London, UK, 30 April 2024

Edison issues update on The Merchants Trust (MRCH): Celebrating its 135th anniversary

The Merchants Trust’s (MRCH’s) manager, Simon Gergel at Allianz Global investors, is very excited about the number of reasonably priced opportunities available in the UK market. Also, good income generation from the trust’s portfolio of high-quality companies with robust fundamentals enabled MRCH to record another consecutive dividend increase in FY24; it now has a 42-year track record. The trust’s attractive 5.1% dividend yield is one of the highest in the 19-strong AIC UK Equity Income sector and its NAV total return over the last three, five and 10 years is superior versus the peers with a higher yield. MRCH could be seen as a good income play in a scenario of improving investor sentiment towards UK companies, which Gergel envisages given the more stable political environment (as the two main political parties’ policies are now less divergent) and signs of improvement in the UK economy.

Despite an uncertain macroeconomic backdrop, which has seen many investment companies trading at wider discounts than their historical averages, demand for MRCH’s shares has remained relatively robust. The trust regularly traded at a premium during FY24, allowing the board to issue shares from treasury. MRCH’s share base increased by c 5.8% raising c £46.0m.

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