Alliance Trust hails turnaround in half year results

Lord Smith of Kelvin

The results show that for the first six months the trust’s Total Shareholder Return (TSR), NAV Total Return and Equity Portfolio Total Return were 16.8 per cent, 16.7 per cent and 16.3 per cent respectively, compared to their benchmark, the MSCI All Country World Index (ACWI) which returned 16.7 per cent over the same period.

The results come two years after Willis Towers Watson, the firm appointed to oversee the trust’s multi-billion pound portfolio, said would take Alliance Trust back to its traditional identity as an equity investment trust.

Following WTW’s appointment in April 2017, the TSR has now reached 21.1 per cent, while NAV Total Return was 20.5 per cent and the Equity Portfolio Total Return was 22.2 per cent before fees, outperforming the Trust’s benchmark, which returned 21.5 per cent.

Chairman of Alliance Trust Lord Smith of Kelvin, said in a statement accompanying the results that the company was reaching the end of its “simplification” programme, which will see all of its investments move to equities.

Last month’s £40 million sale of its Dundee-based Alliance Trust Savings arm to Interactive Investor, along with the sale of mineral rights, meant 99.5 per cent of the trust’s assets were now invested in equities.

The remaining “non-core” investments of less than £14m will be realised before the end of the year.

Lord Smith said: “With the sale of Alliance Trust Savings having closed in June, we have completed the simplification of the Trust as approved by our shareholders just over two years ago following the strategic review.

“I am pleased to report an encouraging period of strong absolute returns to shareholders.

“Global equity markets rebounded strongly in the first half and we delivered a total shareholder return of 16.8 per cent against the 16.7 per cent return of our benchmark index.

“We have also outperformed many of our peers in a challenging period for active managers.”

Lord Smith said the proceeds of the ATS sale to Interactive Investor were £34.2m after costs, which has now been invested into the trust’s equity portfolio.

The firm’s iconic West Marketgait building was included in the sale to Interactive Investor but yesterday the firm said it was committed to retaining its headquarters in Dundee.

It has leased offices in the Dundee One building at the Waterfront, where it will hold board meetings and the executive functions.

Discount to the company’s net asset value dropped to an averaged 5.1 per cent in the first half of this year against 5.8 per cent in the same period last year.

The interim dividend of 3.49p is an increase of 3 per cent year on year and takes the successive dividend growth to more than half a century. Alliance Trust shares closed up slightly at 823.00 from the day’s 822.00 starting price.