20th Oct 2025 10:28
(Alliance News) - Mercantile Investment Trust PLC on Monday announced a higher dividend amid positive net total return, however it underperformed against its benchmark.
The London-based investment company focused on medium and smaller sized companies in the UK said net asset value per share rose 3.9% to 273.4 pence as at July 31, from 263.2p at January 31.
NAV total return with debt at fair value was 6.0% in the six months to July 31, underperforming against the FTSE All-Share index, which had a return of 7.2%.
Mercantile declared a second quarterly interim dividend of 1.55 pence per share, up 3.3% from 1.50p a year ago.
Mercantile said government services outsourcing provider Serco Group PLC was its top contributor, on the back of improving contract win momentum and an anticipated acceleration in growth.
Further, Mercantile added that its position in homewares retailer Dunelm Group PLC performed well.
Meanwhile, enterprise software company Bytes Technology Group PLC experienced "a significant decline" due to a profit warning just weeks after full-year results. This was amid challenges in the implementation of an internal sales team reorganisation and as a consequence of weakening demand.
Portfolio Managers Guy Anderson & Anthony Lynch said on the outlook of Mercantile: "The outlook is always uncertain, and this year is no different, with valid reasons to be apprehensive: the international geopolitical landscape appears primed for generating unanticipated shocks... However, there are also reasons for optimism. Despite well-known headwinds to growth, and widespread caution heading into the upcoming budget, portfolio companies are mostly performing well, and yet the valuation of the UK market remains at a marked discount to both its own history and relative to other developed markets... We believe that a portfolio of companies with these characteristics offers the best prospect of delivering compelling returns and outperformance for our shareholders over the long-term, just as it has done in the past."
Mercantile shares were up 0.4% to 247.00p each on Monday morning in London.
By Tom Budszus, Alliance News slot editor
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