17th Sep 2019 15:08
(Alliance News) - The Merchants Trust PLC on Tuesday reported a rise in net assets and a dividend rise but lagged behind its benchmark in the first half of the financial year.
Net asset value at July 31 stood at GBP570.1 million, 6.8% higher than GBP533.9 million at the end of January.
Net asset value per share at the end of the half rose by 5.5% to 518.20 pence compared to 491.10p six months earlier. The company's shares were trading 0.5% higher at 489.28p a piece in London on Tuesday afternoon.
Merchants Trust reported a net asset value total return of 7.4%, behind the FTSE All-Share Index which returned 11%.
The trust said satellite communications firm Inmarsat PLC was the biggest contributor to its performance during the period. Inmarsat accepted a GBP3.4 billion takeover bid by a consortium including private equity firm Apax Partners LLP, Warburg Pincus International LLC, the Ontario Teachers' Pension Plan Board, and the Canada Pension Plan Investment Board.
Standard Life Aberdeen PLC and Man Group PLC were also positive contributors during the period, Merchants said.
Shopping centre owner Hammerson PLC and Land Securities Group PLC underperformed however, Merchants attributed this to "investor nervousness about the outlook for the UK retail property sector".
Total dividends paid during the period increased by 4.7% to 13.50p per share from 12.90p the year before.
Chair Colin Clark said: "Although markets have undoubtedly been stronger over the period than in the final months of 2018, the main issues that were prevalent then are still present now and our managers remain cognisant of the potential ramifications of global trade tensions, Brexit and US interest rate policy in particular.
"That said, as to be expected when following a value based investment philosophy, uncertainty will often reveal opportunities to invest in companies with sound business models and whose share prices have been caught in a wider sentimental downdraught."
Clark also added that Brexit is "less of a structural risk" for the portfolio due to its high exposure to multinational businesses and the benefits that a weaker sterling can have on overseas earnings.
Related Shares:
InmarsatSLA.LMerchants TrustManLand SecuritiesHammerson