Merchants Dividends - MRCH

Merchants Dividends - MRCH

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Merchants Trust Plc MRCH London Ordinary Share GB0005800072 ORD 25P
  Price Change Price Change % Stock Price Last Trade
-0.25 -0.05% 473.50 16:35:15
Open Price Low Price High Price Close Price Previous Close
469.50 469.50 478.00 473.50 473.75
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Industry Sector

Merchants MRCH Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

Top Dividend Posts

ctrader3: Closed-ended funds on the other hand have fared much better so far. Out of the 22 trusts that compose the AIC UK Equity Income sector, only one cut their dividend for the 2020 financial year, Temple Bar. Two more have committed to rebasing it in the next financial year to a more sustainable level, Edinburgh Investment Trust and Troy Income & Growth. Of the remaining 19, 16 have managed to grow their pay-out between their 2019 and 2020 financial year; and of these 16 a further six have indicated that their 2021 dividend will be higher than 2020. Two trusts have already paid higher interim dividends in their 2021 financial year, Chelverton UK Dividend Trust and Merchants Trust. The other 14 trusts which have paid a 2021 financial year dividend have maintained their pay-outs from last year, with Troy Income & Growth the only one to have cut theirs. While the pandemic is not over, and 2021 is likely to see continued pressure on UK dividends, investment trusts have served income seekers well so far, which has been rewarded with high ratings for the shares. It looks increasingly likely their revenue reserves will be equal to the task of maintaining pay-outs through this crisis. Kepler
goldpiguk: Hi again ctrader3, The wording about the dividends (in the final results just published) needs to be read in conjunction with the interim report which better explains how the dividend payments and payment dates are accounted for. Link to BAE interim report: It states: "Dividend - The directors have declared an interim dividend of 13.8p per share in respect of the year ended 31 December 2019, payable in September, being the value of the dividend proposed but subsequently deferred earlier in the year. - In addition, the directors have also declared an interim dividend of 9.4p per share in respect of the half year ended 30 June 2020. This dividend will be payable in November assuming that there are no major additional or unforeseen pandemic-related disruptions." ------------------------------- Of the 37.5p of dividends for the year (announced today) 23.2p has already been paid, and only this years proposed final of 14.3p remains to be paid. Hope this helps. Goldpig
goldpiguk: Hi ctrader3, Although a top 10 holding in the MRCH portfolio, BAE is not a company I usually follow. I have looked at their website to check recent and proposed payouts. Many plc's deferred dividends due to the pandemic, and the ADVFN Financial page is not always correct or up to date. According to the BAE website the catch up dividend of 13.8p was paid on 14th September 2020. This was the 'delayed' final dividend from the previous year. The interim dividend for 2020 of 9.4p was paid on 30th November 2020. The only proposed payout due is the 2020 final to be paid on 1st June 2021. The good news is the proposed final dividend is an increase from 13.8p to 14.3p, so going in the right direction. All eyes are now on the UK budget next week! Goldpig
ctrader3: Merchants (MRCH), the high-yielding portfolio of UK value stocks, has reiterated its determination to keep growing its dividend after a painful half-year saw its shares drop by a third...... Merchants fund manager Simon Gergel acknowledged ‘some of the most volatile and challenging investment conditions’ of his career as interim results for the £403m UK equity income trust showed shareholders experiencing losses almost twice as severe as the wider UK market during the coronavirus pandemic’s first wave. The trust also faces questions over the sustainability of its record as a leading ‘dividend hero’, with a lofty 8% yield to maintain if it is to extend its 38-year record of consecutively rising payouts. In the six months to the end of July covered by the results, shareholder total returns fell 34.3% compared to the 17.8% decline for the FTSE All-Share index, as lockdown upended the high-yielding strategy. Gergel identified the trust’s gearing, or borrowing, as a major factor in the outsized losses. Merchants entered the period with gearing, which amplifies both positive and negative returns, standing at 15%. That had actually been cut by its board from just under 20% six months prior, preventing an even worse result. Without gearing, the portfolio would have fallen 25.5% over the six months, the company said. By the end of July, gearing was back around 19%, with Gergel reiterating its potential to enhance long-term total returns. Otherwise, the Allianz Global Investors fund manager said his positions in economically exposed ‘cyclical̵7; stocks drove the underperformance, with industries like travel, leisure and aerospace almost shutting down, along with ‘value’ stocks becoming even more unloved. Housebuilder Vistry (VTY), Aerospace company Meggitt (MGGT) and bus firm National Express (NEX), where the stake has been reduced, were the worst-performing holdings over the half year. Compared to the index, however, not owning the strongly-performing AstraZeneca (AZN) took the most away from relative performance. While competitor GlaxoSmithKline (GSK) is Merchants’ top holding, Gergel said shunning Astra was partly due its high valuation. The best performing holdings over the six months were spread betting firm IG Group (IGG) and Stock Spirits (STCK). Some profits have been taken on the latter, a leader in vodka in eastern Europe. With buys and additions, Gergel said he had tried to reduce the portfolio’s sensitivity to economic conditions amid the downturn, as well as boost the income potential. Tobacco companies have risen back to the top of the holdings list behind Glaxo. British American Tobacco (BATS) and Imperial Brands (IMB) were 4.9% and 4.7% positions respectively at the end of July, after Gergel added to the stocks. The manager also bought into BT (BT.A) and Vodafone (VOD), with valuations depressed though the telecoms sector should be resilient during the recession. After reducing the stake in Shell (RDSB) following its landmark dividend cut, they bought high-yielding Diversified Gas and Oil (DGOC). Vistry was also jettisioned in favour of fellow housebuilder Bellway (BWY), which has lower debt. Gergel picked out several companies in the portfolio they had taken advantage of market volatility to add to, including DFS (DFS) and WPP (WPP). Next (NXT) was a new buy, with the manager noting its successful transition to online retail and track record of repositioning itself. Complete sales included insurer Prudential (PRU) and German property specialist Sirius Real Estate (SRE) due to their economic sensitivity, and events company Informa (INF) with the pandemic fundamentally impacting its business. Some profits have been taken on other stocks which have done relatively well, including copper miner Antofagasta (ANTO) and PZ Cussons (PZC), the maker of Imperial Leather soap. Income challenge. Gergel said it had been ‘particularly challenging’ to deliver a high income stream this year as dividend cuts had swept the FTSE, adding the trust had been writing more call options to generate extra income. Earnings over the six months were 8.9p per share, a decrease of 45% from 16.1p per share in the same period last year. While the manager mulled a ‘new normal’ level of dividends for certain companies, Merchants’ board reiterated its commitment to a ‘high and growing yield’ – a goal which looks under increasing pressure – backed up by revenue reserves. While reserves covered more than one year’s total dividend at the end of the last financial year, analysts have questioned previously whether those reserves are as strong as the accounts make out, once the timing of the trust’s dividend payments is factored into the equation. By the end of July, reserves had fallen to 22.6p per share, from 28.8p a year prior, meaning they no longer cover a full year’s dividend payment.
ctrader3: The aim of the portfolio, is to own dividend paying shares to earn dividends to buy more shares, whilst very roughly maintaining equal weight. *The long term aim is to have shares sitting on the books that cost nothing but still produces income. MRCH Amount invested, 5k current value £4,977.00 (this will of course fluctuate with the price) current profit £1,608.00, includes dividends received and 'profit' taking. so 30% of target achieved. MRCH is a core holding and although I am willing to take 'profit' the core holding will be retained for the dividends. expected dividend for this year £280.00 * unless the markets are extremely volatile and unless inflation gets out of control, not going to be achieved in the timescale for this portfolio of ten years, now in year three.
ctrader3: The manager comments that MRCH started the year in a strong position. In FY20 (to 31 January2020) the dividend was 1.1x covered and at the end of the period revenue reserves were around one year of dividends. The board has announced its intention to use these reserves to enable the trust’s record of dividend increases to continue. Gergel is hopeful that with increased levels of income expected in FY22 and FY23, by this time MRCH will be closer to covering its dividend. The manager has undertaken a number of transactions in the portfolio to boost income, such as buying companies with ‘reliable̵7; dividends and writing more covered call options. ‘The income story is very important for the trust,’ he adds.
zac0_4: pj fozzie - here you go - Investment trust shares are often hit disproportionately hard in market sell-offs but, equally, they can do particularly well when markets are on the up – as happened in November. When vaccine news propelled the FTSE 100 index to its greatest monthly gain in 30 years many investment trusts made even greater share price gains. These included UK equity income fund Merchants Trust (MRCH), whose share total return of 24.3 per cent for the month to 30 November put it well ahead of both the FTSE All-Share and FTSE 100 indices. However, 2020 has not been plain sailing for this trust. Its value bias – among other factors – mean that it has faltered more generally, and made a share price total return loss of nearly 13 per cent over the 12 months to the end of November. Despite this, its investment team has stuck to its target of generating a high and rising income with a good total return. Simon Gergel, the trust’s manager, notes that a focus on good yields in the medium term has added some portfolio continuity, meaning no fire sale of holdings that suspended or cut their dividends. “We look at companies with good yields in line with the market in the next 18 months – not just today,” he explains. “The reason for that, almost exemplified by this crisis, is companies can cut dividends. We’re not forced to sell just because [a company] has cut its dividend.” The trust will receive a “significantly lower” income from its holdings this year due to dividend cuts, according to its board. But the board has also vowed to use its revenue reserves to cover any shortfalls. Merchants was recently trading on a 6.5 per cent yield. Mr Gergel, like many investors, also expects a return to dividend payments in selected sectors and has not deviated from the portfolio’s slight value bias. But a challenging 2020 has inevitably forced some changes. 2020 changes The trust's asset allocation has changed this year, with Mr Gergel making it more defensive while also trying to capitalise on “anomaliesR21; and mispricings in the market. This has involved taking money out of some cyclical names, for example, the coronavirus outbreak prompted Mr Gergel and his team to call time on positions in Prudential (PRU) and Sirius Real Estate (SRE). They also remain wary about companies with uncertain business models in post-pandemic life. “We held Informa (INF), which runs trade shows and exhibitions,” he says. “[But] there’s a question mark, long term, about whether people will still go to trade shows. Companies might send people to a trade show but they won’t send 10 – they might send five. Where we have companies with a question mark, unless we’re confident they’re very cheap, we’ve been looking to get out. So we sold Informa.” This caution extends elsewhere. In a year when share price tumbles have meant that some weak companies trade on high dividend yields, Mr Gergel notes that much of his team’s time has been spent “trying to avoid value traps”. They never buy holdings purely for income, but instead seek solid businesses that look under priced. Doing this has led them back to a variety of high-profile UK names this year, and they have a preference for businesses that look resilient and defensive. They added Next (NXT) amid the retail slowdown earlier this year, with a view that online sales have become “a dominant part of the profits”. And Mr Gergel believes that Next will pay dividends in the future. He also bought Vodafone (VOD) and BT (BT.A), stocks he had not held for around half a decade and previously viewed as value traps. Mr Gergel argues that sector consolidation, politicians now acknowledging the importance of fibre optic cables and broadband, and the possibility of lighter regulation have changed this sector's outlook. “Having been under huge pressure from competition and regulation, the sector might have more benign regulation and competition, and looks cheaper,” he explains. “They have defined earning streams – customers stay with them unless they leave. It’s not like a retailer where you have zero sales unless someone comes to your store or website.” Mr Gergel and his team have also topped up a position in Imperial Brands (IMB). They believe that prices in the tobacco sector have grown more attractive in the past 18 months. They also added to National Grid (NG.) and SSE (SSE) in the belief these are “resilient businesses and monopolies”, even if some regulatory pressures remain. They have favoured housebuilders but grown cautious on debt heavy businesses, prompting a move out of Vistry (VTY) and into Bellway (BWY). And they hold DFS Furniture (DFS) – a pandemic-oriented play. “We like things associated with house building,” he says. “People have sat on their sofas a lot and might realise they’re not that comfortable any more. We want businesses that are defendable against the internet: it’s hard to sell sofas on the internet [as] people want to touch them, but also you need people to deliver them.”
ctrader3: Henderson Far East Income Ltd - closed-end investment company - Net asset value per share falls to 301.02 pence as at August 31 from 358.99p a year before. NAV total return of negative 9.9% underperforms MSCI AC Asia Pacific ex Japan High Dividend Yield index and FTSE All-World Asia Pacific ex Japan index. Chair John Russel notes: "The weakness of the NAV performance, although disappointing, is understandable as high-yielding stocks have been out of favour compared to more growth-orientated companies, which are less well represented in the portfolio." For financial year, total dividend amounts to 23.0p per share, up 2.7% from the year before. Fund managers Mike Kerley and Sat Duhra say: "We remain positive on the outlook for Asia in the years ahead but expect volatility in the short term as the world digests the virus impact and potentially navigates a 'second wave', while the US election and relations between the US and China remain events that are difficult to predict. Although global equity markets are currently feasting on the liquidity provided by central government support, this can't last forever and eventually the stimulus will have to be withdrawn. "Asia is well positioned to weather these impending storms with an income story that shines like a beacon of stability compared to other regions. We will continue to focus on attractive companies which are beneficiaries of this relative stability with strong balance sheets and cash flow, and sustainable and growing dividends. The portfolio is poised to take advantage in more structural growth areas if volatility provides opportunities." -------------- Dividends The Company has continued with its approach of paying four interim dividends in respect of each financial year. For the year ended 31 August 2020, the total dividend amounted to 23.0p per ordinary share, a 2.7% increase on the total dividend for the prior financial year and, once again, comfortably above the 12-month inflation figure of 0.5% for the same period. The revenue streams from the companies in which we invest on your behalf have proved as resilient as anticipated. Accordingly, we are not having to access the Company's revenue reserves in order to cover the dividend. We will in fact, as we have done in prior years, be adding a small amount to the reserve which will remain available to smooth the dividend during times of severe economic or financial shock.
ctrader3: if u bought 10k of MRCH yielding 8%, it's easier to switch to a cash equivalent so £800 pa. if u assume the dividend is unchanged over 10 years but the share price doubles, u will still earn £800 pa but it will only now yield 4% (still 8% on buying price) if the share price doesn't rise keep re-investing in MRCH for as long as they don't change their dividend policy, your dividend take after 10 years would be £1,440, more if the share price fell as the yield would rise. if u sold your MRCH shares say roughly 20k plus dividends earned of 8k and re-invested in a share say a Renewable yielding 6% your dividend would rise to £1,680 pa
ctrader3: The Merchants Trust continues to be an AIC 'Dividend Hero', an elite group of investment trust companies that have increased their dividends each year for 20 years or more. The company's dividend has increased for 38 consecutive years and a high and growing yield remains a key objective of the company. The total distribution declared for the first half of 2020/21 is 13.6p, an increase of 0.7% on the same period last year (13.5p). The company's revenue reserves remain strong, and as at 31 July 2020 revenue reserves were 22.6p per share (2019 - 28.8p). Shareholders will be aware that there have been a large number of dividend cuts by listed companies, including those held within the investment portfolio, due to the pandemic. Taking these cuts into account, the income received by the company will be significantly lower both this year and probably next year compared to the last financial year. We would like to reassure shareholders that the company had more than one year's total dividend payment in revenue reserves at the year end, which the board is prepared to use to cover any shortfalls. The great advantage of investment trusts is that they can put away money in good times for use in bad times and the board considers that these are the kind of conditions in which reserves may be called upon. Our manager has a balanced view on the outlook for dividends over the next 24 months and we have recently been encouraged by a number of companies reinstating deferred dividends or resuming dividend payments, although not all dividends will recover to their previous levels in the short term.
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