New Alliance Trust chairman Robert Smith on Friday vowed to address the lack of gender diversity on the Dundee-based investment firm’s plc board as he delivered his first chairman’s statement to accompany the firm’s annual results.
In a traumatic year for Alliance Trust, total 2015 group revenue fell to £200.2 million from £273.9 million in 2014 and pre-tax profit plunged to £145 million from £228.5 million in 2014.
Alliance Trust has long been under pressure from US activist shareholder Elliott Advisors to restructure.
Previous chair Karin Forseke departed on January 1, and Katherine Garrett-Cox, chief executive of subsidiary Alliance Trust Investments (ATI), will stand down as chief executive of ATI on March 11.
Susan Noble left the Alliance Trust plc board in February to become chairman of the Alliance Trust Investments subsidiary.
“I am acutely aware of the lack of gender diversity on the current board as a result of the recent changes,” said Smith.
“Alliance Trust has long been a leader in the area of board diversity, and this is an issue which I am determined to address at the earliest opportunity.”
For 2015, Alliance Trust Investments (ATI) generated net inflows of £81 million, ending the year with third party assets under management of £2.1 billion. Losses were reduced by 36% to £2.1 million.
Following ATI’s appointment as investment manager for Alliance Trust plc, total assets under management now stand at around £5 billion.
The year-end discount at Alliance Trust — the amount by which the share price trails the net asset value (NAV) — improved to 8.1% from 12.4% a year earlier.
Alliance Trust bought back 4.9% of the company’s shares between October 1 and December 31, which helped the discount to narrow.
Total dividend was 12.43p, up 0.4% on 2014 — meaning a 49th year of consecutive dividend increases.
Equities (company stocks) made up 89% of the firm’s total investments at the year end.
Alliance said its equity portfolio finished the year 2.2% ahead of the MSCI All Country World Index.
It said its top stock performers were Visa, Walt Disney, Nasdaq, data firm Equinix and consulting firm Accenture.
Among its problematic stocks were Dutch insurer Delta Lloyd and Brazilian brewer Ambev.
Alliance’s biggest 10 holdings — in terms of percentage of its portfolio — were Visa, Pfizer, Accenture, Prudential, Walt Disney, Amgen, Wells Fargo, CVS Health, Australian healthcare firm CSL, and National Grid.
Alliance Trust, which has been under prolonged pressure from US hedge fund Elliott Advisors to restructure, said in November that previous chair Forseke would leave her post on January 1, 2016.
Forseke’s departure followed big changes at Alliance Trust in October 2015 which included Garrett-Cox stepping down as chief executive of Alliance’s parent company but remaining as boss of its fund management subsidiary ATI.
Then, last month, it was announced Garrett-Cox would leave the company altogether.
“2015 was an eventful year for Alliance Trust and highlighted that shareholders expected change,” said Smith.
“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.”
Read Alliance Trust plc’s full 2015 final results below –