For clients that have elected the “Growth” Australian equity option we have sold ALS. Despite having been bought relatively recently (2013), at their half year report the company announced they were divesting their Energy division after a very weak performance. This division was only recently acquired and its potential for turnaround as the oil and gas sector recovers was one of the key reasons for our purchase of the company.

Given the loss of shareholder value on such a recent acquisition, this raises serious questions in our mind around the ability of management, particularly in relation to a strategy of growth by acquisition. As this is their stated intention with the life sciences division going forward and given the gains made since purchase we have used the recent strength to exit the stock.

We are currently doing due diligence on a number of potential replacements within the Portfolio however in the near term we are using the proceeds of the sale to slightly reduce our overweight positioning to Australian Equities.

If you have any queries, please contact your Elston adviser.