Merchants Share Discussion Threads

[uapatel] 26/3/2020 16:12

Nice one. Hoping I don’t have to buy more down here again, be nice to think we are recovering, but who knows.

[escapetohome] 26/3/2020 16:07

I got some at 3.03

[uapatel] 26/3/2020 15:59

Well done.

I did get a small amount around 3.05, but will be adding more in the new ISA period. Still way down on my average, but then these are a long term holding for income generation. Also been adding to my HFEL, another trust on crazy low price, especially as Asia is ahead of the curve on the Covid front.

[mister md] 26/3/2020 15:29

added at 315p the other day - what a gift

[tim 3] 22/3/2020 14:44

Wish I wasn't already in would be loading up!

As far as i'm concerned I will not be worrying about valuations to much.At some point things will recover may take months even years but at some point, unless this is the first time in financial history, things will recover.

You could say my shares are like many in this country on lockdown!

[speedsgh] 20/3/2020 11:15

Merchants’ Gergel unveils defensive tips from past crises -

When it comes to Covid-19, investors have few certainties to go on except that stock markets have endured their sharpest falls since 1987, with the FTSE 100 having plunged by a third in the past month.

Simon Gergel, manager of Merchants (MRCH), a £402m UK equity income investment trust, has said while he has no idea how the coronavirus will progress or how successful government responses to it will prove, he takes some comfort from lessons of the 2000 dot-com bubble, 2008 financial crisis and the 1987 crash that preceded them both, which occurred just one month after he began work in the City...

[mister md] 18/3/2020 12:44

I've added some today for the long (loooooong) term portfolio. GLA

[tim 3] 18/3/2020 12:24

Wish I was in cash lol.

In fairness I am suffering financially like most but have a plan for events like this, basically sitting tight might be a long time but so be it part of the risk of investing in shares.

Specifically these are particularly hard hit because of their exposure to RDS.

it should also be remembered they have gone 37 years without a dividend cut and survived many crashes.

[jeffian] 18/3/2020 11:22

I am in the very lucky position of being largely in cash as a result of takeovers before all this blew up. I am licking my lips at the opportunities around and this is on my list as one of them.

[uapatel] 18/3/2020 11:10

Recently checked last years report and appears they have around 1yrs dividend reserve so looking good for long term dividend payments.

Currently hold these, sadly much higher SP, but will add in batches to my ISA and SIPP.

[mister md] 18/3/2020 10:07

If there is one low risk share to buy when things eventually turn around then this is surely it ?

[tim 3] 09/3/2020 09:28

Hold tight and don't panic, thats what I'm doing anyway, you should have a plan for when things like this happen its part of the risk of holding shares.

[rcturner2] 09/3/2020 08:12

I would wait. There is plenty of time.

[noiseboy] 09/3/2020 08:11

Good opportunity to top up imho

[escapetohome] 09/3/2020 08:10

I wonder whether to sell at this price?

I doubt it

Long term holding


Income only for me

[speedsgh] 30/1/2020 08:59

Correct, uapatel. It was predominantly the costly debt that was previously holding them back. Averge cost of borrowing has reduced substantially in the past couple of years. From the last Interims...

"The company's weighted average interest rate on all borrowings has fallen from 8.5% in January 2018 to 6.0% at the half year end and following this latest refinancing exercise it is 3.5%. This has enhanced the company's earnings potential and your board believes it will improve the long-term capital returns for shareholders. The refinancing has also provided more flexibility in the company's borrowings by introducing an element of shorter term debt."

[uapatel] 30/1/2020 07:19

As I understand it, the main reason for the previous low growth in the dividend was due to outstanding high rate loans. These have mainly been cleared, so hopefully allowing a better rate of dividend growth going forward.

See also Edison report (Oct 19)




... Gergel explains that the trust’s dividend growth in recent quarters has been helped by reasonable income growth from portfolio companies, sterling weakness and refinancing its debt at more favourable rates. Over the last two to three years, the manager has diversified MRCH’s income stream: the portfolio now has less exposure to high-yielding, low-growth companies (such as in the oil & gas sector) and more to firms with higher rates of dividend growth.....


Happy for any other views on this.

[redponza] 30/1/2020 04:24

Hi, I saw that their past div increase rate is quite low as compared to other ITs.
Any particular reason behind or the trust is just poorly run?

[tim 3] 29/1/2020 15:23

Thanks for that.Have to say of all my holdings these are the ones I feel most comfortable with.Can easily see another leg up coming but in no rush happy for it to tick along.My second largest holding.

[speedsgh] 29/1/2020 08:22

Further debt reduction announced this morning...

Debt repayment and lower gearing level -

The board is pleased to announce that today the company is repaying £16m of debt under its revolving credit facility. This will take the company's total debt to £93m, and gearing to around 15%*. The board and manager decided to reduce gearing after a period of strong equity market and portfolio returns. The board's formal policy is unchanged and is to maintain gearing in the range of 10%-25% (measured at the time that any increase in total borrowing facilities is agreed).

*Unaudited