12th Mar 2025 12:07
(Alliance News) - Law Debenture PLC on Wednesday said its investments in Rolls-Royce Holdings PLC and Marks & Spencer Group PLC performed well last year, as the investment trust's net asset value grew strongly.
The London-based company also provides independent governance and transactional support services.
Law Debenture said net asset value per share at fair value grew 8.7% to 872.34 pence as at December 31 from 802.67p a year prior.
NAV total return with independent professional services and debt at fair value was 13.6% in 2024, higher than 9.4% in 2023 and outperforming its benchmark, the FTSE Actuaries All-Share index, which had a total return of 9.5% in 2024.
Law Debenture declared a final dividend of 9.5p per share, up 4.1% from around 9.13p a year prior. This would bring the total payout for 2024 to 33.5p, 4.7% higher than 32.0p in 2023.
Pretax profit grew 29% to GBP98.8 million in 2024 from GBP76.8 million in 2023.
Notably, net gain on investments held at fair value jumped to GBP76.3 million from GBP37.4 million. Total income and capital gains improved 32% to GBP176.0 million from GBP133.4 million.
The largest individual detractor from investment performance was AFC Energy PLC, an AIM-listed provider of hydrogen power generation technologies.
"Commercial roll-out of the technology has been slower than expected, however we continue to see their technology as having a role in the route to net zero," Law Debenture said.
Among the largest contributors were jet engine maker Rolls-Royce Holdings PLC and retailer Marks & Spencer Group PLC.
"In both cases the businesses have long had potential, and under refreshed management teams they are achieving successful turnarounds," Law Debenture said.
It added: "In the case of Rolls-Royce, one of the market leaders globally in jet engines, they have been helped by end market tailwinds, specifically a recovery in flying hours following Covid, as well as difficulties in supply chains for new build aircraft, meaning that older planes are tending to be flown for longer."
With regards to M&S, the food business has been performing well, Law Debenture noted, while a refreshed clothing offering with a focus on more competitive pricing has moved sales and earnings forecasts have moved higher.
Law Debenture reduced its stake in Rolls-Royce and M&S as a result of both stocks rising.
Looking ahead, investment managers James Henderson and Laura Foll said: "The investment approach will remain the same as in the past. We will reduce holdings in companies that we believe are approaching fair value and invest in companies which we believe will come through with profitable growth which is not currently recognised in the valuation."
Law Debenture shares were 1.1% higher at 893.78 pence each on Wednesday morning in London.
By Tom Budszus, Alliance News slot editor
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Law DebentureAFC EnergyRolls-RoyceMarks & Spencer