Dundee investment firm Alliance Trust has held an annual general meeting for more than 100 years – but this was the first to be interrupted with the offer of a museum tour.
This year’s AGM was held at V&A Dundee where, despite the tannoy announcement, all shareholder resolutions were passed.
And, fitting for a meeting held in an architectural landmark, shareholders were told the company had the building blocks for strong performance in the future.
Addressing around 100 people at the 135th AGM, chairman Gregor Stewart said the firm had outperformed its competitors last year.
He said: “Overall, against a background of a very challenging year for global equity markets, the company delivered a performance which was ahead of most of its peers and which was more resilient than the market itself.
“The company’s net asset total return for the year was minus 7.1% and its total shareholder return was minus 5.8%. The average total shareholder return of the peer group was minus 23.2% and our benchmark index returned minus 8.1%.
“It’s pleasing to report that this outperformance has continued into 2023.
“While any negative annual return is frustrating we remain focused on long-term financial performance.”
Alliance Trust AGM in Dundee
Mr Stewart said he was pleased the company’s track record of increasing dividends has now been extended to 56 years.
He noted that 2022’s dividend payment was covered by income from its multi-billion-pound portfolio.
However, he warned income may drop this year.
He added: “We expect to further extend this track record (of increasing dividends) and provide shareholders with a real return through a combination of capital growth and a rising dividend.
“Income from stocks in the company’s portfolio was particularly high in 2022 largely due to increasing dividends from companies in the energy sector.
“The dividend was fully covered by income generated in the year. Surplus income was added to our revenue reserves. The same level of income may not continue in 2023.
“However, the company has significant distributable reserves of £2.9 billion. We will continue to use both investment income and reserves when appropriate to fund dividend payments.”
Share buyback
During last year the company purchased 5% of its stock in a buyback programme which has continued this year.
Craig Baker, from Willis Towers Watson, which oversees the stock pickers investing the Alliance Trust portfolio, was hopeful of another good year of performance.
He said: “So many of the stock pickers in the portfolio are genuinely excited.
“They are saying they are investing in companies that are beating expectations in earnings but despite some of them doing that some of them have halved in value because of what has happened to interest rates in the short term.
“They are saying there’s an enormous amount of latent value.”
Referring to a uncertain investing environment, he added: “Volatility creates opportunity.”
Conversation