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May 2021

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The Merchants Trust Plc

Simon Gergel

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Highlights – Financial Year to 31 January 2021

Source: AllianzGI.

Dividend 27.2p 2020: 27.1p

Net Asset Value Total Return

-12.4%

2020: +18.7%

Benchmark Total Return

-7.5%

2020: +10.7%

Extraordinary year, dominated by Covid-19 pandemic 39 th year of dividend growth Negative shareholder total return, but strong second half Consistent investment process applied through volatile period Attractive investment opportunities in UK stock market

Yield 6.2% 2020: 5.1%

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Past performance is not a reliable indicator of future results . Source: Annual Report and previous reports. March 2021.

39 years of rising dividends

Dividends

Reserves built up in good years to offset pressures in difficult years. Revenue reserves of 18.3p at Jan 2021 Earnings fell in financial year FY21 from 29.7p to 18.5p, with improving trend across the year – Earnings per Share (EPS) -45% H1, -29% H2 (-38% overall) “The board recognises the importance of a growing dividend to shareholders. We can see a path to a covered dividend in the medium term. Absent any significant further deterioration in the outlook for income, the board plans to continue with its progressive dividend policy, and is willing to consider utilising reserves, built up over many years, to cover any shortfall from earnings .” Colin Clark,Chairman , April 2021

Reserve accumulation

Reserve depletion

Special Dividend

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Investment Activity 3 phases: Pandemic shock, extreme polarisation, value recovery

Maintained consistent, value-oriented investment philosophy and process Focus on attractively priced, strong companies, with high dividend yields

This is no recommendation or solicitation to buy or sell any particular security. A stock mentioned as example above will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date. Source: AllianzGI as of 31/01/2020

Phase 1 – Pandemic Shock Buy Example Sell Example Repositioned portfolio more defensively, prioritising income Reduced exposure to cyclicals / challenged companies / leverage Vodafone Informa

Phase 2 – Polarised Market Buy Example Sell Example Took advantage of extreme market polarisation Bought strong businesses at cheap prices, sold fully valued shares Next Pennon

Phase 3 – Value Recovery Buy Example Sell Example Selectively sold businesses under pressure, as shares recovered Bought strong companies at fair prices DCC Senior

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Investment Performance: Strong long term returns

Past performance is not a reliable indicator of future results . Source: Thomson Reuters DataStream/AllianzGI.

Merchants Trust NAV Total Return vs Benchmark: 10 year history

MERCHANTS TRUST - TOT RET NAVF NET 40543 40574 40602 40633 40663 40694 40724 40755 40786 40816 40847 40877 40908 40939 40968 40999 41029 41060 41090 41121 41152 41182 41213 41243 41274 41305 41333 41364 41394 41425 41455 41486 41517 41547 41578 41608 41639 41670 41698 41729 41759 41790 41820 41851 41882 41912 41943 41973 42004 42035 42063 42094 42124 42155 42185 42216 42247 42277 42308 42338 42369 42400 42429 42460 42490 42521 42551 42582 42613 42643 42674 42704 42735 42766 42794 42825 42855 42886 42916 42947 42978 43008 43039 43069 43100 43131 43159 43190 43220 43251 43281 43312 43343 43373 43404 43434 43465 43496 43524 43555 43585 43616 43646 43677 43708 43738 43769 43799 43830 43861 43890 43921 43951 43982 44012 44043 44074 44104 44135 44165 44196 100 102.50836120401338 104.68227424749166 102.00668896321072 106.85618729096991 106.27090301003345 104.34782608695652 101.00334448160534 91.471571906354512 86.705685618729092 96.404682274247477 95.150501672240793 94.983277591973234 97.575250836120389 102.00668896321069 102.42474916387958 101.25418060200667 92.140468227424748 99.498327759197309 102.34113712374582 105.01672240802674 106.77257525083611 109.61538461538458 111.03678929765883 112.45819397993306 123.16053511705681 125.41806020066885 128.010033444816 135.61872909698991 140.63545150501668 134.11371237458189 146.90635451505011 142.30769230769226 141.88963210702337 148.99665551839459 146.65551839464877 149.74916387959857 145.65217391304338 154.68227424749156 148.07692307692298 152.59197324414706 154.0133779264213 151.00334448160527 150.66889632107012 151.08695652173904 145.15050167224069 145.23411371237447 148.82943143812699 145.56856187290958 153.01003344481595 158.94648829431424 156.02006688963195 162.79264214046805 163.87959866220717 152.67558528428074 156.43812709030081 146.82274247491623 140.1337792642139 148.9966555183945 148.49498327759184 149.08026755852833 144.48160535117049 144.31438127090291 144.48160535117049 146.73913043478254 144.56521739130429 144.56521739130429 150.91973244147152 156.60535117056853 158.19397993311028 162.87625418060193 161.28762541806012 168.72909698996645 167.05685618729086 172.1571906354514 174.99999999999989 175.4180602006688 181.93979933110356 175.91973244147147 183.27759197324406 183.69565217391298 184.19732441471567 188.12709030100325 182.52508361204002 192.64214046822732 191.97324414715709 183.5284280936454 180.85284280936449 198.82943143812707 204.4314381270903 204.01337792642141 205.85284280936452 197.49163879598663 196.73913043478262 184.11371237458192 178.84615384615384 166.8896321070234 180.685618729097 186.62207357859535 187.29096989966561 196.32107023411379 182.10702341137133 189.96655518394658 194.06354515050177 183.11036789297668 192.64214046822755 195.48494983277604 205.93645484949843 220.23411371237466 216.22073578595328 187.95986622073585 140.38461538461544 156.43812709030104 159.3645484949833 161.53846153846155 148.07692307692309 153.92976588628764 148.49498327759198 147.24080267558529 179.68227424749165 193.22742474916387 FTSE ALL-SHARE TOTAL RETURN (was FTSE 100 up to 310117) 40543 40574 40602 40633 40663 40694 40724 40755 40786 40816 40847 40877 40908 40939 40968 40999 41029 41060 41090 41121 41152 41182 41213 41243 41274 41305 41333 41364 41394 41425 41455 41486 41517 41547 41578 41608 41639 41670 41698 41729 41759 41790 41820 41851 41882 41912 41943 41973 42004 42035 42063 42094 42124 42155 42185 42216 42247 42277 42308 42338 42369 42400 42429 42460 42490 42521 42551 42582 42613 42643 42674 42704 42735 42766 42794 42825 42855 42886 42916 42947 42978 43008 43039 43069 43100 43131 43159 43190 43220 43251 43281 43312 43343 43373 43404 43434 43465 43496 43524 43555 43585 43616 43646 43677 43708 43738 43769 43799 43830 43861 43890 43921 43951 43982 44012 44043 44074 44104 44135 44165 44196 100 99.447133974899998 102.06773452430001 101.1046943078 104.10719011900001 103.11587097299999 102.7012863029 100.5168039133 93.862434687299995 89.417454076799999 96.753890298100004 96.608344631899996 97.818371459099993 99.821246038200002 103.7268515034 102.35960420409999 102.07318276170001 95.1689730927 99.9667917206 101.19264437240001 103.2954032498 104.041811319 104.95763350509999 106.95324378940001 107.57408301949999 114.58803568660001 116.62904791130001 118.16908206379999 118.83091277190002 122.2038884991 115.77601013659999 123.41962299110001 120.3987069664 121.46316895939999 126.7295236439 125.67516306269999 127.6500136363 123.2348787096 129.43858692250001 126.0383778292 129.93255900509999 131.71049528739999 130.07265612929999 129.92218144030002 132.59284773109999 128.9121849501 127.63133401969999 131.570138724 128.59022100350001 132.30850245670001 136.7036605712 134.034032037 138.2587386564 139.2557631873 130.33754346980001 133.9357046065 125.95094684549998 122.3501913132 128.6805058162 129.098721676 126.89089477349999 123.73793116059998 124.75674858079999 126.98247678250002 128.78972968530002 129.183817707 135.28738242 139.9383475059 142.27485621139999 144.8381147069 146.33326234949999 143.39200105770001 151.0950079392 150.23496725979999 154.90175723870001 156.8024632648 156.22456697800001 163.04216637830001 159.02282015439999 160.87985956840001 163.1171105798 162.42290295699999 165.450376517 162.7121678652 170.48186835090002 167.18322067150001 161.71243474190001 158.76128976289999 168.96618405410001 173.68288208449999 173.36869834660001 175.60613707049998 170.75743024920001 171.9536044669 163.02449794250001 160.34335388 154.33235494090002 160.78025464179998 164.4678894763 168.8516794505 173.38500586700002 168.1780028785 174.35235859010001 177.84233219929999 171.50110010649999 176.5685386573 174.0956602631 177.99632734959999 183.9104463292 177.94165606529998 162.11584440819999 137.69209338320002 144.4640587817 149.4016031454 151.70084741759999 146.2642222735 149.8065930029 147.26778057050001 141.64320822139999 159.68778238870001 165.85789437789998 MERCHANTS - SHARE PRICE TOTAL RETURN 100 100.14088326976649 99.944022003141285 100.90379149134449 105.49717383699604 107.71738653214008 104.49930673676248 100.65987471692338 95.854477035920766 92.819485299845169 96.755435991054796 94.519644346753381 93.979975385260289 94.748442459151235 100.09924498747307 99.446699457994157 99.529798989067785 91.231211433249143 97.276197773343242 98.061518437686289 98.276932816489847 99.515848748231377 101.37084130574249 104.48910960640487 105.03614316204508 114.4680284556587 117.32485366409793 118.46208154588489 124.81563729940328 133.81134742331258 128.6950080798095 142.5455436415935 138.56221878226432 138.7044829134334 147.19323986908014 143.4774126481239 147.33727433538073 143.28448152549063 151.59291214464056 145.0044683258719 149.83691672768416 150.72176563312135 148.95203241554432 146.8473163843808 149.68279135113389 144.16111607591759 142.68876375373361 147.22337097301863 142.2353101131456 148.1303136608972 147.21214704828478 147.05911927951604 150.56374551928175 152.73237064869326 143.90303662044437 146.41131824818964 141.78454738195759 132.21719604407991 139.87127539191678 139.19553847221493 137.56590957694655 133.61820386046361 130.39070588218632 130.63274610136796 134.24037043908558 132.60327072956215 131.94845917111491 140.84099416355915 140.50880847948039 142.00357324442948 141.36915594669736 147.1788293411096 152.60965101737622 154.42449237410443 160.56734284026908 159.71418293368615 161.36041757248825 168.57718873613663 164.64470790178476 164.94527540041452 170.9425335053628 170.19832002277369 171.81991159654498 168.45089302785385 176.60742889271924 175.21569763242471 169.47092472393405 171.6252101387802 184.69488628075263 191.96632539326237 192.69347284518358 190.60479605031162 182.50958459440218 186.92515447944371 177.43183855676622 172.7724227107089 171.09499476688939 177.990981204706 180.82521693686706 185.17107102442927 189.16802746427115 180.5520896327759 187.63629810177591 186.98931142460998 179.90563405614944 191.06483533758885 193.33256382766294 202.38889022647555 219.71402714419463 212.11429708489547 188.59033170415304 147.32374897497607 157.32097308948985 157.52395971567014 156.91496443042669 138.99272887954797 145.61148083576828 140.23376921344732 141.70721914341286 176.15946329103903 188.38104268490468

Total Return % (to end-January 2021) 1 Year 3 Years p.a. 5 Years p.a. 10 Years p.a. Merchants Portfolio (excludes gearing) -8.5 1.5 6.4 6.9 FTSE All-Share Total Return (was FTSE 100 to 31 Jan 2017) -7.5 -0.5 5.9 5.2 Active Return -1.0 2.1 0.5 1.7

Good long term performance, difficult H1 but strong recovery in H2

Portfolio performance slightly behind benchmark over the financial year but well ahead over longer periods

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UK equities are cheap, especially value shares

Past performance is not a reliable indicator of future results. Source: Morgan Stanley as of 31 January 2021 (includes sources from MSCI, IBES).

UK Value vs Growth average valuation premium

UK vs Europe average valuation premium

UK still at 40-year extreme discount vs Europe, with Brexit risk receding UK Value still at substantial discount to growth even after significant value rally in November

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Home economics : strong fundamentals in housing & RMI (Repair, Maintenance and Improvement)

Portfolio Positioning – key portfolio themes

This is no recommendation or solicitation to buy or sell any particular security. A stock mentioned as example above will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date. Source: Allianz Global Investors , January 2021

Environmental change enablers: undervalued ESG (Environmental, Social and Governance) plays

Uncorrelated value: defensive & differentiated

Digital winners: on the right side of structural change

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ANTOFAGASTA PLC

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Summary

Past performance is not a reliable indicator of future results. Source: AllianzGI

Active, high conviction and value driven investment strategy High dividend yield, 39 years of dividend growth Actively managed portfolio through a difficult year Well positioned for attractive investment opportunities in UK stock market

INCOME' IVERSIFICA LONGEVITY