THE MERCANTILE INVESTMENT TRUST PLC
FINAL RESULTS FOR THE YEAR ENDED 31st JANUARY 2025
The Mercantile Investment Trust plc (the ‘Company’) announces its full year results for the 12-months ended 31st January 2025.
Highlights:
- NAV total return* of +14.1% compared with +12.3% for the FTSE All-Share Index, excluding constituents of the FTSE 100 Index and investment trusts, with net dividends reinvested (the ‘Benchmark’). Share price total return +18.9%.
- The Company’s outperformance was primarily driven by stock selection, with contributions from holdings such as 3i, Intermediate Capital, Plus500 and Games Workshop.
- For five years cumulative ended 31st January 2025, NAV total return* of +18.9% compared with +13.9% for the Benchmark. Share price total return +11.3%.
- For ten years cumulative ended 31st January 2025 NAV total return* of +112.3% compared with +67.2% for the Benchmark. Share price total return +122.7%.
- Final dividend of 3.40p in respect of the year, taking the total dividend to 7.90p per share, an increase of 3.3% on last year.
- Ongoing Charge of 0.48% for the year.
- Buybacks of 35.4 million shares at a cost of £82 million and an average discount of 11.6%.
- Gearing as at year end was 14.1% (compared to 13.4% on 31st January 2024).
*NAV total return with debt at fair value.
The Chairman, Angus Gordon Lennox, commented:
“The investment outlook is always clouded by uncertainties of some kind and the associated risk of volatility. I believe the shock and effects of the budget in October will wane and the entrepreneurial spirit in the UK will once again come to the fore. Most recently widespread U.S. tariffs and retaliatory action taken by other countries have added a new dimension to economic uncertainty and ongoing geopolitical tensions.”
“However, your Portfolio Managers have a long and successful track record of navigating volatility triggered by a variety of market developments, and this, combined with their disciplined investment approach, leaves the Board confident in their ability to steer the portfolio through the coming months and years. Moreover, the Board believes that market corrections that occur after unexpected shocks often present excellent buying opportunities. While there may be ongoing weakness and volatility, the Board is of the view that these are typically just fluctuations when viewed over a longer time horizon.“
Portfolio Managers, Guy Anderson and Anthony Lynch, commented:
“Financial markets continue to be buffeted by the inter-connected forces of inflation, monetary policy, and their impact upon economic growth expectations. Furthermore, the current geopolitical landscape appears to be primed for generating unanticipated shocks at any moment; the latest announcement from the President of the United States on tariffs is truly extraordinary, and while the UK is less directly impacted than many economies and the ultimate end game may look very different to the view today, this can only have a negative impact on global economic growth.
“Despite this, and amidst the market turmoil that it is creating, there is cause for some cautious optimism. The valuation of the UK market remains at a steep discount to both its own history and relative to other developed markets.“
“We will maintain our focus on investing in structurally robust businesses that operate in growing end markets and possess the ability to invest capital at attractive returns while being able to adapt to the changing environments in which they operate. We believe that a portfolio of such investments offers the best prospect of delivering compelling returns and outperformance for our shareholders over the long-term, just as they have done in the past.”