28th Feb 2023 11:45
(Alliance News) - Law Debenture Corp PLC on Tuesday reported a fall in net asset value, citing inflation and the cost of living crisis in the UK, amid interest rate hikes.
The London-based investment trust and professional services business said net asset value at December 31 fell to 625.81 pence each from 717.86p a year prior.
In 2022, NAV total return was negative 6.8%, which was worse than its benchmark, the FTSE Actuaries All-Share Index, which returned positive 0.3%. Law Debenture noted that its NAV with debt at fair value outperformed its benchmark, with a positive return of 0.6%.
Law Debenture's 2022 pretax profit grew 8.1% to GBP14.42 billion from GBP13.34 billion in 2021.
The company declared a dividend of 30.5p per share, up 5.2% from 29.0p.
Noting inflation, it said: "The rapid rise in interest rates has slowed the economy, but not brought about deep recessionary conditions. This can be evidenced in the UK by the continued low level of unemployment. Inflation, as well as meaning interest rates rise, has put an upward pressure on wages, leading to public sector strikes. The debate rages about how entrenched inflation has become."
Looking ahead, the firm had "tentative optimism" for 2023, citing investors anticipating that inflation and the cost of living crisis may subside "sooner than first thought."
Law Debenture shares were virtually flat at 843.37 pence each in London on Tuesday morning.
By Tom Budszus, Alliance News reporter
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