Alliance Trust looks to offload savings business as performance impoves

In its 2018 interim report, the Dundee-based company said it had is now “considering whether a change of ownership would be in the interests of Alliance Trust shareholders and ATS’ customers and staff”.

Chairman Lord Smith of Kelvin said: “Discussions with interested parties, each of whom envisage maintaining or growing ATS’ presence in Dundee, are at an early stage and there can be no certainty that the board of Alliance Trust will decide to sell ATS.”

ATS swung to a profit of £23,000 from a £1.5 million loss 12 months previously.

Last year the business was forced to employ 100 additional members of staff in order to integrate systems spread across locations in both Edinburgh and the City of Discovery, sparking a shareholder backlash.

The wider Alliance Trust has undergone a major strategic change in the past two years, following a series of boardroom battles with activist shareholders.

The finance firm moved its focus to investment almost entirely in equities, getting out of fixed income bonds, and shifting its focus away from stocks with an environmental and social emphasis.

It also moved its funds from its in-house team to outsourced fund managers.

The trust’s interim report revealed that bosses are confident they will achieve their three-year outperformance target after unveiling the £2.7 billion trust’s results for the first half of this year.

In the six months to the end of June the FTSE 250 firm said its total shareholder return came in at 1.1 per cent, and the net asset value (nav) total return at 2.9 per cent, outstripping the MSCI All Country World Index (ACWI) total return of 2.3 per cent.

While the difference is considerably lower than the trust’s outperformance target of two percentage points, director Clare Dobbie noted that the target is based on three-year rolling performance after the deduction of costs.

Ms Dobbie added that since the trust moved to a multi-manager approach in April 2017 it had delivered a net asset value total return of 12.3 per cent against the index’s 10.1 per cent.

“That makes us pretty confident of meeting our outperformance target,” she said. “We think this is a pretty good half-way point.”