Half-yearly report
19 September 2011
Alliance Trust PLC
Interim Results for the six months ended 31 July 2011
Financial Highlights As at 31 July 2011 Total Return
Share Price 370.8p 3.1%
NAV Per Share 439.2p 0.7%
Company Highlights
Alliance Trust delivered strong investment performance in the six months, with
TSR of 3.1%, outperforming both the FTSE All-World (-0.8%) and FTSE All-Share
(+1.2%) indices
· 5 out of 6 of the regional portfolios outperformed their benchmark,
representing over 70% of the assets of the Trust
· Projecting a full year dividend of 8.564p*, representing the 45th consecutive
year of dividend growth
Asset allocation decisions have contributed positively to investment performance
· Raised cash ahead of market falls
Discount volatility reduced as a result of our active buyback policy
· 39.9m shares (6.0% of issued share capital) bought back in the period
Commenting on the results, Katherine Garrett-Cox, Chief Executive, said:
"Over the period, Alliance Trust has delivered consistent outperformance and
Total Shareholder Return of more than 3%. In these extremely tough market
conditions, when investors are looking for durability of performance and
visibility of the dividend, we have successfully diversified our income
generation globally. Furthermore, we have demonstrated our commitment to
reducing uncertainty around the discount, maintaining a more active share
buyback policy and focusing on improving investment performance.
There is no doubt that the global macro picture will remain unstable in the near
term, with the Eurozone crisis moving particularly quickly at present. However,
I strongly believe that these conditions can provide real investment
opportunities for long-term stock pickers such as Alliance Trust. We will
continue to invest in solid, well-managed companies which are focused on
creating value for shareholders."
* In the absence of any unforeseen circumstances a dividend of at least this
amount will be paid for the period to 31 December 2011
For more information please contact:
James Leviton and Clare Dundas
Finsbury Group
020 7251 3801
Evan Bruce Gardyne
Head of Investor Relations, Alliance Trust
01382 321169
Mobile: 07501 500243
Alliance Trust Interim Report 2011
Highlights
* Total Shareholder Return for period +3.1% against a backdrop of FTSE All-
World -0.8%
* Ranked 7/34 of Peer Group for TSR and 16/34 for NAV return over the period*
* 5 out of 6 regional equity portfolio managers outperformed their benchmarks
* Net gearing reduced to 7.6% in advance of market falls
* Highest ever closing Share Price (392.7p) in July 2011
* Over 39.9 million shares (6% of share capital) bought back during the
period
* 97% of net assets in equities at the beginning of the period reducing to
95% at period end
* Third party assets under management rose by 48% during the period
* Revenues at Alliance Trust Savings increased by 18% year on year
*Source:Morningstar
Performance Summary
This interim report sets out the results of Alliance Trust PLC for the six
months ended 31 July 2011.
Over the past six months the total return of the Company's Net Asset Value (NAV)
per share was 0.7%. This NAV return was broadly in line with the sector average
and we were ranked 16/34 in our peer group.
The Total Shareholder Return (TSR) was 3.1%, which compares favourably to the
return of the FTSE All-World Index, which fell by 0.8%, and the FTSE All-Share
Index which rose by 1.2%, over the period. The TSR return was ranked 7/34 in our
peer group.
The discount ended the period at 15.6%, compared to 17.1% at the start of the
year. Since the middle of April the discount has largely traded between 14% and
16%.
Significantly better returns were achieved by five of our six regional equity
portfolios - each of our UK, European, Asian, Global and Emerging Markets
portfolios outperformed their respective benchmarks. Stock selection was a
meaningful contributor to regional performance. In North America, we held the
view that cyclical companies were overpriced and positioned our holdings
accordingly. Although returns from the portfolio were below those of the
benchmark over the period, it has been well positioned to ride the turmoil we
have witnessed in equity markets since early July and relative performance since
the period end has been strong.
In advance of the falls in the markets in July, we reduced our equity exposure
from 99% of net assets at the end of June to 95% because of our concerns about
the sustainability of equity market levels and the likely impact of
deteriorating global economic factors. We also reduced our gearing by £79
million, taking gearing to its lowest level in over a year.
Our investment strategy aims to allocate resources to undervalued regions within
a controlled risk framework. While maintaining our positive view of the longer-
term growth prospects for Asian economies, our largest allocation moves in the
past six months have been to reduce our risk exposure to the region by 3% early
in the period, and by a further 2% in July. Asian equities accounted for around
16% of our equity portfolio at the period end.
As at 31 July 2011 the Company's net assets were allocated thus:-
+---------------------------------------+------+
| Quoted Equities | 95% |
+---------------------------------------+------+
| Fixed Income | 5% |
+---------------------------------------+------+
| Private Equity | 4% |
+---------------------------------------+------+
| Other Assets (including subsidiaries) | 3% |
+---------------------------------------+------+
| Property | 1% |
+---------------------------------------+------+
| Gearing | (8)% |
+---------------------------------------+------+
Key Priorities
In our Annual Report and Accounts we set five key priorities for the year.
Progress towards these, after six months, is as follows.
· To focus on investment in equities
Quoted equities represented over 95% of net assets at the end of the period. We
have maintained a high weighting in equities throughout the period, which was
beneficial to performance. The best returns within our global equity
investments, in both absolute and relative terms, came from our UK, Global and
European portfolios.
Net debt amounted to £207.4 million (7.6% of net assets versus 10.8% at 31
January 2011).
In other asset classes, we announced in March our intention to close Alliance
Trust Equity Partners and to realise our private equity holdings in an orderly
fashion. By the end of the period we had reduced the total committed to private
equity funds and co-investments from £308.1 million to £221 million, following
the disposal of four fund holdings at a premium to their 31 December 2010 NAV.
· To continue to improve investment performance
Investment performance continues to be our top priority. It is encouraging to
report that the measures which we have taken to strengthen the capability of our
equity investment team are flowing through to investment performance. The
ranking of the Trust's NAV return in its peer group improved to 16/34 for the
six month period ended 31 July 2011, compared to 20/34 for the comparable period
last year. All but one of our regional portfolios outperformed their respective
benchmarks with the contribution from stock selection demonstrating the stock-
picking skills of our investment managers, supported by a rigorous investment
process.
· To manage our cost base in line with market conditions
We remain conscious of prevailing market conditions and the requirement to apply
strict cost controls across the business, which has led to a 1.4% decrease in
the level of consolidated expenses for the first half of the year. Â Company
expenses have increased by 3.8% to £8.1 million, largely as a result of
necessary expenses associated with the closure of our private equity business
and with the additional professional fees associated with the AGM requisitions
submitted by Laxey Partners in December 2010.
· To develop our subsidiary businesses
Alliance Trust Asset Management has experienced strong growth with third party
assets under management rising from £83 million at 31 January 2011 to £123
million at the end of the period. This growth reflects the extension of our
distribution reach to financial intermediaries and fund platforms in addition to
our core targets of discretionary fund buyers. Our funds are now listed on a
growing number of the major fund platforms in the UK. The Alliance Trust Monthly
Income Bond Fund has attracted significant inflows at a time when the Sterling
Corporate Bond sector, in which the Fund is classified, has reported net
redemptions. Â The gross annual distribution yield of over 6% and the low
volatility of the Fund have appealed to investors seeking income in an
environment of continuing low deposit rates.
Alliance Trust Savings has continued to grow its business and to report strong
financial progress during the period. Â Revenues grew by 18%, while costs have
remained flat, delivering a further year-on-year reduction in losses of 42%. Â We
also re-priced our ISA product at the half year, the increased revenues from
which will start to flow through in the second half of the year and onwards. The
business launched its on-line transactional site for advisers and shortly after
the period end, has added over 21,000 international equities to its i.nvest
investment platform, making it one of the most comprehensive dealing platforms
in the UK. New account volumes continued to grow strongly with a 30% increase
reported in new accounts opened against the same period last year. This growth
continues. Business received from financial advisers has also grown solidly and
now represents 10% of volumes.
· To invest in the development of our people
We continue to strengthen our investment team, taking the decision to establish
a London-based Global Equities team which will enhance our capability to invest
across regions at the same time as supporting the development of our asset
management business. Having the majority of our investment professionals now
based in Edinburgh or London maximises our direct access to companies and
enables us to attract and retain high calibre investment professionals.
Investment Portfolio Statistics
Returns to 31 July 2011 (Sterling)
+------------+---------+---------------------------+---------------------------+
|Â |Â |Returns for 6 months to 31 | Returns for 12 months to |
| | | July 2011 | 31 July 2011 |
+------------+---------+---------+-----+-----------+---------+-----+-----------+
|Â |Â |Â |Â |Â |Â |Â |Â |
+------------+---------+---------+-----+-----------+---------+-----+-----------+
|Â |% of Net | Â | Â |Relative to| Â | Â |Relative to|
| |Assets |Portfolio|Index| Index|Portfolio|Index| Index|
| |31 July | (%)| (%)| (%)| (%)| (%)| (%)|
| |2011 | | | | | | |
+------------+---------+---------+-----+-----------+---------+-----+-----------+
|UK | 31.6| 2.2| 1.2| 0.9| 16.6| 14.9| 1.4|
+------------+---------+---------+-----+-----------+---------+-----+-----------+
|North | 24.5| (2.2)|(0.9)| (1.3)| 10.7| 15.4| (4.1)|
|America | | | | | | | |
+------------+---------+---------+-----+-----------+---------+-----+-----------+
|Asia | 15.8| 0.7|(0.3)| 1.0| 15.2| 13.3| 1.7|
+------------+---------+---------+-----+-----------+---------+-----+-----------+
|Europe | 13.7| 0.9|(1.7)| 2.6| 14.6| 12.6| 1.8|
+------------+---------+---------+-----+-----------+---------+-----+-----------+
|Emerging | 5.7| 0.6| 0.2| 0.4| 9.4| 10.4| (0.9)|
|Markets | | | | | | | |
+------------+---------+---------+-----+-----------+---------+-----+-----------+
|Global | 3.9| 3.1|(0.8)| 4.0| 15.8| 13.3| 2.2|
+------------+---------+---------+-----+-----------+---------+-----+-----------+
|Fixed | 4.7| 3.6| 6.2| (2.5)| 4.9| 8.1| (3.0)|
|Income* | | | | | | | |
+------------+---------+---------+-----+-----------+---------+-----+-----------+
* Based on the Company's holding in the Alliance Trust Monthly Income Bond Fund
Investment Overview
Over the period there have been a number of key events which have influenced
equity and bond markets and resulted in the volatile conditions which we
anticipated in our 2011 Annual Report. These included:
* Middle Eastern tensions which resulted in a flight to quality in government
bonds and developed market equities, as well as a spike in the oil price
which added to inflationary pressures on food and energy prices.
* The earthquake and subsequent tsunami in Japan which were human tragedies
from which it will take years to recover. The immediate and well co-
ordinated response to these disasters has shown how the global community can
assist in stabilising such situations.
* The European Sovereign Debt crisis which has been on the agenda throughout
the period and looks set to persist for some time yet.
* The debt ceiling problems in the US. Although resolved in the short term,
the fundamental structural issues of over-indebtedness in the US remain.
We began the period with historically high weightings in Asian economies and
Emerging Markets which offer some of the most attractive longer-term growth
opportunities. Following strong performance we reassessed the risk profile of
our regional allocation and rebalanced the portfolio by reducing our high
weighting in Asia, while adding to our US exposure.
We retained a balanced mix of cyclical and defensive growth companies across the
portfolio in the middle of the period, while taking advantage of specific themes
and valuation based regional opportunities. Net gearing was reduced to around
10% at this time.
Corporations are generally in good health, with strong balance sheets, but the
degree of macro level economic concerns and their possible impact on global
economic growth represent significant risks. In advance of these concerns taking
hold in late July, we reduced net gearing to 7.6%, which we assessed to be an
appropriate level in light of the uncertainties and risks being faced. This
reduction was implemented by selling some holdings in our Asian and Global
portfolios.
Investment Portfolio - Equities
UK
· Outperformance (1 Feb 11 - 31 July 11) 0.9%
· % of Net Assets (31 July 11) 31.6%
Our UK portfolio outperformed on a relative basis, returning 2.2% against the
1.2% return of its benchmark. Both sector allocation and stock selection
contributed to our returns.
The UK equity market had a lacklustre six months at index level, though the
modest total return from the index masks sharp underlying movements at both
stock and sector level.
We made several significant changes to the composition of our portfolio over the
period, including raising cash of over £31 million in February. We adopted a
slightly more defensive bias through reductions in holdings of cyclical and
Asian-exposed companies such as Informa, Xstrata, Rio Tinto and HSBC, and
increases in our exposure to companies with reliable levels of demand and higher
yields, for example Pearson, National Grid and RSA. This shift was also
reflected in the sales of our holdings in Barclays and Smiths Group and the
increase in our holding in BAE Systems. A position in BG Group was purchased as
we believe that the potential of its Brazilian and other exploration assets is
very attractive. Towards the end of the period we initiated a new holding in
Lloyds Banking Group: while the UK economic outlook remains challenging we
believe that Lloyds is very attractively valued and is being managed to create
increased shareholder value over the medium term.
North America
· Outperformance (1 Feb 11 - 31 July 11) (1.3)%
· % of Net Assets (31 July 11) 24.5%
Our North American portfolio lagged its benchmark, returning (2.2%) against the
index return of (0.9%). Our portfolio was positioned to favour defensive growth
companies whereas economically sensitive companies performed more strongly
through most of the period. Relative performance of the portfolio has improved
markedly in the volatile markets experienced since the period end, outperforming
its benchmark by 0.65% in August.
Corporate profits in North America continued to recover strongly as companies
kept a tight control on costs and benefited from an upturn in global growth.
During the period we added to holdings in some smaller companies, which we
expect to provide good future growth. Â An example is BE Aerospace which provides
seats and fittings for aircraft cabin interiors and is well placed for the new
generation of planes. We also added some large cap stocks where we saw strength
of businesses and strong balance sheets combined with particularly attractive
valuations. We added to Pfizer which, despite the pending Lipitor patent expiry,
has a healthy pipeline of new products. Caterpillar is a new holding and the
premier supplier of mining equipment after its acquisition of Bucyrus and should
benefit from significant plans for mine expansion in metals and oil sands. We
significantly increased our holding in Visa, in the financial sector, which
benefits from growing debit and credit card use in emerging markets. Sales
tended to be in stocks which we believed had limited growth prospects, such as
Republic Services, which still awaits a recovery in US construction, and Hologic
which is exposed to pressures in hospital spending.
Asia
· Outperformance (1 Feb 11 - 31 July 11) 1.0%
· % of Net Assets (31 July 11) 15.8%
Our Asian portfolio outperformed the benchmark with a rise of 0.7% against a
fall of 0.3% in its index. Over the course of the period, the bias of the Asian
portfolio has moved to be increasingly defensive through the reduction of basic
materials in favour of telecoms and utilities. This move has served us well.
The key events of the first six months in Japan were the earthquake and
subsequent tsunami which devastated areas in the north of the country and led to
severe supply chain disruptions, particularly in the auto sector. We continued
to move our focus away from the export-led developed markets of North Asia in
favour of the more domestically-orientated South East Asian markets of
Indonesia, Malaysia and Singapore. Their economies continue to exhibit strong
domestic demand, in terms of both consumption and investment.
Examples of additions to South East Asian holdings include Axiata Group (mobile
telecoms) in Malaysia, Glow Energy (utilities) in Thailand, and DBS Group
(banking) in Singapore. Â Sales in developed markets to fund these purchases were
made via the disposal of Macarthur Coal, which received a takeover approach, and
a reduction of BHP Billiton. Within the North Asian auto sector, the Korean
company Hyundai Motor and Japanese company Toyota were also sold. This, combined
with concerns over demand in the US and Europe, encouraged a shift in emphasis
away from autos and exporters in favour of more defensive domestic names. In
Japan, the positions in Toyota and Nidec were replaced with NTT DoCoMo and
Astellas Pharmaceutical.
Europe
· Outperformance (1 Feb 11 - 31 July 11) 2.6%
· % of Net Assets (31 July 11) 13.7%
Our European portfolio outperformed due to its relatively defensive positioning
in core markets, rising by 0.9% against a 1.7% fall in the benchmark. We have
remained very underweight in the markets of the periphery, but continue to
monitor developments closely.
Investors in Europe in the first half of 2011 may have a sense of déjà vu.
Headline events are very similar to those of this period last year as the debt
crisis in the Eurozone has continued to dominate headlines.
Markets not only faced the continuing turmoil in southern Europe, but also had
the added complications of higher oil and commodity prices. This has had a
knock-on effect in Europe in, for example, input costs for food and beverage
companies. Our holdings in Nestlé, Danone and the chocolate manufacturer Barry
Callebaut were adversely affected in the early part of the year, but recovered
strongly towards the end of the period as they reported positive earnings growth
and commodity pricing pressures started to ease.
Emerging Markets
· Outperformance (1 Feb 11 - 31 July 11) 0.4%
· % of Net Assets (31 July 11) 5.7%
Our Emerging Markets portfolio performed well on a relative basis, rising by
0.6% against the 0.2% return of the benchmark.
The diverse nature of Emerging Markets was emphasised by the range of their
returns during the period.
In Asia, the ASEAN countries in which we were invested delivered positive
returns, driven by the prospects of government infrastructure programmes, and
continued growth in consumer expenditure. Our holding in Astra International in
Indonesia benefited from these trends. Whilst China dominated the economic
headlines, the stock market has continued to disappoint. The Brazilian market
has also delivered disappointing returns as interest rates were raised to
address inflationary concerns, although these were cut post the period end. We
had reduced our position in the Brazilian retailer Hering as a result. The South
African economy has continued its recent recovery which has resulted in more
prosperity for the growing middle class. We have purchased a holding in Vodacom,
a South African mobile telecom company.
Global
· Outperformance (1 Feb 11 - 31 July 11) 4.0%
· % of Net Assets (31 July 11) 3.9%
Our Global portfolio outperformed the benchmark, rising by 3.1% against a fall
of 0.8%. The strong performance of the portfolio resulted from good stock
selection over the period.
The first half of the year was beset by worries over the global growth outlook,
particularly in Western economies with the spreading of the European sovereign
debt crisis and fears over the sustainability of the US recovery.
The portfolio has been positioned slightly more defensively over the period;
examples of transactions include a reduction in the miners BHP Billiton and Rio
Tinto and the addition of healthcare stocks Fresenius in Germany and Express
Scripts in the US. The portfolio is currently overweight in sectors such as
industrials and technology, and favours the long-term structural growth
prospects of Asia.
Equity Portfolio Attribution
From 1 February 2011 to 31 July 2011
+--------------+---------+---------+------+----------+---------+--------+------+
|Â |Portfolio|Portfolio| Index| Sector| Stock|Currency| Total|
|Sector | Weight| Return|Return|Allocation|Selection| Effect|Effect|
+--------------+---------+---------+------+----------+---------+--------+------+
|Â | Â | Â | Â | Â | Â | Â | Â |
+--------------+---------+---------+------+----------+---------+--------+------+
|UK | 33.2| 2.2| 1.2| 0.6| 0.4| 0.0| 0.9|
+--------------+---------+---------+------+----------+---------+--------+------+
|North America | 25.8| (2.2)| (0.9)| 0.0| (1.7)| 0.4| (1.3)|
+--------------+---------+---------+------+----------+---------+--------+------+
|Asia | 16.6| 0.7| (0.3)| (1.0)| 2.4| (0.4)| 1.0|
+--------------+---------+---------+------+----------+---------+--------+------+
|Europe | 14.4| 0.9| (1.7)| 1.3| 0.5| 0.7| 2.6|
+--------------+---------+---------+------+----------+---------+--------+------+
|Emerging | 6.0| 0.6| 0.2| 0.0| 0.5| (0.2)| 0.4|
|Markets | | | | | | | |
+--------------+---------+---------+------+----------+---------+--------+------+
|Global | 4.0| 3.1| (0.8)| (0.9)| 4.9| 0.0| 4.0|
+--------------+---------+---------+------+----------+---------+--------+------+
Top twenty holdings as at 31 July 2011
+-------+--------+------------------+---------------------+-------+------------+
|Â |Â |Â |Â |Value | % of quoted|
|Rank at|Rank at | | |£m | equity|
|31/7/11|31/1/11*|Company |Sector | | portfolio |
+-------+--------+------------------+---------------------+-------+------------+
| 1 | 1 |Royal Dutch Shell |Oil & Gas Producers | 61.2| 2.4|
+-------+--------+------------------+---------------------+-------+------------+
| 2 | 6 |GlaxoSmithKline |Pharmaceuticals & | 58.4| 2.3|
| | | |Biotechnology | | |
+-------+--------+------------------+---------------------+-------+------------+
| 3 | 4 |BP |Oil & Gas Producers | 52.5| 2.0|
+-------+--------+------------------+---------------------+-------+------------+
| 4 | 2 |BHP Billiton** |Mining | 52.5| 2.0|
+-------+--------+------------------+---------------------+-------+------------+
| 5 | 5 |Rio Tinto |Mining | 52.0| 2.0|
+-------+--------+------------------+---------------------+-------+------------+
| 6 | 3 |HSBC Holdings |Banks | 51.9| 2.0|
+-------+--------+------------------+---------------------+-------+------------+
| 7 | 10 |British American |Tobacco | 43.7| 1.7|
| | |Tobacco | | | |
+-------+--------+------------------+---------------------+-------+------------+
| 8 | - |BG Group |Oil & Gas Producers | 39.1| 1.5|
+-------+--------+------------------+---------------------+-------+------------+
| 9 | - |Pearson |Media | 32.1| 1.2|
+-------+--------+------------------+---------------------+-------+------------+
| 10 | 12 |Prudential |Life Insurance | 30.3| 1.2|
+-------+--------+------------------+---------------------+-------+------------+
| 11 | 9 |InterOil |Oil & Gas Producers | 29.9| 1.2|
+-------+--------+------------------+---------------------+-------+------------+
| 12 | 16 |Clean Harbors |Support Services | 29.4| 1.1|
+-------+--------+------------------+---------------------+-------+------------+
| 13 | 15 |AstraZeneca |Pharmaceuticals & | 29.1| 1.1|
| | | |Biotechnology | | |
+-------+--------+------------------+---------------------+-------+------------+
| 14 | 17 |Unilever |Food Producers | 28.2| 1.1|
+-------+--------+------------------+---------------------+-------+------------+
| 15 | 8 |Philip Morris |Tobacco | 27.4| 1.1|
| | |International | | | |
+-------+--------+------------------+---------------------+-------+------------+
| 16 | 14 |Canadian Pacific |Industrial | 27.2| 1.1|
| | |Railway |Transportation | | |
+-------+--------+------------------+---------------------+-------+------------+
| 17 | - |National Grid |Gas, Water & Multi- | 26.9| 1.0|
| | | |utilities | | |
+-------+--------+------------------+---------------------+-------+------------+
| 18 | 7 |New York Community|Banks | 26.8| 1.0|
| | |Bancorp | | | |
+-------+--------+------------------+---------------------+-------+------------+
| 19 | 19 |Vodafone Group |Telecommunications | 26.7| 1.0|
+-------+--------+------------------+---------------------+-------+------------+
| 20 | - |American Tower |Telecommunications | 25.8| 1.0|
+-------+--------+------------------+---------------------+-------+------------+
* Diageo, CNOOC, Taiwan Semiconducter were in the top twenty on 31 Jan 2011.
** We have combined our holdings in BHP Billiton PLC (£41.2m) with our position
in BHP Billiton Ltd (£11.3m) to show total exposure.
Investment Portfolio - Fixed Income
· % of Net Assets (31 July 11) 4.7%
Our fixed income portfolio made a strong contribution to overall income
generation as it has maintained a gross annual distribution yield of over 6%. In
absolute terms, the portfolio returned 3.6% over the period, indicating a small
capital gain in addition to the half year's income distribution.
The ongoing European debt concerns through the period coincided with a run of
weaker than expected economic data, which drove prices of government bonds
higher. UK 10 year gilt yields reached levels not seen for over 50 years.
 Following strong performance in the first quarter of the year, corporate bond
markets also became a victim of the sell-off in equities and spreads widened, in
particular on financial company bonds.
We have maintained our core strategy of reducing interest rate exposure as Gilt
yields have fallen; such that by the end of July the interest rate sensitivity
of the portfolio had reached 3.48 years, significantly below that of the
benchmark (6.36 years). This position represents our medium-term view that the
easy monetary conditions to be found in the UK will inevitably force bond yields
higher once economic growth begins to pick up again. We believe it is prudent to
reduce interest rate sensitivity to protect capital against future market falls.
Our fixed income portfolio is focused on systemically important financial
institutions and bonds with certainty of final maturity.
Other Investments
Following the announcement in March of our intention to close our Private Equity
business we have been implementing an orderly exit strategy focused on
maximising value for shareholders. By the period end we had reduced the total
committed to private equity funds and co-investments from £308 million to £221
million, following the sale of four fund positions. The sales of these funds
were completed at a premium to their Net Asset Values as at 31 December 2010 and
returned £18.4 million in cash.
We have further reduced our exposure to direct property, having completed the
disposal of two properties since the end of January. These sales realised a
total of £18.5 million. Our direct property investments amounted to £10.1
million at the period end.
Share Buybacks
At the Annual General Meeting in May, the Board detailed its approach to buying
back shares in the Company. The Board believes that investment performance is
the key driver of the level of the discount over the longer term. The Board is
committed to the ongoing flexible use of share buybacks and continues to believe
that a rigid discount control mechanism that fails to take into account factors
such as performance, peer group discounts and general market conditions is not
appropriate for the Company. During the period, we bought back and cancelled
over 39.9 million shares (6% of share capital) at a total cost of £151.3
million.
Financial Year End
The Company's financial year end will be changing to 31 December in order to aid
investment performance comparisons for shareholders. Our next period end will be
31 December 2011. There is no anticipated cost implication as a result of this
change.
Dividend
As a result of the change of year end the current financial period will comprise
only 11 months. As a consequence of this change, dividend payments in the
current period will be accelerated. A first quarterly payment of 2.141 pence per
share was made on 30 June 2011 and a second quarterly payment of the same amount
will be made on 30 September 2011. Barring unforeseen circumstances a quarterly
payment of 2.141 pence per share will be made on 3 January 2012 and a further
quarterly dividend of at least 2.141 pence per share will be made on, or around,
2 April 2012, making a total payment of at least 8.564 pence for the period.
Outlook
We expect markets to remain volatile over the remainder of the year as macro-
economic and political events will inevitably continue to drive market
sentiment. A number of key issues remain unresolved, such as US growth and
European sovereign debt. We anticipate more stresses in the Eurozone system as
we move towards a restructuring of peripheral economies. Inflationary pressures
in the Chinese economy, however, now appear to be under greater control and
China is expected to maintain its high rates of growth.
Recent meetings we have held with the senior management of several major multi-
national companies have been encouraging and suggest some disconnect between
macro-economic expectations and structural growth at individual company level.
"Investing in companies and not in markets" is a key tenet of our investment
approach and we continue to identify excellent longer-term stock specific
opportunities across the globe. Many global companies' inventory levels and
balance sheets are in better shape than they have been for many years.
We retain our cautiously optimistic stance which supports current gearing levels
at our weighted average borrowing cost of 1.8%.
Risks and Uncertainties
The Company invests in both quoted and unquoted securities, fixed income
securities, its subsidiary businesses, other asset classes and financial
instruments for the long term in order to achieve its investment objectives. Its
principal risks and uncertainties are therefore:
· investment (market)
· liquidity
· credit
· reputational
· credit and counterparty
· strategic and
· operational
These risks, and the way in which they are managed, are described in more detail
within the Risk Factors and Risk Management section on pages 22 and 23 of the
Company's Annual Report and Accounts for the year ended 31 January 2011, which
is available on the Company's website atwww.alliancetrust.co.uk.
The Directors do not consider that the nature of the Company's principal risks
and uncertainties has changed materially since the date of that report and is
not expected to change for the remainder of the financial period.
Related Party Transactions
The nature of related party transactions has not changed significantly from
those described in the Company's Annual Report and Accounts to 31 January 2011.
There were no transactions with related parties during the six months ended 31
July 2011 which have a material effect on the results or financial position of
the Company or the Group.
Going Concern Statement
The accounts have been prepared on a going concern basis as the Company's and
the Group's liquid assets significantly exceed its liabilities and its revenue
income exceeds its expenditure.
Responsibility Statement
We confirm that to the best of our knowledge
· The financial statements have been prepared in accordance with IAS 34 "Interim
Financial Reporting" as adopted by the EU:
· The interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the "Disclosure and Transparency Rules", being an indication
of important events that have occurred during the first six months of the
financial period and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining
five months of the period; and
(b) DTR 4.2.8R of the "Disclosure and Transparency Rules", being related party
transactions that have taken place in the first six months of the current
financial period and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
Signed on behalf of the Board
Lesley Knox Katherine Garrett-Cox
Chairman Chief Executive
16 September 2011 16 September 2011
Note on audit
The interim financial information for the period ended 31 July 2011 has not been
audited or reviewed in accordance with International Standard on Review
Engagements 2410 issued by the Auditing Practice Board.
Consolidated Income Statement (Unaudited)
For the period ended 31 July 2011
 6 months to 31 July 2011 6 months to 31 July 2010 Year to 31 January 2011
(audited)
£000 Note Revenue Capital Total Revenue Capital Total Revenue Capital   Total
Revenue
Income  65,983 - 65,983 62,652 - 62,652 101,943 - 101,943
(Loss)/Profit
on fair value - (30,354) (30,354) - 82,129 82,129 - 404,536 404,536
designated
investments
Profit on  - 115 115 - 5 5 - 589 589
investment
property held
  -------- --------- --------- -------- -------- --------- -------- -------- ---------
Total revenue 3 65,983 (30,239) 35,744 62,652 82,134 144,786 101,943 405,125 507,068
Administrative  (17,127) (1,908) (19,035) (17,658) (1,647) (19,305) (38,138) (2,684) (40,822)
expenses
Finance costs 4 (4,805) (2,185) (6,990) (1,321) (775) (2,096) (5,306) (4,462) (9,768)
Impairment  - - - - - - - (297) (297)
losses
Loss on   - (5) (5) - - -  - (47) (47)
revaluation of
office premises
Foreign  - (1,632) (1,632) (44) (895) (939) 30 95 125
exchange
(losses)/gains
  -------- --------- ---------- -------- --------- --------- -------- --------- ---------
Profit/(Loss) Â 44,051 (35,969) 8,082 43,629 78,817 122,446 58,529 397,730 456,259
before tax
Tax 5 (2,722) - (2,722) (3,081) 217 (2,864) (4,439) (73) (4,512)
  -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit/(Loss) Â 41,329 (35,969) 5,360 40,548 79,034 119,582 54,090 397,657 451,747
for the period
  ======== ======= ======= ====== ======== ======= ====== ======= =======
Attributable
to:
- Non- Â - - - 469 1,001 1,470 - - -
controlling
interest
- Equity  41,329 (35,969) 5,360 40,079 78,033 118,112 54,090 397,657 451,747
holders of the
parent
  -------- -------- -------- -------- -------- -------- -------- -------- --------
  41,329 (35,969) 5,360 40,548 79,034 119,582 54,090 397,657 451,747
  ======== ======= ======= ====== ======== ======= ====== ======= =======
Earnings/(Loss)
per share from
continuing
operations
attributable to
equity holders
of the parent
Basic (p per 7 6.54 (5.69) 0.85 6.07 11.83 17.90 8.20 60.26 68.46
share)
Diluted (p per 7 6.52 (5.69) 0.83 6.06 11.79 17.85 8.17 60.10 68.27
share)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)
  Year to 31 January 2011
6 months to 31 July 2011 6 months to 31 July 2010 (audited)
£000 Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
Profit/(Loss) Â 41,329 (35,969) 5,360 40,548 79,034 119,582 54,090 397,657 451,747
for the
period
Income and
expenses
recognised
directly in
equity:
Defined 8
benefit plan - (798) (798) - 2,752 2,752 - 3,077 3,077
actuarial
(loss)/gain
Retirement
benefit - (554) (554) - (16) (16) - (348) (348)
obligations
deferred tax
Loss on
revaluation - - - - - - - (183) (183)
of office
premises
  -------- -------- -------- -------- -------- -------- -------- -------- --------
Total
recognised 41,329 (37,321) 4,008 40,548 81,770 122,318 54,090 400,203 454,293
income and
expense for
the period
  ======= ======= ====== ======= ====== ====== ====== ====== ======
Attributable
to:
- Non- Â - - - 469 1,001 1,470 - - -
controlling
interest
- Equity  41,329 (37,321) 4,008 40,079 80,769 120,848 54,090 400,203 454,293
holders of
the parent
  -------- -------- -------- -------- -------- -------- -------- -------- --------
  41,329 (37,321) 4,008 40,548 81,770 122,318 54,090 400,203 454,293
  ======= ======= ====== ======= ====== ====== ====== ====== ======
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
For the period ended 31 July 2011
 6 months to 6 months to Year to
31 July 2011 31 July 2010 31 January 2011
£000   (audited)
Called up share capital
At 1 February 2011 16,527 16,677 16,677
Own shares purchased and cancelled in (999) (150) (150)
the period
 ---------- ---------- ----------
At 31 July 2011 15,528 16,527 16,527
 ---------- ---------- ----------
Capital Reserves
At 1 February 2011 2,158,630 1,776,750 1,776,750
(Loss)/Profit for the period (35,969) 78,033 397,657
Pension scheme financing (1,352) (84) 2,729
Own shares purchased and cancelled in (151,315) (19,800) (19,800)
the period
LTIP reserve movement 821 691 1,294
 ---------- ---------- ----------
At 31 July 2011 1,970,815 1,835,590 2,158,630
 ---------- ---------- ----------
Revaluation Reserve
At 1 February 2011 - 183 183
Revaluation of office premises - - (183)
 ---------- ---------- ----------
At 31 July 2011 - 183 -
 ---------- ---------- ----------
Merger Reserve
At 1 February 2011 and 31 July 2011 645,335 645,335 645,335
 ---------- ---------- ----------
Capital redemption reserve
At 1 February 2011 2,471 2,321 2,321
Own shares purchased and cancelled in 999 150 150
the period
 ---------- ---------- ----------
At 31 July 2011 3,470 2,471 2,471
 ---------- ---------- ----------
Revenue Reserve
At 1 February 2011 71,541 72,017 72,017
Profit for the period 41,329 40,079 54,090
Dividends (28,157) (27,403) (54,599)
Unclaimed dividends 31 29 33
 ---------- ---------- ----------
At 31 July 2011 84,744 84,722 71,541
 ---------- ---------- ----------
Non-controlling interest
At 1 February 2011 - 11,684 11,684
Profit for the period - 1,470 -
PATIF/ATIF* net subscriptions - 39,715 (11,684)
 ---------- ---------- ----------
At 31 July 2011 - 52,869 -
 ---------- ---------- ----------
Total equity shareholder funds
At 1 February 2011 2,894,504 2,524,967 2,524,967
 ---------- ---------- ----------
At 31 July 2011 2,719,892 2,637,697 2,894,504
 ---------- ---------- ----------
* Premier Alliance Trust Investment Fund and Alliance Trust Investment Fund.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
As at 31 July 2011
£000 Note 31 July 2011 31 July 2010 31 January 2011
    (audited)
Non-current assets
Investments held at fair value  2,961,787 2,872,322 3,237,614
Investment property  10,130 28,020 28,515
Property, plant and equipment:
 Office premises  6,025 6,500 6,270
 Other fixed assets  20 35 27
Intangible assets  2,095 3,041 2,345
Pension scheme surplus 8 2,899 - 846
Deferred tax asset  149 136 182
  ---------- ---------- ----------
  2,983,105 2,910,054 3,275,799
Current assets
Outstanding settlements/other  63,063 168,838 47,051
receivables
Withholding tax debtor  837 1,742 1,413
Corporation tax debtor  79 62 79
Cash and cash equivalents  403,136 257,350 295,355
  ---------- ---------- ----------
  467,115 427,992 343,898
Total assets  3,450,220 3,338,046 3,619,697
Current liabilities
Outstanding settlements/other  (467,937) (415,991) (383,505)
payables
Tax payable  (1,969) (2,125) (2,260)
Bank overdrafts and loans 13 (259,530) (280,000) (338,997)
  ---------- ---------- ----------
  (729,436) (698,116) (724,762)
Total assets less current  2,720,784 2,639,930 2,894,935
liabilities
Non-current liabilities
Deferred tax liabilities  (622) - (303)
Other long-term liabilities  (270) (64) (128)
Pension scheme deficit 8 - (2,169) -
  ---------- ---------- ----------
Net assets  2,719,892 2,637,697 2,894,504
Equity
Share capital 14 15,528 16,527 16,527
Capital reserves  1,970,815 1,835,590 2,158,630
Merger reserve  645,335 645,335 645,335
Revaluation reserve  - 183 -
Capital redemption reserve  3,470 2,471 2,471
Revenue reserves  84,744 84,722 71,541
  --------- ---------- ----------
Equity attributable to equity
holders of the parent 2,719,892 2,584,828 2,894,504
Non-controlling interest  - 52,869 -
Total Equity  2,719,892 2,637,697 2,894,504
Net Asset Value per ordinary
share
attributable to equity holders of
the
parent
Basic (£) 9 4.39 3.92 4.39
Diluted (£) 9 4.38 3.91 4.38
CONSOLIDATED CASH FLOW (unaudited)
For the period ended 31 July 2011 6 months to 6 months to Year to
 31 July 2011 31 July 2010 31 January 2011
£000   (audited)
Cash flows from operating activities
Profit before tax 8,082 122,446 456,259
Adjustments for:
Losses/(Gains) on investments 30,239 (82,134) (405,125)
Foreign exchange losses/(gains) 1,632 939 (125)
Scrip dividends (230) - (213)
Depreciation 7 8 16
Amortisation of intangibles 936 773 1,696
Impairment losses - - 297
Loss on revaluation of office premises 5 - 47
Share based payment expense 821 751 1,294
Finance costs 6,990 2,096 9,768
 --------- --------- ---------
Operating cash flows before movements
in working capital 48,482 44,879 63,914
Increase in amounts due to depositors 24,871 17,799 25,930
Increase in receivables (18,195) (135,022) (12,616)
(Decrease)/Increase in payables (4,392) 6,249 7,575
 --------- --------- ---------
Net cash inflow/(outflow) from
operating activities before income
taxes 50,766 (66,095) 84,803
Taxes paid (2,085) (4,070) (4,998)
 --------- --------- ---------
Net cash inflow/(outflow) from
operating activities 48,681 (70,165) 79,805
Cash flows from investing activities
Proceeds on disposal of fair value
through profit and loss investments 948,592 756,413 1,304,562
Purchase of fair value through profit
and loss investments (660,923) (807,910) (1,510,954)
Purchase of property, plant and
equipment - (39) (40)
Proceeds on disposal of office
premises 240 - -
Purchase of intangible assets (686) (113) (692)
 --------- --------- ---------
Net cash inflow/(outflow) from
investing activities 287,223 (51,649) (207,124)
Cash flows from financing activities
Dividends paid - Equity (28,190) (27,277) (68,071)
Unclaimed dividends repaid 31 29 33
Purchase of own shares (151,315) (19,800) (19,800)
Bank loan raised - 120,000 178,997
Bank loan repaid (79,467) - -
Non-controlling interest investment in
PATIF/ATIF* 39,427 39,715 71,662
Finance costs payable (6,977) (2,039) (9,747)
 --------- --------- ---------
Net cash (outflow)/inflow from
financing activities (226,491) 110,628 153,074
 --------- --------- ---------
Net increase/(decrease) in cash and
cash equivalents 109,413 (11,186) 25,755
Cash and cash equivalents at beginning
of period 295,355 269,475 269,475
Effect of foreign exchange rate
changes (1,632) (939) 125
 --------- --------- ---------
Cash and cash equivalents at end of
period 403,136 257,350 295,355
* Premier Alliance Trust Investment Funds and Alliance Trust Investment Funds
Notes to the Financial Statements
1 General Information
The information for the year ended 31 January 2011 does not constitute statutory
accounts as defined in section 435 of the Companies Act 2006. A copy of the
statutory accounts for the year ended 31 January 2011 has been delivered to the
Registrar of Companies. The auditors' report on those accounts was not
qualified, did not contain an emphasis of matter paragraph and did not contain
statements under section 498 (2) or (3) of the Companies Act 2006.
The interim results are unaudited. They should not be taken as a guide to the
full year and do not constitute the statutory accounts.
2 Accounting Policies
Basis of preparation
The annual financial statements were prepared using accounting policies
consistent with International Financial Reporting Standards (IFRS) as adopted
for use in the EU. The condensed set of financial statements included in this
half yearly financial report have been prepared in accordance with IAS 34
'Interim Financial Reporting', as adopted by the EU.
Going concern
The directors have a reasonable expectation that the Company has sufficient
resources to continue in operational existence for the foreseeable future.
Accordingly the financial statements have been prepared on a going concern
basis.
Changes in accounting policies
The same accounting policies, presentations and methods of computation are
followed in these financial statements as are applied in the Group's latest
annual audited financial statements. No material changes in accounting policies
are anticipated in the forthcoming financial statements for the period ended 31
December 2011.
3 Revenue
£000 6 months to 6 months to Year to
 31 July 2011 31 July 2010 31 January 2011
Deposit interest 1,410 982 2,022
Dividend income 56,585 54,468 85,527
Mineral rights income 754 858 1,400
Property income 1,433 1,800 3,517
Other operating income 5,801 4,544 9,477
 --------- -------- --------
 65,983 62,652 101,943
 --------- -------- --------
4 Finance Costs
  6 months   6 months   Year to
to to
  31 July   31 July   31
2011 2010 January
2011
£000 Revenue Capital Total Revenue Capital Total Revenue Capital Total
Interest
payable
Payable to 1 - 1 5 - 5 8 - 8
depositors
Net
distributions 2,908 643 3,551 - - - 2,050 2,160 4,210
to third
party
investors
Bank loans 1,896 1,542 3,438 1,316 775 2,091 3,248 2,302 5,550
and
overdrafts
 --------- -------- -------- --------- -------- -------- --------- -------- --------
Total finance 4,805 2,185 6,990 1,321 775 2,096 5,306 4,462 9,768
costs
 --------- -------- -------- --------- -------- -------- --------- -------- --------
5 Taxation
Corporation tax for the period to 31 July 2011 is charged at 27.33% (28% all
other periods) of the estimated assessable profit for the period. Â The tax
charge for this period is higher than that resulting from applying the standard
rate of corporation tax in the UK of 26% for the financial year 2011, due to a
change in the UK tax rate from 1 April 2011. Â Taxation for other jurisdictions
is calculated at the rates prevailing in those jurisdictions, this taxation
mainly comprises withholding tax on foreign investments.
6 Dividends
£000 6 months to 6 months to Year to
 31 July 2011 31 July 2010 31 January 2011
Fourth interim dividend for the year - 13,805 13,805
ended 31 January 2010 of 2.075p per
share
First dividend for the year ended 31 - 13,598 13,598
January 2011 of 2.0625p per share
Second interim dividend for the year - - 13,598
ended 31 January 2011 of 2.0625p per
share
Third interim dividend for the year - - 13,598
ended 31 January 2011 of 2.0625p per
share
Fourth interim dividend for the year 14,475 - -
ended 31 January 2011 of 2.2075p per
share
First interim dividend for the period 13,682 - -
ending 31 December 2011 of 2.141p per
share
7 Earnings per share
From continuing operations
The calculation of the basic and diluted earnings per share is based on the
following data:
 6 months to 31 July 6 months to 31 July Year to 31 January 2011
2011 2010
 Revenue Capital Total Revenue Capital Total Revenue Capital Total
Ordinary
Shares
Earnings for
the purposes
of basic
earnings per
share being
net
profit/(loss)
attributable
to equity
holders of
the parent
(£000) 41,329 (35,969) 5,360 40,079 78,033 118,112 54,090 397,657 451,747
Number of
shares
Weighted
average
number of
ordinary
shares for
the purposes
of basic
earnings per
share   632,063,810   659,897,723   659,987,723
Weighted
average
number of
ordinary
shares for
the purposes
of diluted
earnings per
share   633,834,020   661,653,167   661,667,979
The weighted average number of ordinary shares is arrived at by excluding
1,770,210 (1,770,203 all other periods) ordinary shares acquired by the Trustee
of the Employee Benefit Trust with funds provided by the Company.
IAS 33 requires that shares should only be treated as dilutive if they decrease
earnings per share or increase the loss per share. The earnings per share
figures on the income statement reflect this.
8 Pension Schemes
The Group sponsors two pension arrangements.
The Alliance Trust Companies' Pension Fund ('the Scheme') is a funded defined
benefit pension scheme which closed to new entrants in 2005. Â Following a
consultation process between the participating employer, Scheme Members and the
Trustees, members ceased to accrue benefits under the Scheme from 2 April 2011.
Employees (other than Executive Directors) are entitled to receive contributions
into their own Self Invested Personal Pension ('SIPP') provided by Alliance
Trust Savings Limited.
Defined Benefit Scheme
The net actuarial loss made in the period and recognised in the Consolidated
Statement of Comprehensive Income was £798,000 (31 July 2010 net actuarial gain
of £2,736,000 and 31 January 2011 net actuarial gain of £2,729,000).
Certain actuarial assumptions have been used to arrive at the retirement benefit
scheme deficit of £2.9m as at 31 July 2011 (31 July 2010 deficit of £2.2m and
31 January 2011 surplus of £0.8m). These are set out below:
 31 July 2011 % per 31 July 2010 % per 31 January 2011
annum annum % per annum
Inflation - (RPI) 3.70 3.50 3.70
Inflation - (CPI) 3.20 3.10 3.20
Salary increases - - 4.50 4.70
(RPI+1%)
Rate of discount 5.50 5.40 5.60
Allowance for pension in 3.70 3.50 3.70
payment increases
Allowance for revaluation 3.20 3.50 3.20
of deferred pensions
9 Net Asset Value Per Ordinary Share
The calculation of the net asset value is based on the following:
 31 July 2011 31 July 2010 31 January 2011
Equity shareholder funds (£000) 2,719,892 2,584,828 2,894,504
Number of shares at period end - Basic 619,336,548 659,289,557 659,289,557
Number of shares at period end - 621,106,760 661,059,760 661,059,760
Diluted
The number of ordinary shares has been reduced by 1,770,210 (1,770,203 all
periods) ordinary shares held by the Trustee of the Employee Benefit Trust in
order to arrive at the Basic figures above.
10 Segmental Reporting
Alliance Trust PLC's operating segments are strategic business units that offer
different products and services. They are managed separately because of the
differences in the products and services provided. They are however all
complementary to the core business of investing in various asset classes to
generate increasing value over the long term.
Alliance Trust PLC's primary operating segments are the Company and Alliance
Trust Savings Limited ('ATS').
The Company is a self managed investment company with investment trust status.
ATS provides pension administration services, share dealing services and a fund
supermarket.
The accounting policies of the operating segments are the same as those
described in the summary of significant accounting policies in the Annual Report
and Accounts for the year ended 31 January 2011.
Alliance Trust PLC evaluates performance based on operating profit before tax.
Intersegment sales and transfers are accounted for on an arms length basis, i.e.
market price.
£000 6 months to 31 July 2011
Revenue Company ATS Total
Investment (losses)/gains (31,955) 763 (31,192)
Net interest income 126 1,390 1,516
Non interest income 55,370 4,659 60,029
 --------- -------- --------
Segment revenue 23,541 6,812 30,353
 --------- -------- --------
Segment profit/(loss) before tax 10,358 (1,490) 8,868
£000 6 months to 31 July 2010
Revenue Company ATS Total
Investment gains 80,668 - 80,668
Net interest income 137 1,485 1,622
Non interest income 52,052 4,292 56,344
 --------- -------- --------
Segment revenue 132,857 5,777 138,634
 --------- -------- --------
Segment profit/(loss) before tax 122,602 (2,590) 120,012
£000 Year to 31 January 2011
Revenue Company ATS Total
Investment gains 391,938 1,434 393,372
Net interest income 249 2,744 2,993
Non interest income 86,588 8,585 95,173
 --------- -------- --------
Segment revenue 478,775 12,763 491,538
 --------- -------- --------
Segment profit/(loss) before tax 457,010 (5,446) 451,564
Reconciliation of reportable segment revenues and profit to consolidated amounts
Revenue 6 months to 6 months to Year to
£000 31 July 2011 31 July 2010 31 January 2011
Total revenues for reportable segments 30,353 138,634 491,538
Other revenues 20,025 13,434 42,383
Elimination of intersegment revenues (2,168) (2,328) (5,354)
Elimination of movement in investment (12,466) (4,954) (21,499)
in subsidiaries
 --------- -------- --------
Consolidated revenue 35,744 144,786 507,068
 --------- -------- --------
Profit 6 months to 6 months to Year to
£000 31 July 2011 31 July 2010 31 January 2011
Total profit for reportable segments 8,868 120,012 451,565
Elimination of movement in investment (786) 2,434 4,694
in subsidiaries
 --------- -------- --------
Consolidated profit before tax 8,082 122,446 456,259
 --------- -------- --------
Assets and Liabilities
£000 As at 31 July 2011
 Company ATS Total
Reportable segment assets 3,036,247 306,548 3,342,795
Reportable segment liabilities (316,355) (291,269) (607,624)
 --------- -------- --------
Total net assets 2,719,892 15,279 2,735,171
Assets and Liabilities As at 31 July 2010
£000 Company ATS Total
Reportable segment assets 3,031,235 261,812 3,293,047
Reportable segment liabilities (445,472) (248,049) (693,521)
 --------- -------- --------
Total net assets 2,585,763 13,763 2,599,526
Assets and Liabilities As at 31 January 2011
£000 Company ATS Total
Reportable segment assets 3,267,680 274,261 3,541,941
Reportable segment liabilities (373,176) (263,245) (636,421)
 --------- -------- --------
Total net assets 2,894,504 11,016 2,905,520
Reconciliation of reportable segment assets to consolidated amounts
Assets As at As at As at
£000 31 July 2011 31 July 2010 31 January 2011
Reportable segment assets 3,342,795 3,293,047 3,541,941
Third party assets and other 107,425 44,999 77,756
subsidiaries
 --------- -------- --------
Consolidated assets 3,450,220 3,338,046 3,619,697
Reconciliation of reportable segment liabilities to consolidated amounts
Liabilities As at As at As at
£000 31 July 2011 31 July 2010 31 January 2011
Reportable segment liabilities (607,624) (693,521) (636,421)
Third party liabilities and other (122,704) (6,828) (88,772)
subsidiaries
 --------- -------- --------
Consolidated liabilities (730,328) (700,349) (725,193)
11 Financial Commitments
As at 31 July 2011 the Group and Company had financial commitments, which have
not been accrued, totalling £118m (£168m at 31 July 2010 and £195m at 31 January
2011).  Of this amount £118m (£168m at 31 July 2010 and £195m at 31 January
2011) was in respect of uncalled subscriptions in investments structured as
limited partnerships of which £116m (£168m at 31 July 2010 and £193m at 31
January 2011) relates to investments in our private equity portfolio. Â This is
the maximum amount that the Company may be required to invest. Â These Limited
Partnership commitments may be called at any time up to an agreed contractual
date. Â The Company may choose not to fulfil individual commitments but may
suffer a penalty should it do so, the terms of which vary between investments.
12 Share Based Payments
The group operates two share based payment schemes. Â Full details of these
schemes (LTIP and AESOP) are disclosed in the 2011 annual report and financial
statements and the basis of measuring fair value is consistent with the
disclosed therein.
LTIP
In the period to 31 July 2011 participating employees applied a proportion of
their annual cash bonuses for the year ended 31 January 2011 to purchase
136,368 (103,112 at 31 July 2010 and 31 January 2011) Company shares at a
weighted average price of £3.76 (£3.48 at 31 July 2010 and 31 January 2011) per
share. Â Matching awards of up to 309,513 (297,750 at 31 July 2010 and 31 January
2011) shares, and performance awards of up to 618,083 (657,194 at 31 July 2010
and 31 January 2011) shares were granted.
Matching awards and performance awards made during the period were valued at
£602,204 (£485,499 at 31 July 2010 and at 31 January 2011) and £1,202,573
(£1,107,594 at 31 July 2010 and £1,072,000 at 31 January 2011) respectively.
 The fair value of the awards was calculated using a binominal methodology.
The cumulative charge to the income statement during the period for the cost of
all LTIP awards was £821,000 (£751,000 at 31 July 2010 and £1,294,000 at 31
January 2011) for the Group. Â Per IFRS 2 the costs of matching awards for each
plan are expensed over the three year performance period.
These costs are adjusted if certain vesting conditions are not met, for example
if a participant leaves before the end of the three year vesting period.
13 Bank Overdrafts and Loans
£000 As at As at As at
 31 July 2011 31 July 2010 31 January 2011
Bank loans repayable within one year 259,530 280,000 338,997
 --------- -------- --------
Analysis of borrowings by currency:
Bank loans - Sterling 210,000 280,000 290,000
Bank loans - Euro 49,530 - 48,997
The weighted average % interest rates
payable:
Bank loans 1.82% 1.61% 1.85%
The Directors' estimate of the fair
value of the borrowings:
Bank loans 259,530 280,000 338,997
14 Share Capital
£000 As at As at As at
 31 July 2011 31 July 2010 31 January 2011
Authorised:[1]
- 720,000,000 ordinary shares of 2.5p - 18,000 18,000
each
Allotted, called up and fully paid:
- 621,106,760 (661,059,760 as at 31 15,528 16,527 16,527
July 2010 and 31 January 2011)
ordinary shares of 2.5p each
[1]At the Company's AGM on 20 May 2011 new Articles of Association were adopted
which removed the requirement, which was abolished by the Companies Act 2006,
for the Company to have an authorised share capital limit
Share Buy Backs
£000 As at As at As at
 31 July 2011 31 July 2010 31 January 2011
Ordinary shares of 2.5p each
Opening share capital 16,527 16,677 16,677
Share buy backs (999) (150) (150)
 --------- -------- --------
Closing share capital 15,528 16,527 16,527
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Source: Alliance Trust PLC via Thomson Reuters ONE
[HUG#1547442]
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