Alliance Trust PLC : Interim Management Statement
Alliance Trust PLC
18 November 2011
ALLIANCE TRUST PLC
Interim Management Statement
Objective
Alliance Trust is a self-managed investment company with investment trust status. Our objective is to be a core investment for investors seeking increasing value over the long term. We have no fixed asset allocation benchmark and we invest in a wide range of asset classes throughout the world to achieve our objective.
Our focus is to generate a real return for shareholders over the medium to long term by a combination of capital growth and a rising dividend.
Financial Highlights for the 3 months to 31 October 2011
| 31 October 2011 | % Change | Total Return (%) | |
| Share Price | 339.0p | (8.6) | (8.0) |
| NAV per share (inc income) | 406.3p | (7.5) | (7.6) |
| Discount (inc income) | 16.6% |
Key Information
| Total Assets: | £2,717.5m | EPIC Code: | ATST | |
| Net Assets: | £2,457.7m | Year End: | 31 December | |
| Total Borrowings: | £259.8m | Date of Incorporation: | 21 October 1888 | |
| Net gearing: | 2.9% | Issued Share Capital: | 606,681,146 |
| Total Expenses Ratio (year to 31 January 2011): | 0.63% | |
| Dividend of 2.141p Paid: | June, September, December, March | |
Review of the three months to 31 October 2011
During the three months to 31 October 2011, the total shareholder return was down 8.0% and the NAV total return (with debt at fair value and inclusive of income) was down 7.6%. In the wake of the turmoil that has hit equity markets over the summer months, we have seen the discount widen slightly from 15.6% to 16.6%.
In the third quarter of the year, Alliance Trust bought back and cancelled 14.4m shares at a cost of £48.7m. The number of shares in issue therefore reduced to 606,681,146 at the end of October, giving the Company a market capitalisation of £2,056.6m. At the Annual General Meeting on 20 May 2011, the shareholders authorised the Directors to buy back up to 15% of the issued shares. By the end of October, 38.3m shares or 5.9% of the shares outstanding at the time of AGM had been repurchased.
Alliance Trust also announced, at the AGM, that Lesley Knox will step down as Chairman by the time of the 2012 AGM, after 10 years on the Board. The Nomination Committee has seen a long list of candidates of an extremely high calibre and good progress is being made. An announcement will be made in due course.
The year end of the Trust will be moved to December from January, and the next period end will be for the 11 months to 31 December 2011. The year end is being changed in order to aid comparability with other Trusts.
Dividend payment dates are being brought forward in line with the change of year end. The Company has declared and paid two interim dividends of 2.141p per share, paid on 30 June 2011 and 30 September 2011. In the absence of any unforeseen developments the Company expects to pay one further interim payment of 2.141p at the end of December and a fourth interim payment of at least 2.141p at the end of March 2012, making a total for the 11 months to 31 December 2011 of at least 8.56p, an increase of 2% on last year, which will be paid out of current year earnings.
Alliance Trust Asset Management
Over the past 3 months, Alliance Trust Asset Management has seen net cash inflows of £7.3m. The vast majority of this has been raised by the Alliance Trust Monthly Income Bond Fund. Approval has recently been granted by the FSA for Alliance Trust Asset Management to launch a Global Thematic Opportunities Fund, which will be managed by Ilario Di Bon and Juergen Lanzer. It is intended that this will be launched in December 2011.
Alliance Trust Savings
Alliance Trust Savings continues to make good progress. It had its busiest ever equity trading month in August, up 96% on August 2010 and up by 21% from the previous highest ever month, tax year end in March 2011. While continuing to provide very competitive pricing and service, a fixed annual charge of £25 was introduced for its 34,000 ISA customers in August. There has been minimal attrition as a result. It expanded the investments available on its i.nvest platform to include international equities. There are now 21,000 overseas equity instruments in 21 exchanges across 18 countries on the platform, making it one of the most comprehensive offerings on the market. The move into the intermediary and discretionary fund manager market continued with the launch of its online advisor proposition. The number of accounts increased to 80,289.
Cumulative performance (%)
| 3 | 6 | 1 | 3 | 5 | 10 | |
| Months | Months | Year | Years | Years | Years | |
| Share Price | (8.6) | (11.1) | (2.7) | 38.4 | (6.7) | 20.5 |
| NAV* | (8.1) | (10.2) | (4.6) | 26.3 | (2.1) | 26.9 |
*NAV is calculated with debt at fair value and including accrued income, for all periods except the 10 year NAV return, which is done on an ex-income basis
Source FactSet & Fundamental Data
Asset Allocation (%)
| 31-Oct-11 | 31-Jul-11 | |
| Equities | 91.7 | 94.1 |
| Fixed Income | 5.0 | 4.7 |
| Private Equity | 3.5 | 4.2 |
| Operating Subsidiaries | 0.8 | 0.8 |
| Property | 0.9 | 0.8 |
| Cash | 7.6 | 1.9 |
| Other Assets | 1.1 | 2.8 |
| Gross Assets | 110.6 | 109.3 |
| Gearing | (10.6) | (9.3) |
| Net Assets (incl income) | 100.0 | 100.0 |
Source: Alliance Trust
Equity portfolio geographic breakdown (%)
| 31-Oct-11 | 31-Jul-11 | |
| United Kingdom | 37.3 | 34.0 |
| North America | 28.7 | 27.4 |
| Asia Pacific | 18.9 | 20.8 |
| Europe Ex UK | 15.1 | 15.2 |
| Other | 0.0 | 2.7 |
Source: Alliance Trust
By raising cash from our Global and Emerging Markets portfolios we have increased the relative percentage of equities in the UK and the US. We retain exposure to emerging markets through our Asian portfolio.
Equity portfolio sector allocation (%)
| 31-Oct-11 | 31-Jul-11 | |
| Financials | 18.9 | 18.7 |
| Industrials | 16.6 | 18.1 |
| Oil & Gas | 13.9 | 14.1 |
| Consumer Goods | 11.5 | 12.2 |
| Health Care | 10.5 | 9.6 |
| Basic Materials | 8.9 | 8.8 |
| Technology | 7.6 | 8.0 |
| Consumer Services | 5.2 | 5.0 |
| Telecommunications | 4.9 | 3.5 |
| Utilities | 2.0 | 2.1 |
Source: Alliance Trust
The largest sector exposures remain in Financials, Industrials and Oil & Gas and although we have reduced some of the cyclical exposures we maintain a bias to higher growth markets and stocks which should perform throughout the economic cycle
Equity portfolio top 20 holdings
| Jul-11 | Direction | Oct-11 | Holding | % of Equity portfolio |
| (1) | - | 1 | Royal Dutch Shell | 2.7 |
| (2) | - | 2 | GlaxoSmithKline | 2.4 |
| (3) | - | 3 | BP | 2.2 |
| (6) | Up | 4 | HSBC Holdings | 2.1 |
| (5) | - | 5 | Rio Tinto | 1.9 |
| (4) | Down | 6 | BHP Billiton | 1.7 |
| (8) | Up | 7 | BG Group | 1.6 |
| (7) | Down | 8 | British American Tobacco | 1.6 |
| (10) | Up | 9 | Prudential | 1.4 |
| (14) | Up | 10 | Unilever | 1.3 |
| (13) | Up | 11 | AstraZeneca | 1.3 |
| (20) | Up | 12 | American Tower | 1.2 |
| (12) | Down | 13 | Clean Harbors | 1.2 |
| (19) | Up | 14 | Vodafone Group | 1.2 |
| (-) | New | 15 | Standard Chartered | 1.1 |
| (-) | New | 16 | Carillion | 1.1 |
| (18) | Up | 17 | New York Community Bancorp | 1.1 |
| (-) | New | 18 | Diageo | 1.1 |
| (15) | Down | 19 | Philip Morris International | 1.1 |
| (17) | Down | 20 | National Grid | 1.0 |
Source: Alliance Trust
For Further Information, please contact:
Evan Bruce-Gardyne
Head of Investor Relations,
Alliance Trust PLC
Tel: +44 (0)1382 321000
Email: investor@alliancetrust.co.uk
Web: www.alliancetrust.co.uk
James Leviton / Conor McClafferty
Finsbury Group
Tel: +44 (0)20 7251 3801
Email: alliancetrust@finsbury.com
Web: www.finsbury.com
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: Alliance Trust PLC via Thomson Reuters ONE
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