The Law Debenture Corporation p.l.c.
Second Interim Dividend Announcement - Law Debenture remains committed to at least maintaining 2019 full year dividend level of 26.0p
· Declaring a second interim dividend of 6.5 pence per ordinary share payable in October 2020
· Further interim dividend of 6.5 pence per ordinary share expected in January 2021
· It remains the Board's current intention for the full year 2020 dividend to be at least equal to 2019 dividend of 26.0 pence per share
· Dividend Yield is currently 5.12%
Whilst the Covid-19 pandemic has undoubtedly placed significant stress on the global economy, it has also highlighted the unique advantage of the Law Debenture structure. We approached 2020 with a professional services business that has funded 35% of dividends for the investment trust over the preceding 10 years1 and, as demonstrated by our H1 results, our Independent Professional Services business continues to show its resilience despite the challenging market conditions.
We also entered 2020 with the strongest reserves position2 of the Investment Trusts in the UK Equity Income sector3 with group retained earnings of £62.5m4. The combination of this diversification of income and the strength of our reserves provides us with a genuine competitive advantage over other equity income trusts when forming our dividend policy.
As a result of this, it remains our intention to pay a dividend for the full year 2020 which is at least equal to the 2019 dividend of 26.0 pence per ordinary share. We have listened to our shareholders who are seeking regular, reliable income and recently transitioned to a quarterly dividend cycle. This comes at a time when the recipients of those dividends may be increasingly reliant on that income, particularly in light of the large number of quoted companies who have announced cuts to their dividends in order to protect the long term future of their businesses.
With this in mind, we have declared a second interim dividend of 6.5 pence per ordinary share in respect of the year ending 31 December 2020. This dividend will be paid on 28 October 2020 to shareholders registered at the close of business on 25 September 2020. The Corporation's shares will go ex-dividend on 24 September 2020. Based on the Corporation's current share price, that implies a dividend yield of 5.12%.5
We intend to pay a further interim dividend of 6.5 pence per ordinary share in January 2021. Shareholders will be asked to vote on a final dividend to be paid in April 2021 at the Corporations 2021 AGM. It continues to be the Board's current intention to recommend the final dividend payment be at least 6.5 pence per share.
Law Debenture Corporate Services Limited
15 September 2020
+44 (0)777 193 7173
The Law Debenture Corporation p.l.c. is registered in England at Fifth Floor, 100 Wood Street, London EC2V 7EX, company registration number 30397. The Law Debenture Corporation p.l.c. LEI number - 2138006E39QX7XV6PP21
1 Calculated on an annualised basis on dividend payments in respect of accounting years between 1 January 2010 and 31 December 2019.
2 Investec Securities analysis from 30 March 2020, based on Group Revenue Return, including professional services fees.
3 AIC UK Equity Income Sector.
4 Group retained earnings were £62.5m as at 1 January 2020.
5 Based on closing share price on 15 September 2020 of 508.0 pence per share and a dividend of 26.0 pence per share.