The Courier & Advertiser (Angus and Dundee)
Jobs concern played down with potential Alliance sale
Expressions of interest over savings arm employing 250 people in city
The board of Alliance Trust is considering the future of its savings arm after receiving “a number of expressions of interest” in the business.
Alliance Trust Savings (ATS) employs more than 300 staff, with around 250 based at the trust’s main corporate headquarters at West Marketgait in Dundee.
Any sale of ATS would put a question mark over the workforce’s future, although the trust was keen to play down talk of potential job losses.
“We have received a number of expressions of interest in ATS and are currently considering whether a change of ownership would be in the interests of Alliance Trust shareholders and ATS’S customers and staff,” said chairman Lord Smith of Kelvin, as the group published its half-year trading figures.
“Discussions with interested parties, each of whom envisage maintaining or growing ATS’S presence in Dundee, are at an early stage and there can be no certainty that the board of Alliance Trust will decide to sell ATS.”
ATS is the trust’s sole trading subsidiary following the sale of Alliance Trust Investments to Liontrust Asset Management last year.
In March the group said ATS had suffered a “poor financial performance” in 2017, as the unit turned in a £19.3 million full year operating loss.
The downturn saw the trust’s board moved to write down the fair value of the business by £23.5 million to £38m.
ATS’S lacklustre performance was the subject of significant ire at the trust’s AGM in April as investors questioned the continued financial support offered to the business and flagged poor customer service levels.
At the time, deputy chairman Gregor Stewart said many of the problems had stemmed from transferring operations to Dundee in the first half of 2017 and logistical issues surrounding the integration of the Stocktrade platform.
Stewart said yesterday that ATS had since stabilised, moving back into the black with a marginal £23,000 operating profit in the first half of 2018.
The business has 110,000 customers and has grown its assets under management to above £16 billion.
“We have received a number of expressions of interest in that business (ATS), given the attractiveness of the business and the attractiveness of the sector,” Mr Stewart said.
“As a plc, we are duty-bound to review these. We are currently at the early stage of reviewing these and considering whether a change would be in the interests of shareholders, customers and staff.”
The wider update shows the trust produced a total shareholder return of 1.1% in the first half of the year and a net asset value total return of 2.9%.
The equity portfolio total return for the period was 2.9%, ahead of its benchmark index return of 2.3%.
The trust said the equity portfolio – which relates to 95% of the group’s assets and which has been under third party management since April last year when Willis Towers Watson was appointed – is on track to deliver the targeted 2% outperformance of benchmarks over a rolling three-year period.
The trust declared an interim dividend of 3.389 pence for the half year, keeping up its more than 50-year record of successive dividend growth.
Lord Smith said: “Although the shortterm market future looks set to remain uncertain, we remain focused on consistent outperformance over the long-term, at a competitive cost.
“We are encouraged by the steady progress made by WTW’S all-weather approach to active stock picking.
“Our diversified, high-conviction portfolio is designed to deliver consistent outperformance, irrespective of the dominant drivers of returns in any given period, with low volatility.”