alliance trust plc 127th annual general meeting katherine garrett-cox chief executive 29 april 2015
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Alliance Trust PLC127th Annual General Meeting
Katherine Garrett-CoxChief Executive
29 April 2015
Our vision
To be the UK’s most trusted investment and savings business by:
• Delivering consistently good investment performance and a growing dividend
• Regenerating our investor base to increase shareholder demand
• Ensuring that the subsidiary businesses add long-term value to the Trust
Creation of wealth and the preservation of capital
Company highlights
Outcomes in 2014 Year end
• Performance • Total shareholder return: 9.0% 478.9p
• NAV total return: 8.1% 546.8p
• Ongoing Charges Ratio: 0.60%
• Dividend • Ordinary dividend: 9.834p (3%)
• Special dividend: 2.546p
• Total dividend: 12.38p (14.3%)
• 48th consecutive year of dividend increase
Delivering consistent returns and top quartile dividend growth
Source: Alliance Trust
Subsidiary highlights
Outcomes in 2014 – Alliance Trust Savings
• Profit from continuing operations £200k
• Assets under administration as at 31 December 2014 £6.4bn (+19%)
• Fair value £31.6m (+18%)
Outcomes in 2014 – Alliance Trust Investments
• 3rd party assets under management £1.9bn (+6%)
• 4th consecutive year of net inflows
• Funds ranked in top or 2nd quartile over 3 years 80%
• Fair value £24.3m (+90%)
Source: Alliance Trust
Contribution analysis for 2014
Contribution Analysis (%)Average
WeightRate of Return
Contribution toTotal Return
Equities 97.7 6.9 6.9
Fixed Income 6.6 5.1 0.4
Private Equity 4.3 10.5 0.5
Mineral Rights 0.5 126.6 0.6
Alliance Trust Savings 0.9 4.9 0.0
Alliance Trust Investments 0.4 62.4 0.3
Other Investments, cash & accruals 2.8 n/a 0.2
Gearing -13.2 1.9 -0.3
Expenses -0.7
Share Buybacks 0.2
NAV Total Return 8.1
Source: Alliance Trust and FactSet
Progressive dividend growth
• Effective yield of 2.6% – one of the highest in the sector
• Compound annual growth rate of 8.7% over 5 years (RPI = 3.5%)
• Top quartile dividend growth over 1,3,5 years and ahead of inflation
The growth in the ordinary dividend and RPI is rebased to 100 at 31 January 1968. Source: Alliance Trust & FactSet* To 31 January 1968-2011 † To 31 December 2011-2014
Alliance Trust – a distinctive investment approach
• Experienced investment team with a clear, differentiated strategy and a sustained track record of outperformance
• Investing in well-managed businesses, for the long term
• Businesses that are more sustainable are better placed to grow faster than the market
• Our expertise and understanding of social and environmental issues gives investors the opportunity to maximise returns
There is sense in sustainability, delivering quality, growth & income
Investment process
• Identify high quality companies from around the world, with strong long-term prospects
• Select those which are significantly undervalued
• Construct a high conviction, diversified portfolio
To generate growth of capital and income
Source: Alliance Trust
Key investment themes
Climate Change
Quality of Life
Sustainable Consumption
Resilience
Sectors: Transport, Energy, IT, Automotive, Construction
Sectors: Healthcare, Food Producers, Education
Sectors: Industrials, Utilities, Automotive, Transport, Chemicals
Sectors: IT, Retail, Automotive, Finance, Testing Companies
Source: Alliance Trust
Alliance Trust Savings – the strategy & opportunity
Objective: Grow assets under administration from £6.4bn to £45bn by 2020
•Individuals have more financial responsibility – ATS well positioned
•Excellent customer service, broad investment choice for a fixed cost
•Delivered through a combination of organic and inorganic growth
•Alliance Trust Savings will represent a more significant part of the Net Asset Value
Objective: Grow assets under management from £2bn to £10bn by 2020
•Attract retail and institutional clients
•Deliver through a combination of organic and inorganic growth
•Promote sustainability as a point of competitive advantage
•Deliver investment strategies with consistent performance
•Reducing the Ongoing Charges Ratio of the Trust
Alliance Trust Investments – the strategy and opportunity
Source: Alliance Trust Investments
Generating long-term consistent returns
Total Shareholder Return
Peer group quartile ranking 31 March 2015
Total Shareholder
Return
NAVTotal
Return
6 months Q2 Q1
1 year Q2 Q1
3 years Q3 Q2
5 years Q2 Q3
Note: Peer group made up of Morningstar Global Sector constituentsSource: Alliance Trust, FactSet & Morningstar. Prices & Index rebased to 100 at 30 August 2008. Data as at 31 March 2015
Risk-adjusted returns
Source: Morningstar. Time period 01/04/2010 to 31/03/2015
• Generating superior reward per unit of risk
• Top quartile ranking in 4 out of the last 6 quarters
• Top half returns vs peer group in all but one quarter over the last 5 years
Market outlook
What Alliance Trust stands for
The Company has demonstrated:
• Resilience: through our long-term approach to investing, providing financial security
• Relevance: by constantly adapting to the ever changing world around us
• Responsible behaviour: both in terms of how we invest and how we do business
Investing for generations
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