Half-yearly report
27 September 2010
Alliance Trust PLC
Interim Results for the half year ended 31 July 2010
Financial Highlights As at 31/07/10 % change Total Return %
NAV per share 392.2p  3.8 4.4
Share Price 316.6p  1.2 2.5
Company expenses  £7.8m  (2.8)
Full year dividend*  8.25p  1.2
* In the absence of any unforeseen circumstances a dividend of at least this
amount will be paid
Company highlights
* Positive absolute returns generated by all regional teams, with over 60% of
assets in portfolios which have generated positive relative returns over 1
and 3 years
* Bolder investment approach illustrated by reduction in UK exposure from 36%
to 31% of our net assets, reinvesting in Asia and emerging markets
* Revenues up 17% in Alliance Trust Savings year on year, and 3rd party assets
at Alliance Trust Asset Management up from £12m to £52m in the last 6
months
* Current year earnings continue to support our progressive dividend with
income being generated across all regional and fixed income portfolios
* Second interim dividend of 2.0625p payable on 1 November 2010
Commenting on the results, Katherine Garrett-Cox, Chief Executive, said:
"It is pleasing to report great progress across all parts of our company against
a global backdrop of ongoing market and economic volatility.
We remain cautiously optimistic about the global economic recovery, whilst
recognising that risks of a double dip recession persist. In our view, the
overall outlook for equity markets remains positive. However, developed markets
are hampered by debt indigestion and we see better prospects for growth in
emerging markets and Asia.
With interest rates at historic lows, our shareholders increasingly rely on
Alliance Trust as a dependable source of income. Recognising this, we are
confident that our portfolio is well positioned to deliver a 44th consecutive
dividend increase for the year ending 31 January 2011."
For more information please contact:
James Leviton and Clare Dundas
Finsbury Group
020 7251 3801
Douglas Connon
Managing Director, Corporate Affairs, Alliance Trust
01382 321088
Mobile: 07918 741082
Notes to editors
A FTSE 100 investment trust company, Alliance Trust PLC was founded in 1888 and
has grown to become the UK's largest generalist investment trust. As at 31 July
2010, Alliance Trust managed assets of more than £2.9bn. Of the company's net
assets of £2.6bn, less than 1% was invested in its subsidiaries, which include
Alliance Trust Savings and Alliance Trust Asset Management.
Alliance Trust Interim Report 2010
Highlights
* Positive absolute returns generated by all regional teams, with over 60% of
assets in portfolios which have generated positive relative returns over 1
and 3 years.
* Bolder investment approach illustrated by reduction in UK exposure from 36%
to 31% of our net assets, reinvesting in Asia and emerging markets.
* Revenues up 17% in Alliance Trust Savings year on year, and 3rd party assets
at Alliance Trust Asset Management up from £12m to £52m in the last 6
months.
* Current year earnings continue to support our progressive dividend with
income being generated across all regional and fixed income portfolios.
* Overall outlook for equity markets remains good, with better prospects from
exposure to Asia and emerging markets as debt concerns continue to affect
more developed markets.
+---------------------------+--------------+-----------------+--------+
| Company Statistics | 31 July 2010 | 31 January 2010 | Change |
+---------------------------+--------------+-----------------+--------+
| Net Asset Value (basic) | 392.2p | 377.7p | 3.8% |
+---------------------------+--------------+-----------------+--------+
| Net Asset Value (diluted) | 391.2p | 376.7p | 3.8% |
+---------------------------+--------------+-----------------+--------+
| Share Price | 316.6p | 313.0p | 1.2% |
+---------------------------+--------------+-----------------+--------+
Performance Summary
This interim report sets out the results of Alliance Trust PLC for the six
months ended 31 July 2010.
Over the past six months the Company's basic Net Asset Value (NAV) per share
increased by 3.8%. The Total Shareholder Return (TSR) was 2.5%.
Our core equity portfolio represents over 95% of our net assets and is the prime
driver of our investment returns. Over the period all of our equity portfolios
generated positive absolute returns. This has been achieved against a global
background of ongoing market and economic volatility.
We have been actively reducing the proportion of the portfolio invested in Large
Cap UK listed companies and increasing investments in other parts of the globe,
whilst at the same time not compromising our commitment to a progressive
dividend. Significantly, we have reduced UK equities from 36% of our net assets
to around 31% during the period, increased Emerging Markets exposure from under
1% to nearly 6%, and increased Pan-Asia from 13% to 20%.
Equity Portfolio Statistics
From 31 January 2010 to 31 July 2010
+----------------------+----------------------------+--------------------------+
|Â |Returns for 6 months to 31 | Relative to Index|
| |July 2010 | |
+------------+---------+---------+-----+------------+---------+----------------+
|Â |% of Net |Portfolio|Index|Relative to |1 year to| 3 years to 31 |
| |Assets 31| (%) | (%) | Index | 31 July | July |
| |July 2010| | | (%) | 2010 | 2010 |
| | | | | | (%) |(annualised) (%)|
+------------+---------+---------+-----+------------+---------+----------------+
|UK | 31.1| 4.7| 4.0| 0.6| 2.5| 0.5|
+------------+---------+---------+-----+------------+---------+----------------+
|North | 21.8| 6.4| 7.1| (0.7)| 1.5| 6.6|
|America | | | | | | |
+------------+---------+---------+-----+------------+---------+----------------+
|Europe | 11.3| 1.4| 0.7| 0.6| 3.6| 3.8|
+------------+---------+---------+-----+------------+---------+----------------+
|Pan Asia | 19.7| 6.2| 6.6| (0.4)| 0.2| -|
+------------+---------+---------+-----+------------+---------+----------------+
|Emerging | 5.6| 9.6| 10.9| (1.1)| -| -|
|Markets | | | | | | |
+------------+---------+---------+-----+------------+---------+----------------+
|Global | 6.2| 4.5| 5.1| (0.6)| (2.0)| -|
+------------+---------+---------+-----+------------+---------+----------------+
These moves are indicative of our bolder, more decisive approach to managing the
investment portfolio. We have also moved to enhance and to re-align our
investment talent, offering development opportunities for our team, while
committing more resources to those parts of the world which we believe offer
greater potential for growth in future investment returns.
Good progress has been made in our subsidiaries and we are confident that
Alliance Trust Savings and Alliance Trust Asset Management are a potential
source of value and benefit to our shareholders. The benefits that will accrue
from all parts of the business working together uniquely position the Company
for growth.
We have indicated that, in the absence of any unforeseen developments, we will
pay a dividend of at least 8.25p per share this year. We are confident that the
dividend will be covered by current year earnings and do not expect to draw down
on reserves in order to fund the 44th consecutive year of increased annual
dividend, even taking into account the decision by BP not to pay dividends for
the remainder of 2010. We believe that our portfolio is well positioned to
provide the ongoing progressive dividend in a difficult environment of
continuing pressure on the payouts of a number of UK companies, as we have
successfully diversified our income generation and increasingly source it from
other regions as well as from our fixed income and property portfolios.
Key Priorities
In our Annual Report and Accounts we set five key priorities for the year. After
six months, progress towards these is as follows.
To focus on investment in equities
Quoted equities represented over 95% of net assets throughout the period. Our
high weighting in global equities has benefited performance, as global markets
have generally risen, albeit not in a straight line, since the start of February
2010. Emerging Markets, Asia-Pacific and North America have seen the best
absolute returns and our exposure to these parts of the world helped increase
our NAV return.
We have increased our net debt to £247 million (9.6% of net assets; 4.8% at 31
January 2010) by drawing down on our banking facilities to fund investments,
including a £100 million commitment towards fixed income securities which are
yielding in excess of 6%. In other asset classes, we have continued to reduce
our holdings in Commercial Property and have made a small increase in Private
Equity.
To continue to improve investment performance
The rolling 1 year ranking of the Trust's NAV return in its peer group has been
improving each month. Over the short and medium term, the NAV of the Trust will
be driven by the aggregate performance of the equity portfolios.
To manage our cost base in line with market conditions
We remain very conscious of prevailing market conditions and the requirement to
apply strict cost controls across the business which has led to a 2.4% decrease
in the level of Company expenses for the first half of the year.
To develop our subsidiary businesses
Good progress has been made in Alliance Trust Savings in the first half of the
year. Revenues grew by 17%. Costs continue to be well controlled and remain flat
during the period despite further investment in the business for growth. The
creation of a strong marketing and sales capability is also well advanced.
Development of the business proposition and its unique model continues as
planned, with re-pricing of the Full SIPP, a significant extension of the Funds
Supermarket offering and the comprehensive redevelopment of the Retail
E-commerce site.
Alliance Trust Asset Management launched the Alliance Trust Monthly Income Bond
Fund in June. The success of this launch has helped to grow third party assets
under management of the business to £52 million compared to £12 million as at
31 January 2010. The UK Equity Income Fund and North American Equity Fund are
both ranked ahead of their respective peer group average on both a 6 month and a
1 year basis. Distribution activity continues to be targeted at the main
discretionary fund buyers in the UK, while plans are being developed to extend
the reach of the business to financial intermediaries and fund platforms. The
marketing capabilities of the company have also been strengthened as part of
this process.
Both businesses are expected to continue this progress in the second half of the
year. We see the Financial Services Authority's Retail Distribution Review
(RDR), which will come into effect in 2012, as an opportunity for the Trust. It
will level the playing field between investment trusts and pooled funds. As
Alliance Trust Savings rebates all commission back to the investor, it is ready
for RDR and is well positioned to cope with the new regulatory requirements.
To invest in the development of our people
We continue to attract high quality people to the business and have maintained
our policy of recruiting Management Trainees, with new appointees joining us in
early September. Â We are investing in a new leadership development programme
designed to retain and develop our people and to ensure that we are building a
strong leadership cadre for the future.
Investment Overview
Company earnings reports in the first two quarters of 2010 have given us a
valuable insight into the health of the corporate sector. The most recent data
suggest that corporate balance sheets are in much better shape than those of
many governments, where we have seen a further deterioration in several
developed economies. At a company level, nearly 70% of results published during
the period exceeded market expectation. We have seen improvements in both top
and bottom line growth. Although share prices did not always reflect the
positive tone of many of these results, we have been able to evaluate how our
holdings are reacting to the current economic environment and to position our
portfolios accordingly.
One of the key events during the period was the catastrophic Deepwater Horizon
rig explosion and oil leak from the Macondo Well in the Gulf of Mexico. This had
a significant impact in the UK where BP was seriously affected but also in North
America where one of our key holdings, Diamond Offshore Drilling, had around one
third of its rig fleet operating in the Gulf of Mexico at the time. Further
detail on the impact is provided in the regional updates.
In our Annual Report we noted that we expect Asian economies and Emerging
Markets to maintain their long-term growth. We have steadily increased our
weightings in these higher growth markets over the last six months by adding a
total of £166 million to the Pan Asia and £124 million to the Emerging Markets
portfolios. These were funded by reductions of £140 million in our UK quoted
equity portfolio and £150 million from our Global portfolio.
Within Pan Asia, we favour Indonesia, India and Thailand where we have
overweight positions. While cautious on the longer term outlook for the Japanese
economy, meetings we have held with management of Japanese companies suggest
that shorter term fundamentals and earnings momentum are strong and there is
value to be found in selected companies there to the extent that 8% of the
equity portfolio is invested in Japan. Pan Asia accounted for 20% of our net
assets against 13% at the year end
Emerging Markets represented nearly 6% of our net assets at the period end
compared to less than 1% six months ago. Many developing markets are
experiencing strong growth in an environment of historically low interest rates.
We have taken advantage of a period of relative underperformance in Latin
American markets to add to our holdings in Brazil, while also favouring emerging
Asian markets.
In Fixed Income securities, the Company initiated a £100 million investment in
the Alliance Trust Monthly Income Bond Fund. This new Fund, managed by the team
of four highly experienced Fixed Income managers appointed by the Company
towards the end of last year, is predominantly invested in a diversified
portfolio of corporate bonds, with the focus on an average maturity of 10 years.
The fund has a forecast annual distribution yield of over 6%, thereby making a
significant contribution to the income generation of our investment portfolio.
The capital value of the Preference Stock portfolio rose to £20.6 million from
£17.5 million at the year end as the UK financial sector continued its recovery.
The current annual income yield on the Preference Stock portfolio is 5.9%.
Net debt was increased by £127 million to £247 million during the period, as we
drew down on our banking facilities to fund our Fixed Income and other
investments. Net gearing stood at 9.6% of net assets at 31 July 2010. We believe
net gearing to be at an appropriate level in the current market environment but
are prepared to increase gearing further should we conclude that the market
outlook offers good investment returns.
Equity Investment
Two themes dominated activity in our UK portfolio over the period. We reduced
holdings in cyclical companies and those reliant upon discretionary consumer
spending, in particular those biased towards western economies, while increasing
our conviction in medium-term structural growth stocks.
Reflecting our move out of cyclical and consumer areas, we sold our positions in
Charter, Great Portland and Hays and reduced holdings in Carnival Cruises, Next,
Weir, Rio Tinto and Smiths Group. We reduced our holding in Vodafone, where we
believe that longer term concerns regarding the sustainability of returns
outweigh the attractions of cash flow visibility and a relatively high yield.
We also disposed of our holdings in BAE Systems and BG Group. BAE appears
vulnerable to government spending cuts and this issue is likely to continue to
erode the company's longer term growth rate. Although BG may benefit from its
exploration success in Brazil we believe this was reflected in its valuation and
near term earnings and production growth for the company is challenging.
We increased our holding in BP in June when our analysis of potential oil spill
costs and the resulting net asset value showed significant value within BP's
equity. While the shares have performed well since, we remain optimistic that
further value will be realised. In particular, data points such as company
results, publication of reports relating to the Macondo incident in the Gulf of
Mexico and, ultimately, legal rulings will help to clarify the background to
this catastrophe and the value in BP's shares.
We became more positive on both major UK pharmaceutical stocks as cost controls,
new drug delivery and strategic initiatives combine with good near term cash
flow visibility and attractive cash based valuations. We introduced therefore a
new holding in AstraZeneca and added to GlaxoSmithKline. We also increased
investments in Serco, Tesco, Diageo and IMI where both current and future
prospects appear attractive.
In North America the Gulf of Mexico drilling moratorium removed a large portion
of current work from Diamond Offshore Drilling and pushed down contract rates in
the rest of the world as rigs sought work elsewhere. As a result, we sold our
entire holding. Some of the proceeds were reinvested in Apache, an oil and gas
company that has recently acquired some assets from BP and which has a global
spread of oil and gas reserves. Another notable sale in the period was the
holding in Verizon, the fixed line and wireless telecom operator, which is
facing increased pension costs and is committed to sharing cash flow from its
wireless operation with Vodafone. We also sold shares in the electricity utility
Exelon as it continues to experience tough regulatory requirements and faces
lower prices for power generation as currently beneficial forward contracts
expire. Investment was increased in the technology sector, where we expect
continued sales growth to emerging markets and corporations, with additions to
Intel, Cisco and Dell. A new investment in Canada was made in Yellow Pages
Income Fund, provider of the eponymous product, which pays a substantial
dividend and is expected to benefit from a recovery in small business growth and
advertising.
The key strategic move over the period in our Pan Asia portfolio was a gradual
but ongoing shift away from developed markets in the region, other than Japan,
into emerging markets. The rationale behind this move is the anticipated higher
growth rates in the emerging economies led by domestic demand, and in particular
both consumption and investment. Examples of such moves were additions to Astra
International (automobiles and conglomerate) in Indonesia and the purchases of
Ports Design (apparel retail) and Ajisen (noodle restaurants) in China and
Kasikornbank in Thailand. Sales in developed markets to fund these purchases
included the insurance group QBE and Westpac Banking Corp of Australia and Sun
Hung Kai Properties of Hong Kong. The developed market element of the portfolio
is now underweight in financials and overweight in industrials and technology,
while the emerging market exposure is largely through financials and companies
expected to benefit from domestic consumption.
In Europe, the first half of 2010 is likely to be remembered for the crisis in
the Eurozone. This was initially sparked by a sell-off in the Greek bond market
on the realisation that its public finances were much poorer than had been
expected, but quickly spread to other countries in the Eurozone. We used
opportunities presented by the ensuing turmoil in these markets to increase our
exposure to the banking sector, in particular banks in Spain and Italy which had
been aggressively sold during this period. Our substantial overweight in
Switzerland was a positive contributor to performance, and we used this period
of outperformance to trim back some of our Swiss positions. We remain very
overweight in Germany, although the composition of our holdings changed
following the sale of the dialysis company Fresenius Medical Care after a period
of very strong performance due to its defensive nature and large percentage of
US Dollar earnings. We invested in the car company BMW as we think it remains
well positioned to boost earnings from a combination of new model launches,
Asian demand and a potential improvement in German consumption.
Turnover in our Global portfolio was limited as we maintained our key investment
themes. We believe that corporate earnings will surprise on the upside this
year. Many companies cut back dramatically on investment during the two year
economic downturn, and have reached a point where they must invest to avoid
shrinking. This is particularly true of investments in technology where
companies have delayed upgrading for a considerable time. In contrast, consumers
in developed markets are being forced to change their spending habits due to
unemployment fears. Confidence in these themes has led us to prefer investing in
technology and industrial sectors rather than those involved in consumer
discretionary goods. We have limited exposure to the utilities,
telecommunications and healthcare sectors.
Having initiated a small Emerging Markets portfolio in December 2009, most of
the trading activity in the period has been as a result of our decision to
increase asset allocation to this area. The main theme in our portfolio is
exposure to the strong growth in consumer spending. Many developing countries
are experiencing their lowest interest rates in years and healthy economic
growth, which has resulted in a strong increase in consumer spending. At a
regional level, the portfolio is overweight Asia, neutral Latin America and
underweight EMEA (Europe, Middle East and Africa), with the exception of Turkey,
where we have initiated a holding of Garanti Bank. Chinese exposure was
increased, most notably the positions in China Life and CNOOC and we have
increased our exposure to India through Hero Honda which give us greater
exposure to domestic demand in the region.
Top twenty holdings as at 31 July 2010
+---------------------------+-------------------------------+--------+--------+
|Stock |Sector |Value £m|% of net|
| | | |assets |
+---------------------------+-------------------------------+--------+--------+
|HSBC |Banks | 62.1| 2.4|
+---------------------------+-------------------------------+--------+--------+
|BHP Billiton |Mining | 61.0| 2.4|
+---------------------------+-------------------------------+--------+--------+
|BP |Oil & Gas Producers | 55.6| 2.2|
+---------------------------+-------------------------------+--------+--------+
|GlaxoSmithKline |Pharmaceuticals & Biotechnology| 51.9| 2.0|
+---------------------------+-------------------------------+--------+--------+
|Rio Tinto |Mining | 48.9| 1.9Â |
+---------------------------+-------------------------------+--------+--------+
|Royal Dutch Shell |Oil & Gas Producers | 46.7| 1.8|
+---------------------------+-------------------------------+--------+--------+
|British American Tobacco |Tobacco | 37.6| 1.5|
+---------------------------+-------------------------------+--------+--------+
|New York Community Bancorp |Banks | 37.0| 1.4|
+---------------------------+-------------------------------+--------+--------+
|InterOil |Oil & Gas Producers | 37.0| 1.4Â |
+---------------------------+-------------------------------+--------+--------+
|Philip Morris International|Tobacco | 33.7| 1.3Â |
+---------------------------+-------------------------------+--------+--------+
|Prudential |Life Insurance | 33.3| 1.3Â |
+---------------------------+-------------------------------+--------+--------+
|Diageo |Beverages | 32.3| 1.3|
+---------------------------+-------------------------------+--------+--------+
|CNOOC |Oil & Gas Producers | 31.2| 1.3|
+---------------------------+-------------------------------+--------+--------+
|Tesco |Food & Drug Retailers | 30.9| 1.2|
+---------------------------+-------------------------------+--------+--------+
|Canadian Pacific Railway |Industrial Transportation | 28.3| 1.1|
+---------------------------+-------------------------------+--------+--------+
|Republic Services |Support Services | 27.8| 1.1|
+---------------------------+-------------------------------+--------+--------+
|Standard Chartered |Banks | 27.0| 1.1|
+---------------------------+-------------------------------+--------+--------+
|Bank Rakyat Indonesia |Banks | 25.8| 1.0|
+---------------------------+-------------------------------+--------+--------+
|IMI |Industrial Engineering | 24.3| 0.9|
+---------------------------+-------------------------------+--------+--------+
|American Tower |Telecommunications | 23.8| 0.9|
+---------------------------+-------------------------------+--------+--------+
  A full list of companies in which we invest can be found on our website
www.alliancetrust.co.uk
Other Investments
We have continued to use available opportunities to reduce our quoted Private
Equity holdings, taking advantage of narrowing discounts to net asset values or
volume availability. We intend to continue this strategy through the second half
of the year. We have added two new fund commitments in the last six months. A
£20 million commitment was made to UK-based Phoenix Equity Partners 2010 LP and
a €20 million commitment to French-based 21 Centrale Partners IV FCPR. Both
funds fit with our focus on the lower to mid market European private equity
buyout sector. Drawdowns by the funds continue to be at a relatively low level
due to subdued private equity market conditions. Total commitments stand at
£253.1 million with drawn capital at £85.1 million.
Following the completion of a number of disposals, the value of the UK
Commercial Property portfolio was reduced to £28 million against £51.6 million
at the year-end, in line with our stated intention to reduce our direct holdings
in this area. The running yield from our current portfolio is 7%. Our property
weighting, including our indirect investment of £15.4 million in the Climate
Change Property Fund, amounts to 2% of net assets.
Outlook
We remain cautiously optimistic about the global economic recovery, whilst
recognising that risks of a double dip recession remain. As such, we are
maintaining our highest weighting in quoted equities in 5 years. We can identify
better prospects for longer term growth in Asian markets than in the UK and are
looking to opportunities to reduce further our UK weighting.
We expect a slowdown in growth in the year ahead but not a move back into
recession. The higher growth economies of Asia and Latin America will not
replace the loss of demand and output for the world's largest economy, the US,
but should prevent the global economy slipping back into negative GDP growth.
China is an economic powerhouse and has recently replaced Japan as the world
second largest economy but it is still only about a third the size of the US.
Currently however, it is growing at around three times the pace of the US.
On a sector basis, we are overweight in Energy, Basic Materials and Industrials
and underweight in Financials, Utilities and Telecommunications. With the
exception of Asia, we continue to have a low exposure to companies exposed to
discretionary consumer spending. Within Asia, however, we see opportunities in
this area as domestic demand is increasing and the consumer has greater spending
power. At a company level, the key attributes we look for in our stock selection
process remain strong management capability, sound financial health and the
ability to benefit from the economic environment.
Many companies have survived the economic downturn intact and are now well
positioned to take advantage of any pick up in global demand. Balance sheet
levels of cash have increased significantly and, with little returns available
for uninvested cash, it may be that we see a period where merger and acquisition
activity increases. This would be a positive move and consistent with companies
anticipating a more encouraging trading environment ahead.
Risks and Uncertainties
As an investment trust the Company invests in both quoted and unquoted
securities, fixed income securities, its subsidiary businesses, other asset
classes and financial instruments for the long term in order to achieve its
investment objectives. Its principal risks are therefore market risk (comprising
currency risk, interest rate risk and other price risk), liquidity risk and
credit risk. Other risks faced by the Company include regulatory, reputational,
operational and strategic risks. These risks, and the way in which they are
managed, were described in more detail within the Risk Factors section of the
Company's Annual Report and Accounts to 31 January 2010.
The nature of the Company's principal risks and uncertainties has not changed
materially since the date of that report and is not expected to change for the
remainder of the financial year.
We continue to monitor the progress of the AIFM directive through the European
legislative process. Â While the intention was to produce a final version of the
directive before the summer, in the event the European Parliament and Council of
Ministers were not able to reach agreement on a range of issues and discussions
between them continue under the Belgian presidency.
Related Party Transactions
The nature of related party transactions has not changed significantly from
those described in the Company's Annual Report and Accounts to 31 January 2010.
There were no transactions with related parties during the six months ended 31
July 2010 which have a material effect on the results or financial position of
the Company or the Group.
Dividend
In accordance with our quarterly dividend policy, the Company paid an interim
dividend of 2.0625 pence per share on 2 August 2010. A second interim dividend
of 2.0625p per share will be paid on or around 1 November 2010 to shareholders
on the register on 8 October 2010. For the financial year ending 31 January
2011, in the absence of any unforeseen developments, we expect to pay a third
interim dividend of 2.0625 pence in January 2011 and a fourth interim dividend
of at least 2.0625 pence in May 2011.
Going Concern Statement
The factors impacting Going Concern are set out in detail in the Accountability
and Audit section of the Company's Annual Report and Accounts to 31 January
2010. As at 31 July 2010 there have been no significant changes to these
factors. Having reviewed the Company's forecasts and other relevant evidence the
Directors believe that they have a reasonable expectation that the Company will
continue in operational existence for the foreseeable future. Accordingly the
financial statements have been prepared on a going concern basis.
Company Performance Tables
Net Asset Value per share (Basic)
+--------+--------+--------+--------+---------+
| 2007 | 2008 | 2009 | 2010 | H1 2011 |
+--------+--------+--------+--------+---------+
| 421.5p | 402.3p | 316.8p | 377.7p | 392.2p |
+--------+--------+--------+--------+---------+
Share Price
+--------+--------+--------+--------+---------+
| 2007 | 2008 | 2009 | 2010 | H1 2011 |
+--------+--------+--------+--------+---------+
| 365.5p | 338.0p | 268.0p | 313.0p | 316.6p |
+--------+--------+--------+--------+---------+
Dividend
+--------+------+-------+-------+---------+
| 2007 | 2008 | 2009 | 2010 | 2011 |
+--------+------+-------+-------+---------+
| 7.575p | 7.9p | 8.0p* | 8.15p | 8.25p** |
+--------+------+-------+-------+---------+
   *excludes special dividend of 0.5p
   ** in the absence of unforeseen developments a dividend of at least this
amount will be paid
Company Expenses
+----+------+------+------+------+------+
| £m | 2007 | 2008 | 2009 | 2010 | 2011 |
+----+------+------+------+------+------+
| H1 | 6.2 | 7.6 | 8.2 | 8.0 | 7.8 |
+----+------+------+------+------+------+
| H2 | 3.8 | 7.4 | 8.6 | 8.0 | - |
+----+------+------+------+------+------+
Responsibility Statement
We confirm that to the best of our knowledge
* The financial statements have been prepared in accordance with IAS 34
"Interim Financial Reporting" as adopted by the EU:
* The interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the "Disclosure and Transparency Rules", being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining six
months of the year; and
(b) DTR 4.2.8R of the "Disclosure and Transparency Rules", being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
Signed on behalf of the Board
Lesley Knox Katherine Garrett-Cox
Chairman Chief Executive
24 September 2010 24 September 2010
Note on audit
The interim financial information for the period ended 31 July 2010 has not been
audited or reviewed in accordance with International Standard on Review
Engagements 2410 issued by the Auditing Practice Board.
Consolidated Income Statement (Unaudited)
For the period ended 31 July 2010
  6 months to 31 July 2010 6 months to 31 July 2009 Year to 31 January 2010
(audited)
£000 Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
Revenue
Income  62,652 - 62,652 56,010 - 56,010 93,652 - 93,652
Profit on fair value
designated investments - 82,129 82,129 - 151,535 151,535 - 420,327 420,327
Profit/(loss) on
investment property - 5 5 - (4,620) (4,620) - 4,691 4,691
held
  -------- --------- --------- -------- -------- --------- -------- -------- ---------
Total revenue 3 62,652 82,134 144,786 56,010 146,915 202,925 93,652 425,018 518,670
Administrative  (17,658) (1,647) (19,305) (17,059) (931) (17,990) (36,819) (1,256) (38,075)
expenses
Finance costs 4 (1,321) (775) (2,096) (301) (554) (855) (666) (1,267) (1,933)
Loss on revaluation of
office premises - - - - (969) (969) - (951) (951)
Foreign  (44) (895) (939) - (3,873) (3,873) 178 (4,505) (4,327)
exchange(losses)/gains
  -------- --------- ------------ -------- --------- --------- -------- --------- ---------
Profit before tax  43,629 78,817 122,446 38,650 140,588 179,238 56,345 417,039 473,384
Tax 5 (3,081) 217 (2,864) (4,524) 155 (4,369) (5,567) 355 (5,212)
  -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit for the period  40,548 79,034 119,582 34,126 140,743 174,869 50,778 417,394 468,172
  ======== ======= ======= ====== ======== ====== ====== ======= =======
Attributable to:
- Minority interest  469 1,001 1,470 124 403 527 186 1,583 1,769
- Equity holders of  40,079 78,033 118,112 34,002 140,340 174,342 50,592 415,811 466,403
the parent
  -------- -------- -------- -------- -------- -------- -------- -------- --------
  40,548 79,034 119,582 34,126 140,743 174,869 50,778 417,394 468,172
  ======== ======= ======= ====== ======== ====== ====== ======= =======
Earnings per share
from
continuing operations
attributable to equity
holders of
the parent
Basic (p per share) 7 6.07 11.83 17.90 5.07 20.94 26.01 7.57 62.19 69.76
Diluted (p per share) 7 6.06 11.79 17.85 5.06 20.89 25.95 7.55 62.02 69.57
 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)
  Year to 31 January 2010
6 months to 31 July 2010 6 months to 31 July 2009 (unaudited)
£000 Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
Profit for the  40,548 79,034 119,582 34,126 140,743 174,869 50,778 417,394 468,172
period
Income and
expenses
recognised
directly in
equity:
Defined 8
benefit plan - 2,752 2,752 - 421 421 - (3,244) (3,244)
actuarial
gains/(losses)
Retirement 8
benefit - (16) (16) - (118) (118) - 14 14
obligations
deferred tax
Exchange
differences on - - - - 462 462 - - -
translation of
foreign
subsidiary
  -------- -------- -------- -------- -------- -------- -------- -------- --------
Total
recognised 40,548 81,770 122,318 34,126 141,508 175,634 50,778 414,164 464,942
income and
expense for
the period
  ======= ======= ====== ======= ====== ====== ====== ====== ======
Attributable
to:
- Minority  469 1,001 1,470 124 403 527 186 1,583 1,769
interest
- Equity  40,079 80,769 120,848 34,002 141,105 175,107 50,592 412,581 463,173
holders of the
parent
  -------- -------- -------- -------- -------- -------- -------- -------- --------
  40,548 81,770 122,318 34,126 141,508 175,634 50,778 414,164 464,942
  ======= ======= ====== ======= ====== ====== ====== ====== ======
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 July 2010
 6 months to 6 months to Year to
31 July 2010 31 July 2009 31 January 2010
£000   (audited)
Called up share capital
At 1 February 2010 16,677 16,798 16,798
Own shares purchased and cancelled in (150) - (121)
the period
 ---------- ---------- ----------
At 31 July 2010 16,527 16,798 16,677
 ---------- ---------- ----------
Capital Reserves
At 1 February 2010 1,776,750 1,378,674 1,378,674
Profit for the period 78,033 145,971 415,811
Pension scheme financing (84) 303 (3,230)
Own shares purchased* (19,800) - (15,405)
SMEIP/LTIP reserve movement 691 324 900
 ---------- ---------- ----------
At 31 July 2010 1,835,590 1,525,272 1,776,750
 ---------- ---------- ----------
Revaluation Reserve
At 1 February 2010 and 31 July 2010 183 183 183
 ---------- ---------- ----------
Merger Reserve
At 1 February 2010 and 31 July 2010 645,335 645,335 645,335
 ---------- ---------- ----------
Capital redemption reserve
At 1 February 2010 2,321 2,200 2,200
Own shares purchased and cancelled in 150 - 121
the period
 ---------- ---------- ----------
At 31 July 2010 2,471 2,200 2,321
 ---------- ---------- ----------
Revenue Reserve
At 1 February 2010 72,017 78,806 78,806
Profit for the period 40,079 27,971 50,592
Dividends (27,403) (30,322) (57,363)
Unclaimed dividends 29 10 4
SMEIP/LTIP reserve movement - (22) (22)
 ---------- ---------- ----------
At 31 July 2010 84,722 76,443 72,017
 ---------- ---------- ----------
Translation Reserve
At 1 February 2010 - 984 984
Translation of foreign subsidiary - 462 -
Write back on wind up of foreign subsidiary - - (984)
 ---------- ---------- ----------
At 31 July 2010 - 1,446 -
 ---------- ---------- ----------
Minority Interest
At 1 February 2010 11,684 6,734 6,734
Profit for the period 1,470 527 1,769
PATIF/ATIF** net subscriptions 39,715 (774) 3,181
 ---------- ---------- ----------
At 31 July 2010 52,869 6,487 11,684
 ---------- ---------- ----------
Total equity shareholder funds
At 1 February 2010 2,524,967 2,129,714 2,129,714
 ---------- ---------- ----------
At 31 July 2010 2,637,697 2,274,164 2,524,967
 ---------- ---------- ----------
* Own shares purchased in the period relates to the purchase and cancellation of
own shares.
** Premier Alliance Trust Investment Fund and Alliance Trust Investment Fund.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
As at 31 July 2010
£000 Note 31 July 2010 31 July 2009 31 January 2010
    (audited)
Non-current assets
Investments held at fair value  2,872,322 2,206,147 2,595,849
Investment property  28,020 51,715 51,625
Property, plant and equipment:
 Office premises  6,500 6,375 6,500
 Other fixed assets  35 6 3
Intangible assets  3,041 4,344 3,646
Deferred tax asset  136 - 141
  ---------- ---------- ----------
  2,910,054 2,268,587 2,657,764
Current assets
Outstanding settlements/other  168,838 39,469 17,025
receivables
Withholding tax debtor  1,742 1,280 1,099
Corporation tax debtor  62 625 62
Cash and cash equivalents  257,350 269,795 269,475
  ---------- ---------- ----------
  427,992 311,169 287,661
Total assets  3,338,046 2,579,756 2,945,425
Current liabilities
Outstanding settlements/other  (415,991) (253,133) (252,860)
payables
Tax payable  (2,125) (2,854) (2,677)
Bank overdrafts and loans 13 (280,000) (47,964) (160,000)
  ---------- ---------- ----------
  (698,116) (303,951) (415,537)
Total assets less current  2,639,930 2,275,805 2,529,888
liabilities
Non-current liabilities
Deferred tax liabilities  - (497) -
Other long term liabilities  (64) - -
Pension scheme deficit 8 (2,169) (1,144) (4,921)
  ---------- ---------- ----------
Net assets  2,637,697 2,274,164 2,524,967
Equity
Share capital 14 16,527 16,798 16,677
Capital reserves  1,835,590 1,525,272 1,776,750
Translation reserve  - 1,446 -
Merger reserve  645,335 645,335 645,335
Revaluation reserve  183 183 183
Capital redemption reserve  2,471 2,200 2,321
Revenue reserves  84,722 76,443 72,017
  --------- ---------- ----------
Equity attributable to equity holders of the
parent 2,584,828 2,267,677 2,513,283
Minority interest  52,869 6,487 11,684
Total equity  2,637,697 2,274,164 2,524,967
Net Asset Value per ordinary share
attributable to equity holders of the
parent
Basic (£) 9 3.92 3.38 3.78
Diluted (£) 9 3.91 3.37 3.77
CONSOLIDATED CASH FLOW (unaudited)
For the period ended 31 July 2010 6 months to 6 months to Year to
 31 July 2010 31 July 2009 31 January 2010
£000   (audited)
Cash flows from operating activities
Profit before tax 122,446 179,238 473,384
Adjustments for:
Gains on investments (82,134) (146,915) (425,018)
Foreign exchange losses 939 3,873 4,327
Scrip dividends - - (357)
Depreciation 8 2 5
Amortisation of intangibles 773 913 1,605
Loss on revaluation of office premises - 969 951
Share based payment expense 751 302 878
Interest pay 2,096 855 1,933
 --------- --------- ---------
Operating cash flows before movements
in working capital 44,879 39,237 57,708
Increase in amounts due to depositors 17,799 25,617 29,475
Increase in receivables (135,022) (15,470) (4,790)
Increase/(decrease) in payables 6,249 (8,717) 7,397
 --------- --------- ---------
Net cash (outflow)/inflow from
operating activities before income
taxes (66,095) 40,667 89,790
Taxes paid (4,070) (3,950) (4,623)
 --------- --------- ---------
Net cash (outflow)/inflow from
operating activities (70,165) 36,717 85,167
Cash flows from investing activities
Proceeds on disposal of fair value through
profit and loss investments 756,413 482,523 925,131
Purchases of fair value through profit and loss
investments (807,910) (717,152) (1,280,596)
Purchase of property, plant and equipment (39) - -
Purchase of intangible assets (113) (6) -
Purchases in respect of new head office - (969) (1,076)
 --------- --------- ---------
Net cash outflow from investing activities (51,649) (235,604) (356,541)
Cash flows from financing activities
Dividends paid - Equity (27,277) (30,312) (57,292)
Unclaimed dividends repaid 29 - 4
Purchase of own shares (19,800) - (15,405)
New bank loan raised 120,000 - 110,000
Minority interest investment in PATIF/ATIF* 39,715 (1,275) 3,181
Interest payable (2,039) (855) (2,345)
 --------- --------- ---------
Net cash inflow/(outflow) from financing
activities 110,628 (32,442) 38,143
 --------- --------- ---------
Net decrease in cash and cash equivalents (11,186) (231,329) (233,231)
Cash and cash equivalents at beginning of period 269,475 507,033 507,033
Effect of foreign exchange rate changes (939) (5,909) (4,327)
 --------- --------- ---------
Cash and cash equivalents at end of period 257,350 269,795 269,475
* Premier Alliance Trust Investment Funds and Alliance Trust Investment Funds
Notes to the Financial Statements
1 General Information
The information for the period ended 31 July 2010 does not constitute statutory
accounts as defined in section 435 of the Companies Act
2006. A copy of the statutory accounts for the year ended 31 January 2010 has
been delivered to the Registrar of Companies. The auditors'
report on those accounts was not qualified, did not contain an emphasis of
matter paragraph and did not contain statements under section 498 (2) or (3) of
the Companies Act 2006.
The interim results are unaudited. They should not be taken as a guide to the
full year and do not constitute the statutory accounts.
2 Accounting Policies
Basis of preparation
The annual financial statements were prepared using accounting policies
consistent with International Financial Reporting Standards (IFRS)
as adopted for use in the EU. The condensed set of financial statements included
in this half yearly financial report have been prepared in
accordance with IAS 34 'Interim Financial Reporting', as adopted by the EU.
Going concern
The directors have a reasonable expectation that the Company has sufficient
resources to continue in operational existence for the foreseeable future.
Accordingly the financial statements have been prepared on a going concern
basis.
Changes in accounting policies
The same accounting policies, presentations and methods of computation are
followed in these financial statements as are applied in the
Group's latest annual audited financial statements, except that a change has
been made to the allocation of finance costs between revenue and capital such
that those costs associated with the fixed income bond funds have been charged
in full to revenue expenses. No further material changes in accounting policies
are anticipated in the forthcoming financial statements for the year ended 31
January 2011.
3 Revenue
£000 6 months to 6 months to Year to
 31 July 2010 31 July 2009 31 January 2010
Deposit Interest 982 1,492 2,488
Dividend Income 54,468 46,868 75,961
Mineral rights income 858 833 1,572
Property income 1,800 2,057 4,495
Other operating income 4,544 4,760 9,136
 --------- -------- --------
 62,652 56,010 93,652
 --------- -------- --------
 4 Finance Costs
  6 months   6 months   Year to
to to
  31 July   31 July   31
2010 2009 January
2010
£000 Revenue Capital Total Revenue Capital Total Revenue Capital Total
Interest
payable
Payable to 5 - 5 23 - 23 30 - 30
depositors
Bank loans 1,316 775 2,091 278 554 832 636 1,267 1,903
and
overdrafts
 --------- -------- -------- --------- -------- -------- --------- -------- --------
Total 1,321 775 2,096 301 554 855 666 1,267 1,933
finance
costs
 --------- -------- -------- --------- -------- -------- --------- -------- --------
5 Taxation
Corporation tax for the period to 31 July 2010 is charged at 28% (six months to
31 July 2009: 28% and year ended 31 January 2010: 28%) of the estimated
assessable profit for the period. Taxation for other jurisdictions is
calculated at the rates prevailing in those jurisdictions.
6 Dividends
£000 6 months to 6 months to Year to
 31 July 2010 31 July 2009 31 January 2010
Fourth interim dividend for the year - 13,401 13,401
ended 31 January 2009 of 2.00p per
share
Special dividend for the year ended - 3,350 3,350
31 January 2009 of 0.50p per share
First interim dividend for the year - 13,570 13,570
ended 31 January 2010 of 2.025p per
share
Second interim dividend for the year - - 13,570
ended 31 January 2010 of 2.025p per
share
Third interim dividend for the year - - 13,472
ended 31 January 2010 of 2.025p per
share
Fourth interim dividend for the year 13,805 - -
ended 31 January 2010 of 2.075p per
share
First interim dividend for the year 13,598 - -
ended 31 January 2011 of 2.0625p per
share
7 Earnings per share
From continuing operations
The calculation of the basic and diluted earnings per share is based on the
following data:
 6 months to 31 July 2010 6 months to 31 July 2009 Year to 31 January 2010
 Revenue Capital Total Revenue Capital Total Revenue Capital Total
Ordinary
Shares
Earnings for
the purposes
of basic
earnings per
share being
net profit
attributable
to equity
holders of
the parent
(£000) 40,079 78,033 118,112 34,002 140,340 174,342 50,592 415,811 466,403
Number of
shares
Weighted
average
number of
ordinary
shares for
the purposes
of basic
earnings per
share   659,897,723   670,114,650   668,649,882
Weighted
average
number of
ordinary
shares for
the purposes
of diluted
earnings per
share   661,653,167   671,909,760   670,448,116
The weighted average number of ordinary shares is arrived at by excluding
1,770,203 (1,770,197 at 31 July 2009 and 1,789,960 at 31
January 2010) ordinary shares acquired by the Trustee of the Employee Benefit
Trust with funds provided by the Company.
IAS 33 requires that shares should only be treated as dilutive if they decrease
earnings per share or increase the loss per share. The
earnings per share figures on the income statement reflect this.
8 Pension Schemes
The Group sponsors two pension arrangements.
The Alliance Trust Companies' Pension Fund ('the Scheme') is a funded defined
benefit pension scheme which is now closed to new
entrants. Members continue to accrue benefits under the Scheme.
Employees who joined the Group pursuant to an offer made after 1 March 2005 are
not entitled to join the Scheme but are entitled to
receive contributions into their own Self Invested Personal Pension ('SIPP')
provided by Alliance Trust Savings Limited.
Defined Benefit Scheme
The net actuarial gain made in the period and recognised in the Consolidated
Statement of Comprehensive Income was £2,736,000 (31 July 2009 net actuarial
gain of £303,000 31 January 2010 net actuarial loss of £3,230,000).
Certain actuarial assumptions have been used to arrive at the retirement benefit
scheme deficit of £2.2m as at 31 July 2010 (31 July 2009
deficit of £1.1m, 31 January 2010 deficit of £4.9m). These are set out below:
 31 July 2010 % per 31 July 2009 % per 31 January 2010
annum annum % per annum
Inflation - (RPI) 3.50 3.40 3.70
Salary increases - 4.50 4.40 4.70
(RPI+1%)
Rate of discount 5.40 6.30 5.70
Allowance for pension in 3.50 3.40 3.70
payment increases of RPI
or 5% p.a. if less
Allowance for revaluation 3.50 3.40 3.70
of deferred pensions of
RPI or 5% p.a. if less
9 Net Asset Value Per Ordinary Share
The calculation of the net asset value is based on the following:
 31 July 2010 31 July 2009 31 January 2010
Equity shareholder funds (£000) 2,584,828 2,267,677 2,513,283
Number of shares at period end - Basic 659,289,557 670,139,563 665,269,800
Number of shares at period end - 661,059,760 671,909,760 667,059,760
Diluted
The number of ordinary shares has been reduced by 1,770,203 (1,770,197 at 31
July 2009 and 1,789,960 at 31 January 2010) ordinary
shares held by the Trustee of the Employee Benefit Trust in order to arrive at
the Basic figures above.
10 Segmental Reporting
Alliance Trust PLC's operating segments are strategic business units that offer
different products and services. They are managed separately because of the
differences in the products and services provided. They are however all
complementary to the core business of investing in various asset classes to
generate increasing value over the long term.
Alliance Trust PLC's primary operating segments are the Company and Alliance
Trust Savings Limited ('ATS').
The Company is a self managed investment company with investment trust status.
ATS provides pension administration services, share dealing services and a fund
supermarket.
The accounting policies of the operating segments are the same as those
described in the summary of significant accounting policies in the Annual Report
and Accounts for the year ended 31 January 2010.
Alliance Trust PLC evaluates performance based on operating profit before tax.
Intersegment sales and transfers are accounted for on an arms length basis, i.e.
market price.
£000 6 months to 31 July 2010
Revenue Company ATS Total
Investment gains 80,668 - 80,668
Net interest income 137 1,485 1,622
Non interest income 52,052 4,292 56,344
 --------- -------- --------
Segment Revenue 132,857 5,777 138,634
 --------- -------- --------
Segment profit/(loss) before tax 122,602 (2,590) 120,012
£000 6 months to 31 July 2009
Revenue Company ATS Total
Investment gains 139,050 - 139,050
Net interest income 545 567 1,112
Non interest income 48,671 4,358 53,029
 --------- -------- --------
Segment Revenue 188,266 4,925 193,191
 --------- -------- --------
Segment profit/(loss) before tax 178,312 (3,579) 174,733
£000 Year to 31 January 2010
Revenue Company ATS Total
Investment gains 410,230 - 410,230
Net interest income 748 1,710 2,458
Non interest income 80,465 8,223 88,688
 --------- -------- --------
Segment Revenue 491,443 9,933 501,376
 --------- -------- --------
Segment profit/(loss) before tax 469,566 (7,749) 461,817
 Reconciliation of reportable segment revenues and profit to consolidated
amounts
£000 6 months to 6 months to Year to
Revenue 31 July 2010 31 July 2009 31 January 2010
Total revenues for reportable segments 138,634 193,191 501,376
Other revenues 13,434 1,249 27,929
Elimination of intersegment revenues (2,328) (1,065) (4,125)
Elimination of movement in investment (4,954) 9,550 (6,510)
in subsidiaries
 --------- -------- --------
Consolidated revenue 144,786 202,925 518,670
 --------- -------- --------
£000 6 months to 6 months to Year to
Profit 31 July 2010 31 July 2009 31 January 2010
Total profit for reportable segments 120,012 174,733 461,817
Elimination of movement in investment 2,434 4,505 11,567
in subsidiaries
 --------- -------- --------
Consolidated profit before tax 122,446 179,238 473,384
 --------- -------- --------
Assets and Liabilities
£000 As at 31 July 2010
 Company ATS Total
Reportable segment assets 3,031,235 261,812 3,293,047
Reportable segment liabilities (445,472) (248,049) (693,521)
 --------- -------- --------
Total net assets 2,585,763 13,763 2,599,526
Assets and Liabilities As at to 31 July 2009
£000 Company ATS Total
Reportable segment assets 2,349,275 234,491 2,583,766
Reportable segment liabilities (82,127) (222,221) (304,348)
 --------- -------- --------
Total net assets 2,267,148 12,270 2,279,418
Assets and Liabilities As at 31 January 2010
£000 Company ATS Total
Reportable segment assets 2,703,857 237,870 2,941,727
Reportable segment liabilities (191,020) (225,880) (416,900)
 --------- -------- --------
Total net assets 2,512,837 11,990 2,524,827
Reconciliation of reportable segment assets to consolidated amounts
£000 As at As at As at
Assets 31 July 2010 31 July 2009 31 January 2010
Reportable segment assets 3,293,047 2,583,766 2,941,727
Elimination of subsidiaries 44,999 (4,010) 3,698
 --------- -------- --------
Consolidated assets 3,338,046 2,579,756 2,945,425
Reconciliation of reportable segment liabilities to consolidated amounts
£000 As at As at As at
Liabilities 31 July 2010 31 July 2009 31 January 2010
Reportable segment liabilities (693,521) (304,348) (416,900)
Elimination of subsidiaries (6,828) (1,244) (3,558)
 --------- -------- --------
Consolidated liabilities (700,349) (305,592) (420,458)
11 Financial Commitments
As at 31 July 2010 the Group and Company had financial commitments, which have
not been accrued, totalling £168m (£152.4m at 31 July 2009 and £174.9m at 31
January 2010). Of this amount £168m (£152.4m at 31 July 2009 and £174.9m at 31
January 2010) was in respect of uncalled subscriptions in investments structured
as limited partnerships of which £168m (£140.5m at 31 July 2009 and £165.3m at
31 January 2010) relates to investments in our private equity portfolio. This is
the maximum amount that the Company may be required to invest. These Limited
Partnership commitments may be called at any time up to an agreed contractual
date. The Company may choose not to fulfil individual commitments but may suffer
a penalty should it do so, the terms of which vary between investments.
12 Share Based Payments
The group operates three share based payment schemes. Full details of two of
these schemes (LTIP and AESOP) are disclosed in the 2010 Annual Report and
Financial Statements and the basis of measuring fair value is consistent with
that disclosed therein.
During the period a third scheme was introduced. The Investment Incentive Plan
is a discretionary plan for members of the investment team. It consists of
matching awards which are made based upon the proportion of annual bonus set
aside in the scheme by participants either in the form of cash or units in the
funds which they manage. The awards are settled in cash at the end of a three
year performance period subject to meeting predefined performance targets.
LTIP
In the period to 31 July 2010 participating employees applied a proportion of
their annual cash bonuses for the year ended 31 January 2010 to purchase
103,112 (288,730 at 31 July 2009 and 31 January 2010) Company shares at a
weighted average price of £3.48 (£2.84 at 31 July 2009 and 31 January 2010) per
share. Matching awards of up to 297,750 (527,449 at 31 July 2009 and 31 January
2010) shares, and performance awards of up to 657,194 (650,544 at 31 July 2009
and 31 January 2010) shares were granted.
Matching awards and performance awards made during the period were valued at
£485,499 (£903,627 at 31 July 2009 and £901,000 at 31 January 2010) and
£1,071,594 (£1,114,070 at 31 July 2009 and £1,110,000 at 31 January 2010)
respectively. The fair value of the awards was calculated using a binominal
methodology.
The cumulative charge to the income statement during the period for the cost of
the awards referred to above was £259,515 (£302,111 at 31 July 2009 and £893,000
at 31 January 2010) for the Group. Per IFRS 2 the costs of matching awards for
each plan are expensed over the three year performance period.
These costs are adjusted if certain vesting conditions are not met, for example
if a participant leaves before the end of the three year vesting period.
13 Bank Overdrafts and Loans
£000 As at As at As at
 31 July 2010 31 July 2009 31 January 2010
Bank loans repayable within one year 280,000 47,964 160,000
 --------- -------- --------
Analysis of borrowings by currency:
Bank loans - Sterling 280,000 - 160,000
Bank loans - Euro - 50,000 -
The weighted average % interest rates
payable:
Bank loans 1.61% 0.82% 1.22%
14 Share Capital
£000 As at As at As at
 31 July 2010 31 July 2009 31 January 2010
Authorised:
- 720,000,000 ordinary shares of 2.5p 18,000 18,000 18,000
each
Allotted, called up and fully paid:
- 661,059,760 ordinary shares of 2.5p 16,527 16,798 16,677
each
Share Buy Back
During the period the Company bought back and cancelled 6,000,000 ordinary
shares with a nominal value of £150,000 at a cost of £19.8m. The cost of
acquiring the shares together with associated transaction costs has been
deducted from capital reserves. Share capital has also been reduced by the
nominal value of the shares bought back with an equivalent entry made to the
capital redemption reserve.
[HUG#1446887]
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. 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
Friday, 10th January 2025
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