(Alliance News) - Mercantile Investment Trust PLC on Monday said it is optimistic about the UK's economic and market outlook, giving an upbeat tune for long-term capital and dividend growth despite a fall in net asset value.
The London-based investment company focused on medium and smaller sized companies said net asset value per share as at July 31 declined 2.7% to 230.5 pence from 236.9p a year prior.
Mercantile Investment said NAV total return was positive 0.9% compared to its benchmark index, UK medium and smaller companies, which returned negative 1.3%. Including debt valued at par, Mercantile Investment returned negative 0.3%.
The total dividend for the year to date is 2.90 pence per share, up 7.4% from 2.70p a year prior. The company intends to pay a third quarter dividend of 1.45p in early February, 7.4% higher than 1.35p a year ago.
Looking ahead, Mercantile Investment is optimistic about the UK's economic and market outlook, noting "clearly abating" inflation levels and UK interest rates at or near their peak.
Chair Angus Lennox said: "UK equities, and UK mid and small cap shares in particular, represent good value at current levels, both relative to historic levels and compared to other developed markets. This means there are many attractive investment opportunities and for the patient investor we should in time once again see excellent investment returns. The company's strong long-term performance track record, combined with the good operational performance of the portfolio's holdings gives the board great confidence in the portfolio managers' ability to identify and capitalise on these opportunities."
Mercantile Investment shares were flat at 187.80 pence each on Monday morning in London.
By Tom Budszus, Alliance News reporter
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Mercantile Investment Trust PLC (MRC)