Merchants Trust Boosts Payout On Outperforming Benchmark In Full Year

29th Mar 2018 14:39

LONDON (Alliance News) - Merchants Trust PLC boosted its dividend for the thirty-sixth consecutive year, it said Thursday, after it outperformed its benchmark, yet it also warned of further near-term "speed bumps" in the market which will create short-term volatility.

For the year ended January 31, net asset value per share was 545.8 pence up from 501.5p the year prior. On a total return basis, Merchants grew 15% which was ahead of its FTSE All-Share benchmark which returned 11% over the same period.

Merchants proposed a 6.3p per share final quarterly dividend, up from 6.2p the year prior. For the full year, Merchants will have paid 24.8p up from 24.0p the year prior.

"When I wrote to shareholders at the end of September, in the half-yearly report, I noted the rising risk profile for the UK economy and these concerns remain as valid now as they were six months ago," Chairman Simon Fraser said. "There remain further 'speed bumps' in the form of geopolitical and economic risks that will create short-term volatility along the way. High levels of consumer debt and the impact of inflation on real earnings, as well as uncertainty in the corporate sector caused by Brexit are all concerns.

"However," Fraser added, "interest rates, although nudging upwards, remain very low by historic standards. Add to this the weak pound (which helps exporters), historically high employment levels and the fact that the UK stock market is predominantly exposed to economies outside the UK, and one can begin to understand why markets have remained near to all-time highs since September."

"In uncertain times," the chairman continued, "it is useful to remember that The Merchants Trust will celebrate its 130th anniversary in 2019 and that the company has a long and distinguished history of delivering income and capital returns through many uncertain periods over the years. The investment manager continues to invest in a portfolio comprising solid businesses with good prospects for growth and attractive dividends that are priced at a level from which they can deliver good total returns for shareholders."

Shares in Merchants Trust were 1.0% higher at 472.62 pence on Thursday.

---

Related Shares:

Merchants Trust