9th Mar 2023 11:34
(Alliance News) - Alliance Trust PLC on Thursday said it swung to an annual loss as it also turned to an investment loss from a gain one year earlier, although it still increased its total dividend payout to shareholders.
The Dundee, Scotland-headquartered global equities investor said 2022 pretax loss was GBP235.9 million, swinging from a GBP543.3 million profit in 2021.
This was due to a swing to an investment loss of GBP358.7 million compared to a gain of GBP501.0 million.
Net asset value per share dropped 9.3% to 989.00 pence each on December 31 from 1,090.00p a year earlier.
Despite this, the company declared a total dividend of 24.00p per share for 2022, up 26% from 19.05p a year ago.
Shares in Alliance Trust were down 1.6% to 1,001.98 pence each in London on Thursday morning.
Alliance Trust argued there were "few places for investors to hide" in 2022, citing: "the return of high inflation after a 40-year absence, the war in Ukraine, higher interest rates and fears of recession, sent most asset prices tumbling".
However, it maintained it delivered an "encouraging performance" against its benchmark index, the MSCI All Country World Index.
In 2022, its NAV total return was negative 7.1%, compared to positive 18.6% in 2021. Its benchmark index returned negative 8.1%, compared to positive 19.6% a year earlier.
"The board is satisfied that the company’s long-term performance has been consistent with its objective of delivering real returns and a rising dividend. It is also pleased with the performance versus peers," said Chair Gregor Stewart.
"The only disappointment is that the company has not yet outperformed its benchmark index by the target set when the investment strategy was adopted on April 1, 2017."
Looking ahead, Stewart said the global economic outlook remains "highly uncertain" and equity markets "remain volatile".
"If inflation and interest rates have peaked in the US and the UK, as some analysts believe, and the war in Ukraine comes to an end, equity markets may rally. On the other hand, they may fall further if we descend into a deep recession. Coherent arguments can be made for both a bull and a bear case," said Stewart.
"The good news is that the success of our investment strategy does not hinge on macroeconomic outcomes [...] The speculative froth topping the valuations of many growth stocks has been blown away by higher interest rates and harsher economic conditions. We now look forward to the possibility of company fundamentals, not sentiment, driving share prices, if not for the short term, certainly in the long run."
By Greg Rosenvinge, Alliance News reporter
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