transactions - financial year 2019 to date
Recent transactions - financial year 2019 to date Purchases Sales Royal Bank of Scotland Kier Carnival Marshalls Direct Line Becton Dickinson Source: Janus Henderson, as at 29th March 2019 15
Slide 16: Portfolio: Top holdings at December 2018
Portfolio: Top 15 holdings at: 31 December 2018 % 1 Royal Dutch Shell 4.4 2 GlaxoSmithKline 2.6 3 HSBC 2.6 4 BP 2.4 5 Rio Tinto 2.1 6 Rolls Royce 2.1 7 Stewart Investors Asia Pacific 2.0 8 Prudential 2.0 9 Relx 1.8 10 Hiscox 1.8 11 Senior 1.7 12 National Grid 1.6 13 AstraZeneca 1.6 14 Johnson Servic
Slide 17: Investment outlook
Investment outlook • The UK is generally out of favour. This will lead to opportunities • Dividend growth is coming through from a good starting level • Law Debenture has distinct advantages for a manager over other Trusts 17
Slide 18: 4. Independent Professional Services – Denis Jackson, CEO
4. Independent Professional Services – Denis Jackson, CEO
Slide 19: Independent Professional Services (IPS) - Overview
4. Independent Professional services (IPS) - Overview Pensions Corporate Trust Corporate Services The longest established and A leading independent Highly regarded range of largest provider of corporate trustee across outsourced solutions to independent pension trustees international capital markets
Slide 20: IPS Update by Business Area – Pensions
4. IPS Update by Business Area – Pensions 2018 highlights: 2019 priorities: • Recruitment continues for our Pegasus • Started to see returns from our business with a view to significantly accelerated investment in people, scaling over the next five years with top line revenues up 14.7% • Currently a
Slide 21: IPS Update by Business Area – Corporate Trust
4. IPS Update by Business Area – Corporate Trust 2018 highlights: 2019 priorities: • Revenue grew by 5.8% from £7.9m to • Positioning our offer around what £8.4m customers want to buy rather than what we want to sell • Income is generated by a mixture of up- front acceptance fees on new business • D
Slide 22: IPS Update by Business Area – Corporate Services
4. IPS Update by Business Area – Corporate Services 2018 highlights: 2019 priorities: • Revenue grew 6.9% to £11.7m from • Smart use of technology to increase £11.0m in 2017 automation and improve efficiency • SOP revenue up 2% globally and 6.6% • Capitalise on regional offices and law in London fir
Slide 23: Independent Professional Services – Outlook
4. Independent Professional Services – Outlook • We are focusing on our strengths – the quality of our service, our people, our reputation and our clients – with increased and more proactive promotion of our businesses and a focus on new products • We continue to strengthen our team to support our g
Slide 24: 5. Conclusion – Denis Jackson, CEO
5. Conclusion – Denis Jackson, CEO
Slide 25: Conclusion - Consistent Outperformance over 1, 3, 5 and 10 years
5. Conclusion - Consistent Outperformance over 1, 3, 5 and 10 years • Unique model is a key value driver in achieving long-term capital growth and steadily increasing income – allows increased flexibility in portfolio construction • Investment Manager has a proven track record of identifying quality