REG - Athelney Trust plc - Half-year Report
24/07/2024 14:15
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RNS Number : 6983X Athelney Trust PLC 24 July 2024
Athelney trust PLC
Legal Entity Identifier:
213800ON67TJC7F4DLO5
24 July 2024
Half Yearly Financial Report for the Period ended 30 June 2024
Athelney Trust PLC (LSE:ATY) is a company making investments in the equity
securities of quoted United Kingdom companies including smaller companies.
Investment Objective
The investment objective of the Trust is to provide long-term growth in
dividends and capital, 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 profits and dividends 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.
Chair's Statement
Dear Shareholder
I am pleased to present the Interim Financial Report for your company Athelney
Trust plc, for the half year to 30 June 2024.
Period Highlights
At 30 June 2024:
• Unaudited Net Asset Value (NAV) had declined to 188.1p, (minus 10%) over
the six month period
•The share price was the same as at the start of the period, at a value of
185.0p
•The discount to NAV had decreased to 1.7% from 11.5% at 31 December 2023
compared to a sub sector average of 10% (for UK Smaller Companies sector of
the AIC)
•The Company ranked fourth out of 25 investment trusts with a yield of 4.92%
in the AIC's comparison for the UK Smaller Companies' segment
•Share price total return was minus 6.4% in the six month period (calculated
as the change in net asset value during the half year, including dividend
paid)
•Gross revenue decreased by 23% against the comparative period last year, to
£94,816 (30 Jun 2023: £122,408)
•Revenue return per ordinary share was 3.0p (31 Dec 2023: 7.7p, 30 Jun
2023: 4.9p)
•A final dividend of 7.6p was paid in April 2024 (April 2023: 7.5p) and an
interim dividend of 2.2p was paid in September 2023 (September 2022: 2.1p)
making the total dividend paid for the financial year 9.7p (2022: 9.6p)
•The interim dividend will be 2.3p (2023: 2.2p).
Performance
The Company's investment performance was disappointing, taken over the first
half of the year and by comparison with the UK Smaller Companies segment of
Investment Trusts reported by the Association of Investment Companies.
As explained in the Managing Director's report below, this was mainly due to
losses on exiting a holding in Close Brothers, and poorer than expected
performance for investments in Impax Asset Management and YouGov.
Revenues have also been impacted, in particular as a result of Close Brothers
decision in February not to pay dividends this financial year (Mar 2023
£22,500).
However, despite these hard-to-foresee events, the board continues to be
pleased with our Managing Director and Fund Manager's results during a period
where European economies have still been unwinding from high interest rates
and inflation, and ongoing geopolitical uncertainty.
Government policies, including taxation and business regulation, have affected
investor sentiment. The UK government's initiatives to support innovation and
entrepreneurship through tax incentives and grants have been positive.
Uncertainties surrounding Brexit's long-term impact on trade and regulatory
frameworks continued to pose challenges, particularly for small businesses
involved in import and export activities.
The ongoing conflict in Ukraine and tensions between major economies such as
the US and China contributed to market volatility. This has translated to
cautious investment, with many seeking stability amidst global
uncertainties.
In addition, the UK has seen largely 'as expected' economic progression, with
gentle growth overturning the negative second half of 2023. Much was made by
Sunak's government of a return to target 2% inflation rate in May, and core
inflation also eased to 3.5% (the lowest since October 2021). Smaller
companies have suffered with high borrowing costs, but also with much reduced
consumer spending - KPMG's April "Consumer Pulse" report found that 52% of
consumers cut non-essential spending.
There have been a series of better-than-expected data points in the first half
pointing to a slow but broad recovery. PMI data shows the UK as the only
country in Europe with a positive outlook in services, manufacturing and
construction.
The period ended with surprise announcements of elections in the UK and
France, catching many out, and causing commentators to label both decisions as
risky gambles.
Labour won the July general election by adopting a strategy of targeting
marginal seats, and putting 'safe' seats at risk, which translated into a
sweeping victory. It was remarkable, given the extent of the defeat at the
last election in 2019, albeit with the lowest vote share (under 34%) for a
majority winning party in electoral history. The "first past the post"
system was gamed perfectly by Sir Keir Starmer and his team.
Many believe there should now be a good period of governmental stability with
the new Starmer team holding a majority of 172 seats, and with many shadow
cabinet ministers being appointed Secretary of State.
Given this background, I am pleased by the Company's share price performance
which recovered recently to end the period at 185p per ordinary share, the
same as it started the period.
The discount to NAV at 1.7% at the end of June, has reduced considerably and
to more normal levels. As I write, the discount is 6.5%, compared to the AIC
UK Smaller Companies investment trust sector discount average of just below
10%. We thank shareholders for their support and continued interest in the
company.
Dividends
Our revenue income, as described above, has been impacted by Close Bros
decision not to pay dividends, reducing by 23% for the six months to £94,816
(30 Jun 2023: £122,408).
Although unfortunate, we believe this is also against the trend, as small and
mid-cap companies' dividend yields are set to outperform the FTSE 100 by 2025
(Octopus Investments Dividend Barometer, April 2024).
We therefore have confidence that companies in the UK are currently
well-placed to deliver better yields in 2024 than last year.
Against this background I am delighted to report your board has decided to pay
an interim dividend of 2.3p per share on 27 September 2024 to all shareholders
on the register of members at close of business on Friday 13 September 2024.
As usual, we will review the case for a final dividend in Q1 2025.
Shareholder Relations
The Board held an AGM on 21 March 2024 and was very pleased to take questions
from attendees, as well as have some further conversations over refreshments
and a light lunch.
There was ample opportunity to discuss the company's performance as well as
the future.
We encourage more shareholders to take advantage of the time and access
offered by attending the AGM for this financial year which will be held in
London on 23 April 2025.
Outlook
Although we still have cases of COVID in the general population, it is now
more an inconvenience than a threat. However, we must not underestimate the
long-term impact to individuals, mental health, debt (at all levels) and the
resulting challenges as we continue to recover.
We are returning to more normal bands for UK economic measures, including
inflation and wage growth, and the welcome prospect of more stable government,
good for decision-making and business investment.
Much still rests, medium- and long-term on the new government delivering good
growth, and there is the prospect of unpopular measures to balance UK books
in the future.
There is a real mountain to climb, given manifesto promises not to raise major
taxes, current fiscal rules and UK public sector borrowing at £15bn (in May),
£800m higher than a year ago. National debt is currently about £2.7
trillion, roughly the same as UK GDP, and more than double the usual level
(between 1980 and 2008).
The Ukraine war continues, as does the war in Gaza, with the potential for
drawing others into those conflicts still a risk.
Then there is also the uncertainty raised by the US Presidential election in
November, now heightened by the Trump assassination attempt. The US will be
forced to fund a massive increase in its budget deficit, according to
analysts, likely to reach $1.9 trillion (compared to a February prediction of
$1.5tn). How the US will deal with this reality, the wars it currently
supports, the ongoing trade tensions with China, and closer to home, trade
with the UK and Europe, is hard to predict.
Despite these uncertainties there are also positive developments, as the UK
becomes a comparative haven, resulting in the GBP strengthening to levels not
reached since a year ago. Deal flows have increased, and there is more
foreign investment in the UK, lending support to the expectation that UK
undervalued stocks will be increasingly attractive to buyers.
Your board continues to actively assess opportunities and threats, in order to
provide stability and benefit for shareholders. We remain confident the
Company remains well-positioned to meet its objectives, and to take advantage
of opportunities to capture value.
Frank Ashton
Chair
24 July 2024
Other Matters
The Interim Financial Report for the six months ended 30 June 2024 comprises
an Interim Management Report, in the form of the Chair's Statement and Other
Matters, the Managing Director's Report, Portfolio Information and a set of
Financial Statements which have not been reviewed or audited by the Company's
Auditor.
The important events that have occurred during the period under review and
their impact on the performance of the Company as shown in the Financial
Statements is given in the Chair's Statement, the Managing Director's Report
and the Notes to the Financial Statements.
Directors' Responsibility Statement
The Directors are responsible for preparing the Interim Financial Report in
accordance with applicable laws and regulations. The Directors confirm that to
the best of their knowledge:
· The condensed set of Financial Statements for the
six months to 30 June 2024 have been prepared in accordance with FRS 104
"Interim Financial Reporting", and gives a fair view of the assets,
liabilities, financial position and profit of the Company.
· The Interim Financial Report includes a fair
review of the information required by:
a) rule 4.2.7R of the Disclosure Guidance and
Transparency Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact on the
condensed set of financial statements and a description of the principal risks
and uncertainties for the remaining six months of the year; and
b) rule 4.2.8R of the Disclosure Guidance and
Transparency Rules, being related party transactions that have taken place in
the first six months of the financial year and that have materially affected
the financial position or performance of the Company during that period; and
any changes in the related party transactions described in the last Annual
report that could do so.
Principal Risks and Uncertainties
The Board is responsible for the Company's system of internal control and for
reviewing its effectiveness. The Board considers that the principal risks and
uncertainties facing the Company, other than as set out below, remain the same
as those disclosed in the Annual Report for the year ended 31 December 2023 on
pages 14 and 15 and page 39. These risks include, but are not limited to,
market risk, investment and strategic risk, regulatory risk, operational risk,
financial risk and liquidity risk.
Global Issues
The ongoing war in Ukraine and other conflicts around the world have emerged
as significant risks which have impacted global commercial activities. The
board have been monitoring the development of these risks and have considered
the impact they have had to date and assessed the impact they may have in the
future. The Chair's Statement and Managing Director's Report cover these in
more detail.
On behalf of the Board
Frank Ashton
Chair
24 July 2024
Managing Director's Report
Portfolio Commentary
The UK stock market performed positively over the past six months as shown
in the table below, marked by ongoing macro-economic themes and improving
economic fundamentals. While inflation has declined in response to higher
interest rates, central banks are leaning towards easing them over the coming
months. In spite of these higher interest rates, the stock market has
improved by 3.03% during the period under review and coincidentally, peaked
the day before the Prime Minister announced the election and has declined by
3% since then
Month NAV Pence per Share Month on Month Movement Three-month movement Six-month movement FTSE250 Month on Month Movement Three-month movement Six-month movement
Dec 2023 209.1
Jan 2023 204.7 -2.10% -1.68%
Feb 2023 192.7 -5.86% -1.57%
Mar 2024 190.6 -1.09% -8.85% 4.36% 0.99%
Apr 2024 189.8 3.57% -0.41%
May 2024 195.1 2.79% 3.83%
Jun 2024 188.1 -3.59% -1.31% -10.0% -2.14% 2.02% 3.03%
As shown in the above table, our portfolio materially under-performed the
broader market as represented by the FTSE 250 Index. However, the
under-performance was for the most part caused by the following three stocks
in the portfolio:
Close Brothers (CBG)
There was a substantial decline in the share price following an announcement
by the FCA of a review of historical motor finance commission arrangements.
The financial impact of this on the group is difficult to determine and when
the CBG board decided to not pay any dividends on its ordinary shares for the
current financial year and indicated that the reinstatement of dividends will
only be reviewed once the FCA has concluded its review, we sold our entire
holding.
Impax Asset Management (IPX)
Impax is one of our largest positions and declined by 14.7% on the day when
the company announced that there had been a material outflow from the BNP
Paribas mandate. This decision by BNP Paribas to withdraw the funds reflects
a decision made by them to meet their own business requirements, asset
allocation targets or outflows from their distribution network and is in no
way a reflection on the Impax business. In fact, Impax AUM was up by £2.2bn
or 6% during the past six months, reaching £39.6bn on 31 Mar 24 (30 Sep 23:
£37.4bn) and exceeding that of two thirds of the London-listed peer group and
we have maintained our position in the stock.
YouGov (YOU)
YouGov declined by 46% when the company announced a poor result in its data
products division, despite increased demand for its customised research.
While this is indicative of a downgrading of the growth potential by the
market, we are not of the same persuasion given the reliance this business has
on data, its analysis and interpretation.
Moreover, the valuations of small and mid-sized companies where we concentrate
our investments and effort have underperformed larger companies. This is
clearly evident in the US, where a handful of big tech stocks involved in the
development of AI/Large Language Models have been the major driver of
investment returns over the past six months. They have fuelled the S&P
500's rally so far this year with the shares of Nvidia Corp. (NVDA) surging
around 150% in 2024 alone.
This was highlighted in a recent Forbes article on the S&P performance
over the past two years which showed that while the S&P 500 Growth Index
returned 6.9%, the average stock had a negative return of 1.6%. Analysing the
index performance in terms of market capitalisation by decile, the group
comprising the largest 10%, with an average market capitalization of more than
$1 trillion, drove all the returns of the Index.
Artificial Intelligence has been around for a while. OpenAI released ChatGPT
and it showcased how disruptive this technology could be for nearly every
industry globally. This set off an AI Arms race, with all the major players
in the tech world releasing their versions of ChatGPT this year. While it is
still early days with respect to the technology, what is clear is that it will
touch nearly all the aspects of an organisation's operations.
Early use cases have included customer service chatbots and co-pilot
productivity tools. Models that leverage corporate data to drive insights
and strategic decisions will probably take longer to come through given
corporate inertia and risk aversion, particularly with respect to privacy and
data. While AI offers tremendous benefits, it's crucial to address ethical
concerns and ensure responsible development and deployment.
AI is undoubtedly the defining technology of our time, and its impact on
companies is only going to accelerate in the years to come. By embracing AI
and harnessing its power responsibly, companies can unlock significant
competitive advantages and drive sustainable growth in the ever-evolving
marketplace. Our current position is that those companies with dominant
market positions and more data on their customers are much better positioned
than their competitors to capitalise on these technologies, which should widen
the gap between them and their competitors.
How companies respond positively to this paradigm shift and how easily they
adapt to the changing environment around them - we refer to as a company's
Dynamic Capability. In an ever-volatile financial landscape, investments
anchored in solid fundamentals and proven execution have historically been the
most resilient. Quality stocks, characterized by robust individual
performance, strong fundamentals, and the ability to withstand macroeconomic
fluctuations, remain pillars in challenging times.
As businesses grow, they encounter more complexities and vulnerabilities due
to environmental and societal disruptions. To this end, sustainability is
critical for long-term competitiveness, shifting focus from solely financial
growth to enhanced operational sustainability.
In this unpredictable environment, investors are increasingly turning to ESG
(Environmental, Social, Governance) factors for sustainable returns. ESG has
evolved from an ethical consideration to a crucial risk management tool,
aiding investors in safeguarding their portfolios against significant risks
and adapting to future opportunities and challenges. Quality stocks have
proven to be resilient and exhibit strong growth, especially during
inflationary periods over recent decades. They have consistently outperformed
other investment styles by showing superior earnings growth. Characterised by
high return on equity, stable earnings, and low leverage, Quality stocks
effectively shield against inflation and rising interest rates.
In the face of slowing global growth, persistent inflation, and the
uncertainty of earnings forecasts, Quality and low-risk companies appear to be
the likely beneficiaries. Since the global financial crisis inception in 2007,
Quality has outperformed the broader index for 11 of the last 15 years. This
consistent performance, coupled with its attractive valuation, solidifies the
case for a larger allocation to Quality stocks in investment portfolios.
We recognize that these fundamentals of the economics of businesses drive
long-term investment returns. We focus on high-quality, growing companies
capable of generating predictable, superior economic returns. Sustainability
is integral to our investment philosophy, as we view ourselves as business
owners rather than mere share traders, prioritizing sustainability and
competitiveness in our investment analyses.
In these uncertain times, investors must anticipate and prepare for
unpredictable changes, including black swan events, by structuring equity
portfolios that are resilient to such disruptions. Aligning portfolios with
quality characteristics offers a robust defense against inflation and other
macroeconomic challenges.
As this market uncertainty continues, it is more important than ever that one
has a strict investment process. It is vital not to get caught up in the hype
and noise of the daily market movements, and instead invest with a long-term
approach. A sound investment philosophy sets out a number of 'rules' or
'procedures' that we fall back on when the market noise gets too loud.
Companies that have a sustainable competitive advantage will always be
well-placed to withstand short-term headwinds, regardless of market
conditions, maintain market share and ultimately find new ways to grow.
It can be challenging to recognise the potential in companies, particularly
those that are in the growth stage of their life cycle. It can also be
difficult to evaluate the 'narratives' that some companies are telling about
themselves. To invest in a company in the growth stage of their life cycle
it is important to balance the company's narrative alongside its numbers.
By drilling down into a company's financials and growth plans in a careful,
considered and committed way, it is possible to identify the quality growth
stocks that will prosper over the long-term. Their ability to be flexible, to
move quickly to take advantage of opportunities as they arise, and to
capitalise on market trends and demand, will continue to support the ongoing
success of such businesses, and provide significant long-term opportunities
for their investors. Consistent with this approach we introduced three new
investments to the portfolio in the period under review.
Wise (WISE)
Wise is a high-growth, high-margin, founder-led technology company focused on
reducing the cost of cross-border money movement within an inefficient legacy
banking network. Specializing in international money transfer services, Wise
offers low-cost, cross-border financial transactions at real exchange rates
with minimal fees. The company operates across various segments, including
Personal and Business Transfers, Wise Platform, and Borderless Accounts. By
building an alternative infrastructure and network for cross-border
transactions, Wise is fundamentally changing the way money is moved around the
world, making it faster, easier, and more transparent. With a commitment to
long-term growth and creating meaningful value for customers and shareholders,
Wise has established world-class business fundamentals and is poised to
capture a significant portion of the large market opportunity ahead. Founded
in 2011, Wise is headquartered in London, United Kingdom.
RELX Plc (REL)
RELX is a global provider of information-based analytics and decision tools
for professional and business customers, enabling them to make better
decisions, achieve better results, and increase productivity. Serving
customers in more than 180 countries, RELX operates offices in about 40
countries and employs over 36,000 people, with more than 40% based in North
America.
The company's products, generally sold through dedicated sales teams and
priced on a subscription or transactional basis, are predominantly delivered
in electronic format under multi-year contracts. RELX's products often account
for less than 1% of their customers' total cost base but can have a
significant and positive impact on the economics of the remaining 99%. RELX
aims to enhance the value delivered to customers while maintaining its own
cost base growth below its revenue growth rate.
Raspberry Pi (RPI)
In June we introduced Raspberry Pi to the portfolio, reducing our cash on hand
to 1.9%. Raspberry Pi specialises in the design, manufacture, and
distribution of affordable single-board computers (SBCs) and related products.
The company's flagship product, the Raspberry Pi, is widely used for
educational purposes, hobbyist projects, and professional applications.
Raspberry Pi operates through two primary segments: Hardware Sales and
Software & Services. The Hardware Sales segment includes the sale of
Raspberry Pi computers and accessories. The Software & Services segment
provides educational software, online training, and consulting services to
support the use of Raspberry Pi products in various fields. Founded in 2009,
the company is headquartered in Cambridge, United Kingdom.
The company has a full-stack engineering organisation with research and
development capabilities spanning the entire value chain, from semiconductor
intellectual property development to the design of finished semiconductor and
electronic products, software engineering, and regulatory compliance.
Raspberry Pi maintains close working relationships with world-class technology
partners, including strategic shareholders Sony and Arm, leveraging their
complementary capabilities in semiconductor intellectual property development,
semiconductor and electronic product manufacturing, chip design on advanced
process nodes, and radio frequency and power engineering.
Sustainable Investing
Athelney Trust Plc is committed to responsible investment and we believe that
Environmental, Social and Governance (ESG) factors have a material impact on
long-term investment outcomes. The consideration of ESG factors is an integral
part of our decision-making process and is fully integrated through asset
selection and portfolio management procedures. ESG issues are central to
understanding and framing the contextual, systematic and idiosyncratic
elements of the business and to this end we have adopted a Quality Franchise
framework comprising six distinct pillars into our research process. This
framework ensures that companies are analysed in a systematic way to ensure
they are sustainable over the long-terms as well as able to improve
shareholder returns. Furthermore, through the application of this six-pillar
framework, our investment process aims to mitigate our portfolio against ESG
and sustainability risks through placing a material emphasis on Sustainability
and Management being two of the six distinct pillars:
· The sustainability pillar focuses on areas of a business where
there may be risk to the predictability of business operations through time.
This assists our mitigation of default risk and uncertainty of business
expansion.
· The management pillar focuses on the trustworthiness of
management. This assists our mitigation of uncertainty by reducing the risk of
managerial conduct or failure of business strategy execution.
The other pillars are the Industry, the Business, the Competition and the
Financials.
Our investment philosophy and corporate values steer us away from companies
that have the potential to harm society, and moreover, help us avoid companies
where there is a risk to the sustainability of their business operations. It
is also important to note that we also exclude a number of industries
including weapons, tobacco, gambling, thermal coal, petroleum, old-forest
logging, palm oil, and pesticides - a list that is reviewed annually.
Investment Philosophy
As far as portfolio investments are concerned, our investment philosophy is
clear:
I. The economics of a business drives long-term
investment returns; and
II. Investing in high quality, growth businesses' that
have the ability to generate predictable, above-average economic returns will
produce superior investment performance over the long-term.
In essence, this means that in assessing potential investments we:
a) Value long-term potential, not just performance
b) Choose sustainable, growing businesses; and
c) Ignore temporary market turbulence.
The key attributes that will define our investments are:
(1) Organic Sales Growth: Quality franchises organically
growing sales above GDP growth that can do so (sustainably) because they have
a large, growing market opportunity and compelling competitive advantage which
will drive ongoing market share gains are attractive.
(2) A Proven Track Record: This encompasses both the
management's capability and the strength of the business' model. Generally, a
firm that consistently delivers a Return on Equity of greater than 15%
indicates a Quality Franchise for us. Our investment philosophy is built on
the belief that a stock's long-term return to shareholders is driven by the
return on capital of the underlying business.
(3) Company's future profits: In essence we are backing a
proven management team and a successful business model. Management are the key
decision makers regarding the company's strategy and its competitive position
in the marketplace and it is critical that we have confidence in the company's
ability to sustainably execute its strategy and grow their earnings.
(4) Low Leverage: We require investments to operate with
low levels of debt, which ensure that they have sufficient resources to
execute on their strategy. An Interest Coverage above 4x provides sufficient
bandwidth in times of economic trouble. As a long-term investor, capital
preservation is the highest priority. There is nothing that changes a
management team's focus toward the short term quicker than impending debt
refinancing when market conditions suddenly change for the worse. We need to
be comfortable that this will not happen and that the company has a strong
enough balance sheet so that it will retain optionality and can quickly and
efficiently execute its strategy over the long-term.
Dr Manny Pohl AM
Managing Director
24 July 2024
Investment Portfolio at 30 June 2024
Top 20 Holdings
Holding Value %
£ of portfolio
AEW UK 580,000 494,740 12.5
Games Workshop 30,000 320,100 8.1
Tritax Big Box 200,000 310,000 7.8
Impax Asset Management 66,000 250,140 6.3
Paypoint 36,000 228,600 5.8
Gamma Communications 15,000 211,500 5.3
Cake Box Holdings 120,000 210,000 5.3
Liontrust Asset Management 30,000 205,500 5.2
4Imprint 3,500 204,750 5.2
Fevertree Drinks 17,000 184,110 4.6
National Grid 18,083 159,564 4.0
Cerillion 10,000 157,000 4.0
Treatt 35,000 150,325 3.8
Begbies Traynor 140,000 142,100 3.6
Rightmove 23,000 123,510 3.1
LondonMetric Property 60,000 115,980 2.9
S & U 6,000 111,600 2.8
XP Power 6,600 97,416 2.5
Alpha Group International 4,000 90,000 2.3
NWF 30,000 52,500 1.3
Total of Top 20 Holdings 3,819,435 96.4
Other holdings 150,350 3.6
Portfolio Value 3,969,785
Net Current Assets 88,284
TOTAL VALUE 4,058,069
Shares in issue 2,157,881
NAV 188.1p
Income Statement
For the Six Months Ended 30 June 2024
Audited
Year ended
Unaudited Unaudited 31 December
6 months ended 30 June 2024 6 months ended 30 June 2023 2023
Notes Revenue Capital Total Revenue Capital Total Total
£ £ £ £ £ £ £
Gains on investments held at fair value - (111,919) (111,919) - 12,885 12,885 (57,725)
Income from investments 94,816 - 94,816 122,634 - 122,634 219,366
Investment Management expenses (1,594) (14,469) (16,063) (1,781) (16,141) (17,922) (34,438)
Other expenses (27,520) (51,031) (78,551) (15,728) (38,500) (54,228) (139,858)
Net return on ordinary
activities before taxation 65,702 (177,419) (111,717) 105,125 (41,756) 63,369 (12,655)
Taxation 2 (317) - (317) - - - (623)
Net return on ordinary
activities after taxation 65,385 (177,419) (112,034) 105,125 (41,756) 63,369 (13,278)
Dividends Paid:
Dividend (163,999) - (163,999) (161,841) - (161,841) (209,314)
Transferred to reserves (98,614) (177,419) (276,033) (56,716) (41,756) (98,472) (222,592)
Return per ordinary share 3 3.0p (8.2)p (5.2)p 4.9p (1.9)p 3.0p (0.6)p
The total column of this statement is the statement of comprehensive income of
the Company prepared in accordance with Financial Reporting Standards ("FRS").
The supplementary revenue return and capital return columns are prepared in
accordance with the Statement of Recommended Practice issued in July 2022 by
the Association of Investment Companies ("AIC SORP").
All revenue and capital items in the above statement derive from continuing
operations.
The revenue column of the Income statement includes all income and expenses.
The capital column includes the realised and unrealised profit or loss on
investments
Statement of Changes in Equity
For the Six Months Ended 30 June 2024
For the Six Months Ended 30 June 2024 (Unaudited)
Called-up Capital Capital Total
Share Share Reserve Reserve Retained Shareholders'
Capital Premium Realised Unrealised Earnings Funds
£ £ £ £ £ £
Balance at 1 January 2024 539,470 881,087 2,467,624 453,206 170,583 4,511,970
Net losses on realisation
of investments - - (111,919) - - (111,919)
Decrease in unrealised
appreciation - - - (177,868) - (177,868)
Expenses allocated to
capital - - (65,500) - - (65,500)
Profit for the period - - - - 65,385 65,385
Dividend paid in period - - - - (163,999) (163,999)
Shareholders' Funds at 30 June 2024 539,470 881,087 2,290,205 275,338 71,969 4,058,069
For the Six Months Ended 30 June 2023 (Unaudited)
Called-up Capital Capital Total
Share Share Reserve Reserve Retained Shareholders'
Capital Premium Realised Unrealised Earnings Funds
£ £ £ £ £ £
Balance at 1 January 2023 539,470 881,087 2,539,394 561,784 212,827 4,734,562
Net profits on realisation - - - -
of investments 12,885 12,885
Decrease in unrealised - - - (130,651) - (130,651)
appreciation
Expenses allocated to - - (54,641) - - (54,641)
capital
Profit for the period - - - - 105,125 105,125
Dividend paid in period - - - - (161,841) (161,841)
Shareholders' Funds at 30 June 2023 539,470 881,087 2,497,638 431,133 156,111 4,505,439
For the Year Ended 31 December 2023 (Audited)
Called-up Capital Capital Total
Share Share Reserve Reserve Retained Shareholders'
Capital Premium Realised Unrealised Earnings Funds
£ £ £ £ £ £
Balance 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
Statement of Financial Position As at 30 June 2024
Audited
Notes Unaudited Unaudited 31 December
30 June 2024 30 June 2023 2023
£ £ £
Fixed assets
Investments held at fair value through profit and loss 3,969,785 4,318,342 4,374,302
Current assets
Trade receivables 105,297 135,114 137,709
Cash at bank and in hand 14,721 74,366 40,347
120,018 209,480 178,056
Creditors: amounts falling due within one year (31,734) (22,383) (40,388)
Net current assets 88,284 187,097 137,668
Total assets less current liabilities 4,058,069 4,505,439 4,511,970
Provisions for liabilities and charges - - -
Net assets 4,058,069 4,505,439 4,511,970
Capital and reserves
Called up share capital 539,470 539,470 539,470
Share premium account 881,087 881,087 881,087
Other reserves (non distributable)
Capital reserve - realised 2,290,205 2,497,638 2,467,624
Capital reserve - unrealised 275,338 431,133 453,206
Revenue reserves (distributable) 71,969 156,111 170,583
Shareholders' funds - all equity 4,058,069 4,505,439 4,511,970
Net Asset Value per share 4 188.1p 208.8p 209.1p
Number of shares in issue 2,157,881 2,157,881 2,157,881
Approved and authorised for issue by the Board of Directors on 24 July
2024.
Dr Manny Pohl AM
Managing Director
Statement of Cash Flows
For the Six Months Ended 30 June 2024
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
£ £ £
Cash flows from operating activities
Net revenue return 65,385 105,125 167,070
Adjustments for:
Expenses charged to capital (65,500) (54,641) (122,623)
Increase/(decrease) in creditors (8,654) 5,298 23,303
Decrease/(increase) in debtors 32,412 408,186 405,592
Cash from operations 23,643 463,968 473,342
Cash flows from investing activities (376,627) (669,737) (906,775)
Purchase of investments
Proceeds from sales of investments 491,357 414,615 655,733
Net cash from/(used) in investing activities 114,730 (255,122) (251,042)
Equity dividends paid (163,999) (161,841) (209,314)
Net (decrease)/increase (25,626) 47,005 12,986
Cash at the beginning of the period 40,347 27,361 27,361
Cash at the end of the period 14,721 74,366 40,347
Notes to the Financial Statements
For the Six Months Ended 30 June 2024
1. Accounting Policies
a) Statement of Compliance
The Company's Financial Statements for the period ended 30 June 2024 have been
prepared under UK Generally Accepted Accounting Practice (UK GAAP) and the
Statement of Recommended Practice, 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts' issued in April 2023 ('the SORP') issued
by the Association of Investment Companies.
The financial statements have been prepared in accordance with the accounting
policies set out in the statutory accounts for the year ended 31 December
2023.
b) Financial information
The financial information contained in this report does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The
financial information for the period ended 30 June 2024 and 30 June 2023 have
not been audited or reviewed by the Company's Auditor pursuant to the Auditing
Practices Board guidance on such reviews. The information for the year to 31
December 2023 has been extracted from the latest published Annual Report and
Financial Statements, which have been lodged with the Registrar of Companies,
contained an unqualified auditor's report and did not contain a statement
required under Section 498(2) or (3) of the Companies Act 2006.
c) Going concern
The Company's assets consist mainly of equity shares in companies listed on a
recognised stock exchange which, in most circumstances, are realisable within
a short timescale under normal market conditions. The Directors believe that
the Company has adequate resources to continue in operational existence for
the foreseeable future. Accordingly, they continue to adopt the going concern
basis in preparing the financial statements. In assessing the Company's
ability to continue as a going concern, the Board has fully considered the
impact of the ongoing war in Ukraine and other world conflicts in arriving at
this decision.
2. Taxation
The tax charge for the six months to 30 June 2024 is £317 (year to 31
December 2023: £623; six months to 30 June 2023: nil).
The Company has an effective tax rate of 19% for the year
ending 31 December 2023. The estimated effective tax rate is 19% as investment
gains are exempt from tax owing to the Company's status as an Investment Trust
and there is expected to be an excess of management expenses over taxable
income. Tax is however payable on interest received.
3. The calculation of earnings per share for the six months ended 30 June 2024
is based on the attributable return on ordinary activities after taxation and
on the weighted average number of shares in issue during the period.
6 months ended 30 June 2024
Revenue Capital Total
£ £ £
Attributable return on ordinary activities after taxation 65,385 (177,419) (111,717)
Weighted average number of shares 2,157,881
Return per ordinary share 3.0p (8.2)p (5.2)p
6 months ended 30 June 2023
Revenue Capital Total
£ £ £
Attributable return on ordinary activities after taxation 105,125 (41,756) 63,369
Weighted average number of shares 2,157,881
Return per ordinary share 4.9p (1.9p) 3.0p
12 months ended 31 December 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)
4. Net Asset Value per share is calculated by dividing the net assets by
the weighted average number of shares in issue 2,157,881.
5. Financial Instruments
Fair value hierarchy
The fair value hierarchy consists of the following three classifications:
Classification A - 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 B - 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 C - 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 A investments (2023: classification A
investments only).
6. Related Party Transactions
Dr. E. C. Pohl is the sole beneficial owner of E C Pohl & Co Pty Limited
and a Director of Astuce Group. E C Pohl & Co Pty Limited held 86,000
(2023: 86,000) shares and Astuce Group held 550,000 (2023: 550,000) shares in
the Company as at 30 June 2024.
Copies of the Half Yearly Financial Statements for the six months ended 30
June 2024 will be available on the Company's website www.athelneytrust.co.uk
(http://www.athelneytrust.co.uk) as soon as practicable
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