Law Debenture posts strong first-half performance

(Sharecast News) - The Law Debenture Corporation reported a strong first half on Friday, delivering solid returns and continued dividend growth despite a challenging market environment. It posted a net asset value total return of 15.0% for the six months ended 30 June, with debt at both par and fair value, significantly outperforming the FTSE Actuaries All-Share Index's total return of 9.1% over the same period.

The FTSE 250 investment trust said its share price total return for the half-year was 14.2%, more than five percentage points ahead of the benchmark.

Its independent professional services (IPS) division continued its steady growth, with net revenue rising by 7.7% to £28.2m and profit before interest and tax increasing by 7.5% compared with the first half of 2024.

The valuation of the IPS business rose 4.8% to £203.8m from the end of 2024.

"I am pleased with the excellent performance Law Debenture has delivered in the first half of 2025, against a difficult market backdrop," said chairman Robert Hingley.

"The share price total return of 14.2% exceeded our benchmark by over 5% and we are proud that our long-term record of benchmark outperformance remains strong.

"We remain confident that Law Debenture is well-positioned for further growth and to deliver long-term returns for shareholders due to the diversified combination of a high-quality equity portfolio and good growth potential for IPS."Law Debenture's portfolio generated a net capital gain of £132.4m, up from £59.5m a year earlier, while dividend income from the portfolio increased to £22.5m from £19.9m.

The company's ongoing charges ratio was 0.54%, well below the industry average of 1.01%.

It declared a first interim dividend of 8.375p per ordinary share, representing a 4.7% increase on the prior year's first interim dividend, and reaffirmed its policy of maintaining or increasing total dividends in 2025.

Based on the 24 July closing share price of 995p, Law Debenture's dividend yield stood at 3.4%.

During the first half, the company issued 1.3 million new shares at a premium to NAV, raising £11.6m.

"Law Debenture has once again demonstrated its resilience and ability to adapt against a backdrop of elevated market turbulence and continued macroeconomic uncertainty," commented chief executive Denis Jackson.

"Our unique combination of IPS with the investment portfolio has meant we have been able to navigate these headwinds and continue delivering outperformance of our benchmark.

"I am confident that our well-diversified structure means we are capable of continuing to create value for our shareholders over the long-term."

Over longer time horizons, Law Debenture said its performance remained well ahead of the FTSE All-Share Index, with NAV total return of 52.2% over three years and 120.4% over five years, compared with benchmark returns of 35.5% and 67.3% respectively.

The share price total return over 10 years stood at 187.5%, double the FTSE All-Share's 92.7%.

At 1235 BST, shares in the Law Debenture Corporation were up 0.21% at 997.12p.

Reporting by Josh White for Sharecast.com.