Law Debenture beats the All-Share

1st Mar 2011 08:16

Investment trust and fiduciary services provider Law Debenture saw its net asset value per share (NAV) rise by more than a fifth in 2010, beating the performance of its benchmark index, the FTSE All-Share.NAV after the proposed final dividend of 8.5p (2009: 8.0p) rose to 342.92p at the end of 2010 from 283.95p at the end of 2009.On a total return basis, which includes dividend payments, the gain on the year was 24.8%, which compares unfavourably with 2009's 37.8% advance but which was comfortably better than the 14.5% gain on the FTSE All-Share Index total return index.Group profit for the year dipped to £83.9m from £88.8m in 2009. The full year dividend pay-out has been increased to 12.7p from 12.2p in 2009.Over the course of 2010 the investment trust side of the business increased its exposure to equity markets, selling some short-dated corporate bonds to do so.The performance of the portfolio benefited from the relatively high exposure to industrial companies, which have seen expanding demand from emerging markets, the investment manager, James Henderson, of Henderson Global Investors, said.Geographically, the best performing area for the portfolio was the US, as a result of the strong performance from industrial giants Cummins and Caterpillar, while the weakest geographical area was Continental Europe, as a result of the slower growth within some Mediterranean countries."The cocktail of good profits growth, dividend increases, relatively low valuations, and modest inflation would suggest a positive outlook for equity investment," Henderson opined.On the fiduciary services side of the business new transactions and appointments remained below their historic levels, but the company still managed to squeeze out extra profits, thanks to high activity from existing customers and a focus on cost control."In 2011, we expect activity levels to be influenced less by work arising from pre-existing transactions and more by new appointments. This will be reliant, however, upon the continued growth of the global economy and some rejuvenation of the banking sector, from which a good proportion of our business emanates, but which remains more sluggish than we would prefer," said Caroline Banszky, managing director of Law Debenture.