Dundee-based investment platform Alliance Trust Savings (ATS) today announced a move back into the black following the completion of its £14 million takeover of Edinburgh rival Stocktrade.
The firm, led by chief executive Patrick Mill, posted a pre-tax profit of £1.2m for 2016, compared with a loss of £5.2m a year earlier, helped by a 57.9 per cent jump in operating income.
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ATS, which completed the acquisition of Stocktrade from Brewin Dolphin in May, said its assets under management had grown 60 per cent year-on-year to £13.6 billion, while customer account numbers swelled by almost a third to more than 110,000.
Mill said: “We have a number of strengths in the platform market including one of the broadest investment ranges, a banking licence, the backing of a strong parent, independent of banks and life company product providers and a diversity of distribution channels incorporating direct, intermediary and partnerships.”
ATS is owned by Alliance Trust, which in December struck a deal to sell its in-house investments arm to Liontrust Asset Management for up to £30m.
Alliance Trust, which was founded in 1888, last year saw a Rothschild‑linked investment company walk away from talks over a potential £5bn tie-up, following pressure from activist shareholder Elliott in a move that led to two of the rebel investor’s suggested non-executives appointed to its board.
Mill added: “Over the last year, the completion of the acquisition of Stocktrade and the investment in technology have been a key focus. In 2017, our new platform will open to new intermediary business, followed by the migration of existing intermediary clients.
“This technology will then be implemented in the direct channel along with a new and enhanced proposition, leaving us well positioned to accelerate growth across all three distribution channels.”
His comments came as Alliance Trust announced its 50th consecutive year of increased dividends, with shareholders set to receive a total payout for 2016 of 12.774p a share – a hike of 16.4 per cent on last time.
The wealth manager’s chairman, Lord Smith of Kelvin, said: “The last two years have seen considerable change for Alliance Trust and we are very appreciative of the strength of support shareholders have shown. With a clear course of direction and a settled shareholder register, we believe that Alliance Trust is now well placed for the future.”
Richard Troue, head of investment analysis at Hargreaves Lansdown, said Alliance Trust was poised for a “fresh start”, but he pointed out the trust had “disappointingly” underperformed its benchmark.
He added: “We believe the change in strategy is entirely sensible on paper, though it will be several years before we truly know if it is adding value in practice. Shareholders will now want a period of stability in which the managers simply get on with their day job, unencumbered by the boardroom drama that has dogged Alliance in recent times.”