Alliance Trust ups dividend on solid results after turbulent year

Catherine Neilan
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It's been a rollercoaster year for Alliance Trust investors (Source: Getty)

Alliance Trust has upped its dividend for the 49th year in a row, shrugging off one of the most turbulent periods in its 128-year history.

The figures

The iconic investment trust generated a total shareholder return of 10.7 per cent in the year to 31 December, with a net asset value (NAV) total return of 5.4 per cent. That compared with the benchmark MSCI ACWI return of 3.8 per cent.

The trust has also managed to narrow its discount to 8.1 per cent, down from 12.4 per cent last year. It attracted net inflows of £81m, ending the year with third party assets under management of £2.1bn. Total AUM stands at around £5bn. Losses were reduced by 36 per cent to £2.1m.

And, Alliance Trust will pay out a total dividend of 12.43p per share, up 0.4 per cent on 2014.

Management said it was on track to reach its target charges ratio of 0.45 per cent by the end of this year, making it one of the lowest in the global investment trust sector.

Why it's interesting

It's been quite a year for the investment trust, involving wrangling with activist investors Elliot Advisors, before eventually agreeing a truce. But the turbulence didn't end there.

There was a historic board shake-up, which resulted in the departure of Katherine Garrett-Cox (not once but twice) and huge changes made to the way the business operates.

After all that, the business now has to put its money where its mouth is and show investors that it can do what it has set out.

What Alliance Trust said

Chairman Lord Smith of Kelvin said: "2015 was an eventful year for Alliance Trust and highlighted that shareholders expected change. In order to deliver this, we set out a package of changes on 1 October to enhance shareholder value and the process to implement them is well under way.

"We have already made good progress. In particular, the investment team is continuing to deliver improved investment returns, significantly outperforming the benchmark. At the same time the discount to NAV has narrowed and we are on target to achieve our cost cutting objectives."

In short

Alliance Trust has been through a turbulent year but its results are encouraging.

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