Merchants Trust PLC (MRCH) · LSE:MRCH
Merchants Trust PLC (MRCH) — The Merchants Trust — Investor Presentation (June 2026)
34 slides from Merchants Trust PLC (MRCH)'s investor presentation, June 2026
Slide 1: The Merchants Trust PLC Investor Presentation
The Merchants Trust PLC Investor Presentation This is a marketing communication. Please refer to the prospectus and to the KIID before making any final investment decisions. A ranking, a rating or an award provides no indicator of future performance and is not constant over time. Simon Gergel June 2
Slide 2: Contents
Contents 01 Overview 04 Dividends & Performance 02 Investment Process 05 Market Outlook 03 Portfolio Positioning A Appendix Diagram Description automatically generated https://rsmr-production.s3-eu-west-1.amazonaws.com/rsmr/assets/Image/logos/Investment%20Trust%20logo.png Simon Gergel Richard Knight
Slide 3: Overview
01 Overview 3
Slide 4: The Merchants Trust: A Differentiated Proposition
The Merchants Trust: A Differentiated Proposition 35 Merchants Trust Dividend - 44 Years of Growth We seek to provide an above average level of 30 income and income growth, together with long term growth of capital, through a policy of investing mainly in higher yielding UK Large Cap 25 Companies. 2
Slide 5: Investment Process
02 Investment Process 5
Slide 6: A Simple Investment Philosophy
A Simple Investment Philosophy Value Buying materially undervalued companies Conviction Contrarian, opportunistic and concentrated Risk Mitigating downside potential at a stock and portfolio level Source: Allianz Global Investors. Schematic representation for illustrative purposes only. 6
Slide 7: Income Investing: Historically Superior Long Term Returns
Income Investing: Historically Superior Long Term Returns Returns to Dividend Yield buckets, rebalancing each month Target stocks yielding at least in line with the market within 18 months Yield alone never a sufficient reason for buying a share Purchase/sale driven by total return considerations No
Slide 8: Focused Stock Selection
Focused Stock Selection Fundamentals • Competitive Positioning • Business Quality • Growth • Financial Profile Valuation Structural Themes • Cash/earnings based • Long term trends • Asset backing • External to business • DCF analysis* • Positive/Negative • Absolute return focus • Identifying value t
Slide 9: A Robust and Repeatable Investment Process
A Robust and Repeatable Investment Process c.350+ high yielding stock universe, FTSE All Share, AIM and selected overseas AllianzGI internal resources External sources Idea Generation 2000+ stocks Fundamentals Structural Valuation Stock Selection Themes Conviction Level Correlated Risk Exposure Port
Slide 10: Hikma Pharma: Diversified global pharma with high margin growth engines
Hikma Pharma: Diversified global pharma with high margin growth engines This is an EXAMPLE ONLY Global manufacturer and supplier of generic and injectables medicines, and branded pharmaceuticals in MENA. Vertically integrated with 29 manufacturing plants, 9 R&D centers, Fundamentals and 800+ product
Slide 11: Portfolio Positioning
03 Portfolio Positioning 11
Slide 12: Portfolio Positioning: Top Holdings, Sectors & Market Cap
Portfolio Positioning: Top Holdings, Sectors & Market Cap Top 20 Holdings Fund / % Relative Allocation in % Market Cap Split LLOYDS BANKING 5.53 Industrial Goods & Svcs GSK 4.57 Energy RIO TINTO 4.32 3% Banks SHELL 3.73 4% Health Care 1% TATE & LYLE 3.66 Real Estate 4% Cash DCC 3.24 Food Beverage &
Slide 13: Positioning: Examples Only
Positioning: These are EXAMPLES ONLY Housing Related: Not priced for recovery, beneficiary of falling rates Overblown negative narratives: Net winners from big changes… BARRETT REDROW Home building Infrastructure Home renovation Household products Healthy food trends Vaccines Climate disruption Spre
Slide 14: Acquisitions & Disposals 12m to May 29, 2026
Acquisitions & Disposals 12m to May 29, 2026 Purchases Sales Statistics Fund Btg Consulting WPP Number of holdings 56 Chesnara Assura New holdings 11 Bloomsbury Publishing Drax Complete Sales 8 Coloplast Dowlais Primary Health Properties 12 months turnover* 30.7% AENA Breedon Pz Cussons MONY Close B
Slide 15: Dividends & Performance
04 Dividends & Performance 15
Slide 16: Dividend Per Share (p)
The Merchants Trust 44 years of dividend growth • Reserves built up in good years can smooth dividends in difficult years. • Dividend fully covered by earnings; income has recovered since pandemic. • Revenue reserves of 20.3p at Jan 2026 Special Dividend 35 30 27.2 27.3 29.1 29.5 28.4 27.6 27.1 25 2
Slide 17: Investment Performance: Strong Long-term Returns
Investment Performance: Strong Long-term Returns Merchants Trust NAV Total Return vs Benchmark: 10-year history • Gearing amplifies performance of NAV level • Strong portfolio performance over all periods 200 169 150 165 135 100 50 0 -50 May 2016 May 2017 May 2018 May 2019 May 2020 May 2021 May 2022
Slide 18: 20 Year Shareholder Return: The Importance of Dividends
20 Year Shareholder Return: The Importance of Dividends • Over 20 years Merchants Trust has returned the initial share price in dividends alone. • A shareholder buying a share at 451p in January 2006, would have received 498p* in dividends to January 2026. • Total received would have been 1126p* but
Slide 19: Gearing (debt) Policy
Gearing (debt) Policy Total Borrowings: £117.3m 2.6% • Gearing can enhance income (yield) and potential returns • However, gearing increases volatility and risk of greater loss in down 30.0% 49.9% markets • Cost of debt 5.2%, down from 8.5% in 2017 34.8% • Gearing policy range 10-25%* 2040 Notes 205
Slide 20: Market Outlook
05 Market Outlook 20
Slide 21: Economic & Market Outlook
Economic & Market Outlook 1 UK equities cheap, especially mid-caps, creating exceptional opportunities 4 UK equities have seen outflows, despite strong recent performance 2 UK economy not out of line with Europe 5 High volume of takeovers and buybacks supporting the market 3 Benefits from lower inte
Slide 22: Despite recent market strength UK remains attractive
Despite recent market strength UK remains attractive UK cheap vs peers (& own history)… Valuations: UK valuations stand out compared to other regions • The UK stock market remains one of the cheapest major markets, with particular opportunity amongst small and medium sized companies. • Uncertainties
Slide 23: UK Economy – despite the pessimism, not a bad outlook vs G7
UK Economy – despite the pessimism, not a bad outlook vs G7 GDP not an outlier… Government debt not an outlier… 3.0% 2.5% 2.2% 2.0% 1.8% 2.0% 1.3% 1.5% 1.2% 1.2% 1.0% 0.9% 0.9% 0.8% 0.8% 1.0% 0.7% 0.7% 0.5% 0.6% 0.0% -0.5% US Canada UK France Italy Germany Japan 2024 2025 2026E 2027E Source: Allianz
Slide 24: UK Economy – inflation fallen, rising income, delayed spending
UK Economy – inflation fallen, rising income, delayed spending… Housing affordability (as % take-home pay) Outstanding debt of Households (as a % of GDP) • Housing affordability continues to improve, as interest rates have fallen, now running close to the long-run averages • Consumers have strong ba
Slide 25: Outflows & Sentiment battered for years – about to turn?
Outflows & Sentiment battered for years – about to turn? Declining levels of domestic ownership of UK equities Continued outflows from UK equity funds UK equity market ownership • Cyclical & Structural reasons for outflows – pension fund regulation, Brexit, political turmoil, ‘stagflation’ narrative
Slide 26: UK Equities – Other market participants agree
UK Equities – Other market participants agree UK market is seeing elevated levels of M&A UK PLC buying back own shares Number and value of bids in £bn by quarter Rolling annual summation in local currency for UK buybacks 30 0 B Bn 25 0 20 40 15 30 10 20 5 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 0
Slide 27: The Merchants Trust: A Differentiated Proposition
The Merchants Trust: A Differentiated Proposition 35 Merchants Trust Dividend - 44 Years of Growth We seek to provide an above average level of 30 income and income growth, together with long term growth of capital, through a policy of investing mainly in higher yielding UK Large Cap 25 Companies. 2
Slide 28: Appendix
A Appendix 28
Slide 29: Discount/Premium to NAV (Fair Value inc. Revenue)
Discount/Premium to NAV (Fair Value inc. Revenue) Merchants Investment Trust % Discount/Premium to NAV (Fair Value including Revenue) 4% 2% 0% -2% -4% -6% -8% -10% % Discount/Premium to NAV UK-DS INV.TRUSTS AIC UK EQ.INC.£ - DISCOUNT % (PAR) Past performance does not predict future returns. Source:
Slide 30: Risk Factors
Risk Factors International Exposure Cyclicality Fund Investment Categories 71% 21% 27% 60% 33% 46% 32% 51% 8% 3% 38% 38% Fund FTSE All Share Fund FTSE All Share 0% 3% Defensive Uncorrelated Cyclical Value Franchise Special Situation Cash Moderately Cyclical Highly Cyclical • Bottom-up stock selectio
Slide 31: Holistic equity oversight relies on a four-pillar framework for thorough risk management
Holistic equity oversight relies on a four-pillar framework for thorough risk management AllianzGI Equity Oversight Framework Equity Oversight Framework 1 Investment Risk reviews EIMC1 CIOs including equity 2 EIMC1 meetings 3 Risk & Compliance reviews 4 Global Equity CIO reviews investment teams EIM
Slide 32: Opportunities and Risks
Opportunities and Risks Opportunities Risks • High return potential of stocks in the long run • High volatility of stocks, losses possible. The volatility of fund unit prices may be strongly increased. • Investments specifically in the UK stock market • Underperformance of the investment style possi
Slide 33: Disclaimer
Disclaimer Investment trusts are quoted companies listed on the London Stock Exchange. Their share prices are determined by factors including the balance of supply and demand in the market, which means that the shares may trade below (at a discount to) or above (at a premium to) the underlying net a
Slide 34: ADM-5152386
Allianz @ Global Investors ADM.5152306
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