Merchants Trust PLC Edison issues review on The Merchants Trust (MRCH)

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Merchants Trust PLC

22 May 2018

London, UK, 22 May 2018

Edison issues review on The Merchants Trust (MRCH)

The Merchants Trust (MRCH) is managed by Simon Gergel at AllianzGI. He aims to generate a high and growing level of income, with the potential for long-term capital growth, from a portfolio of UK equities. The manager considers there are great opportunities in the UK stock market for high-yield investors, and that in aggregate UK stocks are looking attractively valued compared to global equities. MRCH has a distinguished dividend history; payouts have grown in each of the last 36 consecutive years. In FY18, the annual distribution was 2.5% higher than in FY17 - a larger growth rate than in recent years, reflecting higher dividend growth from portfolio companies, but also due to MRCH's lower interest costs following the refinancing of a tranche of its high-cost debt in late 2017.

MRCH's shares are currently trading at a 3.7% discount to cum-income NAV, with debt at market value. This is narrower than the 5.3% averages over both the last one and three years, but wider than the 3.2% five-year average. There is potential for a narrower discount if the manager continues to build on his long-term record of outperformance. MRCH has a progressive dividend policy; annual distributions have increased for the last 36 consecutive years, growing at broadly double the annual rate of UK inflation over this period.

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May 22, 2018 11:06 ET (15:06 GMT)