A new seven year strategic vision to deliver long-term growth was outlined to Alliance Trust shareholders yesterday.
Investors who gathered for the Dundee headquartered Trust’s annual meeting yesterday were told the board had spent months mapping out a new pathway for the FTSE 250 firm.
Chairman Karin Forseke said the Vision 2020 strategy was “key to the future development of Alliance Trust” and would position the company as a “leading investment and savings business.”
The plan followed a significant realigning of the Trust’s main equity portfolio in 2012, a major restructuring of Alliance Trust Savings and continued progress within the loss-making Investments division.
Details of the “ambitious but attainable” plan were contained within the Trust’s revamped annual report which was published in March.
But Ms Forseke said the AGM – held at Dundee’s Gardyne Theatre – had been the first opportunity for the board to communicate direct with the shareholder base.
“We took our time to focus on our long-term strategy, took a real look at where we were going and what we wanted to achieve and questioned and challenged the whole of our business.
“Vision 2020 is our strategy for the next seven years and is designed to consolidate our reputation as a widely respected business.”
In an interim statement yesterday, the company outlined its trading performance in the three months to March 31.
While the share price edged ahead 0.9% in the period to 454.3p, net asset value (NAV) per share fell by 1.3% from 516.5p at December 31 to 508.5p. The discount continued to narrow in the quarter from 12.9% at year end to 10.7%.
The Trust said that towards the end of the quarter NAV had been hit by its exposure to the UK insurance market which had been impacted by regulatory changes announced by the Financial Conduct Authority.
Chief Financial Officer Alan Trotter said Trust-derived revenues had increased by almost £10 million to £89.9m in 2013, as a result of increased exposure to equities.
He also told investors that significant progress had been made in both the Investments (ATI) and Savings (ATS) businesses during 2013.
The ATI arm saw losses narrow from £6.6m to £4.2m in the period while revenues climbed 142% from £3.8m to £9.2m, primarily as a result of a deal with Aviva Investors over £1.2 billion of third-party assets.
In the first quarter of 2014, ATI saw net business inflows of £22m, with managed assets now totalling £2.2bn.
ATS booked an operating profit of £400,000 in 2013 – a turnaround of the same size of loss in 2012 – as revenues moved ahead from £9.6m to £10.9m. Total asset under administration were £5.4bn at year end.
The Trust said the division had enjoyed a “positive impact” from its flat-fee structure in the first quarter of the current year with overall new business up 45% on 2013. The uplift came in spite of a 56% increase in costs related to ISAs and 15% rise in SIPP charges introduced on February 1.
“ATS is operating in a market which is expected to grow by 20% per annum, helped by the most radical shake-up in pensions in a generation which was announced in the last Budget. We see that 2014 is going to be about growth,” the company said in its update.
The Trust said Q1 2014 had been “challenging” for stock pickers due to “considerable sector rotation, volatility and unexpected external factors” such as the political situation in the Ukraine.
“For investors this emphasises how important it is to remain focused on the factors that drive stock specific returns over the medium to long term,” the Trust said.
Shares in the company closed the day 0.7% ahead at 442.7p.