2009 AGM Presentation

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


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


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


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


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

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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

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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

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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


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

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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

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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


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

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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

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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

[email protected]

Jane Lennard, European Equity Group

+44 (0) 20 7742 8570

[email protected]

J.P. Morgan Asset Management

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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




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




Against 175,616 0.34%

Net Total 52,367,073 100.00%


Resolution:

3. To re-elect Hamish Leslie Melville

Shares

%

19




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




Against 68,520 0.13%

Net Total 52,420,209 100.00%


Resolution:

5. To grant authority for the Company to repurchase its own shares

Shares

%

21


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%


2009 AGM Presentation

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