RNS Number : 3731U

Athelney Trust PLC

28 July 2020

                                           Athelney Trust PLC 
                                          Legal Entity Identifier: 
                                                28 July 2020 
                         Half Yearly Financial Report for the Period ended 30 June 
                       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. 


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.


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.


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.


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


28 July 2020


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


28 July 2020


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


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 


for the six months ended 30 June 2020

                                                                                                  Year ended 
                                     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 
  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 
  expenses                  (1,903)   (17,136)     (19,039)     (1,780)    (16,085)    (17,865)     (38,494) 
  expenses         2       (14,420)   (42,039)     (56,459)    (16,769)   (127,218)   (143,987)    (199,191) 
 Net return 
  on ordinary 
  taxation                   36,255    182,030      218,285     100,754    (71,421)      29,333    1,081,431 
 Taxation          3              -          -            -           -           -           -            - 
 Net return 
  on ordinary 
  taxation                   36,255    182,030      218,285     100,754    (71,421)      29,333    1,081,431 
 Dividend                 (200,683)          -    (200,683)   (196,367)           -   (196,367)    (196,367) 
  to reserves             (164,428)    182,030       17,602    (95,613)    (71,421)   (167,034)      885,064 
                        ===========  =========  ===========  ==========  ==========  ==========  =========== 
 Return per 
  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


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 
   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 
   of investments                  -         -      71,882            -           -          71,882 
 Increase in unrealised 
   Appreciation                    -         -           -      449,760           -         449,760 
 Expenses allocated 
   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 
   of investments                  -         -     262,480            -           -         262,480 
 Increase in unrealised            -         -           -      824,374           -         824,374 
 Expenses allocated 
  to                               -         -   (201,066)            -           -       (201,066) 
 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 
                          ==========  ========  ==========  ===========  ==========  ============== 


as at 30 June 2020

                                                  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 
            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 


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 
 Net revenue return               36,255        100,754       195,643 
 Adjustments for: 
 Expenses charged to 
  capital                        (59,175)      (143,303)     (201,066) 
  in creditors                   (5,031)         (7,595)      (1,431) 
  in debtors                      99,389        109,975      (10,298) 
 Cash from operations             71,438        59,831       (17,152) 
                              -------------  ------------  ------------ 
 Cash flows from investing 
  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 
                              =============  ============  ============ 


   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 
   taxation         36,255    182,030     218,285        100,754   (71,421)   29,333 
   number of 
   shares                    2,157,881                         2,157,881 
  Return per 
   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 
   taxation        195,643    885,788   1,081,431 
   number of 
   shares                    2,157,881 
  Return per 
   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) Dow Jones Newswires

July 28, 2020 10:36 ET (14:36 GMT)