Alliance Trust PLC 6 March 2020 Outperformance in 2019 Results for the year ended 31 December 2019 Financial Highlights As at 31 Dec 2019 As at 31 Dec 2018 Year-on-year change Share price 840.0p 688.0p +22.1% NAV per share 2 875.9p 723.6p +21.0% Total dividend 2 13.96p 13.55p +3.0% Performance Highlights - In 2019, the Trust’s Total Shareholder Return 1 for 2019 was 24.3% (2018: -6.1%) and the Trust’s Net Asset Value (NAV) Total Return 1 was 23.1% (2018: - 5.4%) versus 21.7% (2018: -3.3%) for its benchmark, the MSCI All Country World Index (MSCI ACWI) - Since the appointment of Willis Towers Watson (WTW) as the Trust’s Investment Manager in April 2017, the Total Shareholder Return was 28.9% and the Trust’s NAV Total Return was 27.1%, outperforming the MSCI ACWI which returned 25.5% - The Trust’s Equity Portfolio Total Return, before fees, since the appointment of WTW was 29.2%, 3.7% ahead of the MSCI ACWI. This is an approximation of what the Trust’s NAV Total Return would have been between the appointment of WTW and 31 December 2019 had the Trust not held the non-core investments and subsidiaries which have now been sold - Ongoing Charges Ratio (OCR) 1 for 2019 was 0.64%, down from 0.65% in 2018 - The year began with the Trust’s shares trading at a discount of 4.9% and ended 2019 at a discount of 4.1%. The Trust bought back 4.6m shares in 2019 compared to 14.0m in 2018 - The Trust raised its total ordinary dividend for 2019 by 3.0% to 13.96p, marking the 53 rd consecutive annual increase. Gregor Stewart, Chairman of Alliance Trust PLC commented: “I am pleased to report that 2019 was a good year for the Trust; it outperformed its benchmark and many of our peers, despite political and macroeconomic headwinds. We have increased the dividend for the 53 rd consecutive year, raising it by 3.0%. In 2019, our Total Shareholder Return was 24.3% and our NAV Total Return was 23.1%, versus 21.7% for our benchmark, the MSCI ACWI and a median return of 22.4% for our peers*. “Our investment strategy has also performed well since WTW was appointed in April 2017, delivering a Total Shareholder Return of 28.9% and a NAV Total Return of 27.1% versus 25.5% for the MSCI ACWI. “During 2019, we completed the simplification of the Trust by selling our subsidiary, Alliance Trust Savings, and virtually all our remaining non-core assets. As a result, we are now fully focused on global equities, something the Board has been working towards for the last four years. We expect the Trust’s new streamlined structure to lead to continued improvement in returns to shareholders, making us an attractive core holding for generations of investors for many years to come.” 1. Alternative Performance Measure 2. GAAP Measure * Peer group is the Morningstar universe of UK retail global equity funds (closed and open ended). About Alliance Trust PLC Alliance Trust aims to deliver long-term capital growth and rising income from investing in global equities at a competitive cost. We blend the top stock selections of some of the world’s best active managers, as rated by Willis Towers Watson, into a single diversified portfolio designed to outperform the market while carefully managing risk and volatility. Alliance Trust is an AIC Dividend Hero with 53 consecutive years of rising dividends. https://www.alliancetrust.co.uk
For more information, please contact: Mark Atkinson Head of Marketing and Investor Sarah Gibbons-Cook Relations Alliance Trust PLC Quill PR Tel: 07918 724303 Tel: 020 7466 5050 / AllianceTrust@quillpr.com -ENDS- CHAIRMAN’S STATEMENT “I am delighted that in my first Chairman’s Statement I can report that 2019 was a good year for the Trust, despite these unusual and uncertain times overshadowed by Brexit and now the coronavirus. We saw strong returns from our investments, outperforming our benchmark and our peers not only over the last 12 months but also since we adopted our multi-manager strategy in April 2017. We have also increased our ordinary dividend for the past 53 years. Virtually all of our non-core investments have been sold; the Trust is now well-positioned for continued outperformance.” The Trust delivered a strong investment performance in 2019. We ended the year with a NAV Total Return of 23.1% and a Total Shareholder Return (TSR) of 24.3%; our benchmark index, the MSCI ACWI, returned 21.7%. The main reason for this, which is explained in more detail in our Investment Manager’s report, is down to the performance of the stocks selected by our nine Stock Pickers. We are a long-term investor so we do not want to concentrate too much on performance over 12 months. Our multi-manager approach is also delivering over a longer period. Between 1 April 2017, when we appointed WTW as our Investment Manager and 31 December 2019, our NAV Total Return was 27.1% and our TSR was 28.9%, both comfortably ahead of the MSCI ACWI which returned 25.5% for the same period. On page 8 of the Annual Report we provide an estimate of how the Trust would have performed had we not owned Alliance Trust Savings or held the non-core investments, which we have now sold. COMMITTING TO AN INCREASING DIVIDEND I am pleased to report that we are declaring a fourth interim dividend for 2019 of 3.49p per share. This brings the total dividend for the year to 13.96p, an increase of 3% on last year. The Trust has increased its ordinary dividend for the past 53 years and the Board expects this to continue. The Trust has strong revenue reserves from which it can continue to pay dividends even if there should be a shortfall in the income from our portfolio in any year. To further strengthen our dividend coverage and provide the potential to increase dividends, we are asking shareholders to approve a conversion of our Merger Reserve to a distributable reserve; if successful this change will mean we will have an additional £645.3m available to support increased dividend levels in the future. We will also be giving our shareholders the opportunity to approve our progressive Dividend Policy. We report in more detail on page 35 of the Annual Report. We are introducing a Dividend Reinvestment Plan which will be administered by our Registrars. This will be available for the June 2020 dividend and shareholders will be able to join the Plan from 31 March 2020. This will enable shareholders to increase their holding in the Trust in a cost-effective way. NARROWING OUR DISCOUNT We increased our focus on the Trust’s sales, marketing and investor relations activities in 2019 and we have seen demand for the Trust’s shares from existing as well as new investors. These activities included an increased number of meetings with shareholders and potential shareholders, which helped us maintain our understanding of the needs of investors. The increased demand for shares will naturally narrow the discount at which our shares trade, thereby benefitting existing shareholders. This focus will continue in 2020. During 2019, the Trust bought back a total of only 4.6m shares compared to 14.0m in 2018 and added £1.9m to the Net Asset Value for remaining shareholders. The average discount for the year was 5.0% and we ended the year at 4.1% (4.9% in 2018). While I am pleased at the progress made to date, we expect to see the discount narrow further as a result of continuing strong performance and increased demand. We report in more detail on our discount and share buyback activity on page 36 of the Annual Report.
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