24 September 2007
ALLIANCE TRUST NET ASSET VALUE RISES AS
CHOPPY MARKETS OPEN UP OPPORTUNITIES
·
Company
net asset value up 3.1%
·
Equity
portfolio rose 3.4%
·
Greater
volatility on stock markets led to buying opportunities
·
Investment
increased in private equity and property
·
Subsidiaries
revenue up with over 10% growth in SIPP business in the six months to 31 July
2007.
Alliance Trust PLC, announced today that the net asset value of the Company
rose 3.1% to £2,915m in the six months to 31 July 2007.
Consolidated profit before tax for the period rose to £117m, made up of
a £81.5m net capital appreciation on the group’s assets as well as net revenue
of £35.5m. This compares with a figure of £33.0m for the same period in the
last financial year, made up of £2.4m net capital appreciation and £30.6m of
net revenue
Gains on stock market investments boosted capital income although our
decision last year to reduce equity exposure dampened short-term gains. The
value of the quoted equity portfolio rose 3.4% led by strong absolute gains in
Asia-Pacific, up 15.3%, and UK Small Cap, which climbed 4.2%. This was offset
by a drop in
The Company continued to diversify assets across different asset classes
over the half year. At the end of the period, 86.5% of the Company’s assets
were invested in quoted equities, with 4.2% in private equity, 3.5% in
property, 3.3% in cash and other net assets, 0.9% in fixed income and 1.6% in
subsidiaries.
Chief Executive Alan Harden said, “We
enjoyed steady growth over the six months despite some sharp moves on the stock
market in late February and late July. More importantly, we acted boldly as
value started to emerge in the quoted equity markets where we were a decisive
and active buyer, particularly at the end of the period and afterwards. We also
made good progress in our objective of diversification, increasing our exposure
to private equity and property. We
continued to invest in our people and our business to build even stronger,
complementary income streams and drive improved performance over the
long-term.”
“We remain convinced the best use of
company capital is to continue seeking diversification of our assets beyond
quoted equities into areas such as commercial property with strong rental yield,
venture capital or private equity partnerships with prospects for medium and
long-term growth and returns, and our fast-growing subsidiaries, which can
generate fees and revenue that are not directly correlated with the stock
markets. Investing in our financial services businesses and building up
specialist teams in asset classes such as property and private equity is a
long-term strategy. Although markets are still struggling with uncertainty, we
are confident that this strategy is positioning our group well for long-term
growth with a solid portfolio of quality stocks and specialist investment
opportunities.”
Chief Investment Officer Katherine Garrett-Cox said, “Fairly flat returns for equity markets over
the period masked periods of extreme volatility. We took decisive action as
opportunities emerged and investors began pricing risk back into the market. We
reinvested some of the cash we generated by reducing our equity exposure last
year, when we anticipated this sea-change in attitudes to risk, cutting our
cash holding in the company from over 7% of net assets at the start of the
period to just over 3% at the end. We have since moved further, taking gearing
of up to 5% to acquire stocks we believe present real long-term value. Since our
objective is to provide real growth we have the flexibility to pinpoint exactly
those assets we believe will deliver real long-term growth in income and
capital. We used the freedom this gives us to cut our holding in
Notes to editors
1.
Alliance
Trust PLC has been investing since 1888 and is the largest generalist
2.
On 21 June 2006 the merger with the Second Alliance
Trust became effective and the Company divided its ordinary shares on the basis
of ten new shares for every one previously held. Reported earnings, NAV and
dividends per share for the periods prior to the merger have been restated to
reflect the ten for one subdivision of the Company’s shares.
3.
In
the six months to 31 July 2007, the FTSE All-Share returned 2.4% and the FTSE
All-World Index returned 2.3%. The UK Retail Price Index was up 2.2% in the
same period. At the end of July 2007, 86.5% of the company’s capital was
invested in quoted equities. Within the quoted equities portfolio,
approximately half was invested in
4.
In
November 2006, Alliance Trust acquired Albany Ventures Managers (Holdings)
Limited, a private equity business that specialises in early stage technology
and life sciences. The asset management business also includes AT Asset
Management (Asia-Pacific) Limited. This subsidiary manages the portfolios of
two open-ended investment companies, Premier Alliance Trust Asia-Pacific Equity
Fund and Premier Alliance Trust Japan Equity Fund that were launched in
November 2006.
5.
Photographs
of Alan Harden and Katherine Garrett-Cox are available.