Date post: | 05-Dec-2014 |
Category: |
Documents |
Upload: | jacknickelson |
View: | 294 times |
Download: | 0 times |
The Mercantile Investment Trust plc
Annual General Meeting
29 April 2009
2
Mercantile Investment Trust AGM_0409_JL.ppt
Agenda
Introduction
Performance Review
Current Portfolio
Outlook
3
Mercantile Investment Trust AGM_0409_JL.ppt
The Mercantile Investment Trust
Investment Objective
– Long term capital growth from a portfolio of UK small and mid cap companies
Performance Benchmark
– FTSE All-Share Index excluding FTSE100 and Investment Trusts
Mercantile was incorporated in 1884
Mercantile provides exposure to a diversified portfolio of UK companies
Active discount management
4
Mercantile Investment Trust AGM_0409_JL.ppt
Performance – 10 Years to 31 January 2009
Relative RelativeMercantile Benchmark Performance Mercantile Benchmark Performance
1 year -39.3 -36.2 -3.1 -39.2 -36.2 -3.0
3 years -33.8 -30.8 -3.0 -32.8 -30.8 -2.0
5 years +7.4 +7.3 +0.1 +10.6 +7.3 +3.3
10 years +113.1 +55.5 +57.6 +148.3 +55.5 +92.8
J.P. Morgan Asset Management/Fundamental Data Ltd/ Russell Mellon Caps/Standard & Poor’sNAV Net of fees
NAV Cumulative % Share Price Cumulative %
5
Mercantile Investment Trust AGM_0409_JL.ppt
Attribution – Sector
-1.8%
-0.9%
-0.8%
-0.7%
-2.7%
0.4%
0.4%
0.5%
0.8%
2.1%
-4.0% -3.5% -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%
Support Services
Real Estate
Nonlife Insurance
Construction & Materials
Oil Equipment, Services & Distribution
Household Goods
Electricity
General Industrials
Oil & Gas Producers
General Financial
Relative Contribution %
Top 5
Bottom 5
12 month attribution to 31 January 2009
Source: Factset
6
Mercantile Investment Trust AGM_0409_JL.ppt
Attribution – Stock
-0.37%-0.37%-0.35%-0.35%-0.35%
0.44%0.52%
0.56%0.58%
0.71%
-0.44%-0.46%
-0.55%-0.70%
-0.77%
0.37%0.38%0.38%0.39%0.40%
-1.00% -0.75% -0.50% -0.25% 0.00% 0.25% 0.50% 0.75% 1.00%
DSG InternationalReal Estate Opportunities
Enodis*Randgold Resources
China Real Estate OpportunitiesMapeley
GKNAga Rangemaster
BrixtonEnterprise Inns
Intermediate CapitalCookson*
BellwayVenture Production
Cattles*Punch TavernsPremier Foods
Inchcape*IG Group
Imperial Energy
Relative Contribution %
Top 10
Bottom 10
12 month attribution to 31 January 2009
Source: Factset. * Not held
7
Mercantile Investment Trust AGM_0409_JL.ppt
Dividend
36p dividend for the financial year ended 31st Jan 2009
3 interim dividends of 6p during financial year 2009 (3x 5.5p in 2008) and a final dividend of 18p (17.5p 2008)
Revenue reserves increased by 19% to 40p
Intention to maintain the current 6p for the three interim dividends. The final dividend will be determined based on the income received during the year and with regard to the strong reserves of 40p
8
Mercantile Investment Trust AGM_0409_JL.ppt
Current Portfolio – Gearing & Size Stratification
Mercantile by Market Capitalisation
All data as at 15 April 2009
Portfolio size £1,013 million
Equities 105.0%
Cash 16.4%
Borrowings (21.4)%
Total 100%
£100m to £300m
£300m to £500m
£500m to £1bn
£1bn to £1.5bn
>£1.5bn<£50m
£50m to £100m
9
Mercantile Investment Trust AGM_0409_JL.ppt
Current Performance – 31 January 2009 to 24 April 2009
90
95
100
105
110
115
120
125
130
30/01/09 06/02/09 13/02/09 20/02/09 27/02/09 06/03/09 13/03/09 20/03/09 27/03/09 03/04/09 10/04/09 17/04/09 24/04/09
Merc NAV +25.9%
Benchmark +20.6%
Capital only return
Net of fees. Rebased to 100 30/01/2009. Source: Datastream
10
Mercantile Investment Trust AGM_0409_JL.ppt
Current Portfolio – Sectors
%
As at 15 April 2009
1
15.9
23.4
20.5
0
24.4
10.2
3.4
0.5 0.7
3.5
12.3
21.5
18.6
0.6
29.9
6.2 6.3
0.4 0.7
0
5
10
15
20
25
30
35
Basic Materials ConsumerGoods
ConsumerServices
Financials Healthcare Industrials Oil & Gas Technology Telecoms Utilities
Mercantile
Benchmark
11
Mercantile Investment Trust AGM_0409_JL.ppt
Current Portfolio – Top Ten
Ten largest investments at 31 March 2009
Holding (%)
Premier Oil 2.3Venture Production 2.1Bellway 2.0Tomkins 1.7Mitchells & Butlers 1.7Investec 1.7Wolseley 1.7United Business Media 1.7Ladbrokes 1.6Persimmon 1.5Total 18.0
12
Mercantile Investment Trust AGM_0409_JL.ppt
Stock Example – Segro
Real estate owner with 5.1m sq m of logistics, industrial, and office space in the UK and Europe
Top ten tennants include Telefonica, Tesco, Mars, Argos, and Deutsche Post
Net property rental income in 2008 of £245m
Recently raised £500m through a deeply discounted rights issue to give greater room over covenants (can now withstand a further 30% decline in valuations)
Post raising NAV per share of 46p
Source: Datastream
0
25
50
75
100
125
150
Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 May-08 Aug-08 Nov-08 Feb-09
Segro share pricePence
13
Mercantile Investment Trust AGM_0409_JL.ppt
Stock Example – ITV
ITV is the UK’s leading commercial TV broadcaster. ITV 1 has an average audience share of 18% and just under 40% of the TV advertising market
Challenging advertising market with limited visibility
High level of debt but no repayments due until October 2011 and existing debt is covenant free
Significant cost saving programme implemented
Television still an effective advertising medium
Source: Datastream
0
25
50
75
100
125
150
Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 May-08 Aug-08 Nov-08 Feb-09
ITV share pricePence
14
Mercantile Investment Trust AGM_0409_JL.ppt
Outlook
The economy has always been cyclical, and this downturn is coupled with a need to bring down the massive amount of gearing that is in the system
Coordinated global response to recession. Central banks are have eased monetary policy aggressively. Fiscal stimuli are also being introduced
Significant falls in corporate earnings are already being discounted by the market
Capital preservation still important
Cyclical downturn but growth will return. Long term value present
New growth opportunities emerge first in the mid & small cap universe
15
Mercantile Investment Trust AGM_0409_JL.ppt
Any forecasts or opinions expressed are J.P. Morgan’s own at the date of this document and may be subject to change. The value of investments and the income from them may fluctuate and your investment is not guaranteed and investors may not get back the full amount invested. Past performance is not a guide to future performance. Exchange rates may cause the value of underlying overseas investments to go down or up. Investments in smaller companies may involve a higher degree of risk as they are usually more sensitive to market movements. Investments in emerging markets may be more volatile than other markets and the risk to your capital is therefore greater. Also, the economic and political situations may be more volatile than in established economies and these may adversely influence the value of investments made. Telephone lines are recorded and may be monitored for security and training purposes
Contact:
Martin Hudson, Managing Director, European Equity Group
+44 (0) 20 7742 8509
Jane Lennard, European Equity Group
+44 (0) 20 7742 8570
J.P. Morgan Asset Management
16
Mercantile Investment Trust AGM_0409_JL.ppt
The Mercantile Investment Trust plcAnnual General MeetingProxy voting as at 27 April 2009
Total For / Discretion 52,050,800 99.65%
Against 181,915 0.35%
Net Total 52,232,715 100.00%
Withheld 204,612
Resolution:
1. To receive the Director’s Report
Shares
%
17
Mercantile Investment Trust AGM_0409_JL.ppt
The Mercantile Investment Trust plcAnnual General MeetingProxy voting as at 27 April 2009
Total For / Discretion 52,058,025 99.47%
Against 278,539 0.53%
Net Total 52,336,564 100.00%
Votes Withheld 100,763
Resolution:
2. To approve the Directors’ Remuneration Report
Shares
%
18
Mercantile Investment Trust AGM_0409_JL.ppt
The Mercantile Investment Trust plcAnnual General MeetingProxy voting as at 27 April 2009
Total For / Discretion 52,191,457 99.66%
Against 175,616 0.34%
Net Total 52,367,073 100.00%
Votes Withheld 70,254
Resolution:
3. To re-elect Hamish Leslie Melville
Shares
%
19
Mercantile Investment Trust AGM_0409_JL.ppt
The Mercantile Investment Trust plcAnnual General MeetingProxy voting as at 27 April 2009
Total For / Discretion 52,334,678 99.84%
Against 81,684 0.16%
Net Total 52,416,362 100.00%
Withheld 20,965
Resolution:
4. To re-appoint PricewaterhouseCoopers LLP as auditors
Shares
%
20
Mercantile Investment Trust AGM_0409_JL.ppt
The Mercantile Investment Trust plcAnnual General MeetingProxy voting as at 27 April 2009
Total For / Discretion 52,351,689 99.87%
Against 68,520 0.13%
Net Total 52,420,209 100.00%
Votes Withheld 17,118
Resolution:
5. To grant authority for the Company to repurchase its own shares
Shares
%
21
Mercantile Investment Trust AGM_0409_JL.ppt
Resolution Shares % Shares % Shares % Shares
Total For/ Discretion Against
Net Total
VotesWithheld
1. To receive the Directors' Report 52,050,800 99.65% 181,915 0.35% 52,232,715 100.00% 204,612
2. To approve the Directors' Remuneration Report 52,058,025 99.47% 278,539 0.53% 52,336,564 100.00% 100,763
3. To re-elect Hamish Leslie Melville 52,191,457 99.66% 175,616 0.34% 52,367,073 100.00% 70,254
4. To re-appoint PricewaterhouseCoopers LLP 52,334,678 99.84 % 81,684 0.16% 52,416,362 100.00% 20,965
5. To grant authority for the Company to repurchase its own shares 52,351,689 99.87 % 68,520 0.13% 52,420,209 100.00% 17,118
No of shares in issue on 27th April 2009 102,321,968
Total number of shares voted by proxy 51.2%
The Mercantile Investment Trust plcAnnual General MeetingProxy voting as at 27 April 2009