AGM Statement

RNS Number : 3673F

Mercantile Investment Trust(The)PLC

22 May 2013

 



LONDON STOCK EXCHANGE ANNOUNCEMENT

AGM STATEMENT

THE MERCANTILE INVESTMENT TRUST PLC

22^ND MAY 2013

At the Annual General Meeting of the Company, which was held today, the Chairman made the following introductory remarks:

"In my statement in the 2012 Annual Report I made it clear that the Board considered that the Company's investment performance was not good enough and that the Board was working with the Manager to improve matters. As a result of the Board's concerns, JPMorgan has made significant changes to the team, and in the way that the investment process is carried out.  Guy Anderson has joined Martin Hudson and Anthony Lynch and manages approximately 25% of the portfolio, with specific responsibility for the General Retailers, Media, Financial Services and Technology sectors.  JPMorgan Asset Management (UK) Limited has also committed to employ a junior level analyst shortly.  The outcome of these changes has been favourable, with an improved return on net assets, although for the year ended 31^st January 2013 the Company's performance was still 0.6% behind its benchmark. I am pleased to report that for the first three months of the current year, the Company's NAV performance has exceeded its benchmark by 1.8% giving an increase of 16.1% to 17^th May 2013.

Over a ten year period to the end of April, the Company's NAV performance has exceeded its benchmark by 16%.  The three year NAV performance figure is 62.2% against a benchmark of 64.3%, and the five year is 64.0% against a benchmark of 66.4%, which are less satisfactory figures and explain the actions taken by the Board in relation to the Manager which I have already outlined. The share price closed yesterday at £13.58 compared with £11.71 on 31st January 2013.

Thirdly, the dividend.  Again this year, the question of whether to maintain the overall dividend payment at the previous year's level required careful consideration by the Board.  Once again, earnings have not been sufficient to fund the entire dividend payment of 36 pence.  As you know, the investment policy followed by Mercantile is focused primarily on capital growth, rather than income.  Nonetheless, the Board has taken the view, once again, that the Company should again utilise some of its Revenue Reserve to maintain the level of the total dividends to be paid to shareholders over the year ended 31st January 2013.  In terms of the current year, taking account of the wishes of many of our shareholders, we have adjusted the flow of dividend payments, so that the first three interims will be paid at 8p.  Additionally, it is pleasing to see that revenue projections for 2014 and beyond, supplied by JPMorgan Asset Management (UK) Limited to the Board over the last three months, have become more positive.  However, we will not make a decision on the level of the fourth interim dividend until early in 2014.

Fourthly, I would like to comment on The Alternative Investment Fund Management Directive.   Following advice from Dickson Minto, we expect to appoint JPMorgan to be the Company's AIFM.  We will have a window of one year, commencing on 22^nd July 2013, to register with the FCA.  It will be necessary for the Company to appoint a depositary which will be responsible for the proper monitoring of cash flows, and six different organisations are under consideration for this role.  The Board expects to make a decision about the appointment of a depositary in the Autumn." 

The Board is pleased to announce that all of the Ordinary Resolutions put to shareholders were passed.  In addition, four items of special business were passed, which:

i)          allow the Directors of the Company to exercise all powers of the Company to allot shares in the Company up to an aggregate nominal amount of £1,228,008 representing approximately 5% of the Company's issued ordinary share capital as at the date of the passing of the resolution;

ii)         allow the disapplication of pre-emption rights on the allotment of new ordinary shares up to an aggregate nominal amount of £1,228,008;

iii)        allow the Company to make market purchases of up to 14,726,283 ordinary shares, representing 14.99% of the Company's issued share capital; and

iv)        approved the Company's dividend policy to continue to pay four quarterly interim dividends.

The full text of all the resolutions can be found in the Notice of Annual General Meeting contained in the Annual Report and Accounts which is available for viewing at the National Storage Mechanism which can be located at www.morningstar.co.uk/uk/NSM and from the Company's website, www.mercantileit.co.uk 

A summary of proxy votes received will shortly be available on the Company's website, www.mercantileit.co.uk

22^nd May 2013

For further information, please contact:

Juliet Dearlove

For and on behalf of

JPMorgan Asset Management (UK) Limited - Company Secretary

020 7742 4000

 

END

 

 

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