TIDMATY
RNS Number : 3731U
Athelney Trust PLC
28 July 2020
Athelney Trust PLC
Legal Entity Identifier:
213800ON67TJC7F4DL05
28 July 2020
Half Yearly Financial Report for the Period ended 30 June
2020
Athelney Trust PLC (LSE: ATY) is a company making investments
in the equity securities of quoted United Kingdom companies
including smaller companies.
Investment Objective
Our Investment Objective is to offer our prospects
long-term dividend and capital growth
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 ISDX, and 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, whose market rating is favourable
when compared to future earnings and dividends; second,
to those companies whose shares are standing at a favourable
level compared with the value of land, buildings, other
assets or cash on their balance sheet.
CHAIRMAN'S STATEMENT
Period Highlights
-- Investment performance beat the FTSE 250 index by 6.9% -
unaudited Net Asset Value (NAV) declined to 227.3p, a drop of 14.9%
for the half year compared to a FTSE 250 drop of 21.8%. Over the
past 12 months, our portfolio beat the same index by 7.0%
-- The Trust remains third in the AIC's 'Next Generation of
Dividend Heroes' table published in March - with a yield at that
time of 4.8%, dividend cover of 2.19 and 16 years increasing
dividend
-- Total return to shareholders declined by 11.4%. This is
calculated as the change in net asset value (NAV) during the half
year including dividend paid
-- Largely due to the impact of the COVID-19 pandemic leading to
portfolio companies cancelling or postponing dividends, gross
revenue has dropped to GBP52,578 - minus 56% compared to the same
period last year (GBP119,303)
-- Revenue return per ordinary share was 1.7p (31 December 2019: 9.1p, 30 Jun 2019: 4.7p)
-- A final dividend of 9.3p was paid in April 2020 (2019: 9.1p)
-- We announce payment of an interim dividend for the first
time, providing shareholders with income when perhaps it has
dropped or been cancelled this year from their direct or open-ended
fund investments. In future we plan to pay dividends twice a year;
this interim dividend will be 1.7p.
Performance
I am very pleased to report the Company has produced very strong
investment performance in relative terms for its shareholders; the
board is delighted with our Managing Director's effort, skill and
diligence in such challenging times.
The NAV return for the period was -14.8% compared to -21.8% for
the FTSE 250 Index, an outperformance of 7% (consistent with 7.0%
outperformance for the 12 months ending 30 June 2020). Further
information on portfolio activity and the drivers behind the
portfolio's performance is contained in the Managing Director's
Report below.
However I am disappointed by the Company's share price which
dropped to 165p at the end of this period and therefore traded at a
discount to NAV of 27.4%. At the time of writing the discount had
improved a little to 21.2%. The board believes this reflects a high
degree of uncertainty about the future from both markets and
individual investors, leading to greater reluctance to commit as
well as higher volatility in prices. In March we had a brutal
equity sell-off in many major markets followed by good recovery in
June, including the best second quarter for US equities since 1987
- more feast-famine swings seem likely in the future.
Dividends
Faced with the medical and economic impact of the COVID-19
pandemic, the British government and Bank of England responded with
an almost unprecedented range of health protection and economic
support measures. The Office of Budget Responsibility says they may
result, along with lost tax revenues, in a record peacetime high
for borrowing of GBP370bn this year. At the time of writing 200
countries report infections and the peak wave is arriving in Africa
and South America having passed through Asia, Europe and America.
Other countries will likely reach record public borrowing and
possibly unemployment levels however the UK has been hit harder
than most.
A good number of UK companies, faced with resulting uncertainty
about income, cash flows and even survival, have cut or cancelled
their dividend, affecting many investors. Recent figures confirm Q2
dividend payouts by British companies dropped by approximately
GBP22bn (57%) compared to Q2 2019, by far the lowest quarterly
figure since 2010 (report by Link Group). For our Company, gross
revenue for the period fell by 56% compared to H1 2019 to
GBP52,578.
Against this backdrop I would like to underline the value of
prudence in prior years, in making use of our status as a
closed-ended fund that allows us to keep up to 15% of investment
income (not possible for open-ended funds) so that 'fat years' can
help pay for 'lean years'. With dividend cover of more than 2 we
are better placed in this regard than 21 of the other funds in the
AIC's 'Next Generation Heroes' table of 25 trusts, published in
late March, to pay dividend.
As a result I am delighted to report your board has decided to
pay for the first time an interim dividend. This will be 1.7p per
share and should be a welcome positive contribution to what
otherwise may be a lean year for many investors; we will pay this
on 25 September 2020 to all shareholders on the register of members
at close of business on 11 September 2020.
We will review the case for a final dividend in Q1 2021, and
subject to shareholder approval, pay any final dividend on 6 April
2021 to all shareholders on the register at 12 Mar 2021.
Shareholder Relations
The Board held the AGM on 8 April 2020 in Yorkshire, in order to
safeguard the health of its shareholders, officers and service
providers. It intends to hold the AGM for the current financial
year in London on 30 March 2021.
Outlook
I wrote in our Annual Report on 2 March 2020 that our internal
dynamics had stabilised, that our smaller portfolio in terms of
number of companies was more focused on value creation and that we
had returned to a more normal operating environment.
In just a few months there have been many changes to the local
and global environment and markets, much of them as a result of the
pandemic - the full outcome is yet to be understood. In addition
there are significant uncertainties for the next 6-9 months that
may impact the timing and strength of recovery in the UK, Europe
and the rest of the world. Will there be a second wave in the
UK/Europe during the winter months? Will there be an effective and
widely available vaccine for the majority of the population? Will
trade agreements between the UK and Europe as Brexit continues,
help or hinder recovery? Will UK relations with China and America
develop as win-win? In the meantime how many more will be made
redundant and what will the new normal be for companies?
We cannot know the answers to these questions and to speculate
is largely pointless.
However we do know that investing in quality and for the long
term reaps rewards - we are already seeing the fruit of this
approach in relative portfolio performance since April last year.
We also know that our fund manager's relentless search for features
in potential investee companies that make them more resilient in
challenging times for capital, growth and cash will provide
comparative advantage to Athelney shareholders.
On dividends, we know that UK companies have in the past
proportionately paid out more dividends than the rest of the world
but also that dividend cover is lower here. The news in May that
Royal Dutch Shell had cut its dividend by two thirds - the first
time since 1945 - was a huge blow to many investors used to high
income.
Given the oil and gas sector was far below the average dividend
cover in 2019 and that Shell had become a hostage to paying a
dividend (cutting future investment and selling assets to service
it), the pandemic has provided the perfect push to halt the
self-digestion. Don't be surprised if BP follows suit and cuts its
dividend soon - the market generally expects it. Chasing high yield
for its own sake is risky, especially if it is fully at the expense
of capital growth.
Investors might now use this and other prompts to review their
expectations for future dividends from individual UK companies or
sectors.
We also know that existing and potential Athelney 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 through companies that may provide
income or growth. 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 spotty dividend payments by portfolio
companies year-on-year.
Overall the board remains confident the Company remains
well-positioned to weather this storm and meet its objectives.
We have all been affected in some way by this virus, reminded of
the need to be grateful, struck by stories of resilience and
tragedy; its impact will be with us for months to come, however we
also know that we will ultimately reach calmer waters. I wish you
and those dear to you both health and happiness in the
meantime.
Frank Ashton
Chairman
28 July 2020
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 2020 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 2020 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
2019 on pages 15, 16 and 49. 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
28 July 2020
MANAGING DIRECTOR'S REPORT
Investment Changes
No new holdings were purchased during this period. Additional
holdings of 4Imprint, Begbies Traynor, Boohoo, Clarke(T), Costain,
Fevertree, Homeserve, Jarvis Securities, JD Sports, and Rightmove
were acquired. The following holdings were sold: Andrews Sykes,
Biffa, Camellia, Hansteen Holdings, Marstons, Vitec, VP and
Wilmington. In addition, Mountview Estates was top-sliced to
provide capital for new purchases.
Corporate Activity
The holding of Hansteen Holdings was taken over at a capital
profit of 15%.
Portfolio Commentary
In the period under review, businesses across the globe were
impacted by COVID-19. After all-time highs in January, volatility
was the only consistent feature for the remainder of the year. Due
to the Company's investments in listed securities the market
volatility had a significant impact on the financial position as
tracked by the monthly net asset value (NAV) per share before tax
on unrealised gains:
Month NAV Month Three-Month Six-Month FTSE Three-Month Six-Month
Pence on Month Movement Movement 250 Movement Movement Movement
per Share Movement
Dec 2019 266.90
----------- ---------- ------------ ---------- -------------- ------------ ----------
Jan 2020 270.90 1.51% -2.03%
----------- ---------- ------------ ---------- -------------- ------------ ----------
Feb 2020 247.80 -8.53% -9.84%
----------- ---------- ------------ ---------- -------------- ------------ ----------
Mar 2020 191.70 -22.64% -28.18% -21.88% -30.99%
----------- ---------- ------------ ---------- -------------- ------------ ----------
Apr 2020 209.90 9.49% 8.96%
----------- ---------- ------------ ---------- -------------- ------------ ----------
May 2020 224.00 6.72% 3.58%
----------- ---------- ------------ ---------- -------------- ------------ ----------
227. 1. 47 +18. -14.
Jun 2020 3 0 % 5 7% 84 % 0.45% +13.36% -21.77%
----------- ---------- ------------ ---------- -------------- ------------ ----------
Over the quarter to June 2020, the portfolio return was 18.6% as
compared to the FTSE 250 return of 13.4%, over the six-month period
-14.8% compared to -21.8% for the index and for the twelve months
to June the portfolio return was -5.0% compared to the FTSE 250
return of -12.0%. Thus, by the end of June 2020 the market had
recovered somewhat with the portfolio tracking significantly
ahead.
As mentioned in the Chairman's Statement dividend revenue in the
current financial year is down by 56% on FY2019 which is largely
due to COVID-19 related precautions from companies preserving
capital and also reflective of the current portfolio mix which
includes investments with higher capital growth prospects and lower
dividend yields than in the prior years.
COVID-19 has had an impact on every element of society and has
posed a significant challenge for businesses and governments across
the globe. One of the common themes during the last four months has
been a focus on capital. Many companies have been raising capital
and also cutting or delaying dividends until a clearer vision of
the future exists. For Athelney, this may have an impact on
dividend revenue for the remainder of the year and additionally the
volatility in the market has impacted the valuation of listed
investment assets throughout the period.
Investment discipline is a prerequisite for long-term success,
and we will ensure the application of the same consistent approach
to investments during this uncertain time. During this time, I have
continued to monitor the investee businesses for long term
COVID-related impacts and have made adjustments to the portfolio
model and investments as necessary.
Athelney is a long-term investor, and as described more fully
later in this report, our investment philosophy is based on the
belief that the economics of a business drives long-term investment
returns. We see ourselves as owners in the business which have
organic growth with predictable earnings, a sustainable competitive
advantage, high returns on equity, a strong financial position and
an experienced and talented management team.
As owners of these businesses we are supportive of management
otherwise we would vote with our feet and, to this end, we
generally vote our proxies in accordance with management's
direction other than when the resolution concerns their own
remuneration. In times of business turmoil, we would not be
concerned at management foregoing margin to retain talented staff
or reducing dividends to shore up the balance sheet after depleting
some of the reserves built up in the good times. However, we take a
dim view of management who lay off staff and reduce dividends
without adopting a similar approach to executive remuneration. We
note that a few of our investee companies have cancelled the
payment of the current dividend.
As detailed elsewhere in this report, the number of stocks in
the portfolio has been reduced further from 54 stocks as at the 30
June 2019 to 39 currently resulting in a more concentrated and
focused portfolio. As a result, the Company realised capital
profits before expenses arising from the sale of investments during
the period in the sum of GBP241,205 (30 June 2019: GBP71,882).
As a high-conviction manager of concentrated portfolios,
understanding the competitiveness and sustainability of a business
is paramount, combined with a healthy dose of trust in a proven
management team. To be sustainable, a business should encompass
three characteristics: firstly, the business must operate in an
industry with a low risk of macro-environmental factors affecting
future performance; secondly, the business has demonstrated strong
ESG performance to date and holds a capacity to mitigate ESG
issues; and lastly, the business has dynamic capabilities that
sustainably renews its competitive advantage. ESG is a topic that
is frequently discussed and within our framework, the recent
disclosures pertaining to Boohoo have brought the long-term
sustainability of the business model into question which has
subsequently resulted in us exiting this position post period
end.
In so far as our other investments are concerned, the management
teams are trusted through their behaviour, competency, and
attitudes to ensure that their businesses prosper and we remain
confident that our portfolio as a result of this will produce above
average returns for our shareholders.
Notwithstanding the fact that previous Annual Reports have
contained extensive information on our investment philosophy and my
approach to investing, I have decided to summarise this in each
report for the benefit of any new shareholders and to ensure that
we have a succinct synopsis to which all shareholders can
refer.
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 high-quality, 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.
Ongoing Charges and Costs
I am very pleased to confirm that we have maintained a strict
control over costs during the period under review. Total expenses
have declined by 53% from those incurred in the six months to June
2019 for reasons outlined in the 2019 Annual report, returning to a
normal cost run-rate for the Company for the first half of the
year.
Dr Manny Pohl AM
Managing Director
28 July 2020
INVESTMENT PORTFOLIO
Top 20 Holdings
Holding Value %
GBP of portfolio
Liontrust Asset Management 33,000 429,000 9.08
Games Workshop 4,500 360,450 7.63
National Grid 28,000 276,920 5.86
Tritax Big Box 170,000 246,330 5.21
LondonMetric Property 100,000 210,400 4.45
Homeserve 16,000 208,640 4.42
Hill & Smith 14,000 173,880 3.68
Jarvis Securities 29,000 162,400 3.44
Close Brothers 13,500 149,040 3.15
Clarke T 145,000 143,840 3.04
XP Power Ltd 4,000 141,600 3.00
Gamma Communications 10,000 128,000 2.71
4Imprint 5,000 123,000 2.60
Lok'n Store Group 22,000 118,800 2.51
Picton Property Income 175,000 118,650 2.51
Target Healthcare REIT 100,000 109,800 2.32
Rightmove 20,000 109,160 2.31
Randall & Quilter Investment Holdings 68,217 108,465 2.30
Treatt 21,000 104,475 2.21
Belvoir Lettings 85,000 97,750 2.07
INCOME STATEMENT
for the six months ended 30 June 2020
Audited
Year ended
31
Unaudited Unaudited December
6 months ended 30 June 6 months ended 30
2020 June 2019 2019
Notes Revenue Capital Total Revenue Capital Total Total
GBP GBP GBP GBP GBP GBP GBP
Gains/(Loss)
on
investments
held at fair
value - 241,205 241,205 - 71,882 71,882 1,086,854
Income from
investments 52,578 - 52,578 119,303 - 119,303 232,262
Investment
Management
expenses (1,903) (17,136) (19,039) (1,780) (16,085) (17,865) (38,494)
Other
expenses 2 (14,420) (42,039) (56,459) (16,769) (127,218) (143,987) (199,191)
Net return
on ordinary
activities
before
taxation 36,255 182,030 218,285 100,754 (71,421) 29,333 1,081,431
Taxation 3 - - - - - - -
Net return
on ordinary
activities
after
taxation 36,255 182,030 218,285 100,754 (71,421) 29,333 1,081,431
Dividends
Paid:
Dividend (200,683) - (200,683) (196,367) - (196,367) (196,367)
Transferred
to reserves (164,428) 182,030 17,602 (95,613) (71,421) (167,034) 885,064
=========== ========= =========== ========== ========== ========== ===========
Return per
ordinary
share 4 1.7p 8.4p 10.1p 4.7p (3.3)p 1.4p 50.1p
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 October 2019 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 2020
For the Six Months Ended 30 June 2020 (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
2020 539,470 881,087 1,916,502 1,982,060 439,598 5,758,717
Net gain on realisation
of investments - - 241,205 - - 241,205
Decrease in unrealised
Appreciation - - - (870,649) - (870,649)
Expenses allocated
to
Capital - - (59,175) - - (59,175)
Profit for the
period - - - - 36,255 36,255
Dividend paid in
year - - - - (200,683) (200,683)
Shareholders' Funds
at 30 June 2020 539,470 881,087 2,098,532 1,111,411 275,170 4,905,670
========== ======== ========== =========== ========== ==============
For the Six Months Ended 30 June 2019 (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
2019 539,470 881,087 1,855,088 1,157,686 440,322 4,873,653
Net profits on
realisation
of investments - - 71,882 - - 71,882
Increase in unrealised
Appreciation - - - 449,760 - 449,760
Expenses allocated
to
Capital - - (143,303) - - (143,303)
Profit for the
year - - - - 100,754 100,754
Dividend paid in
year - - - - (196,367) (196,367)
Shareholders' Funds
at 30 June 2019 539,470 881,087 1,783,667 1,607,446 344,709 5,156,379
========== ======== ========== =========== ========== ==============
For the Year Ended 31 December 2019 (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
2019 539,470 881,087 1,855,088 1,157,686 440,322 4,873,653
Net profits on
realisation
of investments - - 262,480 - - 262,480
Increase in unrealised - - - 824,374 - 824,374
appreciation
Expenses allocated
to - - (201,066) - - (201,066)
Capital
Profit for the
year - - - - 195,643 195,643
Dividend paid in
year - - - - (196,367) (196,367)
Shareholders' Funds
at 31 December
2019 539,470 881,087 1,916,502 1,982,060 439,598 5,758,717
========== ======== ========== =========== ========== ==============
FINANCIAL POSITION
as at 30 June 2020
Audited
Notes Unaudited Unaudited 31 December
30 June 30 June
2020 2019 2019
GBP GBP GBP
Fixed assets
Investments held at
fair value through
profit and loss 4,724,305 5,033,637 5,466,191
---------- -------------- --------------
Current assets
Trade receivables 124,342 103,460 223,733
Cash at bank and in
hand 74,101 35,227 90,902
198,443 138,687 314,635
Creditors: amounts falling
due within one year (17,078) (15,945) (22,109)
---------- -------------- --------------
Net current assets 181,365 122,742 292,526
---------- -------------- --------------
Total assets less current
liabilities 4,905,670 5,156,379 5,758,717
Provisions for liabilities -
and charges - -
Net assets 4,905,670 5,156,379 5,758,717
========== ============== ==============
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 2,098,532 1,783,667 1,916,502
Capital reserve - unrealised 1,111,411 1,607,446 1,982,060
Retained earnings 275,170 344,709 439,598
Shareholders' funds
- all equity 4,905,670 5,156,379 5,758,717
========== ============== ==============
Net Asset Value per
share 5 227.3p 239p 266.9p
Number of shares in
issue 2,157,881 2,157,881 2,157,881
STATEMENT OF CASH FLOWS
for the six months ended 30 June 2020
Unaudited Unaudited Audited
6 months 6 months
ended ended Year ended
30 June 31 December
30 June 2020 2019 2019
GBP GBP GBP
Cash flows from operating
activities
Net revenue return 36,255 100,754 195,643
Adjustments for:
Expenses charged to
capital (59,175) (143,303) (201,066)
(Decrease)/Increase
in creditors (5,031) (7,595) (1,431)
Decrease/(Increase)
in debtors 99,389 109,975 (10,298)
Cash from operations 71,438 59,831 (17,152)
------------- ------------ ------------
Cash flows from investing
activities
Purchase of investments (481,304) (1,475,968) (2,074,201)
Proceeds from sales
of investments 593,748 1,612,211 2,343,102
Net cash from investing
activities 112,444 136,243 268,901
------------- ------------ ------------
Equity dividends paid (200,683) (196,367) (196,367)
Net Decrease (16,801) (293) 55,382
Cash at the beginning
of the period 90,902 35,520 35,520
Cash at the end of the
period 74,101 35,227 90,902
============= ============ ============
NOTES TO THE HALF YEARLY FINANCIAL REPORT
1. Accounting Policies
a) Statement of Compliance
The Company's Financial Statements for the period ended 30 June
2020 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 October 2019 ('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 2019.
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 2020 and 30 June 2019 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 2019 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. Issues leading to board/major shareholder disruption in H1
2019 resulted in approximately GBP71,000 non-recurring costs in
that period.
3. Taxation
The tax charge for the six months to 30 June 2020 is nil (year
to 31 December 2019: nil; six months to 30 June 2019: nil).
The Company has an effective tax rate of 0% for the year ending
31 December 2020. 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.
4. The calculation of earnings per share for the six months
ended 30 June 2020 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 6 months ended 30 June
2020 (Unaudited) 2019 (Unaudited)
Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP
Attributable
return
on
ordinary
activities
after
taxation 36,255 182,030 218,285 100,754 (71,421) 29,333
Weighted
average
number of
shares 2,157,881 2,157,881
Return per
ordinary
share 1.7p 8.4p 10.1p 4.7p (3.3)p 1.4p
12 months ended 31 December
2019 (Audited)
Revenue Capital Total
GBP GBP GBP
Attributable
return
on
ordinary
activities
after
taxation 195,643 885,788 1,081,431
Weighted
average
number of
shares 2,157,881
Return per
ordinary
share 9.1p 41.0p 50.1p
5. Net Asset Value per share is calculated by dividing the net
assets by the weighted average number of shares in issue
2,157,881.
6. 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 (2019:
classification A investments only).
7. Related Party Transactions
Dr. E. C. Pohl is the sole beneficial owner of E C Pohl & Co
Pty Limited, which owns 54.1% of the issued share capital of Global
Masters Fund Limited on behalf of itself and clients whose
portfolios it manages. E C Pohl & Co Pty Limited held 339,054
(2019: Nil), Global Masters Fund Limited held 204,951 (2019:
379,640) shares in the Company as at 30 June 2020. On the 15 July
2020 E C Pohl & Co Pty Limited purchased 53,946 shares making
their holding 393,000 shares, on the same day Global Masters Fund
Limited sold 100,116 shares reducing their holding to 105,835
shares.
Copies of the Half Yearly Financial Statements for the six
months ended 30 June 2020 will be available on the Company's
website www.athelneytrust.co.uk as soon as practicable.
For further information:
Debbie Warburton
Company Secretary
01326 378 288
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FLFVSDLITFII
(END) Dow Jones Newswires
July 28, 2020 10:36 ET (14:36 GMT)
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