TIDMATY
RNS Number : 6208G
Athelney Trust PLC
27 July 2021
Athelney Trust PLC
Legal Entity Identifier:
213800ON67TJC7F4DL05
27 July 2021
Half Yearly Financial Report for the Period ended 30 June
2021
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 2021.
Period Highlights
-- Unaudited Net Asset Value (NAV) increased by 8.8% to 277.8p
and this improvement lagged the FTSE 250 by just 0.4%
-- The Trust now heads the AIC's 'Next Generation of Dividend
Heroes' table published each March - with a yield at that time of
4.8% after 18 years of dividend growth
-- Total return to shareholders increased by 11.8%. This is
calculated as the change in net asset value (NAV) during the half
year including dividend paid
-- Gross revenue has increased to GBP82,309 an increase of 56%
compared to the same period last year (GBP52,578)
-- Revenue return per ordinary share was 3p (31 Dec ember 2020: 5.9p, 30 Jun 2020: 1.7p)
-- An interim dividend of 1.7p was paid in September 2020 and a
final dividend of 7.7p was paid in April 2021 making the total
dividend 9.4p (2020: 9.3p)
-- Our interim dividend will be 2.0p.
Performance
I am pleased to report your Company has produced very strong
comparable investment performance with more than twice the
percentage increase of the FTSE 250 index in the past three
months.
The NAV return for the half year period was 8.81% compared to
9.21% for the FTSE 250 Index, a lag of just 0.4 percentage points.
Further information on portfolio activity and the drivers behind
recent performance and six months of contrasting quarters, is
contained in the Managing Director's Report below. We have a great
deal of confidence in Manny Pohl as he leads investment decisions,
particularly in such unusual and challenging times; I would like to
thank him personally for his attention to detail, application of
clear and beneficial process and commitment to a disciplined
approach over the past 18 months: All shareholders benefit, I hope
you agree.
I am very encouraged to see the share price recover to 250p and
the discount to NAV narrow to 10.0% (NAV at 277.8p) as the half
year concludes. Most investment trusts this time last year were
running at deep discounts and our small fund, at -27.4% was no
exception. As we look back over the past 12 months, it has been
quite a journey as COVID-19 laid waste to plans from the small, for
example family level, to the large at country level. Unfortunately
the journey still continues as we try to discern what changes are
temporary and which are permanent, as we assess the depth of
economic scarring, all against a background of continuing,
uncertainty as Delta and other variants threaten the rate of
recovery.
We now have a concentrated portfolio reflecting conviction,
subject to process for both investment and divestment, that is
delivering consistent performance for the investor wishing to
reduce risk over the long term. Investment in this company means
you benefit from closed-end status and our dividend policy, which
has marked us out in an 18 month period when many others have
faltered.
Dividends
According to Link Group, the pandemic accounted for a 41.6% drop
in UK dividend payouts (GBP44.8bn from Q2 2020 to Q1 2021) as two
thirds of companies reduced or pulled their dividends. Banking
dividends are returning, albeit at low levels and oil and gas
companies are also showing signs of increasing payouts.
As a result we are seeing a very welcome increase in our
Company's dividend revenue of 56.6% to GBP82,309 in this period,
compared to last year. Link Group expects underlying dividends to
rise 5.6% for the year. We would rather see slow, steady progress
in the current direction for UK dividends than more volatility and
uncertainty.
Your board is delighted that the Company topped the AIC's 'Next
Generation Heroes' table published each year in March with dividend
yield of 4.81% as we extended the run of consecutive years of
dividend growth to eighteen. To provide more context, eight trusts
lost their place in that table since March 2020, as they maintained
or cut their dividend.
Your board has decided to pay an interim dividend of 2.0p; we
will pay this on 24 September 2021 to all shareholders on the
register of members at close of business on 10 September 2021.
We will review the case for a final dividend in Q1 2022, and
subject to shareholder approval, pay any final dividend on 13 April
2022 to all shareholders on the register at 11 March 2022.
Shareholder Relations
The Board held the AGM on 30 March 2021 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 5 April 2022.
Outlook
Just five months ago I wrote in our Annual Report that there may
be pent-up enthusiasm from shoppers and a possible spending spree
might lead to upside risk and inflationary pressures. Given the
unbalancing effect that COVID-19 has had on supply and demand, with
a very variable impact by sector and sub-sector, inflation is now
being forecast to rise to a peak between 3% and 4%. Members of the
Bank of England's Monetary Policy Committee (MPC) still differ on
how temporary this will be or to be more precise, how quickly we
may return to a more normal condition at or below the 2% target for
CPI.
Other areas of life, including the amount of time spent working
from the office, the use of online versus store-based shopping,
seem unlikely ever to return to the pre-Covid normal. Several false
dawns have passed on travel, whether locally or internationally for
business or pleasure and it still seems likely to be a long time
before the world's population approaches vaccination-based
protection that allows more normal free movement.
Even as we are about to move to Step 4 and release restrictions
in England, it still does not feel like a return to normal. Despite
nearly 90% of the UK population being vaccinated with at least one
dose and over 60% with both doses, there are still enough concerns
within government to have delayed the release by a month and now
also to issue guidance for each of us to continue to be cautious as
cases are high and rising, driven by the Delta variant. Disruption
from being required to isolate by the NHS Test and Trace app seems
to be higher than at any other time in the past 12 months,
including for schoolchildren and workplaces. Some businesses
struggle to stay open and others run restricted services,
especially in the leisure/restaurant industry, where supply of
labour, which used to be bolstered by EU workers is now outstripped
by demand. Here also a new normal will need to be created.
Supply and demand as a general topic is much in the news lately.
Globally, there are still examples of supply chain problems, in
particular in microchip manufacture (tin supplies), steel
production (Chinese steel mills increased production, but iron ore
supply problems exist in Australia and Brazil leading to record
high prices), and also shipping (some evidence of retail majors
bringing forward shipping of Christmas stocks to the UK, to reduce
risk). More locally, Brexit teething problems continue and at least
one member of the MPC believes there may be little spare capacity
in the UK economy.
In summary, consumer and business confidence still seem fragile,
and imbalances or bottlenecks in the supply-demand equation can
soon lead to a drag on growth and problems with productivity or the
rate of return to normal employment levels.
However we do know that in the face of uncertainty and also
growth opportunities which are definitely on the rise, better
management teams, with access to funds for development will be well
placed.
The review process conducted by Manny Pohl and his team ensures
both the potential for growth (e.g. competitive advantage) and the
conditions for growth (e.g. quality balance sheet and management
team) are evident in investee companies, and ultimately will
provide comparative advantage to Athelney shareholders.
We each continue to have our lives impacted directly or
indirectly by the virus, and this will be the case for some time to
come. I wish you patience and stamina in completing the journey and
look forward to the AGM next year when we might, I hope, be able to
meet in person once more.
Frank Ashton
Chairman
27 July 2021
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 2021 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 2021 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
2020 on pages 12 and 13 and pages 36 and 37. 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
27 July 2021
Managing Director's Report
Portfolio Commentary
As we reach the half-way mark in the financial year it is
remarkable to consider the current position against the outlook
from 12 months ago. Thinking back to July 2020 we had witnessed an
unprecedented market decline and were hopeful of a recovery against
the backdrop of a worldwide pandemic. Future economic prospects of
the economy relied heavily on the development and rollout of
vaccines and the ongoing coordinated stimulus from government and
central banks.
Over the last 18 months, the number of individuals becoming
involved in financial markets has increased dramatically. However,
the mob-like behaviours of the WallStreetBets crowd have been a
truly unique phenomenon as has been the activist nature of retail
investors in the US against companies that had been targeted by
short-sellers. This culminated in the Dow Jones Industrial Index
being up by 12.7% over the six-month period to June 2021.
After a substantial improvement in the second half of last year,
the UK market was up by 9.21% over the first six months of this
financial year as can be seen from the Chart above. By comparison,
our portfolio performed exceptionally well and after providing for
a 7.7p dividend in March, the NAV went up by 8.81% over the same
six-month period, albeit with two quarters of vastly different
results as shown in the table below.
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 2020 255.30
------- ---------- ------------ ---------- ---------- ------------ ----------
Jan 2021 256.20 0.35% -1.27%
------- ---------- ------------ ---------- ---------- ------------ ----------
Feb 2021 253.20 -1.17% 3.37%
------- ---------- ------------ ---------- ---------- ------------ ----------
Mar 2021 253.30 0.04% -0.78% 2.91% 5.03%
------- ---------- ------------ ---------- ---------- ------------ ----------
Apr 2021 274.20 8.25% 4.55%
------- ---------- ------------ ---------- ---------- ------------ ----------
May 2021 279.30 1.86% 0.83%
------- ---------- ------------ ---------- ---------- ------------ ----------
Jun 2021 277.80 -0.54% 9.67% 8.81% -1.36% 3.98% 9.21%
------- ---------- ------------ ---------- ---------- ------------ ----------
This can be attributed to the fact that during the first quarter
as the vaccine rollout gained momentum and restrictions were being
lifted, stock market commentary focused on inflationary pressures
and the likely BOE response to this. The impact that this had on
the equities market was dramatic in the sense that previously
outperforming (growth) stocks were evaluated using a higher
discount rate for their long-dated earnings reducing their present
value while value stocks with current earnings became more
attractive and saw an improvement. This shift was relatively short
lived and was not as evident in the overall market as was the case
for Athelney where our investment process as outlined below does
favour growth companies.
Dividend revenue in the current financial year increased by
56.6% as compared to same period last year which is a welcome sign
of business conditions returning to normal. As detailed elsewhere
in this report, the number of stocks in the portfolio has been
reduced further to the current holding of 30 stocks. Consequently,
the Company realised capital profits before expenses arising from
the sale of investments during the period in the sum of GBP149,653
(30 June 2020: GBP241,205).
Even though we are now coming off a much higher base, we expect
the earnings of our portfolio companies to increase materially over
the next five years which provides some reassurance at a time when
valuations (PE multiples) are stretched. While it is almost certain
that there will be further COVID outbreaks in the months ahead
despite the success of the vaccine program, the past year has shown
how resourceful and resilient quality growth companies can be. This
provides us with the confidence to face the next six months and to
make the most of the opportunities ahead of us as the ongoing
volatility in the financial markets will provide us with welcome
opportunities to deploy our capital.
Sustainable Investing
Athelney 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-term 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 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
27 July 2021
Investment Portfolio at 30 June 2021
Top 20 Holdings
Holding Value %
GBP of portfolio
Liontrust Asset Management 33,000 619,740 10.6
AEW UK REIT 430,000 412,370 7.1
Games Workshop 3,500 398,650 6.8
Tritax Big Box 170,000 333,540 5.7
Jarvis Securities 116,000 290,580 5.0
Treatt 21,000 244,650 4.2
LondonMetric Property 100,000 231,200 4.0
XP Power Ltd 4,000 223,200 3.8
Lok'n Store Group 33,000 208,890 3.6
Close Brothers 13,500 204,390 3.5
Gamma Communications 10,000 198,800 3.4
Rightmove 30,000 194,760 3.3
Clarke T 145,000 188,863 3.2
Clinigen 30,000 185,550 3.2
Abcam 13,000 179,400 3.1
Target Healthcare REIT 150,000 172,800 3.0
S & U 6,000 159,600 2.7
Homeserve 16,000 152,800 2.6
LXI REIT 106,923 142,208 2.4
4Imprint 5,000 133,500 2.3
Income Statement
For the Six Months Ended 30 June 2021
Audited
Year ended
Unaudited Unaudited 31 December
6 months ended 30 June 6 months ended 30
2021 June 2020 2020
Notes Revenue Capital Total Revenue Capital Total Total
GBP GBP GBP GBP GBP GBP GBP
Gains/(Loss)
on
investments
held at fair
value - 149,653 149,653 - 241,205 241,205 (30,695)
Income from
investments 82,309 - 82,309 52,578 - 52,578 160,876
Investment
Management
expenses (2,120) (19,230) (21,350) (1,903) (17,136) (19,039) (38,002)
Other
expenses (15,545) (35,734) (51,279) (14,420) (42,039) (56,459) (105,508)
Net return
on ordinary
activities
before
taxation 64,644 94,689 159,333 36,255 182,030 218,285 (13,329)
Taxation 2 - - - - - -
Net return
on ordinary
activities
after
taxation 64,644 94,689 159,333 36,255 182,030 218,285 (13,329)
Dividends
Paid:
Dividend (166,157) - (166,157) (200,683) - (200,683) (237,367)
Transferred
to reserves (101,513) 94,689 (6,824) (164,428) 182,030 17,602 (250,696)
=========== ========= =========== ========== ========= ========== ============
Return per
ordinary
share 3 3p 4.4p 7.4p 1.7p 8.4p 10.1p (0.6p)
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 2021
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 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 profits 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 period - - - - (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 Year Ended 31 December 2020 (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 20120 539,470 881,087 1,916,502 1,982,060 439,598 5,758,717
Net profits on
realisation
of investments - - 223,957 - - 223,957
Decrease in unrealised - - - (254,652) - (254,652)
appreciation
Expenses allocated
to - - (109,909) - - (109,909)
Capital
Profit for the
year - - - - 127,275 127,275
Dividend paid
in year - - - - (237,367) (237,367)
---------- -------- ---------- ----------- ---------- --------------
Shareholders'
Funds at 31 December
2020 539,470 881,087 2,030,550 1,727,408 329,506 5,508,021
========== ======== ========== =========== ========== ==============
Statement of Financial Position As at 30 June 2021
Audited
Notes Unaudited Unaudited 31 December
30 June 30 June
2021 2020 2020
GBP GBP GBP
Fixed assets
Investments held at
fair value through
profit and loss 5,844,023 4,724,305 5,310,661
---------- -------------- --------------
Current assets
Trade receivables 124,709 124,342 142,136
Cash at bank and in
hand 36,912 74,101 72,601
161,621 198,443 214,737
Creditors: amounts falling
due within one year (9,969) (17,078) (17,377)
---------- -------------- --------------
Net current assets 151,652 181,365 197,360
---------- -------------- --------------
Total assets less current
liabilities 5,995,675 4,905,670 5,508,021
Provisions for liabilities -
and charges - -
Net assets 5,995,675 4,905,670 5,508,021
========== ============== ==============
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 2,125,239 2,098,532 2,030,550
Capital reserve - unrealised 2,221,886 1,111,411 1,727,408
Revenue reserves (distributable) 227,993 275,170 329,506
Shareholders' funds
- all equity 5,995,675 4,905,670 5,508,021
========== ============== ==============
Net Asset Value per
share 4 277.8p 227.3p 255.3p
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 2021
Unaudited Unaudited Audited
6 months 6 months
ended ended Year ended
30 June 31 December
30 June 2021 2020 2020
GBP GBP GBP
Cash flows from operating
activities
Net revenue return 64,644 36,255 127,275
Adjustments for:
Expenses charged to
capital (54,964) (59,175) (109,909)
(Decrease)/Increase
in creditors (7,408) (5,031) (4,732)
Decrease/(Increase)
in debtors 17,427 99,389 81,597
Cash from operations 19,699 71,438 94,231
------------- ---------- ------------
Cash flows from investing
activities
Purchase of investments (344,385) (481,304) (1,137,856)
Proceeds from sales
of investments 455,154 593,748 1,262,691
Net cash from investing
activities 110,769 112,444 124,835
------------- ---------- ------------
Equity dividends paid (166,157) (200,683) (237,367)
Net Decrease (35,689) (16,801) (18,301)
Cash at the beginning
of the period 72,601 90,902 90,902
Cash at the end of the
period 36,912 74,101 72,601
============= ========== ============
Notes to the Financial Statements
For the Six Months Ended 30 June 2021
1. Accounting Policies
a) Statement of Compliance
The Company's Financial Statements for the period ended 30 June
2021 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 2020.
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 2021 and 30 June 2020 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 2020 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 2021 is nil (year
to 31 December 2020: nil; six months to 30 June 2020: 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.
3 . The calculation of earnings per share for the six months
ended 30 June 2021 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 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
-------- ---------- --------
6 months ended 30 June 2020
Revenue Capital Total
-------- ---------- --------
GBP GBP GBP
-------- ---------- --------
Attributable
return on
ordinary
activities
after taxation 36,225 182,030 218,285
-------- ---------- --------
Weighted
average number
of shares 2,157,881
-------- ---------- --------
Return per
ordinary
share 1.7p 8.4p 10.1p
-------- ---------- --------
12 months ended 31 December
2020
Revenue Capital Total
-------- ---------- ---------
GBP GBP GBP
-------- ---------- ---------
Attributable
return on
ordinary
activities
after taxation 127,275 (140,604) (13,329)
-------- ---------- ---------
Weighted
average
number of
shares 2,157,881
-------- ---------- ---------
Return per
ordinary
share 5.9p (6.5p) (0.6p)
-------- ---------- ---------
4. Net Asset Value per share is calculated by dividing the net
assets by the weighted average number of shares in issue
2,157,881.
5. Financial Instruments
Fair value hierarchy
The fair value hierarchy consists of the following three
classifications:
Classification A - Quoted prices in active markets for identical
assets or liabilities. Quoted in an active market in this context
means quoted prices are readily and regularly available and those
prices represent actual and regularly occurring market transactions
on an arm's length basis.
Classification B - The price of a recent transaction for an
identical asset, where quoted prices are unavailable. The price of
a recent transaction for an identical asset provides evidence of
fair value as long as there has not been a significant change in
economic circumstances or a significant lapse of time since the
transaction took place. If it can be demonstrated that the last
transaction price is not a good estimate of fair value (e.g.
because it reflects the amount that an entity would receive or pay
in a forced transaction, involuntary liquidation or distress sale),
that price is adjusted.
Classification C - Inputs for the asset or liability that are
based on observable market data and unobservable market data, to
estimate what the transaction price would have been on the
measurement data in an arm's length exchange motivated by normal
business considerations.
The Company only holds classification A investments (2020:
classification A investments only).
6. 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 496,000
(2020: 339,054), Global Masters Fund Limited held Nil (2020:
204,951) shares in the Company as at 30 June 2021.
Copies of the Half Yearly Financial Statements for the six
months ended 30 June 2021 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
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END
IR FLFLIDTIDFIL
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July 27, 2021 06:20 ET (10:20 GMT)
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