TIDMATY
RNS Number : 7938T
Athelney Trust PLC
26 July 2022
Athelney Trust PLC
Legal Entity Identifier:
213800ON67TJC7F4DL05
26 July 2022
Half Yearly Financial Report for the Period ended 30 June
2022
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.
Chairman's Statement
Dear Shareholder
I am pleased to present the Interim Financial Report for the
half year to 30 June 2022.
Period Highlights
-- Investment performance trailed the FTSE 250 index by 4.2% -
unaudited Net Asset Value (NAV) declined to 233.7p, a drop of 24.7%
for the half year compared to a FTSE 250 drop of 20.5%. Over the
past 12 months, our portfolio beat the same index by 1.4%
-- Against global market performance, the Company's share price
has been remarkably resilient, only falling 4% since 31 December
2021
-- The Trust now tops the AIC's 'Next Generation of Dividend
Heroes' table published in March with a dividend yield at that time
of 4.42%, after 19 years of dividend growth
-- Total return to shareholders decreased by 22.3% in this
six-month period, calculated as the change in net asset value (NAV)
during the half year, including dividend paid
-- Gross revenue has increased to GBP102,311, a welcome increase
of 24.3% compared to the same period last year (GBP82,309)
-- Revenue return per ordinary share was 3.9p (31 December 2021:
7.0p, 30 Jun 2021: 3.0p)
-- A final dividend of 7.5p was paid in April 2022 (April 2021:
7.7p) and an interim dividend of 2.0p was paid in September 2021
(September 2020:
1.7p) making the total dividend 9.5p (2021: 9.4p)
-- The interim dividend will be 2.1p (2021: 2.0p).
Performance
I am pleased to report the Company has produced solid investment
performance in comparative terms over these six months for its
shareholders; the board is very pleased with our Managing Director
and Fund Manager's focus and resilience over a period of increasing
uncertainty in the global economy and the UK market.
The NAV return for the half year was -24.7% compared to -20.5%
for the FTSE 250 Index, an underperformance of 4.2% (but in
contrast to 1.4% outperformance against the same index for the 12
months ending 30 June 2022). Further information on portfolio
activity and the drivers behind the portfolio's performance is
contained in the Managing Director's Report below. We believe the
relatively short term, market-related issues of NAV return should
be viewed in the context of the longer term benefits of investment
trust status, and our ability to return value over time.
In a period that ended with indices across the world in rapid
decline, I am very pleased by the resilience of the Company's share
price which only dropped 4.4% to 215p from 225p on 31 December
2021. As a result, it is now trading at a modest discount to NAV of
around 8% compared to the AIC UK Smaller Companies investment trust
sector average of just over 13%. The board believes this reflects
the value of our not pursuing a geared approach to investment,
where market falls will often exacerbate the negative impact for
trusts using gearing.
Dividends
The balance of influence for the UK market has now passed from
one-off special payment dividends that characterised 2021, to
underlying dividends that increased 13% in Q1 2022 (according to
the Link Group). There are dividend increases in all sectors but
especially for oil-, gas- and metals-related companies that benefit
from supply-demand mismatches as we release from lockdowns, and the
price increases resulting from the Russian invasion of Ukraine.
We are therefore very pleased to see how income from your
Company's portfolio of UK companies, has steadily been returning to
levels more usually associated with pre-COVID years. Gross revenue
has increased by more than 24% over the comparative period last
year to GBP102,311 (GBP82,309).
We are delighted to head the league table of trusts in the AIC's
'Next Generation Dividend Heroes' published in March each year.
This year is the nineteenth consecutive year of dividend growth. I
would like to pay tribute to Manny Pohl's wisdom and experience in
finely balancing the portfolio's need to generate income as well as
spot the growth companies that will provide superior shareholder
returns over the long term.
I am delighted to report your board has decided to pay an
interim dividend of 2.1p per share on 23 September 2022 to all
shareholders on the register of members at close of business on 9
September 2022.
We will review the case for a final dividend in Q1 2023.
Shareholder Relations
The Board held the AGM on 5 April 2022 and was delighted to be
able to do this in person, for the first time since 2019. The AGM
for the current financial year will be held in London on 16 March
2023.
Outlook
I wrote in our Annual Report in February 2022 that there were a
number of ongoing uncertainties that could slow the rate of
recovery and delay a return to growth post-pandemic.
Firstly, there has been a steady relaxation of COVID restriction
in many countries over the past six months; we seem to be
transitioning to 'living with the virus' however we continue to
deal with the supply side challenges and this has now, driven by
increased energy prices and the Russia-Ukraine war, translated into
the dark cloud of persistent inflation, imminent recession and
possible wage-price spirals in at least some of the G7 nations.
Secondly, the fallout from the now likely very long-term
Russia-Ukraine conflict inevitably has wide-ranging regional even
global impacts for some commodity prices. There is a clear
destabilising effect on market confidence and risk premiums as the
conflict could somehow result in catastrophic 'unintended
consequences'. There are no short-term answers palatable to either
side. Cooperation has increased for western nations ranged against
Putin with one very clear positive result: Substantial acceleration
of and increased targets for the race to Net Zero in Europe as it
weans off Russian fossil fuels. This will drive more gross value
added (GVA - defined as output minus consumption) from highly
skilled jobs, services and products, subject to further regulatory
support from governments.
Thirdly Boris Johnson's era has finally come to an end as he
resigned on 7 July. Able to cut through to the voting public with
his personal brand, convince like so few other politicians that he
was the one to 'get the job done', Johnson has wasted the
opportunity provided by a huge government majority. Ultimately, he
demonstrated why self-awareness and good judgment of others are two
basic requirements for any leader. We now await confirmation of
Rishi Sunak or Liz Truss as his replacement on 5(th) September. Who
would envy them the job, given the challenges of increasing
industrial unrest as UK inflation is forecast to top 11%, a looming
European winter energy crisis, the need to stimulate UK growth and
productivity, even as some economies assess the need for a 100
basis point increase in interest rates? It is time for a 'new
broom'; the UK economy, any long term success of Brexit, even
perhaps the Union itself depend on it sweeping clean, and quickly
too.
In the meantime, your board continues to relentlessly focus on
the conditions that translate into stability and benefit for you as
existing and potential shareholders, in as far as market conditions
allow.
We know that investors are and will remain attracted by the risk
diversification inherent in our portfolio, where both income and
capital growth is possible across a wide range of sectors and
companies. Most understand that for all but a few stocks in the
current climate, there will be a degree of share price volatility
for a while and that our investment trust status will help smooth
the impact of such volatility.
Overall, the board remains confident the Company remains
well-positioned to meet its objectives, as well as to take
advantage of opportunities to identify and capture value where
possible, within the remit of the investment mandate.
Frank Ashton
Chairman
26 July 2022
Other Matters
The important events that have occurred during the period under
review and the key factors influencing the financial statements are
set out above.
Directors' Responsibility Statement
The Directors are responsible for preparing the Half Yearly
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 2022 have been prepared in accordance with FRS 104
"Interim Financial Reporting", gives a fair view of the assets,
liabilities, financial position and profit of the Company.
-- The Half Yearly 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.
The Half Yearly Financial Report for the six months ended 30
June 2022 comprises an Interim Management Report, in the form of
the Chairman'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.
Principal Risks and Uncertainties
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
2021 on pages 13 and 14 and page 36. These risks include, but are
not limited to, market risk, investment and strategic risk,
regulatory risk, operational risk, financial risk and liquidity
risk.
Global Pandemic
The global pandemic COVID-19 declared by WHO on 11 March 2020
has emerged as a significant risk which has impacted global
commercial activities. The board has been monitoring the
development of the pandemic and has considered the impact it has
had to date and assessed the impact it may have in the future. The
Chairman's Statement and Managing Director's Report cover this in
more detail.
On behalf of the Board
Frank Ashton
Chairman
26 July 2022
Managing Directors Report
"Time is the friend of the wonderful business, the enemy of the
mediocre." Warren Buffett - Letter to Shareholders 1989
"When America sneezes, the rest of the world catches a cold"
Circa 1920
After the turmoil of recent years, many had hoped that 2022
would see a return to a more normal environment. However, the year
so far has been punctuated by macro events such as the crisis in
Ukraine and interest rate rises. In the US, investors are clearly
fearful of inflationary pressures and the resulting US Federal
Reserve's (The Fed) policy response. Accordingly, the US equity
market recorded its worst first half period in 60 years, shifting
the market into bear territory and, unfortunately the Fed has
signalled more rate hikes are to come, noting the difficulty of
bringing down inflation without triggering a recession. Despite the
economy slowing with early signs of a recession evident, the US
labour market continues to remain strong with unemployment holding
steady at 3.6%. Wage growth has not kept up with inflationary
pressures with US inflation rising +8.6% compared to a year
ago.
Similarly to what occurred in the 1920's and the 1950's the
beginning of the tightening cycle by the Fed is also impacting the
equity markets globally, which have had a volatile start to the
year. The S&P500 declined by 20.6%, with the Nasdaq materially
worse, declining by 29.5% over the past six months. In Europe,
specifically the ongoing Ukraine conflict continued to drive
declines in Eurozone equities as concerns relating to gas shortages
continue to rise. Ongoing disruptions saw Germany shift into phase
two of its emergency plan, with the next steps being to ration gas
supplies. High inflation and the increasing cost of living are
affecting consumer confidence in an environment when the Central
Banks are expected to raise rates in the coming month.
In the UK, while the Bank of England increased its official rate
by a combined 50 bps, the FTSE100 performed relatively well due to
its number of large cap, defensive stocks declining by only 2.9%.
While the FTSE100 posted this moderate decline, the FTSE 250 posted
a decline of 20.5%, the CAC -17.2%, and the DAX -19.5%.
I have purposely focused on world macro events because the
primary driver of the portfolio decline over the past six months
has been compression of the PE multiple on the back of these
expectations of inflationary and interest rate increases and not a
decline in business metrics. It is important to note that the
idiosyncratic portion of the portfolio return - that return of the
portfolio that is related to the underlying operations of the
companies that we invest in - has been positive and growing through
time.
We expect that these fundamental drivers of return will continue
to be positive despite the factor headwinds remaining for a while.
What this means is that we have an opportunity now to allocate
capital to businesses which are growing strongly and whose share
prices are trading at significantly cheaper prices than their
valuations suggest they should be. Once we see these headwinds ease
up, we expect that there will be a significant unlocking of value
throughout the portfolio.
After a substantial improvement in the second half of last year,
the UK market was down by 9.88% in the first quarter of this
financial year as can be seen from the table below. By comparison,
our portfolio underperformed even after making an adjustment for
the 3.9p dividend in March, but did outperform in the second
quarter with the NAV down by 11.44% as compared to the FTSE250
which declined by 11.78%.
Month NAV Month Three-month Six-month FTSE 250 Three-month Six-month
Pence on Month movement movement Movement movement movement
per Movement
Share
Dec 2021 310.3
------- ---------- ------------ ---------- ---------- ------------ ----------
Jan 2022 282.0 -9.12% -1.27%
------- ---------- ------------ ---------- ---------- ------------ ----------
Feb 2022 270.1 -4.22% 3.37%
------- ---------- ------------ ---------- ---------- ------------ ----------
Mar 2022 263.9 -2.30% -14.95% 2.91% -9.88%
------- ---------- ------------ ---------- ---------- ------------ ----------
Apr 2022 260.0 -1.48% 4.55%
------- ---------- ------------ ---------- ---------- ------------ ----------
May 2022 253.3 -2.58% 0.83%
------- ---------- ------------ ---------- ---------- ------------ ----------
Jun 2022 233.7 -7.74% -11.44% -24.69% -1.36% -11.78% -20.50%
------- ---------- ------------ ---------- ---------- ------------ ----------
As reflected in the Financial Statements, dividend revenue in
the current financial year increased by 24.3% as compared to same
period last year which is a welcome sign of business conditions
continuing to normalise. As detailed elsewhere in this report,
mergers, acquisitions and our assessment of underlying business
resilience has resulted in a further reduction in the number of
stocks in the portfolio to the current holding of 24 stocks with
the intention of using the proceeds to acquire a few new names as
soon as market volatility wanes. Consequently, the Company realised
capital profits before expenses arising from the sale of
investments during the period in the amount of GBP304,722 (30 June
2021: GBP149,653).
The continued increase in the dividend income that we receive
from our investments, as well as the current level of retained
earnings and realised capital reserves, should provide shareholders
comfort that even in the current environment when share prices are
under pressure, we are in the enviable position of being able to
continue to pay dividends to our loyal shareholders for the
foreseeable future.
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.
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 by 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, even in a tough environment like
the current Covid-19 and Brexit conundrum.
(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
26 July 2022
Investment Portfolio at 30 June 2022
Top 20 Holdings
Holding Value %
of
GBP portfolio
AEW UK REIT 385,000 440,442 10.1
Tritax Big Box 180,000 326,520 7.5
Target Healthcare REIT 245,000 265,090 6.1
Jarvis Securities 116,000 261,000 6.0
Liontrust Asset Management 27,000 246,240 5.7
Games Workshop 3,500 233,625 5.4
LondonMetric Property 100,000 228,200 5.2
Treatt 30,000 227,400 5.2
Clarke T 145,000 221,125 5.1
Close Brothers 20,000 204,800 4.7
Fevertree 15,000 182,850 4.2
Rightmove 30,000 170,460 3.9
Gamma Communications 15,000 161,100 3.7
Abcam 13,000 153,010 3.5
National Grid 14,000 147,210 3.4
Begbies Traynor 95,000 134,900 3.1
S & U 6,000 121,200 2.8
4Imprint 5,000 115,750 2.7
XP Power Ltd 4,000 113,800 2.6
LXI REIT 70,000 99,540 2.3
Income Statement
For the Six Months Ended 30 June 2022
Audited
Year
ended
Unaudited Unaudited 31 December
6 months ended 30 6 months ended 30
June 2022 June 2021 2021
Notes Revenue Capital Total Revenue Capital Total Total
GBP GBP GBP GBP GBP GBP GBP
Gains on
investments
held at fair
value - 304,722 304,722 - 149,653 149,653 1,359,219
Income from
investments 102,311 - 102,311 82,309 - 82,309 186,393
Investment
Management
expenses (2,211) (20,042) (22,253) (2,120) (19,230) (21,350) (45,180)
Other expenses (15,552) (39,294) (54,846) (15,545) (35,734) (51,279) (103,609)
Net return
on ordinary
activities
before
taxation 84,548 245,386 329,934 64,644 94,689 159,333 1,396,823
Taxation 2 - - - - - - -
Net return
on ordinary
activities
after taxation 84,548 245,386 329,934 64,644 94,689 159,333 1,396,823
Dividends
Paid:
Dividend (161,841) - (161,841) (166,157) - (166,157) (209,314)
Transferred
to reserves (77,293) 245,386 168,093 (101,513) 94,689 (6,824) 1,187,509
========== ========= ========== ========== ========= ========== ============
Return per
ordinary
share 3 3.9p 11.4p 15.3p 3p 4.4p 7.4p 64.7p
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 April 2021 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 2022
For the Six Months Ended 30 June 2022
(Unaudited)
Called-up Capital Capital Total
Share Share Reserve Reserve Retained Shareholders'
Capital Premium Realised Unrealised Earnings Funds
GBP GBP GBP GBP GBP GBP
Balance at 1
January 2022 539,470 881,087 2,271,737 2,731,784 271,452 6,695,530
Net profits on
realisation
of investments - - 304,722 - - 304,722
Decrease in unrealised
appreciation - - - (1,821,553) - (1,821,553)
Expenses allocated
to
capital - - (59,336) - - (59,336)
Profit for the
period - - - - 84,548 84,548
Dividend paid
in period - - - - (161,841) (161,841)
Shareholders'
Funds at 30 June
2022 539,470 881,087 2,517,123 910,231 194,159 5,042,070
========== ======== ========== ============ ========== ==============
For the Six Months Ended 30 June 2021
(Unaudited)
Called-up Capital Capital Total
Share Share Reserve Reserve Retained Shareholders'
Capital Premium Realised Unrealised Earnings Funds
GBP GBP GBP GBP GBP GBP
Balance at 1
January 2021 539,470 881,087 2,030,550 1,727,408 329,506 5,508,021
Net profits on
realisation - - 149,653 - - 149,653
of investments
Increase in unrealised - - - 494,478 - 494,478
appreciation
Expenses allocated
to - - (54,964) - - (54,964)
capital
Profit for the
period - - - - 64,644 64,644
Dividend paid
in period - - - - (166,157) (166,157)
Shareholders'
Funds at 30 June
2021 539,470 881,087 2,125,239 2,221,886 227,993 5,995,675
========== ======== ========== =========== ========== ==============
For the Year Ended 31 December 2021 (Audited)
Called-up Capital Capital Total
Share Share Reserve Reserve Retained Shareholders'
Capital Premium Realised Unrealised Earnings Funds
GBP GBP GBP GBP GBP GBP
Balance at 1
January 2021 539,470 881,087 2,030,550 1,727,408 329,506 5,508,021
Net profits on
realisation
of investments - - 354,843 - - 354,843
Increase in unrealised
appreciation - - - 1,004,376 - 1,004,376
Expenses allocated
to
Capital - - (113,656) - - (113,656)
Profit for the
year - - - - 151,260 151,260
Dividend paid
in year - - - - (209,314) (209,314)
---------- -------- ---------- ----------- ---------- --------------
Shareholders'
Funds at 31 December
2021 539,470 881,087 2,271,737 2,731,784 271,452 6,695,530
========== ======== ========== =========== ========== ==============
Statement of Financial Position As at 30 June 2022
Audited
Notes Unaudited Unaudited 31 December
30 June 30 June
2022 2021 2021
GBP GBP GBP
Fixed assets
Investments held at
fair value through
profit and loss 4,350,682 5,844,023 6,436,820
---------- -------------- --------------
Current assets
Trade receivables 666,199 124,709 245,163
Cash at bank and in
hand 36,599 36,912 30,676
702,798 161,621 275,839
Creditors: amounts falling
due within one year (11,410) (9,969) (17,129)
---------- -------------- --------------
Net current assets 691,388 151,652 258,710
---------- -------------- --------------
Total assets less current
liabilities 5,042,070 5,995,675 6,695,530
Provisions for liabilities -
and charges - -
Net assets 5,042,070 5,995,675 6,695,530
========== ============== ==============
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 2,517,123 2,125,239 2,271,737
Capital reserve - unrealised 910,231 2,221,886 2,731,784
Revenue reserves (distributable) 194,159 227,993 271,452
Shareholders' funds
- all equity 5,042,070 5,995,675 6,695,530
========== ============== ==============
Net Asset Value per
share 4 233.7P 277.8p 310.3P
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
26 July 2022.
Dr Manny Pohl AM
Managing Director
Statement of Cash Flows
For the Six Months Ended 30 June 2022
Unaudited Unaudited Audited
6 months 6 months
ended ended Year ended
30 June 30 June 31 December
2022 2021 2021
GBP GBP GBP
Cash flows from operating
activities
Net revenue return 84,548 64,644 151,260
Adjustments for:
Expenses charged to
capital (59,336) (54,964) (113,656)
Decrease in creditors (5,719) (7,408) (248)
(Increase)/Decrease
in debtors (421,036) 17,427 (103,027)
Cash from operations (401,543) 19,699 (65,.671)
---------- ---------- ------------
Cash flows from investing
activities
Purchase of investments (504,660) (344,385) (545,379)
Proceeds from sales
of investments 1,073,967 455,154 778,439
Net cash from investing
activities 569,307 110,769 233,060
---------- ---------- ------------
Equity dividends paid (161,841) (166,157) (209,314)
Net Decrease 5,923 (35,689) (41,925)
Cash at the beginning
of the period 30,676 72,601 72,601
Cash at the end of
the period 36,599 36,912 30,676
========== ========== ============
Notes to the Financial Statements
For the Six Months Ended 30 June 2022
1. Accounting Policies
a) Statement of Compliance
The Company's Financial Statements for the period ended 30 June
2022 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 2021 ('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 2021.
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 2022 and 30 June 2021 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 2021 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 COVID-19.
2. Taxation
The tax charge for the six months to 30 June 2022 is nil (year
to 31 December 2021: nil; six months to 30 June 2021: nil).
The Company has an effective tax rate of 0% for the year ending
31 December 2021. The estimated effective tax rate is 0% 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.
3 . The calculation of earnings per share for the six months
ended 30 June 2022 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 2022
Revenue Capital Total
-------- ---------- --------
GBP GBP GBP
-------- ---------- --------
Attributable
return on
ordinary
activities
after taxation 84,548 245,386 329,934
-------- ---------- --------
Weighted
average number
of shares 2,157,881
-------- ---------- --------
Return per
ordinary
share 3.9p 11.4p 15.3p
-------- ---------- --------
6 months ended 30 June 2021
Revenue Capital Total
-------- ---------- --------
GBP GBP GBP
-------- ---------- --------
Attributable
return on
ordinary
activities
after taxation 64,644 94,689 159,333
-------- ---------- --------
Weighted
average number
of shares 2,157,881
-------- ---------- --------
Return per
ordinary
share 3.0p 4.4p 7.4p
-------- ---------- --------
12 months ended 31 December
2021
Revenue Capital Total
-------- ---------- ----------
GBP GBP GBP
-------- ---------- ----------
Attributable
return on
ordinary
activities
after taxation 151,260 1,245,563 1,396,823
-------- ---------- ----------
Weighted
average
number of
shares 2,157,881
-------- ---------- ----------
Return per
ordinary
share 7.0p 57.7p 64.7p
-------- ---------- ----------
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 (2021:
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 (2021: 496,000) shares and Astuce Group held
550,000 (2021: 140,000) shares in the Company as at 30 June
2022.
Copies of the Half Yearly Financial Statements for the six
months ended 30 June 2022 will be available on the Company's
website www.athelneytrust.co.uk as soon as practicable.
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END
IR FLFSLDIIRFIF
(END) Dow Jones Newswires
July 26, 2022 07:44 ET (11:44 GMT)
Athelney (LSE:ATY)
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Athelney (LSE:ATY)
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