Merchants Trust PLC

Report Publication Announcement • May 26, 2020

National Storage Mechanism | Additional information

RNS Number : 9851N

Merchants Trust PLC

26 May 2020

London, UK, 26 May 2020

Edison issues review on The Merchants Trust (MRCH)

The Merchants Trust (MRCH) is managed by Simon Gergel at Allianz Global Investors (AllianzGI). Aiming to continue to provide a high and growing level of income, he is adjusting the trust's portfolio in the wake of dividend cuts sparked by the negative economic effects of COVID-19. If there is an income shortfall in this financial year, MRCH is well positioned to maintain its dividend, with revenue reserves of more than 1x the last annual payment. It has not been an easy period for value managers over the last decade as growth stocks have led the charge; however, Gergel has outperformed the UK market over this period in both NAV and share price terms. The board reduced MRCH's gearing in late January 2020, which was opportune timing ahead of the recent significant stock market weakness.

MRCH's current 1.6% discount to cum-income NAV compares to a range of a 1.0% average premium to a 3.4% average discount over the last one, three, five and 10 years. The board actively issues shares when they are trading at a premium. MRCH has a progressive dividend policy and the annual distribution has increased for the last 38 consecutive years. The trust currently offers a 7.6% dividend yield.

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