Law Debenture Corp PLC Dividend Declaration (1773P)
June 08 2020 - 2:00AM
UK Regulatory
TIDMLWDB
RNS Number : 1773P
Law Debenture Corp PLC
08 June 2020
The Law Debenture Corporation p.l.c.
First Interim Dividend Announcement - Law Debenture Dividend
Yield Hits 4.9%
-- Moving to quarterly dividends, creating greater regularity
and predictability around dividend payments
-- Declaring a first interim dividend of 6.5 pence per ordinary share payable in July 2020
-- Further interim dividends of 6.5 pence per ordinary share
expected in October 2020 and in January 2021
-- Board's current intention for the full year 2020 dividend to
be at least equal to 2019 dividend of 26.0 pence per share
The Corporation declared, and our shareholders overwhelmingly
approved, a 50% increase in our final dividend payment for 2019
earlier this year. This step change in dividend brought our
dividend yield from 3.5% for the year ended 31 December 2018 to
4.0% for the year ended 31 December 2019(1) . The 2019 full year
dividend per share was 26.0p (up 37.6%).
With significant turmoil in global markets as a result of the
Covid-19 pandemic, a large number of quoted companies have cut
their dividends in order to protect the long term future of their
businesses. This is happening at a time when the recipients of
those dividends may themselves be increasingly reliant on that
income. The great advantage of the investment trust structure is
the ability to retain a portion of income received each year in
order to smooth dividends in times of market stress.
With that backdrop, the unique advantage of the Law Debenture
structure has never been more evident. We approach 2020 with a
professional services business that has funded 35% of dividends for
the investment trust over the preceding 10 years and group retained
earnings of GBP62.5m(2) . 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.
We also announced we were moving to a structure of quarterly
dividends. We felt paying quarterly dividends would help to provide
our shareholders with greater regularity of dividend income, which
we hoped would prove attractive to new and existing shareholders.
This has proved timely, as yield becomes increasingly scarce and
shareholders' cash flows constricted.
With that back drop, the Corporation is delighted to declare a
first 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 July 2020 to shareholders registered at the close of business on
26 June 2020. The Corporation's shares will go ex-dividend on 25
June 2020. Based on the current share price, that implies a
dividend yield for the Law Debenture share of 4.9%(3)
We intend to pay two further interim dividends of 6.5 pence per
ordinary share in October 2020 and January 2021. Shareholders will
be asked to vote on a final dividend to be paid in April 2021 at
the Corporations 2021 AGM. It is the Board's current intention to
recommend the final dividend payment be at least 6.5 pence per
share.
Law Debenture Corporate Services Limited
Corporate Secretary
5 June 2020
Contact:
Tulchan Communications
David Allchurch
Lawdebenture@tulchangroup.com
+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) 2018: based on 31 December 2018 share price of 540.0 pence
and dividend of 18.9 pence per share. 2019: based on 31 December
2019 share price of 650.0 pence and dividend of 26.0 pence per
share.
(2) Calculated on an annualised basis on dividend payments in
respect of accounting years between 1 January 2010 and 31 December
2019. Group retained earnings were GBP62.5m as at 1 January
2020.
(3) Based on closing share price on 5 June 2020 of 536.0 pence
per share and a dividend of 26.0 pence per share.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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