Merchants Trust PLC · LSE:72HN

Merchants Trust — The Merchants Trust — Shareholder Meeting (May 2012)

31 slides from Merchants Trust's shareholder meeting presentation, May 9, 2012

  1. Slide 1: The Merchants Trust PLC Annual General Meeting

    The Merchants Trust PLC Annual General Meeting 9 May 2012

  2. Slide 2: 30 years of uninterrupted dividend growth

    The Merchants Trust 30 years of uninterrupted dividend growth Year to January 2011 2012 Ordinary dividend 22.8p 23.0p Revenue reserves available to smooth dividends Revenue reserves (31/01/12)* £11.7m Special Pence per share 11.4p Dividend 28p 26p 24p 0.50 22p 23.00 22.30 22.50 22.80 20p 21.60 20.00

  3. Slide 3: Highlights of 2011/12 performance

    The Merchants Trust Highlights of 2011/12 performance Positives Negatives  30th year of consecutive dividend growth  Gearing reduced NAV return in flat market  UK Equity portfolio outperformed FTSE 100 benchmark by 1.5%  Falling bond yields raised the market value of debt  Call overwriting gene

  4. Slide 4: Dividend Sustainability & Growth

    The Merchants Trust Dividend Sustainability & Growth  Reserves built up in good years to offset pressures in difficult years  Reserve depletion on improving trend  Revenue reserves of 11.4p* available Special  Outlook for UK dividend growth good Dividend Reserve accumulation Reserve depletion So

  5. Slide 5: Outlook for UK dividend growth is good

    The Merchants Trust Outlook for UK dividend growth is good UK FTSE All Share Dividend Level Net Debt to EBITDA  We have seen the deepest dividend cuts for a generation  Payout ratio is now low Source: FTSE, Datastream, Morgan Stanley Research. Note: Data excludes financials sector Dotted lines = F

  6. Slide 6: Valuation summary

    The Merchants Trust Valuation summary 31 January 2011 31 January 2012 Change (%) 30 April 2012 Change (%) Total Assets £552m £526m -4.7 £521m -1.0 Net Assets Value Per Share (Debt at Book Value) 427.1p 402.1p -5.9 405.0p +0.7 Net Assets Value Per Share (Debt at Market Value) 407.3p 366.2p -10.1 371.

  7. Slide 7: Borrowings

    The Merchants Trust Borrowings 31 Jan 2011 31 Jan 2012 (£m) % (£m) % Total Assets 552 100 526 100 Borrowings 111 20 111 21 Shareholder Funds 441 80 415 79 Average Maturity 11 years Average Interest Charge 8.5% Debt at fair value (£m) NAVs (p) with debt at fair value and par Source: RCM. 12-10312\P-I

  8. Slide 8: % Discount/Premium to NAV (Fair Value)

    The Merchants Trust % Discount/Premium to NAV (Fair Value) 29/01/04 to 10/04/12 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Sep-05 Jul-06 Mar-08 Sep-10 Jul-11 Nov-09 Nov-04 Dec-06 Aug-08 Dec-11 Jun-04 Jun-09 Jan-04 Jan-09 May-07 Apr-05 Oct-07 Feb-06 Apr-10 Feb-11 % Discount/Premium to NAV Source : Datas

  9. Slide 9: Key portfolio changes – financial year to January 2012

    The Merchants Trust Key portfolio changes – financial year to 31 January 2012 New Additions 31 Jan 2011  5 additions, 7 disposals, 46 holdings at year end Carnival WPP  Buying undervalued recovery potential and selective consumer exposure London & Stamford Properties Melrose  Selling fully valued

  10. Slide 10: Current economic and market outlook

    The Merchants Trust Current economic and market outlook Groundhog Day  Medium term economic growth will be muted as debt burden is paid down  US economy showing improvement but greater austerity to come  Peripheral Europe struggling with economic/political pressures  Corporates generally in bett

  11. Slide 11: Portfolio themes

    The Merchants Trust Portfolio themes  Large core holdings in well financed global, “mega” caps with  Favour high quality, growth stocks on reasonable valuations strong franchises and good yields  Exposure to emerging market consumer spending growth  Management turnaround and recovery situations

  12. Slide 12: Sector views

    The Merchants Trust Sector views Underweight Overweight Mining -9.3 4.9 Media Oil & Gas Producers -5.3 3.8 Aerospace & Defense Banks -5.1 2.8 Electricity Beverages -2.2 2.7 Travel & Leisure General Retail -0.9 2.2 Gas, Water, Utilities -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 Position rela

  13. Slide 13: Stock views

    The Merchants Trust Stock views Underweight Overweight Rio Tinto -3.3 2.8 BAE Systems BG Group -3.3 2.7 SSE Diageo -2.5 2.7 Reed Elsevier Standard Chartered -2.5 2.7 GlaxoSmithKline Anglo American -2.1 2.4 United Business Media -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 Position relative to FTSE 100 In

  14. Slide 14: Conclusion

    The Merchants Trust Conclusion  30 years of dividend growth  6% yield underpinned by reserves and rising income  Defensively biased but not constrained portfolio  Investment opportunities available despite difficult economic background 12-10312\P-IT\MT\SG\010512 14

  15. Slide 15: Appendix

    informed ROM Appendix

  16. Slide 16: Revenue reserve depletion on an improving trend

    The Merchants Trust Revenue reserve depletion on an improving trend Earnings and dividends per share 31.00 29.00 27.00 Pence per share 25.00 23.00 21.00 19.00  2007 – 2009 eps ahead of dps 17.00 15.00  2009 – 2011 eps benefitted from 1 off factors 2007 2008 2009 2010 2011 2012 (e.g. VAT reclaims)

  17. Slide 17: Disclaimer

    Disclaimer Please remember that past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise as a result of market fluctuations and you may not get back the amount originally invested. You should not make any assumptions about the

  18. Slide 18: Proxy Voting Figures – Annual General Meeting, May 2012

    The Merchants Trust PLC Proxy Voting Figures – Annual General Meeting, 9 May 2012

  19. Slide 19: Resolution - to receive and adopt the Annual Financial Report

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 1 - to receive and adopt the Annual Financial Report For Discretion Against Withheld 32,677,217 280,841 73,074 196,062 12-10275\AH-IT\JB\170412 19

  20. Slide 20: Resolution - to declare and approve a final dividend

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 2 - to declare and approve a final dividend For Discretion Against Withheld 32,785,301 280,841 71,000 90,052 12-10275\AH-IT\JB\170412 20

  21. Slide 21: Resolution - to re-elect Simon Fraser as a Director

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 3 - to re-elect Simon Fraser as a Director For Discretion Against Withheld 32,051,137 269,193 417,444 489,420 12-10275\AH-IT\JB\170412 21

  22. Slide 22: Resolution - to re-elect Mike McKeon as a Director

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 4 - to re-elect Mike McKeon as a Director For Discretion Against Withheld 31,892,628 270,353 462,868 601,345 12-10275\AH-IT\JB\170412 22

  23. Slide 23: Resolution - to re-elect Henry Staunton as a Director

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 5 - to re-elect Henry Staunton as a Director For Discretion Against Withheld 32,023,334 270,353 338,179 595,328 12-10275\AH-IT\JB\170412 23

  24. Slide 24: Resolution - to re-elect Paul Yates as a Director

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 6 - to re-elect Paul Yates as a Director For Discretion Against Withheld 32,020,271 270,353 314,318 622,252 12-10275\AH-IT\JB\170412 24

  25. Slide 25: Resolution - to approve the Directors' Remuneration Report

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 7 - to approve the Directors’ Remuneration Report For Discretion Against Withheld 30,520,793 266,634 1,586,090 853,677 12-10275\AH-IT\JB\170412 25

  26. Slide 26: Resolution - to re-appoint PricewaterhouseCoopers LLP as Auditors

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 8 - to re-appoint PricewaterhouseCoopers LLP as Auditors For Discretion Against Withheld 32,267,881 282,674 342,652 333,987 12-10275\AH-IT\JB\170412 26

  27. Slide 27: Resolution - to authorise the Directors to determine Auditors' remuneration

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 9 - to authorise the Directors to determine the remuneration of the Auditors For Discretion Against Withheld 32,309,675 287,797 178,274 451,448 12-10275\AH-IT\JB\170412 27

  28. Slide 28: Resolution - to authorise the Directors to allot Shares

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 10 - to authorise the Directors to allot Shares For Discretion Against Withheld 31,870,515 377,489 511,511 467,679 12-10275\AH-IT\JB\170412 28

  29. Slide 29: Resolution - to disapply pre-emption rights

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 11 - to disapply pre-emption rights For Discretion Against Withheld 30,362,186 390,813 1,206,782 1,267,413 12-10275\AH-IT\JB\170412 29

  30. Slide 30: Resolution - to authorise market purchases of Ordinary Shares

    The Merchants Trust PLC Annual General Meeting, 9 May 2012 Resolution 12 - to authorise the Company to make market purchases of Ordinary Shares For Discretion Against Withheld 32,130,401 395,874 451,830 249,089 12-10275\AH-IT\JB\170412 30

  31. Slide 31: Presentation to the Annual General Meeting, May 2012

    The Merchants Trust PLC Presentation to the Annual General Meeting, 9 May 2012

The Merchants Trust — Shareholder Meeting (May 2012) on 6ix