Stocktrade acquisition sees Alliance Trust Savings post first profits

The result constitutes ATS’s first profit since its launch by parent, Dundee-based Alliance Trust, 20 years ago.

Alliance Trust has since invested £93 million in ATS and in its half-year results published today, the investment platform posted a 40 per cent rise in assets under administration to £12 billion from £8.5 billion at the end of 2015.

The results contrast with Alliance Trust’s announcement in March that ATS had lost £5.2m in last year, but its value had been uprated to £54 million, while aggregate losses to date had been £92.9m.

But now, mostly due to the recent acquisition of Stocktrade, the firm has seen a 31 per cent growth in customer accounts during the first half of this year, equal to 26,000 new accounts.

Alliance Trust bought Brewin Dolphin’s execution-only stockbroking business for £14m last May.

At the time, the firm said the deal would give its savings business, which accounts for most of the trust’s 250 headcount in Dundee, the ability to scale its operations, with access to 48,000 new potential customers and up to £4.6 billion in assets under administration.

At the time of the acquisition, the Alliance Trust platform had £7.2bn in assets and around 57,000 customers.

Alliance Trust Savings chief executive Patrick Mill said: “In recent years we have made substantial investments in the business with the acquisition of Stocktrade, the creation of a new board and executive committee to oversee our governance and management as a standalone business and the upgrade to new platform technology.

“These investments are now bearing fruit. Delivering a profit at the half year mark demonstrates the success of our business strategy and the appeal of our flat fee model to both direct and advised customers.”

He added: “In the second half of 2016, we expect to continue to win new business attracted by our unique flat fee structure, award winning customer service, and improved platform functionality. We are also making good progress in our corporate partnership channel and expect this to bring additional business by the end of the year.”

Meanwhile, insurer Prudential, which employs more than 2,000 workers at its site near Stirling, has also posted a rise in profits.

The results had not been expected in the face of current global market volatility and ultra-low interest rates but were buoyed by a strong performance in Asia.

The insurance and investment giant said half year operating profits rose nine per cent to £2 billion, with analysts expecting £1.88 billion to be posted.