Tuesday, September 20, 2011

Alliance Trust chief Katherine Garrett-Cox compares European debt crisis with botox

Katherine Garrett-Cox, chief executive of Alliance Trust, has dismissed Europe's attempts to solve its debt crisis as "economic cosmetic surgery", warning there is "more pain" to come over the next few months.

The head of Britain's largest investment trust said the company had reduced its exposure to equities during the first half of the year and invested in higher yielding, defensive stocks ready for a prolonged period of uncertainty.

Her comments came as the company said its net asset value had climbed 0.7pc in the six months ending July 31, with its share price rising 3.1pc.

"It's a bit like botox," she said, referring to efforts to bail out debt-ridden countries. "It looks good for a while but will eventually start to sag again."

Alliance Trust - which defeated a resolution from rebel investor Laxey Partners in May to set up an automatic buyback policy aimed at boosting its share value - has bought back almost 40m shares, 6pc of issued share capital, since the start of February. Ms Garrett-Cox said the company was on course to pay a full-year dividend of 8.5p, representing a 45th consecutive year of dividend growth.

Reflecting on the shareholder disupte, she added: "It certainly cast the spotlight on the company for a while - but has helped focus minds. I think this is reflected in our first-half results." more