Mercantile suffers in turbulent markets

21st Sep 2011 16:24

Mercantile Investment Trust saw huge losses for the six month period to the end of July, blaming specific stock and market wide turbulence. The group made a pre-tax loss of £15.6m, compared to a profit for the same period last year of £89m after the company took a £25.65m bath on the value of its investments.Net asset value on a total return basis dropped 0.3% during the period while its benchmarks - the FTSE All-Share, excluding FTSE 100 constituents and investment trusts - grew by 2.2%.Chairman Hamish Leslie Melville said: "Whilst this is a disappointing result, it has to be viewed against the backdrop of economic and political uncertainty, which has resulted in the portfolio underperforming against the managers' expectations. "With global growth slowing, markets volatile and the European Sovereign debt problem still unresolved, we remain cautious and as at the date of this report the Company is not fully invested, taking into account amounts receivable as proceeds from cash bids for companies in the portfolio. "However, the valuations of many stocks look attractive on a medium term view; generally companies' balance sheets are now strong and dividend yields attractive. The company is well placed to take advantage of opportunities as they present themselves."A second quarterly dividend of 6.0p (2010: 6.0p) has been declared payable in respect of the six months ended 31st July 2011. The share price fell 0.71% to 905.50p by 16:40.NR