AGM Presentation April 2019 Agenda 1. 1. The he Law Debe - PowerPoint PPT Presentation

AGM Presentation April 2019

Agenda 1. 1. The he Law Debe benture Mode del 2. Group Hig Highlights 3. 3. Inv nvest stment Por ortfo folio io 4. 4. I Independent Profe fessi sional l Ser Servic ices 5. 5. Con onclu lusi sion

1. Law Debenture: A highly differentiated and unique business model Tota To tal l Sha Shareholder Re Retu turn rn Investment Tru Trust Inde dependent Pro Professional Se Servi rvices s (IP IPS) Eq Equit ity po portfolio lio man anaged ed by by Jam James es • Tr Trust sted, , profes fessio ional l and and thir third part arty • Hen ende ders rson of Janu Janus s Hen ender erson, , as assis sisted ed by by provid pr ider: r: Lau aura ra Foll • Pen ensio sions Sel elect ectiv ive, , bo bott ttom-up app appro roach, , di diver ersif ifie ied • Corpora rate Tr Trust • by secto by sector r and and geo geogr graphy Corpora rate Ser ervic ices es • Objec bjectiv ive to to ac achie hieve long ng ter term ca capit pital l • Inte ntern rnatio ional pr pres esence ce: : UK, , Caym ayman Isl slands, , • gr growth in n real al ter terms and and stea steadily ily in increasin ing Cha hannel el Isl slands, , De Delaware re, , Du Dubl blin in, , Hong ng income in excess of the Trust’s benchmark Kong ng and and New ew York (FTS TSE E All-Share re Ind ndex) Incre ncreases es the the abilit ability to to pay pay di divid iden ends to to • • Reg Regula lar r IPS rev even enues es cr crea eate gr grea eater r sha share rehold lder ers flexi exibilit ility in n st stock ck sel selec ection Tax eff Tax effici cient • 3

2. Group Highlights – Katie Thorpe, CFO

2. Group Highlights – Year Ended 31 December 2018 Inv nvestmen ent Tr Trust Highlig ights: NAV AV to total l re return for for the the ye year ar was as -5. 5.8%, com ompare red to to -9.5% re retu turned ed by y • th the benchmark FT FTSE All ll-Shar are Index The port The ortfolio io ha has s bee een n sh shel elter ered ed from from ~4 ~40% of of mark arket dec ecli line • The The tru trust ha has s cons onsistently ou outper erformed ed its ts ben enchmark, , wit ith • ou outper erforman ance e on on a a one one, thr three ee, fi five ve an and ten ten ye year ar met etric ic £10, £1 0,000 inv nves ested ed in n Law Law Deb eben enture re ten ten ye years ars ago ago would ld be e wor orth • £34,350 1 at at the the en end of of 201 2018 On On-goin ing cha harges es re remai ain low ow at at 0.4 0.43% com ompare red to to a a se sector r av aver erage e of of • 1.21 1.21% 1 Calculated on a total return basis assuming dividend re-investment between 31 December 2008 and 31 December 2018 5

2. Group Highlights – Year Ended 31 December 2018 Con onsistently ou outperformin ing benchmark on on on one, thr three, fi five and te ten ye year r metr tric 1 ye 1 year 3 ye 3 years rs 5 ye 5 years rs 10 ye 10 years rs NA NAV tota total retu eturn 1 -5. 5.8% 27. 7.3% 30.4% 30.4 199.0% 199.0 FTSE Actu FT ctuaries All ll-Share Index Tota tal -9. 9.5% 19. 19.5% 22.1% 138.3 138 .3% Re Retu turn rn 2 Sha Share pr price e tota total retu eturn 2 -11.6 11.6% 19. 19.0% 18.8% 18.8 243 43.5 .5% Cha hange e in in Re Reta tail Price Index 2 2.7% 9.6% 9. 6% 12.7% 12 34.1% 34.1 1 NAV is calculated in accordance with AIC methodology, based on performance data held by Law Debenture including the value of the IPS business and long term borrowings 2 Source: Bloomberg 6

2. Group Highlights – Year Ended 31 December 2018 Divid idend: To Total l prop roposed divid idend of of 18 18.90p per r sh share re for for 20 2018 (20 2017: : 17 17.3 .30p), ), a 9.2 9.2% • increase Annuali lised divid idend gro growth of of 4. 4.5% 1 ove over r 10 10 ye years rs • Re Rese serv rves pos osit itio ion re remain ins str strong wit ith re reta tain ined earn rnin ings of of £50 50m at t the the • end of of 20 2018 1 Calculated on an annualised basis on dividend payments made by accounting year between 31 December 2008 and 31 December 2018 7

2. Group Highlights – Year Ended 31 December 2018 Independent Profe rofessio ional l Se Serv rvic ices: Str Strong perf rformance fro from the the business con ontinues to to sup support divid idend • gro growth Re Reve venues incre reased 9.0 9.0% to to £29.6m (20 2017: £27.1m) ) foll followin ing stro strong • perfo rformance from from all thr three divis isio ions Nor ormali lised earn rnin ings per r sh share re increased by y 9.2 9.2% to to 7.8 7.87p (20 2017: : 7.2 7.21p) • Increase in fair fair va valu luation of of the the IPS S busin iness of of 10 10.4% in 20 2018 • 8

3. Investment Portfolio – James Henderson, Laura Foll & Charlotte Greville Janus Henderson

3. Investment portfolio Aim im to to achieve a better re retu turn tha than the the FT FTSE All ll Sh Share • Sto Stock picking decis isio ions made on on a va valu luatio ion base sed appro roach • Ove vers rseas hol oldings bri ring exp xpos osure to to op opportunit ities tha that cannot be • fou found in the the UK sto stock market The equit Th uity por ortfoli lio is s exp xpected to to prov rovid ide goo good divi vidend gro growth ove over r • lon ong te term Geari ring 3% % at t 31 1 December 20 2018 18 (31 1 Dec 20 2017, , 1%) %) • Sw Swit itchin ing from from Global l to to UK se sector • 10

The UK represents a value opportunity relative to history The UK m The mark arket pe perform rmed rough ghly in n line ne with th The UK m The mark arket und nder erperfo rform rmance e si since nce EU EU the the world over er the the long ng ter term up p until ntil the the EU EU refer eferendum refer eferendum 170 450 UK UK World ex UK World ex UK 160 400 150 350 140 300 130 250 120 200 110 150 100 100 90 50 80 0 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Datastream, as at 31 December 2018 11

The UK represents a value opportunity relative to history FTSE All FT All Sha Share – 20 0 ye year r divi dividend yiel yield 6 5.5 5 % 4.5 4 3.5 3 2.5 2 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Datastream, as at 29 th March 2019 12

Dividend yield of 3.3% vs. global trust sector of 1.4% 20 Dividend per share 18 16 14 12 10 8 6 4 2 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Janus Henderson Investors, AIC, as at 31 st December 2018 13

Portfolio Sector breakdown at 31 December 2018 Se Sect ctor weightings (%) Financials 27.6 .6 26.6 .6 Industrials 24.8 .8 10.8 .8 10.8 .8 Oil & Gas 12.9 .9 7.4 Consumer Services 11.1 .1 Health Care 8. 8.9 8.0 8. Basic Materials 7.3 7.6 Consumer Goods 4.5 15.6 .6 Weight % Technology 3.7 1.2 Utilities 3.6 Benchmark Weight % 2.6 Telecommunications 1.4 3.6 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Source: Janus Henderson Investors, as at 31 st December 2018 Note: Figures exclude cash 14

Recent tra transactions - fi financial year 2019 to to date te Purc urchases Sales Sa Royal Bank of Scotland Kier Carnival Marshalls Direct Line Becton Dickinson Source: Janus Henderson , as at 29 th March 2019 15

Portfolio: Top 15 15 holdings at: t: 31 31 December 2018 % 1 Royal Dutch Shell 4.4 2 GlaxoSmithKline 2.6 3 HSBC 2.6 4 BP 2.4 5 Rio Tinto 2.1 6 Rolls Royce 2.1 7 Stewart Investors Asia Pacific 2.0 8 Prudential 2.0 9 Relx 1.8 10 Hiscox 1.8 11 Senior 1.7 12 National Grid 1.6 13 AstraZeneca 1.6 14 Johnson Service 1.5 15 Microsoft (USA) 1.5 16

Investment outl tlook Th The UK is s ge genera rall lly ou out of of fav favour. r. Th This is wil ill l lead to to op opportunit itie ies • Divid idend gro growth is s com oming thr through fro from a go good sta startin ing leve vel • La Law Debenture has s distin inct adva vantages for for a manager ove over r oth other Tr Trusts • 17

4. Independent Professional Services – Denis Jackson, CEO