Alliance Trust increases dividend

Investment trust Alliance Trust has announced an increase in its full-year dividend of 7.2%, to 9p.

Katherine Garrett-Cox
Katherine Garrett-Cox

In its final results, the trust say the discount has narrowed from 17.1% to 15.5% in the 11 months to December 31 2011.

Katherine Garrett-Cox, chief executive of Alliance Trust, says: “We have generated returns well ahead of the sector as a whole and, crucially for our long-term investors, we have been able to grow the dividend by over 7%, the largest annual increase in twenty years and we have done so out of current year earnings.

“Despite the rally over the last three months, equity markets have been and remain as challenging as at any time in generations.

“We have witnessed a perfect storm created by the global financial crisis which has culminated in the recent uncertainty within the eurozone, the increased dependence on sovereign debt and the need to substitute consumer demand from the West with that from the Far East.”

She adds: “Going forward, we see continued high levels of volatility and pressure on margins and corporate earnings which will present challenges for investors.

“Despite this, in certain cases corporate balance sheets look extremely robust and there are opportunities out there to invest in world class companies at attractive valuations. Consequently, we continue to favour equities as an asset class and continue to invest in companies which we are confident will ride out the storm on the back of their competitive advantage and strong management.”

The investment trust says its Alliance Trust Savings platform had reduced losses to £3.1m, while it confirmed its rebrand of Alliance Trust Asset Management as Alliance Trust Investments.

In its results, the investment trust’s board says it would not take a political stance in the Scottish parliament’s proposal to hold a referendum on independence.