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Mercantile Investment Trust PLC on Friday reported growth in its net asset value, but a lower return than its benchmark in financial 2026. The London-based investor in small and medium sized UK companies booked a NAV per share of 288.2 pence at January 31, up from 263.2p a year earlier. NAV total return for the year ended in January was 12.3%, lagging behind the 15.8% returned by the firm’s benchmark, the FTSE All-Share index, ex-FTSE 100 and ex-investment trusts, with net dividends reinvested. Mercantile declared a total dividend per share of 8.20 pence in financial 2026, up 3.8% from 7.90p on-year. Its shares rose 0.6% to 252.50 pence on Friday morning in London and have risen 19% over the past year. The investment firm praised performance among its investees in the industrial support service sector, such as government outsourcer Serco Group PLC, which was Mercantile’s ‘top contributor on the back of improving contract win momentum, particularly in defence markets’. Mercantile also benefitted from strong trading at construction firm Balfour Beatty PLC, hailing ‘a healthy demand backdrop in the UK’. Other contributors included online trading business Plus500 Ltd and Georgian lender Lion Finance Group PLC. Investment banking & brokerage services were the main source of weakness in Mercantile’s portfolio, it said, with stakes in private equity firms ICG PLC and 3i Group PLC ‘coming under pressure’. At ICG, Mercantile attributed this ‘to wider market concerns surrounding the health of the private credit market’. At 3i, it pointed to slower than expected growth at discount retailer Action. Other detractors included 4imprint Group PLC, ‘due to increased uncertainty on their growth outlook following the US tariff announcements’ and WH Smith PLC, following a review into its accounting practices, which led Mercantile to exit its stake. Mercantile’s holding in Bytes Technology Group PLC was hit by a profit warning. The investor also noted that it did not have a stake in companies subject to takeover advances, such as Spectris PLC, which in August agreed to a £4.2 billion offer from Kohlberg Kravis Roberts & Co LP, edging out rival bidder Advent International LP. ‘The outlook is always uncertain, and this year is no different,’ commented portfolio managers Guy Anderson and Anthony Lynch on Thursday. Chair Rachel Beagles added: ‘The recent war in Iran raises the spectre of heightened oil prices, and if prolonged, threatens the downward trend of inflation and interest rates in the UK. However, levels of corporate and personal sector debt are historically low; valuations of medium and smaller companies remain attractive relative to history and larger peers. Beagles continued: ’Increased levels of market volatility should offer opportunities for active stock pickers. My fellow directors and I remain confident in your portfolio managers’ ability to guide the portfolio through any challenges.‘ Copyright 2026 Alliance News Ltd. All Rights Reserved.
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