REG - Athelney Trust plc - Annual Financial Report
11/03/2025 16:30
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RNS Number : 2471A Athelney Trust PLC 11 March 2025
Athelney Trust PLC
Legal Entity Identifier:
213800ON67TJC7F4DL05
NON- STATUTORY ACCOUNTS
Athelney Trust plc, the investor in small companies and junior markets
announces its final results for the 12 months ended 31 December 2024.
The financial information set out below does not constitute the Company's
statutory accounts for the years ended 31 December 2024 and 2023 but is
derived from those accounts. Statutory accounts for 2023 have been delivered
to the Registrar of Companies, and those for 2024 will be delivered in due
course. The auditors have reported on those accounts; their report was (i)
unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under Section 498 (2) or (3) of the
Companies Act 2006. The text of the Auditor's report can be found in the
Company's full Annual Report and Accounts on the Company website:
www.athelneytrust.co.uk
Chair's Statement and Business Review
Dear Shareholder
I am pleased to present the Annual Financial Report for the year to 31
December 2024.
The Strategic Report section of this Annual Report has been prepared to help
all Shareholders understand the drivers of performance in the past year, how
the Company operates and to assess its performance.
Financial Summary and Overview
The key performance indicators are as follows:
Year ended Year ended % Change
31 December 2024 31 December 2023
NAV total return (10.4%) (4.4)% n/a
Revenue return per ordinary share 7.4p 7.7p (3.8%)
Total return per share (13.1)p (0.6)p n/a
Share price 175.0p 185.0p (5.4%)
Net asset value per ordinary share 186.1p 209.1p (11.0%)
Discount to NAV per ordinary share 5.9% 11.5% n/a
Cumulative value of shareholder investment (net asset value plus cumulative
dividends per ordinary share)
196p 218.8p (10.4%)
Shareholders' funds £4.015m £4.512m (11.0%)
196p
218.8p
(10.4%)
Shareholders' funds
£4.015m
£4.512m
(11.0%)
· The Trust's Investment performance over 12 months
as measured by NAV total return, which is the change in NAV plus the dividend
paid, was minus 10.4% (2023: minus 4.4%).
· The interim dividend of 2.3p per share was paid
on 27 September 2024.
· Your Board recommends a final dividend of 7.6p
per share increasing a total dividend payable for the year to 9.9p (2023:
9.8p) an increase of 1%.
· This is the 22nd successive year of progressive
dividends and importantly returns the Trust to the "Dividend Heroes" list
maintained by the AIC, a list of investment companies that have consistently
increased their dividends for 20 or more years in a row.
Performance
A review of 2024 for UK equity markets suggests a year of underperformance, for a number of reasons, explained below.
Your company's performance for the year was also negative as measured by NAV
Total Return (10.4%), and it also underperformed compared to AIM (-5.7%) and
FTSE 250 (4.7%) indices. Much of this can be attributed to the selling of
Close Brothers at a loss, and the poor performance of Impax Asset Management,
Fevertree and YouGov, covered in the Half Yearly Financial Report (30 June
2024).
As further explanation, in 2024 the UK equities market underperformed relative
to the US and other global markets due to a combination of factors spanning
economic, market dynamics and investor sentiment dimensions.
On Discount to NAV, the share price performed a little better than most over
the year, ending at 10.5% compared to the AIC UK Smaller Company sector
average of 12.2%. At the time of writing on 6 March 2025 this has improved
to 3.1% compared to the sub sector average of 12.3%.
Economic Factors
The UK's economic landscape in 2024 was marked by modest growth, with the
economy expanding gently after a negative second half in 2023. Key drivers
included real wage growth and sustained full employment. Notably, the UK was
the only European country exhibiting a positive outlook across services,
manufacturing, and construction sectors.
Despite these positive indicators, the UK faced challenges such as heightened
competition in the domestic market and the ongoing cost of living crisis, and
uncertainty and delay produced by the general election, which adversely
affected consumer cyclical stocks.
The optimism for clarity and momentum created by the new Labour landslide
majority was dented by the following weeks of relatively gloomy ministerial
analysis, ending in an Autumn Budget that handicapped private sector
aspirations, with National Insurance, minimum wage and Inheritance Tax
rises. Since then, evidence from KPMG and other surveys shows that
recruitment has reduced as employers are more reluctant to take on new staff.
A large increase in government borrowing and shaving of the expected headroom
to one third of the usual, announced at that Budget, translated to the UK
being the most vulnerable of G7 countries to the increased interest costs
driven by rapidly rising gilt yields during December for US, Germany and UK.
The new Chancellor's position was not helped by the poor reception from
economists and business leaders of the 'anti-growth' Budget implications. In
the background, UK actual growth was anaemic at 0.1% in November, half the
rate expected. Reeves' options are now currently being squeezed, along with
her fiscal headroom.
Geopolitical turmoil generated by continuing wars in 2024, and uncertainty
about global economic pressures after US President Elect Trump's appetite to
apply tariffs, both contributed to delays in investment decisions, layoffs
or reduction of expansion plans at the end of 2024.
Market Dynamics and Investor Sentiment factors
Over the past decade, the UK's share of the global equity market has
diminished, decreasing from 8.7% in 2010 to 3.7% in 2024. This decline
reflects the superior performance of the US economy, a higher volume of IPOs,
and substantial returns from US stocks.
The AIM underperformance continues, however there are still good potential
opportunities for large gains, even taking into account the negative (but
better than expected) impact of the October Budget's reduction of IHT relief.
The UK's primary stock index increased by approximately 20% from 2015 to
October 2024, whereas the major US index grew by more than 250% during the
same period. This disparity underscores the challenges facing UK capital
markets, including low liquidity, diminished investor confidence, and a
shrinking pool of capital. However, there are signs that investors are
increasingly questioning the ability of US stocks to continue on the same
trajectory, and also proving more nervous at potential threats like AI from
China's DeepSeek. In January President Trump called the release of its R1
model, cheaper to develop and using less memory than the West's OpenAI model
ChatGPT, a 'wake-up call' for US companies.
Investor sentiment over 2024 favoured US and European stocks over UK equities.
Global fund managers have reduced their overweight positions in US stocks from
36% to 19%, while increasing their allocations to European stocks. This shift
indicates a growing preference for areas perceived to offer better value,
further contributing to the underperformance of UK equities.
The decline of active equity funds in the UK has also impacted the Initial
Public Offering (IPO) market. Since 2016, £150 billion has flowed out of
active funds due to disappointing performance, high fees, and a shift towards
passive funds and alternative assets. This trend has starved active managers
of funds, affecting their ability to participate in IPOs and contributing to a
weak IPO market.
High potential - UK small cap equities remain undervalued
We remain confident of and committed to our value-based principles, despite
the different headwinds nationally and internationally, discussed above. We
believe small cap stocks remain cheap now compared to large cap as well as for
their long term performance.
Recent analysis(( 1 (#_ftn1) )) shows that average outperformance of smaller
companies over large caps over the past 5 cycles has been in excess of 50%.
Therefore despite being out of favour currently, there remains high potential
for rapid and significant small cap recovery.
Dividend and Earnings
The company's total revenue earned from its portfolio in 2024 dropped 7.5% to
£202,843 from £219,366 in the previous year. Our earnings per share fell
3.8% to 7.4p (2023: 7.7p).
Excluding one-off special dividends, UK dividends fell year on year to
£86.4bn (-0.4%) in 2024, however the UK market continues to deliver better
dividend yield than any other major market - the FTSE Small Cap had a yield of
4.2% and FTSE All Share 3.5% (next best was Japan at 2.3%).
The board is pleased to recommend a maintained final dividend of 7.6p which,
subject to shareholder approval at the AGM, will be paid on 15 May 2025 to
those shareholders on the register at 11 April 2025. Once added to the
interim dividend, this brings the full dividend for 2024 to 9.9p a 1.0%
increase on 2023.
Board and Company Developments
The Board places significant importance on corporate governance and compliance
with the AIC and UK Corporate Governance Codes. Full details are set out in
the Corporate Governance section on pages 16 to 19.
We note the Financial Conduct Authority's Policy Statement PS22/3 of April
2022 to comply or explain in relation to board diversity and inclusion, with
changes to the Listing Rules commencing in 2023 for the Trust. As a small,
low-cost fund, your Board continues to assess how best to structure and plan
for a board that meets shareholder and regulatory needs, has continuity,
stability and reflects prudent management of costs.
In terms of controllable costs, I confirm a continued freeze on the
non-executive director's fee (£10,500) with no premium for Chair positions,
which is comparable to the NED fee of other, similarly sized funds.
Our Ongoing Charges Figure (OCF), calculated using the AIC recommended Ongoing
Charges methodology, taking annualised costs that would reasonably be incurred
if there was no trading of the investee shares, divided by the average of
published monthly NAV is 3.13% (2023: 3.84%).
The decrease is due to the decrease in auditor fees from the previous year
resulting in a net decrease of £11k in Ongoing Charges in 2024 compared to
2023. While we remain a small fund, reducing the OCF will continue to be a
challenge, however every effort is made to do this, while applying appropriate
time and resources to growth and good governance.
As we continue to explore ways to grow the fund, the Company is now using the
specialist marketing services of Colchester-based Equity Development Ltd. We
look forward to the impact this will make in the coming year and continue to
take opportunities for the Fund Manager to explain the investment approach,
including use of Goodacre Events such as the UK Smaller Companies Conferences
which can be joined online.
I am disappointed to report the sudden resignation of Moore Kingston Smith LLP
(MKS) as our auditor on 6 August 2024 because, as it explained in its
resignation letter, "the Company's audit partner is shortly to depart MKS.
As a result our firm has reduced its capacity to complete audits for Public
Interest Entities and in order to maintain the quality of the audit services
that we provide, we have determined that it is necessary for us to resign from
the office of auditor. There are no circumstances connected with our
ceasing to hold office as auditor which we consider should be brought to the
attention of the company's members or creditors."
1. Simon Thompson interview "The scene is set for a UK
Small Cap recovery ", Investors Chronical, 19 Dec 2024
We are delighted to report that after an appropriate, competitive tender
process to review a number of alternative auditors, the Board has accepted the
recommendation of the Audit Committee and appointed Beever and Struthers as
auditor for this financial year on 10 October 2024.
Through no fault of the Company's, two auditors have now resigned with no
notice in less than 12 months.
We suggest this is further evidence that audit reforms, though
well-intentioned by the FRC, were launched into a sector unprepared for the
sudden pressures on audit firm costs, approved individuals and general
resources capable of sustainably and reliably delivering PIE audits.
Environmental, Human Rights, Employee, Social and Community Issues
The Board consists entirely of two Non-Executive Directors and one Managing
Director who was the sole employee. The Company has no direct impact on the
community or the environment, and as such has no environmental, human rights,
social or community policies. In carrying out its investment activities and in
relationships with suppliers, the Company aims to conduct itself responsibly,
ethically and fairly.
Environmental, Social and Governance factors are considered as part of the
commercial evaluation of investee companies.
Annual General Meeting (AGM)
We are pleased to invite shareholders to our AGM at the offices of Druces LLP,
Salisbury House, London Wall, London EC2M 5PS on 23 April 2025 at 12.00 noon.
There will be an opportunity to ask questions during the AGM and also
afterwards in a less formal environment.
We encourage all shareholders to vote on the resolutions, all of which the
board endorses ahead of the deadline at 12 noon on 17 April 2025. Details on
how to vote at the AGM, and its resolutions are in the Notice of AGM, which is
delivered with this Annual Report. Further copies are available on our
website, or from the Company Secretary.
An Independent Board
The Directors in place at the time of signing these accounts are:
· Myself, Frank Ashton - Non-Executive Chair
· Simon Moore - Non-Executive Director, Chair of
Audit Committee, Chair of Remuneration Committee
· Dr Manny Pohl - Managing Director
· Jason Pohl - Alternate for Dr Manny Pohl
We currently have three directors who together make up an independent Board
under the AIC Code of Corporate Governance 2022.
Capital Gains
During the year the Company realised capital profits before expenses arising
on the sale of investments in the sum of £49,006 (2023: £50,853).
Portfolio Review
Additional Holdings Purchased
Additional and new holdings of AJ Bell, Alpha Group, Auto Trader, Begbies
Traynor, Liontrust Asset Management, National Grid, NWF Group, Paypoint,
Raspberry Pi, RELX and Wise were acquired.
Holdings Sold or Trimmed
4Imprint, Cerillion, Clarke T, Close Brothers, Games Workshop, Gamma,
LondonMetric Property. Rightmove, Spirax Engineering, Target Healthcare and XP
Power.
Outlook
After a brighter start, this has proved to be a further largely challenging
year for the Investment Trust sector in the UK. Some of the optimism and
expectation felt at the half year, did not translate into material gains by
the year end. Inflation, elections and eventually rate cuts were filling
2024's headlines.
Although since mid-January 2025 we now have a returning US President in Donald
Trump and a ceasefire between Israel and Hamas in Gaza, there are remaining
uncertainties and some expectations. For example, trade tariffs are likely
to harm global growth, be inflationary and may cause recession in some
countries. Meanwhile there are increasing fiscal challenges in the UK, given
the declining growth forecasts from commentators and the Chancellor's rules.
We are delighted now to be using the very attractive option of moving to fund
management fees that are only driven by performance against shareholder
returns (in cash terms), underpinned by the external fund management of EC
Pohl and Company. External management is the chosen fund management model
for the large majority of investment trusts. We thank Dr Pohl for his years
of service as internal Fund Manager and welcome the new environment which your
board believes will translate into lower OCF and strong performance as a
result of a mandate executed by EC Pohl and Company. This is a top-rated
Australian investment firm with total funds under management as at December
2024 exceeding Aus$3,000m. Overall this adjusts the balance of performance and
cost for shareholders, against a backdrop of continuing market headwinds for
the UK Investment Trust sector, and sets up the Company for a successful and
stable future.
Thank you for your continued support; we hope to see you in person at the AGM.
Frank Ashton
Non-Executive Chair
11 March 2025
Fund Manager's Review
Reflecting on 2024
As we close the chapter on 2024, it was a year marked by significant global
economic shifts, geopolitical complexity, and technological advancements. For
many, the rise of artificial intelligence, easing inflation, and the political
ramifications of the U.S. elections underscored the year's challenges and
opportunities. These themes not only tested global markets but also
demonstrated the critical importance of strategic clarity and disciplined
execution.
Last year the London Stock Exchange saw the largest outflow of companies since
the global financial crisis. A number of these firms said declining liquidity
and lower valuations were key reasons for moving away from London,
particularly to the US which offers more capital and trading activity and as
investors have switched to passive, or tracker, funds that track the main
market moves, and as pension funds have ignored smaller companies. This was
particularly evident in the Alternative Investment Market (AIM) which declined
materially relative to the blue-chip FTSE 100 index since Labour's election
win on 4 July and has shrunk to its smallest size in 23 years as business
owners and investors anticipated an abolition of inheritance tax relief in the
budget. Twenty-six companies have delisted from AIM since the general
election in July, taking the total below 700 for first time since 2001.
The attraction of AIM companies is their potential to grow faster than their
main market counterparts and now that the government has made the tax position
clear, we expect the share price for these companies to better reflect their
potential. However, many of the companies on AIM do still lack liquidity
which can lead to short-term price volatility.
For the broader market, ongoing geopolitical instability, slow economic growth
and a diminished appetite for UK equities among pension funds have impacted
valuations and liquidity and UK equities have remained out of favour.
These factors have all had an impact on our portfolio which has performed as
shown in Table 1, outperforming the AIM index and underperforming the FTSE
Small Company Index.
The Athelney NAV has been negatively impacted by rising costs, predominantly
audit fees and our large dividend payout (DY:5.4%) as compared to the FTSE250
(DY:3.3%) in particular.
As we reflect on the year, the IMF's recent statement on global growth
challenges has proven particularly relevant. Ageing populations, insufficient
investment, and stagnant productivity gains have emerged as significant
barriers to sustained growth. Against this backdrop, investor attention
converged on three critical themes:
1. The enduring impact and growth potential of the AI revolution.
2. Disinflation trends and their influence on central bank rate
policies.
3. The economic and geopolitical effects of President Trump's return
to office.
Companies using AI reported tangible returns on investment, leveraging AI to
enhance efficiency and strengthen their competitive advantage. From customer
service innovations to proprietary machine learning models, AI has become a
transformative force, underscoring a structural economic shift. Moreover,
hyperscale cloud providers like Microsoft (NASDAQ: MSFT) have heavily invested
in AI infrastructure, further driving adoption. While AI offers significant
operational benefits, questions about its long-term scalability and broader
impact continue to shape the conversation.
Disinflation has defined 2024. Easing inflationary pressures have fuelled
optimism for potential central bank rate cuts to stimulate growth. While this
trend offers relief, underlying risks in energy markets and persisting
geopolitical tensions are keeping investors cautious. Lastly, President
Trump's return to power has reshaped the political landscape, reigniting
debates on globalization and market dynamics with promises of protectionist
trade policies and fiscal reforms.
Amidst this backdrop, we have remained true to our process - focusing on the
stocks in our portfolio rather than attempting to predict macroeconomic trends
and industry responses. Our focus has been to maintain our large exposure to
Property Trusts and higher dividend yielding businesses in recognition of the
need to maintain the dividend paid to Shareholders within a growth style
portfolio.
During the year, Rightmove (LSE: RMV) was approached by the Australian-listed
company REA Group (ASX: REA) with a £6bn 'Cash and REA Share' offer, which
was ultimately rejected after the fourth attempt. This followed another
development in our portfolio: TClarke Plc was successfully acquired by Regent
Acquisitions in April 2024.
We exited our positions in Close Brothers, LondonMetric Property, Spirax
Sarco, TClarke, and XP Power during the year. The proceeds from these sales
were reallocated to strengthen our existing holdings and initiate new
positions in companies we believe are well-positioned to expand their economic
footprint and generate sustainable growth for the portfolio over the long
term.
We increased our exposure to Alpha Group, Begbies Traynor, Liontrust Asset
Management, National Grid, NWF Group, and PayPoint while trimming our holdings
in Cerillion, Four Imprint, Games Workshop, Gamma Communications, and
RightMove.
In the past twelve months we added five new names to the portfolio:
AJ Bell (LSE: AJB)
AJ Bell is one of the largest and most well-regarded UK-based investment
platforms, offering pension, ISA, and investment account services. With a
low-cost, user-friendly approach, it attracts retail investors and financial
advisers. It has achieved strong growth in assets under administration and has
a scalable business model, positioning AJ Bell to benefit from increasing
demand for digital wealth management solutions.
Auto Trader (LSE: AUTO)
Auto Trader plc is the UK's leading digital automotive marketplace, connecting
buyers and sellers of vehicles. Its subscription-based model ensures recurring
revenue, supported by strong market share and data-driven insights. Continuous
platform enhancements and digital advertising growth, position Auto Trader
well to grow its economic footprint and capitalize on the ongoing shift toward
online car sales.
Raspberry Pi (LSE: RPI)
Raspberry Pi is a high-growth, high-margin, founder-led tech company dedicated
to revolutionising the accessibility and affordability of computing and
digital education in a traditional computing market characterised by high
barriers to entry, expensive hardware and software costs. Raspberry Pi
disrupts this paradigm by offering compact, versatile, and powerful computing
devices at a fraction of the cost and adds to our expanding suite of quality
growth companies.
RELX (LSE: REL)
RELX plc is a global leader in information and analytics, operating across
Scientific, Risk, Legal, and Exhibitions sectors. With a subscription-driven
revenue model, it offers stable growth and recurring income. Significant
investments in AI and data innovation position RELX to capitalize on rising
demand for analytics and decision-making tools.
Wise (LSE: WISE)
Wise is a high-growth, high-margin, founder-led tech business focused
on reducing the cost of cross-border money movement in an extremely
inefficient legacy banking network. The intermediary-heavy nature of this
network creates pressure to keep fees high, as does banks' short-term profit
motive to continue earning the highly profitable income stream from the
cross-border transactions. With strong customer growth, increasing transaction
volumes, and a scalable business model, Wise is well-positioned to benefit
from the ongoing shift toward digital financial services and international
money transfers.
Looking ahead
For investors looking ahead, the three key themes of 2024 remain relevant, but
their secondary effects deserve attention:
· AI Boom and Energy Demand: The increasing demand for
energy-intensive computing power may lead to power bottlenecks, potentially
sparking a new energy capex boom.
· Inflationary Pressures: Emerging energy shortages could add to
global inflationary pressures, compounded by proposed U.S. import tariffs and
potential trade frictions.
· Central Bank Policies: It may be premature to declare victory
over inflation or assume central banks will follow the projected rate-cut
cycle.
As we embrace the opportunities of this AI-driven era, our focus remains on
thoroughly evaluating the business models, financial strength, and growth
strategies of potential investments with care, diligence, and commitment. This
rigorous approach enables us to identify high-quality growth stocks that are
well-positioned for long-term success. Key to their sustained performance is
their agility in seizing emerging opportunities and effectively leveraging AI
to navigate market trends and meet evolving demands.
Companies with a sustainable competitive advantage are particularly
well-equipped to capitalize on the economic potential of AI to withstand
inflationary pressures and interest rate moves. Their resilience to market
disruptions such as business model shifts or price-based competition and the
significant barriers to entry for competitors lacking equivalent data assets
position them to not only capture but retain the economic benefits of AI,
ensuring enduring value creation for investors.
For us, having a stock-specific approach is central to our philosophy, driven
by the belief that the economics of a business underpin long-term investment
returns. Our rigorous research process evaluates industry dynamics, financial
stability, and management capability, ensuring our portfolio comprises
businesses resilient to macroeconomic challenges while positioned to seize
growth opportunities. By leveraging our proprietary 'Pillars of a Quality
Franchise' framework, we do believe we are able to deliver sustainable alpha
by identifying companies early, holding them long-term, and aligning capital
allocation with market valuations. However, the continued takeover of small
companies in the UK market and the move away from new listings in London as
previously mentioned is a worrying feature as our process aims to find
high-quality businesses that we would like to own for the very long-term.
We are encouraged by the recent recovery in our companies' price-to-earnings
(P/E) ratios, rebounding from prior lows. Coupled with strong short-term
financial performance evidenced by organic sales growth, solid earnings, and
rising dividends this reinforces our confidence in their future prospects.
These positive developments point to a promising trajectory for further
valuation growth across our portfolio.
Given the current market landscape in the UK as mentioned previously, we see
this as a prime opportunity to invest in high-quality franchises. These market
conditions are ideal for investors seeking resilient, growth-oriented
investments, positioning them well for long-term outperformance.
Update
The unaudited NAV on 28 February 2025 was 182.5p per share - down by 1.9% from
31 December 2024. The share price on the same day was 175.0p (trading at a
discount of 4.3%). Further updates can be found at www.athelneytrust.co.uk
(http://www.athelneytrust.co.uk)
Dr Manny Pohl AM
BSc (Eng), MBA, DBA, FAICD, F Fin, MSAFAA
Fund Manager
11 March 2025
Section 172(1) Statement
The Directors of the Company are required to promote the success of the
Company for the benefit of the Members and Shareholders as a whole. Section
172(1) of the Companies Act (2006) expands this duty and requires the
Directors to consider a broader range of interested parties when considering
the promotion of the Company. This wider group of stakeholders will include
employees, if any, suppliers, customers and others, and the Board will look to
understand and take into account the needs of each stakeholder, although
recognising that different stakeholders may have conflicting priorities and
not all decisions made will be to the benefit of all stakeholder groups.
When making decisions the Board should consider the following:
· the likely consequences of any decisions in the long-term;
· the interests of the Company's employees (if applicable);
· the impact of the Company's operations on the environment and the
community;
· the need to foster the Company's business relationships with
suppliers, customers and others;
· the need to act fairly for all members of the Company, and
· the desirability of the Company maintaining a reputation for high
standards of business conduct.
In line with similar small Investment Trusts and Investment Companies,
Athelney Trust plc does not have any customers and relies on a number of
third-party providers of services such as Company Administrator, the Custodian
and the Registrar to maintain its operations. The Company takes into account
the regulations of the market in which it operates and has regard to the
environment and the wider community in which it operates.
At every Board meeting the Directors review the performance of the Company
towards meeting the Company's Investment Objective through its strategy. Manny
Pohl is the fund manager, reports to other Board members and answers any
questions raised. Compliance with existing regulatory and legal requirements
is reviewed, together with any new regulations that are due to be introduced
or are being proposed that may affect the Company.
The Board recognises the importance of, and is committed to, understanding the
views of Shareholders and maintaining communication with its Shareholders in
the most appropriate manner.
This is undertaken through:
Annual General Meeting
The Company, in normal circumstances encourages all Shareholders to attend and
participate at its Annual General Meeting ("AGM"). Whilst the formal business
of the meeting is the primary purpose of the meeting, members of the Board are
available to answer questions directly from Shareholders, to provide an update
to the meeting and to offer Shareholders an insight into the business.
The Board plan to hold the 2025 AGM on 23 April 2025 at 12.00 noon. Further
details regarding the 2025 AGM are contained in the Notice of the Annual
General Meeting published in a separate notification.
Published Reports
The Company produces Annual and Half Yearly Reports and monthly fact sheets
which are all available from the Company's website and paper copies are
available on request from the registered office. The publication of these
reports is considered to be the primary method of communication to
Shareholders and other readers of the reports and provides detailed
information on the portfolio, performance over the period and an assessment of
the outlook for the Company.
The Annual Report also contains details regarding the Company's corporate
governance and the Board seek to ensure that the Report is readable and is
mindful that it should be fair, balanced and understandable.
Shareholder enquiries
Shareholders can contact the Company or any of its Directors through the
Company Secretary or through their company email address. Alternatively,
letters can be sent to the registered office address. Although the Directors
are not available full time, with the assistance of the Company Secretary they
seek to maintain open communication to all Shareholders.
Suppliers
The Company Secretary, Deborah Warburton and Administrator GW & Co.
Limited, are often the main contact point for advisors and stakeholders in the
Company. Regular communication is maintained between the Company Secretary and
the Directors advising them of all matters concerning the Company. The Company
also relies on the provision of services from outside parties to operate and
gives consideration to the needs and objectives of those providers and
recognises that their success will often assist the Company in achieving its
objectives.
Regulators
The Company operates in an environment that is governed by legal and
regulatory requirements. The Board recognises that these requirements are
there to protect stakeholders, including the government.
Environment and Community
As the Company does not have any direct employees nor any physical office
environment of its own it has little direct impact on the community or the
environment. The Company seeks to reduce its impact on the environment in
encouraging Shareholders to receive Reports electronically rather than through
printed hard copies. When paper copies are requested FSC paper is used. The
Board also engage through electronic means where possible rather than hold
excessive face to face meetings.
Other Statutory Information
As explained within the Report of the Directors on pages 20 to 22, the Company
carries on business as an investment trust. Investment trusts are collective
closed-ended public limited companies.
Board
The Board of Directors is responsible for the overall stewardship of the
Company, including investment and dividend policies, corporate and gearing
strategy, corporate governance procedures and risk management. Biographical
details of the three male Directors, can be found on pages 2 and 3.
One of the Directors is the Company's only employee (2023: one employee).
Investment Objective
The investment objective of the Trust is to provide shareholders with
prospects of long-term capital growth with the risks inherent in small cap
investment minimised through a spread of holdings in quality small cap
companies that operate in various industries and sectors. The Fund Manager
also considers that it is important to maintain a progressive dividend record.
Investment Policy
The assets of the Trust are allocated predominantly to companies with either a
full listing on the London Stock Exchange or a trading facility on AIM or
AQSE. The assets of the Trust have been allocated in two main ways: first, to
the shares of those companies which have grown steadily over the years in
terms of revenue and profits but, despite this progress are undervalued by the
market when compared to future earnings and dividends; second, those companies
whose shares are undervalued by the market when compared with the value of
land, buildings, other assets or cash on their balance sheet.
Investment Strategy
The investment strategy employed by the Fund Manager in meeting the investment
objective focuses on active stock selection. The selection of individual
holdings is based on analysis of, amongst other things, market positioning,
competitive advantage, future growth, financial strength and cash flows. The
weighting of individual investments reflects the Fund Manager's conviction in
the expected future returns from those holdings.
Investment of Assets
At each Board meeting, the Board considers compliance with the Company's
investment policy and other investment restrictions during the reporting
period. An analysis of the portfolio on 31 December 2024 can be found on pages
11 and 12 of this report.
Responsible Ownership
The Fund Manager takes a particular interest in corporate governance and
social responsibility investment policy. As stated within the Corporate
Governance Statement on pages 16 to 19, the Fund Manager's current policy is
available on the Trust's website www.athelneytrust.co.uk. The Board supports
the Fund Manager on his voting policy and his stance towards environmental,
social and governance issues.
Review of Performance and Outlook
Reviews of the Company's returns during the financial year, the position of
the Company at the year end, and the outlook for the coming year are contained
in the Chair's Statement on pages 4 to 6 and the Fund Manager's review on
pages 7 to 10 which form part of the Strategic Report.
Principal Risks and Uncertainties and Risk Management
As stated within the Corporate Governance Statement on pages 16 to 19, the
Board applies the principles detailed in the internal control guidance issued
by the Financial Reporting Council, and has established a continuing process
designed to meet the particular needs of the Company in managing the risks and
uncertainties to which it is exposed.
The principal risks and uncertainties faced by the Company are described below
and in note 12 which provides detailed explanations of the risks associated
with the Company's financial instruments.
· Global conflict - The continuing war between Russia and
Ukraine, and the Middle East has had a significant impact, inter alia, on
inflation and, in conjunction with affairs in China, an impact on supply
chains and globalisation. Investee companies will vary as to the impact on
them and their ability to adapt.
· Inflationary pressure - Inflation escalated sharply in 2023
which carried over in to 2024, with the Bank of England raising interest rates
on several occasions in an attempt to reduce the level of inflation. This has
stabilised in 2024 however not all investee companies are well-placed to pass
on cost pressures to their customers.
· Market - the Company's fixed assets consist almost entirely of
listed securities and it is therefore exposed to movements in the prices of
individual securities and the market generally.
· Investment and strategic - incorrect investment strategy, asset
allocation, stock selection and the use of gearing could all lead to poor
returns for shareholders.
· Regulatory - Relevant legislation and regulations which apply
to the Company include the Companies Act 2006, the Corporation Tax Act 2010
("CTA") and the Listing Rules of the Financial Conduct Authority ("FCA"). The
Company has noted the recommendations of the UK Corporate Governance Code and
its statement of compliance appears on pages 16 to 19. A breach of the CTA
could result in the Company losing its status as an investment company and
becoming subject to capital gains tax, whilst a breach of the Listing Rules
might result in censure by the FCA. At each Board meeting the status of the
Company is considered and discussed, so as to ensure that all regulations are
being adhered to by the Company and its service providers.
· Operational - failure of the accounting systems or disruption to its
business, or that of other third-party service providers, could lead to an
inability to provide accurate reporting and monitoring, leading to a loss of
shareholders' confidence.
· Financial - inadequate controls by the Fund Manager or other
third-party service providers could lead to misappropriation of assets.
Inappropriate accounting policies or failure to comply with accounting
standards could lead to misreporting or breaches of regulations.
· Liquidity - the Company may have difficulty in meeting obligations
associated with financial liabilities.
· Interest rate risk - this is not considered to be a direct risk to
the Company other than through its effect on investee companies.
· Trading - the Company is a small trust and its shares can be
illiquid, which means that investors may have difficulty in dealing in larger
amounts of shares.
· Geopolitical risk - some of the companies that we have invested in
trade globally and their value may be affected by international political
developments, changes in government and their policies, changes in taxation,
restrictions in foreign investment and currency repatriation, currency
fluctuations and other developments in the laws and regulations of countries
in which they operate.
The Company has complied with the MiFID ll and KID legislation and the
deadlines to ensure that shares in the Company were still able to be traded. A
copy of the Company's KID can be found on the website
http://www.athelneytrust.co.uk
The Board is not aware of any breaches of laws or regulations during the
period under review and up to the date of this report.
The Board seeks to mitigate and manage these risks through continual review,
policy setting and enforcement of contractual obligations. It also regularly
monitors the investment environment and the management of the Company's
investment portfolio. Investment risk is spread through holding a wide range
of securities in different industrial sectors.
Statement Regarding Annual Report and Financial Statements
Following a detailed review of the Annual Report and Financial Statements by
the Audit Committee, the Directors consider that taken as a whole it is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Company's performance, business model and strategy.
The Directors have adopted best practices as described by the AIC's Statement
of Recommended Practice on financial statements dated July 2022.
Greenhouse Gas Emissions
As an investment company with its activities outsourced to third parties or
self managed by the Non-Executive Directors, the Company's own direct
environmental impact is minimal. The Company has no greenhouse gas emissions
to report from its operations, nor does it have responsibility for any other
emissions producing sources under the Companies Act 2006 (Strategic Report and
Directors' Reports) Regulations 2013. Furthermore, the Company considers
itself to be a low energy user under the Streamlined Energy & Carbon
Reporting regulations and therefore is not required to disclose energy and
carbon information.
Social, Community and Human Rights issues
The Company has one employee and, as far as the Board is aware, no issues
exist in respect of social, community or human rights issues.
Alternative Investment Fund Manager's Directive ("AIFMD")
The Company was registered for the period to 31 December 2024 as its own AIFM
with the FCA under the AIFMD and confirms that all required returns have been
completed and filed.
For and on behalf of the Board
Dr Manny Pohl AM
Managing Director
11 March 2025
Statement of Directors' responsibilities in respect of the financial statements
The Directors state that to the best of their knowledge:
• the Financial Statements, prepared in accordance with UK Generally
Accepted Accounting Practice, give a true and fair view of the assets,
liabilities, financial position and net return of the Company;
• consider the Annual Report and accounts, taken as a whole, are fair,
balanced and understandable and provide the necessary information for
shareholders to assess the Company's position and performance, business model
and strategy; and
• the Chair's Statement and Report of the Directors include a fair
review of the development and performance of the business and the position of
the Company together with a description of the principal risks and
uncertainties that it faces.
For and on behalf of the Board
Dr Manny Pohl AM
Managing Director
11 March 2025
Income Statement
For the Year Ended 31 December 2024
2024
2023
Note Revenue Capital Total Revenue Capital Total
£ £ £ £ £ £
Losses on investments held at fair value 8 - (310,888) (310,888) - (57,725) (57,725)
Income from investments 2 202,843 - 202,843 219,366 - 219,366
Investment management expenses 3 (3,133) (29,980) (33,113) (3,419) (31,019) (34,438)
Other expenses 3 (40,154) (101,384) (141,538) (48,254) (91,604) (139,858)
Net return on ordinary activities before taxation 159,556 (442,252) (282,696) 167,693 (180,348) (12,655)
Taxation 5 (448) - (448) (623) - (623)
Net return (negative return) on ordinary activities after taxation 6 159,108 (442,252) (283,144) 167,070 (180,348) (13,278)
Net return per ordinary share 6 7.4p (20.5)p (13.1)p 7.7p (8.3p) (0.6p)
Dividend per ordinary share paid during the year 7 9.9p 9.7p
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued during the year.
The total column of this statement is the Statement of Total Comprehensive
Income of the Company prepared in accordance with applicable Financial
Reporting Standards ("FRS"). The supplementary revenue return and capital
return columns are prepared in accordance with the Statement of Recommended
Practice ("AIC SORP") issued in July 2022 by the Association of Investment
Companies.
Statement of Financial Position
As at 31 December 2024
Company Number: 02933559
2024 2023
Note
£ £
Fixed assets
Investments held at fair value through profit and loss 8 3,927,180 4,374,302
Current assets
Debtors 9 91,471 137,709
Cash at bank and in hand 43,669 40,347
135,140 178,056
Creditors: amounts falling due within one year 10 (47,124) (40,388)
Net current assets 88,016 137,668
Total assets less current liabilities 4,015,196 4,511,970
Net assets 4,015,196 4,511,970
Capital and reserves
Called up share capital 11 539,470 539,470
Share premium account 881,087 881,087
Other reserves (non distributable)
Capital reserve - realised 2,385,266 2,467,624
Capital reserve - unrealised 93,312 453,206
Revenue reserve (distributable) 116,061 170,583
Shareholders' funds - all equity 4,015,196 4,511,970
Net Asset Value per share 13 186.1p 209.1p
These financial statements were approved and authorised for issue by the Board
of Directors on 11 March 2025 and signed on their behalf by
Dr Manny Pohl AM
Managing Director
Statement of Changes in Equity
For the Year Ended 31 December 2024
Called-up Capital Capital Total
Share Share reserve reserve Revenue Shareholders'
Capital Premium realised unrealised reserve Funds
£ £ £ £ £ £
Balance brought forward at 1 January 2023 539,470 881,087 2,539,394 561,784 212,827 4,734,562
Net profits on realisation
of investments - - 50,853 - - 50,853
Decrease in unrealised
Appreciation - - - (108,578) - (108,578)
Expenses allocated to
Capital - - (122,623) - - (122,623)
Profit for the year - - - - 167,070 167,070
Dividend paid in year - - - - (209,314) (209,314)
Shareholders' Funds at 31 December 2023 539,470 881,087 2,467,624 453,206 170,583 4,511,970
Balance brought forward at 1 January 2024 539,470 881,087 2,467,624 453,206 170,583 4,511,970
Net profits on realisation
of investments - - 49,006 - - 49,006
Decrease in unrealised
Appreciation - - - (359,894) - (359,894)
Expenses allocated to
Capital - - (131,364) - - (131,364)
Profit for the year - - - - 159,108 159,108
Dividend paid in year - - - - (213,630) (213,630)
Shareholders' Funds at 31 December 2024 539,470 881,087 2,385,266 93,312 116,061 4,015,196
Statement of Cash Flows
For the Year Ended 31 December 2024
2023 2023
£ £
Cash flows used in operating activities
Net revenue return 159,108 167,070
Adjustment for:
Expenses charged to capital (131,364) (122,623)
Increase/(decrease) in creditors 6,736 23,303
Decrease/(increase) in debtors 46,238 405,592
Cash received/(used) in operations 80,718 473,342
Cash flows from investing activities
Purchase of investments (998,640) (906,775)
Proceeds from sales of investments 1,134,874 655,733
Net cash (used)/received from investing activities 136,234 (251,042)
Cash flows from financing activities (213,630) (209,314)
Equity dividends paid
Net cash (used)/received from financing activities (213,630) (209,314)
Net increase/(decrease) in cash 3,322 12,986
Cash at the beginning of the year 40,347 27,361
43,669 40,347
Cash at the end of the year
As the company does not have any loans, overdrafts or hire purchase
arrangements, net debt is equal to cash and therefore no reconciliation of net
debt has been disclosed.
Notes to the Financial Statements
For the Year Ended 31 December 2024
1. Accounting Policies
Athelney Trust Plc is a public limited company, incorporated in England and
Wales, registration number 02933559, The address of the registered office is
Waterside Court, Falmouth Road, Penryn, Cornwall TR10 8AW.
1.1 Statement of Compliance and Basis of Preparation of Financial Statements
The financial statements are prepared in accordance with applicable United
Kingdom accounting standards, including Financial Reporting Standard 102 ("FRS
102"), the Companies Act 2006 and with the AIC Statement of Recommended
Practice ("SORP") issued in July 2022, regarding the Financial Statements of
Investment Trust Companies and Venture Capital Trusts. All the Company's
activities are continuing.
The presentation currency of the financial statements is pounds sterling,
being the functional currency of the primary economic environment in which the
company operates. Monetary amounts in these financial statements are rounded
to the nearest pound.
1.2 Going concern
The Directors have made an assessment of the Company's ability to continue as
a going concern. This has included consideration of portfolio liquidity, the
financial position in respect of its cashflows, the working arrangements of
key service providers, the continued eligibility to be approved as an
investment trust company, the impact of the current economic environment and
the current conflicts in the Ukraine and the Middle East. In addition the
Directors are not aware of any material uncertainties that may cast
significant doubt upon the Company's ability to continue as a going concern.
The Directors are satisfied that the Company has sufficient resources to
continue in business for the foreseeable future being a period of at least 12
months from the date these financial statements were approved. Therefore, the
financial statements have been prepared on the going concern basis.
1.3 Income
Income from investments including taxes deducted at source is recognised when
the right to the return is established (normally the ex-dividend date). UK
dividend income is reported net of tax credits in accordance with FRS 102
section 23 "Revenue". Interest is dealt with on an accruals basis.
1.4 Investment Management Expenses
All three Directors are involved in investment management, 10% of their
salaries or fees have been charged to revenue and the other 90% to capital.
A fixed percentage of all other investment management expenses have been
charged to capital. The Board propose continuing this basis for future
years.
1.5 Other Expenses
Expenses (including VAT) and interest payable are dealt with on an accruals
basis and charged through the Revenue and Capital Accounts in an allocation
that the Board consider to be a fair distribution of the costs incurred.
1.6 Investments
Listed investments comprise those listed on the Official List of the London
Stock Exchange. Unlisted investments are traded on AIM or
AQSE. Profits or losses on sales of investments are taken to realised capital
reserve. Any unrealised appreciation or depreciation is taken to unrealised
capital reserve.
Investments have been classified as "fair value through profit and loss" upon
initial recognition.
Subsequent to initial recognition, investments are measured at fair value with
changes in fair value recognised in the Income Statement.
Securities of companies quoted on a recognised stock exchange are valued by
reference to their quoted bid prices on 31 December.
1.7 Taxation
The tax effect of different items of income and expenses is allocated between
capital and revenue on the same basis as the particular item to which it
relates, using the Company's effective rate of tax for the year.
1.8 Judgements and estimates
The Directors confirm that judgements and estimates have been made in
allocating revenue and capital expenditure. In certain instances, the
Directors have exercised judgement in allocating specific costs between
capital and revenue. This judgement, consistently applied for many years,
considers the business effect, the nature of the work undertaken, and whether
the time and effort expended contributes to capital growth or revenue
generation. In some cases this approach departs from the AIC Statement of
Recommended Practice (SORP) issued in July 2022, on allocating certain
expenses to capital.
1.9 Deferred Taxation
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed by the balance sheet date. Deferred tax
liabilities are recognised for all taxable timing differences but deferred tax
assets are only recognised if it is considered more likely than not that there
will be suitable profits from which the future reversal of the underlying
timing differences can be deducted. Deferred tax assets and liabilities are
calculated at the tax rates expected to be effective at the time the timing
differences are expected to reverse. Deferred tax assets and liabilities are
not discounted.
1.10 Capital Reserves
Capital Reserve - Realised
Gains and losses on realisation of fixed asset investments are dealt with in
this reserve. As per the company articles the reserve is not readily
distributable.
Capital Reserve - Unrealised
Increases and decreases in the valuations of fixed asset investments are dealt
with in this reserve. Unrealised capital reserves cannot be distributed by way
of dividends or similar.
1.11 Dividends
In accordance with FRS 102 Section 32" Events after the end of the Reporting
Period", dividends are included in the financial statements in the year in
which they go ex-div.
1.12 Share Issue Expenses
The costs associated with issuing shares are written off against any premium
arising on the issue of Share Capital.
1.13 Financial Instruments
Short term debtors and creditors are held at cost.
2. Income
Income from investments
2024 2023
£ £
UK dividend income 134,278 140,588
Foreign dividend income - 2,160
UK Property REITs 66,205 73,339
Bank interest 2,360 3,279
Total income 202,843 219,366
UK dividend income
2024 2023
£ £
UK Main Market listed investments 86,777 105,608
UK AIM-traded shares 47,501 34,980
134,278 140,588
3. Return on Ordinary Activities before Taxation
The following amounts (inclusive of VAT) are included within investment
management and other expenses:
2024 2023
£ £
Directors' remuneration:
Services as a director 21,000 21,000
Otherwise in connection with management 31,325 34,193
Auditor's remuneration:
Audit Services - Statutory audit
Beever and Struthers 42,000 -
Moore Kingston and Smith 2,460 46,140
Miscellaneous expenses:
Management services 32,472 32,472
PR and communications 4,383 2,225
Stock exchange subscription 12,780 12,000
Sundry investment management and other expenses 28,231 24,826
Legal fees - 1,440
174,651 174,296
4. Employees and Directors' Remuneration
2024 2023
£ £
Costs in respect of Directors:
Non-executive Directors' fees 21,000 21,000
Wages and salaries 31,325 34,193
52,325 55,193
Average number of employees:
Chair - -
Investment 1 1
Administration - -
1 1
5. Taxation
Current tax:
2024 2023
£ £
Uk current tax expense 448 623
Tax on profit 448 623
(ii) Factors affecting the tax charge for the year.
The tax charge for the period is higher than (2023: higher than) the average
small company rate of corporation tax in the UK of 19 per cent. The
differences are explained below:
2024 2023
£ £
Total return on ordinary activities before tax (282,696) (12,655)
Total return on ordinary activities multiplied by the average small company (53,712) (2,404)
rate of corporation tax 19% (2023: 19%)
Effects of:
UK dividend income not taxable (25,513) (26.686)
Revaluation of shares not taxable 68,380 20,630
Capital gains not taxable (9,311) (9,662)
Unrelieved management expenses 20,604 18,745
Current tax charge for the year 448 623
The Company has unrelieved excess revenue management expenses of £889,360 at
31 December 2024 (2023: £780,914) and £102,597 (2023: £102,597) of capital
losses for Corporation Tax purposes which are available to be carried forward
to future years. It is unlikely that the Company will generate sufficient
taxable profits in the future to utilise these expenses and therefore no
deferred tax asset has been recognised.
Historically the Company has received approval from HM Revenue and Customs
under Section 1158 of the Corporation Tax Act 2010, as a result of this
approval the Company is not liable to Corporation Tax on any realised
investment gains. The Directors intend to continue to meet the conditions
required to obtain approval and therefore no deferred tax has been provided on
any capital gains or losses arising on the revaluation or disposal of
investments.
The Directors are fully aware that the Company is not a close company and of
the rules associated with this status. The Company holds its Investment
Trust status under the S446 Corporation Tax Act 2010 exemption because more
than 35% of the company's shares are held by the public and have been actively
traded in the past 12 months on the London Stock Exchange and this is
regularly reviewed by the Directors.
6. Return per Ordinary Share
Returns per share are based on the weighted average number of shares in issue
during the year.
2024
£ £ £
Revenue Capital Total
Attributable return on ordinary activities after taxation
159,108 (442,252) (283,144)
Weighted average number of shares 2,157,881
Return per ordinary share 7.4p (20.5p) (13.1p)
2023
£ £ £
Revenue Capital Total
Attributable return on ordinary activities after taxation
167,070 (180,348) (13,278)
Weighted average number of shares 2,157,881
Return per ordinary share 7.7p (8.3p) (0.6p)
7. Dividend
2024 2023
£ £
Final dividend in respect of 2023 of 7.6p (2023: a final dividend of 7.5p was 163,999 161,841
paid in respect of 2022) per share
Interim dividend in respect of 2024 of 2.3p (2023: an interim dividend of 2.2p 49,631 47,473
was paid in respect of 2023) per share
213,630 209,314
The shortfall of retained reserves at December is £47,938. The February
management accounts show profits of £46,079. No other dividends have an
ex-divi date of pre 11 March at the date of signing these accounts there
remains a shortfall. This shortfall will be met by 31 March 2025 according to
our forecasts.
The Company's status as an Investment Trust under Section 1158 of the
Corporation Tax Act requires that no more than 15% of the distributable
revenue profits in a year can be retained from the revenue available for
distribution in that year. Revenue profits for the year were £159,108.
An interim dividend of 2.3p per ordinary share was paid on 27 September 2024
amounting to £49,631. It is recommended that a final dividend of 7.6p (2023:
7.6p) per ordinary share be paid totaling £163,999 making the total dividend
payable in the year £213,630. In deciding on the proposed final dividend, the
Directors have considered the expected accumulated realised distributable
profits to 31 March 2025 and concluded these will be in excess of the proposed
dividend.
For the year 2023, a final dividend of 7.6p was paid on 8 April 2024 amounting
to a total of £163,999. An interim dividend of 2.2p per ordinary share was
paid on 23 September 2023 amounting to £47,473 making the total dividend paid
in the year £211,472.
Summary of dividends paid for the last 10 financial years
Ex-div date Dividend Type Amount Financial Year
10/04/2025 Proposed 7.6p 2024
12/09/2024 Interim 2.3p 2024
08/03/2024 Final 7.6p 2023
07/09/2023 Interim 2.2p 2023
06/04/2023 Final 7.5p 2022
08/09/2022 Interim 2.1p 2022
10/03/2022 Final 7.5p 2021
09/09/2021 Interim 2.0p 2021
11/03/2021 Final 7.7p 2020
10/09/2020 Interim 1.7p 2020
19/03/2020 Final 9.3p 2019
20/03/2019 Final 9.1p 2018
01/03/2018 Final 8.9p 2017
09/03/2017 Final 8.6p 2016
17/03/2016 Final 7.9p 2015
19/03/2015 Final 6.7p 2014
8. Investments
Movements in year 2024 2023
£ £
Valuation at beginning of year 4,374,302 4,180,985
Purchases at cost 998,640 906,775
Sales - proceeds (1,134,874) (655.733)
- realised gains on sales 49,006 50,853
Decrease in unrealised appreciation (359,894) (108,578)
Valuation at end of year 3,927,180 4,374,302
Book cost at end of year 3,833,868 3,921,097
Unrealised appreciation at the end of the year 93,312 453,205
3,927,180 4,374.302
UK Main Market listed investments 2,870,580 2,886,362
UK AIM-traded shares 1,056,600 1,487,940
3,927,180 4,374,302
Gains on investments
2024 2023
£ £
Realised gains on sales 49,006 50,853
Decrease in unrealised appreciation (359,894) (108,578)
(310,888) (57,725)
The purchase costs and sales proceeds above include transaction costs of
£9,047 (2023: £5,429) and £5,979 (2023: £2,795) respectively.
9. Debtors
2024 2023
£ £
Investment transaction debtors 70,002 104,128
Other debtors 21,469 33,581
91,471 137,709
10. Creditors: amounts falling due within one year
2024 2023
£ £
Social security and other taxes 98 700
Other creditors 2,850 2,880
Accruals and deferred income 44,176 36,808
47,124 40,388
11. Called Up Share Capital
2024 2023
£ £
Authorised
10,000,000 Ordinary Shares of 25p 2,500,000 2,500,000
Allotted, called up and fully paid
2,157,881 Ordinary Shares of 25p 539,470 539,470
12. Financial Instruments
The Company's financial instruments comprise equity investments, cash balances
and debtors and creditors that arise directly from its operations, for
example, in respect of sales and purchases awaiting settlement.
The major risks associated with the Company are market, credit and liquidity
risk. The Company has established a framework for managing these risks. The
Directors have guidelines for the management of investments and financial
instruments.
Market Risk
Market price risk arises mainly from uncertainty about future prices of
financial investments used in the Company's business. It represents the
potential loss the Company might suffer through holding market positions by
way of price movements other than movements in exchange rates and interest
rates.
The Company's investment portfolio is exposed to market price fluctuations
which are monitored by the Fund Manager who gives timely reports of relevant
information to the Directors.
Adherence to the investment objectives and the internal controls on
investments set by the Company mitigates the risk of excessive exposure to any
one particular type of security or issuer.
The Company's exposure to other changes in market prices at 31 December on its
investments is as follows:
A 20% decrease in the market value of investments at 31 December 2024 would
have decreased net assets attributable shareholders by 37 pence per share
(2023: 47 pence per share). An increase of the same percentage would have an
equal but opposite effect on net assets attributable to shareholders.
Market risk also arises from changes in interest rates and exchange risk.
All of the Company's assets are in sterling and accordingly the Company has
limited currency exposure. The majority of the Company's financial assets
are non-interest bearing, as a result, the Company's financial assets are not
subject to significant risk due to fluctuations in the prevailing levels of
market interest rates.
The carrying amounts of financial assets best represent the maximum credit
risk exposure at the balance sheet date. Bankruptcy or insolvency of the
custodian may cause the Company's rights with respect to securities held with
the custodian to be delayed.
Liquidity Risk
Liquidity Risk is the risk that the Company may have difficulty in meeting
obligations associated with financial liabilities. The Company is able to
reposition its investment portfolio when required so as to accommodate
liquidity needs. However, it may be difficult to realise its investment
portfolio in adverse market conditions.
Maturity Analysis of Financial Liabilities
The Company's financial liabilities consist of creditors as disclosed in note
10. All items are due within one year.
Capital management policies and procedures
The Company's capital management objectives are:
• to ensure the Company's ability to continue as a going concern;
• to provide an adequate return to shareholders;
• to support the Company's stability and growth;
• to provide capital for the purpose of further investments.
The Company actively and regularly reviews and manages its capital structure
to ensure an optimal capital structure, taking into consideration the future
capital requirements of the Company and capital efficiency, projected
operating cash flows and projected strategic investment opportunities. The
management regards capital as total equity and reserves, for capital
management purposes.
Fair values of financial assets and financial liabilities
Fixed asset investments (see note 8) are valued at market bid price where
available which equates to their fair values. The fair values of all other
assets and liabilities are represented by their carrying values in the balance
sheet.
2024 2023
£ £
Fair value through profit or loss investments 3,927,180 4,374,302
Financial instruments by category
The financial instruments of the Company fall into the following categories
31 December 2024
At Amortised Cost Assets at fair value through profit or loss Total
Assets £ £ £
Investments - 3,927,180 3,927,180
Debtors 91,471 - 91,471
Total 91,471 3,927,180 4,018,651
Liabilities
Creditors 47,026 - 47,026
Total 47,026 - 47,026
31 December 2023
At Amortised Cost Assets at fair value through profit or loss Total
Assets £ £ £
Investments - 4,374,302 4,374,302
Debtors 137,709 - 137,709
Cash at bank 40,347 - 40,347
Total 178,056 4,374,302 4,552,358
Liabilities
Creditors 39,688 - 39,688
Total 39,688 - 39,688
Fair value hierarchy
In accordance with FRS 102, the Company must disclose the fair value hierarchy
of financial instruments.
The fair value hierarchy consists of the following three classifications:
Classification 1 - Quoted prices in active markets for identical assets or
liabilities.
Quoted in an active market in this context means quoted prices are readily and
regularly available and those prices represent actual and regularly occurring
market transactions on an arm's length basis.
Classification 2 - The price of a recent transaction for an identical asset,
where quoted prices are unavailable.
The price of a recent transaction for an identical asset provides evidence of
fair value as long as there has not been a significant change in economic
circumstances or a significant lapse of time since the transaction took place.
If it can be demonstrated that the last transaction price is not a good
estimate of fair value (e.g. because it reflects the amount that an entity
would receive or pay in a forced transaction, involuntary liquidation or
distress sale), that price is adjusted.
Classification 3 - Inputs for the asset or liability that are based on
observable market data and unobservable market data, to estimate what the
transaction price would have been on the measurement data in an arm's length
exchange motivated by normal business considerations.
The Company only holds classification 1 investments (2023: classification 1
investments only).
13. Net Asset Value per Share
The net asset value per share is based on net assets of £4,015,196 (2023:
£4,511.970) divided by 2,157,881 (2023: 2,157,881) ordinary shares in issue
at the year end.
2024 2023
£ £
Net asset value per share 186.1p 209.1p
14. Dividends paid to Directors
During the year the following dividends were paid to the Directors of the
Company as a result of their total shareholding:
Dr E C Pohl AM £8,514¹
Simon Moore £6,682
Frank Ashton £ 228
Notes:
1. Manny Pohl's relationship with EC Pohl & Co Pty Ltd is described
in Note 1 to the table of Directors' interests on page 25. During the year
dividends amounting to £8,514 were paid to EC Pohl & Co Pty Ltd.
15. Events after the balance sheet date
From 1 January 2025, the company has moved its investment management from
internal fund management by Dr E C Pohl, to external management by EC Pohl and
Co Pty Limited. The Company will cease to be an Alternative Investment Fund
Manager, this role passing to EC Pohl and Co Pty. The investment management
fee will be performance based.
Fraud warning
Fraudsters use persuasive and high-pressure tactics to lure investors into
scams. They may offer to sell shares that turn out to be worthless or
non-existent, or to buy shares at an inflated price in return for an upfront
payment. While high profits are promised, if you buy or sell shares in this
way you will probably lose your money. Detailed advice on how to avoid and
report potential investment scams is available on the FCA website:
www.fca.org.uk/scamsmart.
FURTHER INFORMATION
The Annual General Meeting of the Company will be held on Wednesday 23 April
2025 at 12.00 noon at the offices of Druces LLP, Salisbury House, London Wall,
London EC2M 5PS.
A copy of the Annual Report will be submitted to the National Storage
Mechanism and will shortly be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) . This document
will also be available on the Company's website at
https://www.athelneytrust.co.uk/ (https://www.athelneytrust.co.uk/)
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