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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Athelney Trust Plc | LSE:ATY | London | Ordinary Share | GB0000609296 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 177.50 | 165.00 | 190.00 | 177.50 | 177.50 | 177.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | 161k | -582k | -0.2697 | -6.58 | 3.83M |
From Apr 2019 to Apr 2024
TIDMATY
RNS Number : 4518X
Athelney Trust PLC
24 February 2017
ATHELNEY TRUST plc
FINAL RESULTS
Athelney Trust plc, the investor in small companies and junior markets announces its final results for the 12 months ended 31 December 2016.
Chairman's Statement and Business Review
I announce the results for the year ended 31 December 2016. The salient points are as follows:
-- The total return, which is the increase in NAV plus the dividend, is 5.7 per cent (31 December 2015: 10.4 per cent)
-- Audited Net Asset Value ("NAV") was 251.1p per share (31 December 2015: 245p) an increase of 2.5 per cent.
-- Revenue return per ordinary share was 10p (31 December 2015: 9.3p). -- Recommended final dividend of 8.6p per share (2015: 7.9p), an increase of 8.8 per cent.
Review of 2016
I'd rather take advice from my valet than from the Conservative Party Conference - Arthur Balfour, prime minister 1902-05.
The stock market is a device for transferring money from the impatient to the patient - Warren Buffett.
Lack of money is the root of all evil - George Bernard Shaw.
The only function of economic forecasting is to make astrology look respectable - John Kenneth Galbraith, economist.
Imagine a time-traveller, landing in the City of London in January 2016, proclaiming that the UK would vote to leave the EU, a presidential candidate who advocated debt renegotiation would be headed for the White House and that Italy would reject the reforms of Prime Minister Matteo Renzi. Surely, the men in white coats would have arrived, bundled him into the back of a van and then disappeared. But the first shock of 2016 was the big sell-off in Chinese stock-markets when a clumsy attempt to calm market nerves in January back-fired spectacularly, sparking world-wide turmoil. The price of oil dropped to its lowest level for 13 years. All this meant that investors slowly worked out that there would have to be more helpful intervention rather than less. And so it came to pass that Japan announced a surprise experiment with interest rates below zero, the Federal Reserve raised rates just once rather than the early forecast of four times, the Bank of England cut the bank rate after the referendum and the European Central Bank turned to new measures such as buying up corporate debt for the first time. Because of the collapse in the British pound after the referendum, depressed sectors in London markets such as miners and oils suddenly perked up and finished the year on a strong note as the Chinese economy started to react positively to yet another economic stimulus having been applied by the government. There was a strong correlation between markets which did comparatively well and the underlying economies where growth and employment statistics were improving.
Major markets ended on a strong note, tantalised by the thought that Donald Trump would cut corporate and personal tax rates and spend, spend, spend on infrastructure. New York, Tokyo and London finished with rises of 14.4, 2.9 and 15.2 per cent respectively although Shanghai fell by 10.7 per cent. Amongst lesser markets, Egypt, Argentina and Pakistan rose by 80, 55.4 and 48.4 per cent whereas at the other end of the scale Sweden, Czech Republic and Italy rose by modest percentages of 0.2, 1.2 and 2 respectively.
I am indebted to the Private Eye satirical magazine for the full details of the new Police Degree Course:-
Introduction: Hello, hello, hello!
Lecture: Don't do that again, sonny.
Tutorial: Anything that you say will be written down and used against you.
Examination: What's all this, then?
As far as small companies were concerned, Athelney Trust did not have a good year with a total return (i.e. capital growth plus dividend) of just 5.7 per cent whereas the FTSE Small Companies, Fledgling and AIM All-share all did much better with rises of 11, 15.3 and 15.2 per cent respectively. This under-performance was due to the heavy falls in commercial property shares immediately after the referendum and, although some recovery was experienced later in the year, it was not enough to make up for lost ground on the three indices.
Politics is a tough old game isn't it? Imagine having to choose between Hillary Clinton and Donald Trump? Or, even better, an election with three candidates: the first is half paralysed with polio, suffers from high blood pressure, anaemia and numerous other serious diseases, has been known to lie, consults an astrologist, cheats on his wife, is a chain-smoker and drinks too many martinis; the second is obese, has already lost three elections, suffers from depression, has had two heart attacks, smokes cigars and in the evening glugs champagne, port, brandy and whisky before taking two sleeping tablets; the third is a decorated war hero, who respects women, loves animals, might drink a beer from time to time and doesn't smoke. Did you reject one and two and go for three? Congratulations, you rejected Roosevelt and Churchill and elected, er, Adolf Hitler.
No-one compiles lists of wealth destruction, if they did, it would be fair to say that the fall in the pound after the referendum would rank highly. UK household net worth was valued at GBP16.5tn in January 2016 but just GBP14tn today. In dollar terms, value equivalent to the market capitalization of the FTSE 100 Index has been destroyed. Most Britons' wealth is held for paying sterling-denominated bills which, of course, did not leap by 15 per cent in 2016. This highlights a bit of a problem: everything is valued in terms of a currency yet what is a currency really worth? One answer is what it will buy - what Harold Wilson meant when talking about the pound in your pocket. So now we get round to discussing purchasing power parity (PPP). A silly example: in November, a pound suddenly bought less Toblerone than before. PPP struggles with sharp foreign exchange movements so instead look at supply and demand. Measured by nominal GDP (i.e. without making any adjustment for inflation), 2016 did not see a 15 per cent leap in demand for pounds and the prospect of exit from the EU rather hints at a lower demand for sterling. More than this, sterling's attraction was based on London's deep and liquid financial markets that provide a home for trillions of pounds. Britons could afford fuel, overseas holidays and, yes, Toblerone only because the City kept sterling high. Brexit threatens this: if a strong pound is no longer sustainable, then previous living standards cannot be, either.
Aberdeenshire business-owner wins presidential election - The Buchan Observer, Peterhead, Aberdeenshire.
Why do companies obsess over quarterly/six-monthly profits and yet fail to invest in the business for the longer-term? Conventional wisdom places the blame squarely on the pursuit of shareholder value which, it is believed, has fuelled short-term thinking and irresponsible behaviour. Wrong! The culprits are executives, investment managers and the business press who think that the objective of shareholder value is to boost the share price by meeting the market's profit expectations. What does managing for shareholder value mean? It means managing for cash flow not earnings per share: it means managing for the long-term not the short-term. It means that managers must control risk carefully when investing capital. Many executives claim that they have no choice but to adopt a short-term approach given that the average holding period is about one year. This reasoning is deeply flawed: what should matter is not portfolio turnover but the time horizons of those who are saving to meet long-term needs. Shareholder value has not failed management: management has failed true shareholder value.
The U.K. government's approach to the Brexit negotiations could form a suitable addition to Charles Mackay's book about the South Sea Bubble. It would fit neatly after the section on the prospectus seeking funds for a company for carrying on an undertaking of great advantage, but nobody to know what it is.
On the subject of Britain's exit from the EU, we have no doubt all heard the terms hard and soft Brexit to illustrate whether we leave or stay in the single market and/or the customs union but what about a train crash Brexit in which we fail to agree a sensible deal and we simply crash out of the EU with chaotic consequences for trade and diplomatic relations? The problem is that the negotiations are too complicated to complete in the given time. Britain and the EU will have to unpick and then reorder a legal, economic and trading relationship that has been knitted together over the course of more than 40 years. But the two sides will just have two years to achieve and ratify a deal after Britain triggers Article 50, thus giving formal notice that it intends to leave. If there was great goodwill on both sides no doubt that the talks could be accelerated but I believe that there is plenty of ill will on both sides of the Channel. A major flashpoint is likely to be the EU's estimate of Britain's financial liabilities following exit, covering everything from money already pledged to the EU's budget to the pensions of retired bureaucrats: estimates in Brussels indicate a figure of EUR50bn-EUR60bn. The right response would be to negotiate that figure down and then have it spread over a large number of years. In reality, however, hard-liners in the Conservative party may be vigorously opposed and the only alternative might be to hand the problem to the European Court of Justice for arbitration. Such a procedure is likely to take a very long time and our membership of the EU may simply lapse with damaging consequences for Europe-wide supply chains, ports would be clogged up with paper-work and financial services firms would lose the passporting rights which are required to do business across the EU. Let us hope that this interpretation is too gloomy but it really is a shame that the coming dispute is so pointless and self-defeating.
Donald Trump is New York. Glitz, greed, glamour and an ambition so colossal that it will probably not rest until he rules the world - which one day he just might. Even when he seems to lose, at the last minute he comes out the winner. Could Trump possibly make it to the White House? Of course not, says everyone who knows anything about American politics. It's a bad joke. But then Trump has often done what can't be done and if the White House can take a senile movie star, why not a casino operator? Polly Toynbee, Guardian, 26 May 1988.
If devaluation was the springboard to economic success then Britain should have the most successful economy in the world. Alas, as we are all surely aware, one devaluation has followed another. For most of the 1800s, the pound was worth just under $5: the Napoleonic War weakened the pound temporarily as did the US Civil War the dollar, which fell to $10 to the pound at one stage. The financial burdens of the Great War saw sterling fall to $3.66. Despite abandoning the Gold Standard, successive British governments still viewed fixed rates as desirable and so in 1940 the pound was pegged to $4.03 which, on the face of it, looks far too high. $4.03 became $2.80 in 1949. This was maintained until 1971 when currencies were allowed to float freely, since when the rate has drifted even lower due to the higher rate of inflation that we experienced in the UK, which had the effect of debasing the purchasing power of the pound. Inflation is forecast to remain high compared with America so we can expect a further fall in due course, although I happen to feel that the pound has fallen too far and might perk up a touch if we can avoid a train crash Brexit.
December. Beloved leader of the Labour Party, Jeremy Corbyn, walked out of a karaoke party for Labour MPs where they sang Tony Blair's 1997 election-winning anthem Things Can Only Get Better accompanied by chants of We want Tony!
The accord by OPEC members in November will come to symbolise the passing of one of the world's most powerful cartels. After 50 years in control of the oil price, OPEC has submitted to the economic power of a much-changed global market. The agreement to cut production by 1.2m barrels a day raised prices at the time by almost 10 per cent. It is not, however, a deal which is capable of lifting prices to the preferred level of $60 or $70. But will Iran limit its production when it desperately needs increased output to sustain its economy? Will Russia cut production by 300,000 barrels a day? When did Russia last participate in an OPEC quota? Answer: never. Then, there is a surge in production coming from Brazil, Canada and Kazakhstan to add to the present surplus. The US shale business, furthermore, is entirely capable of ramping up production again. For all these reasons, the current deal is inadequate and is likely to fail. Too many of the promises are vague and the incentive to cheat is too high. OPEC has no enforcement mechanism against those who break the agreement, the result being, I believe, that the oil price will fall back later in the year. OPEC as a cartel is on its last legs and everyone will have to get used to the new reality.
In the run-up to Athelney Trust's year end, the Dow Jones Index almost reached 20,000. I ignored all the kerfuffle. Most indices are weighted by market capitalisation - the share price multiplied by the number of shares in issue. So, companies with a higher market value get a higher weighting in the index tracking that market. The Dow, on the other hand, weights companies by price not market cap. This is because equity indices were a new concept when Charles Dow constructed it in 1896. Back then, it included 12 companies and adding all the share prices together and dividing by 12 gave the value of the index. Fast forward to today with 30 companies in the index but it really is rather silly that Goldman Sachs is the top share in the index just because its share price is a whopping $238 whereas Apple is only $116. Yet Apple is the larger company by a country mile.
In 1920, America put its faith in a businessman-president called Warren Harding, whose slogan was America first! This meant what it does now: anti-immigrant, nativism, and isolationist. White working-class and rural Americans were defending a supremacy they saw coming under threat and they were responding to the fact that the economic boom of the 1920s did not extend its benefits much beyond the urban middle-class: there was a resurgence in the Ku Klux Klan. Harding's successors, Calvin Coolidge and Herbert Hoover, were also businessmen. Their policies created the conditions for the 1929 crash and the depression: very dark days indeed. The whole world has much to fear from President Trump's threat to tear up trade agreements and impose punitive restrictions on imports. And even if he refrains from starting a trade war, the loose-tongued, fact-lite style he cultivated during the campaign could wreak serious damage: his hyperbole now carries the weight of the American presidency. His victory was enough to chill some financial markets and marks an alarming step away from a liberal, open economy towards more isolationism and less prosperity for us all. And another thing, isn't it rather worrying that he now has access to the nuclear codes yet seemingly can't control his Twitter account?
Henry Gatewood, corrupt banker in the classic 1939 movie Stagecoach, wished that the US president was a businessman. America for Americans, he said. Don't let the government meddle with business! Reduce taxes! What the country needs is a businessman for president! So why did it take 77 years? Presumably because of Harding, Coolidge and Hoover.........
Chancellor Philip Hammond is a worried man. The tax system is getting out of touch with the way Britons live and work, leading to a hole in projected tax revenues from the rapid rise in incorporated small businesses. The shortfall is set to grow to GBP3.5bn a year by 2020/21 so something must be done to protect the tax base. The chancellor is right to be concerned: there was a 25 per cent rise in such small companies in 2015 alone. Much of this stems from the gig economy in which companies increasingly trade services with others rather than hire employees. But self-employed and small companies pay less tax than employees for exactly the same work. These tax advantages can be shared between those who want to buy services and those who sell them - the 13.8 per cent payroll tax being the most important. Ration your sympathy for chancellors, though, since government decisions have been just as important as changing work practices. National Insurance raised about half income tax revenues in 1979 but now, following a number of stealth increases, it now raises 70 per cent. The rise in personal allowances from GBP6,475 a year in 2010/11 to GBP11,500 in 2017/18 along with an additional GBP5,000 dividend tax allowance provides the opportunity for some couples to extract GBP26,328 a year free of income tax and national insurance. No-one should be surprised or disappointed that so many wish to incorporate: after all, one by one child benefit, the personal allowance and pension tax relief are all tapered at different levels of income, creating wide bands where the effective rate of tax is 60 per cent. One final thought: the Office of Budget Responsibility thinks that almost half of the GBP50bn annual increase in income tax revenues he wants to collect by 2020 will come from the 1.5 per cent of taxpayers earning over GBP150,000 a year. It is exactly this kind of individual that can shift money about. He should not be worried about these tax revenues failing to materialise: he should be scared stiff.
Long before Somerset Maugham branded Monaco a sunny place for shady people the tax haven that Philip and Tina Green call home was given an even worse review by brief visitor Karl Marx. The arch critic of capitalism described Monaco in 1882 as a robber's nest.
Finally, under this heading, I am pleased to report that in April Athelney Trust raised GBP407,000 before expenses by placing 174,800 shares at 233.2p. I look forward to welcoming personally the new investors to their first Annual General Meeting in Spring, 2017.
Capital Gains
During the year the Company realised capital profits before expenses arising on the sale of investments in the sum of GBP294,251 (31 December 2015: GBP332,648).
Portfolio Review
Holdings of Cape, Custodian REIT, Forterra, Lavendon, Ocean Wilsons, Schroder European, Target Healthcare, TP Icap and XL Media were all purchased for the first time. Additional holdings of Air Partner, Andrew Sykes, Begbies Traynor, Epwin, Gattaca, Greencore, KCOM, McColls Retail, Photo-me, Picton Property Income, Trinity Mirror and Vianet were also acquired. Amlin and Stanley Gibbons were sold. In addition, five holdings were top-sliced to provide capital for the new purchases.
Corporate Activity
The holdings of Premier Farnell, UK Mail and Wireless were taken over at a capital profit of 41.2, 47.0 and 94.5 percent respectively.
Dividend
The Board is pleased to recommend an increased annual dividend of 8.6p per ordinary share (2015: 7.9p). This represents an increase of 8.8 per cent over the previous year. Subject to shareholder approval at the Annual General Meeting on 30 March 2017, the dividend will be paid on 6 April 2017 to shareholders on the register on 10 March 2017.
For those patient investors who subscribed for Athelney Trust shares in the IPO of 1994, the annual return has now risen to 17.5 per cent net of basic rate tax on the capital originally invested.
Update
The unaudited NAV at 31 January 2017 was 250.4p whereas the share price on the same day stood at 240.5p. Further updates can be found on www.athelneytrust.co.uk
Prospects
While 2016 was the year the unlikely became true, investors entered 2017 no better equipped to tell the difference between reality and illusion. Nevertheless, one or two hints are starting to emerge: the global economy has picked up, inflation is rising, central banks are still being helpful and US investors remain committed to the view that President Trump will deliver on tax cuts and infrastructure spending, yet will not upset the apple-cart by starting trade wars or grabbing the nuclear codes. It is right, I think, to be cautiously optimistic but I would be the first to admit that there is much which could go wrong. It is important that Athelney Trust buckles down to the task of identifying good companies, with many of the old-fashioned virtues, capable of steady growth in profitability, out of which would come a rising dividend.
Dr. E C Pohl
Chairman
22 February 2017
Income Statement
Hot Features
Premium
For the Year Ended
For the Year Ended 31 December
31 December 2016 2015
Note Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP
Gains on
investments
held at fair
value 8 - 236,357 236,357 - 391,473 391,473
Income from
investments 2 242,157 - 242,157 218,309 - 218,309
Investment
Management
expenses 3 (5,210) (46,933) (52,143) (5,149) (46,910) (52,059)
Other expenses 3 (25,519) (63,393) (88,912) (28,782) (59,514) (88,296)
Net return on
ordinary 211,428 126,031 337,459 184,378 285,049 469,427
activities before
taxation
Taxation 5 - - - - - -
Net return on
ordinary
activities
after taxation
6 211,428 126,031 337,459 184,378 285,049 469,427
Net return
per ordinary
share 6 10p 6p 16p 9.3p 14.4p 23.7p
Dividend per
ordinary share
paid during
the year 7 7.9p 6.7p
The total column of this statement is the profit and loss account for the Company.
All revenue and capital items in the above statement derive from continuing operations.
No operations were acquired or discontinued during the above financial years.
A statement of movements of reserves is given overleaf.
A Statement of Comprehensive Income is not required as all gains and losses of the Company have been reflected in the above Statement.
Statement of Changes in Equity for the Year Ended
31 December 2016
Called-up Capital Capital Total
Share Share reserve reserve Revenue Shareholders'
Capital Premium realised unrealised reserve Funds
GBP GBP GBP GBP GBP GBP
Balance brought
forward at
1 January
2015 495,770 545,281 1,336,934 1,851,828 291,857 4,521,670
Net profits
on realisation
of investments - - 332,648 - - 332,648
Increase in
unrealised
appreciation - - - 58,825 - 58,825
Expenses allocated
to
Capital - - (106,424) - - (106,424)
Profit for
the year - - - - 184,378 184,378
Dividend paid
in year - - - - (132,866) (132,866)
Shareholders'
Funds at 31
December 2015 495,770 545,281 1,563,158 1,910,653 343,369 4,858,231
========== ======== ========== =========== ========== ==============
Balance brought
forward at
1 January
2016 495,770 545,281 1,563,158 1,910,653 343,369 4,858,231
Net profits
on realisation
of investments - - 294,251 - - 294,251
Decrease in
unrealised
appreciation - - - (57,894) - (57,894)
Expenses allocated
to
Capital - (28,127) (110,326) - - (138,453)
Profit for
the year - - - - 211,428 211,428
Dividend paid
in year - - - - (156,663) (156,663)
Shares issued
in the year 43,700 363,933 - - - 407,633
Shareholders'
Funds at 31
December 2016 539,470 881,087 1,747,083 1,852,759 398,134 5,418,533
======== ========= ========== ========== ========== ==========
Statement of the Financial Position as at
31 December 2016
Company Number: 02933559
Note 2016 2015
GBP GBP
Fixed assets
Investments held at
fair value through
profit and loss 8 5,117,268 4,709,749
---------- ----------
Current assets
Debtors 9 256,964 124,368
Cash at bank and in
hand 59,133 39,493
316,097 163,861
Creditors: amounts
falling due within
one year 10 (14,832) (15,379)
---------- ----------
Net current assets 301,265 148,482
---------- ----------
Total assets less current
liabilities 5,418,533 4,858,231
Provisions for liabilities
and charges - -
Net assets 5,418,533 4,858,231
========== ==========
Capital and reserves
Called up share capital 11 539,470 495,770
Share premium account 881,087 545,281
Other reserves (non
distributable)
Capital reserve -
realised 1,747,083 1,563,158
Capital reserve -
unrealised 1,852,759 1,910,653
Revenue reserve (distributable) 398,134 343,369
Shareholders' funds
- all equity 5,418,533 4,858,231
========== ==========
Net Asset Value per
share 13 251.1p 245p
Statement of Cash flows for the Year Ended
31 December 2016
2016 2015
GBP GBP
Cash flows from operating
activities
Net revenue return 211,428 184,378
Adjustment for:
Expenses charged to
capital (110,326) (106,424)
Decrease in creditors (547) (447)
Increase in debtors (132,596) (37,122)
Cash (used)/from operations (32,041) 40,385
---------- ----------
Cash flows from investing
activities
Purchase of investments (741,319) (755,023)
Proceeds from sales
of investments 570,157 868,860
---------- ----------
Net cash from investing
activities (171,162) 113,837
---------- ----------
Financing activities
Share issue 379,506 -
---------- ----------
Net cash from financing
activities 379,506 -
---------- ----------
Equity dividends paid (156,663) (132,866)
Net increase in cash 19,640 21,356
Cash at the beginning
of the year 39,493 18,137
---------- ----------
Cash at the end of
the year 59,133 39,493
========== ==========
Notes to the Financial Statements
For the Year Ended 31 December 2016
1. Accounting Policies
1.1 Statement of Compliance and Basis of Preparation of Financial Statements
The financial statements are prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 ("FRS 102"), the Companies Act 2006 and with the AIC Statement of Recommended Practice ("SORP") issued in November 2014 (amended January 2017), regarding the Financial Statements of Investment Trust Companies and Venture Capital Trusts. All the Company's activities are continuing.
1.2 Income
Income from investments including taxes deducted at source is recognised when the right to the return is established (normally the ex-dividend date). UK dividend income is reported net of tax credits in accordance with FRS 102 "Income Tax". Interest is dealt with on an accruals basis.
1.3 Investment Management Expenses
All three directors are involved in investment management, 10% of their salaries or fees have been charged to revenue and the other 90% to capital. All other investment management expenses have been charged to capital. The Board propose continuing this basis for future years.
1.4 Other Expenses
Expenses (including VAT) and interest payable are dealt with on an accruals basis and charged through the Revenue and Capital Accounts in an allocation that the Board consider to be a fair distribution of the costs incurred.
1.5 Investments
Listed investments comprise those listed on the Official List of the London Stock Exchange. Unlisted investments are traded on AIM. Profits or losses on sales of investments are taken to realised capital reserve. Any unrealised appreciation or depreciation is taken to unrealised capital reserve.
Investments have been classified as "fair value through profit and loss" upon initial recognition.
Subsequent to initial recognition, investments are measured at fair value with changes in fair value recognised in the Income Statement.
Securities of companies quoted on a recognised stock exchange are valued by reference to their quoted bid prices at the close of the year, similarly, AIM-traded investments are valued using the closing bid price on 31 December.
1.6 Taxation
The tax effect of different items of income and expenses is allocated between capital and revenue on the same basis as the particular item to which it relates, using the Company's effective rate of tax for the year.
1. Accounting Policies (continued)
1.7 Deferred Taxation
Deferred tax is recognised in respect of all timing differences that have originated but not reversed by the balance sheet date. Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected to reverse. Deferred tax assets and liabilities are not discounted.
1.8 Capital Reserves
Capital Reserve - Realised
Gains and losses on realisation of fixed asset investments are dealt with in this reserve.
Capital Reserve - Unrealised
Increases and decreases in the valuations of fixed asset investments are dealt with in this reserve.
1.9 Dividends
In accordance with FRS 102 "Events after the end of the Reporting Period", dividends are included in the financial statements in the year in which they are paid.
1.10 Share Issue Expenses
The costs associated with issuing shares are written off against any premium arising on the issue of Share Capital.
2. Income
Income from investments
2016 2015
GBP GBP
UK dividend income 175,503 151,071
Foreign dividend income 46,439 56,033
UK Property REITs 20,210 11,144
Bank interest 5 61
Total income 242,157 218,309
======== ========
UK dividend income
2016 2015
GBP GBP
UK Main Market listed investments 115,086 93,474
UK AIM-traded shares 60,417 57,597
175,503 151,071
======== ========
3. Return on Ordinary Activities before Taxation
2016 2015
GBP GBP
The following amounts (inclusive
of VAT) are included
within investment management
and other expenses:
Directors' remuneration:
- Services as a director 21,000 17,291
- Otherwise in connection
with management 49,401 47,372
Auditors' remuneration:
- Audit Services - Statutory
audit 10,500 10,500
Miscellaneous expenses:
- Other wages and salaries 10,300 31,233
- Management services 22,140 -
- PR and communications 9,662 11,935
- Stock exchange subscription 6,420 6,180
- Sundry investment management
and other expenses 11,632 15,844
141,057 140,355
======== ========
On 1 April 2016 the Company entered into a contract with J Girdlestone to provide management services at an annual cost of GBP24,600 plus VAT.
4. Employees
2016 2015
GBP GBP
Costs in respect of Directors:
Wages and salaries 70,401 64,663
Social security costs 2,971 4,402
73,372 69,065
======= =======
Costs in respect of administrator:
Wages and salaries 6,687 25,250
Social security costs 642 1,581
7,329 26,831
====== =======
Total:
Wages and salaries 77,088 89,913
Social security costs 3,613 5,983
80,701 95,896
------- -------
Average number of employees:
Chairman 1 1
Investment 2 2
Administration - 1
3 4
======= ========
5. Taxation
(i) On the basis of these financial statements no provision has been made for corporation tax (2015: Nil).
(ii) Factors affecting
the tax charge for the
year.
The tax charge for the period is lower than
(2015: lower than) the average small company
rate of corporation tax in the UK of 20 per
cent. The differences are explained below:
2016 2015
GBP GBP
Total return on ordinary
activities before tax 337,459 469,427
---------- -------------------
Total return on ordinary
activities multiplied by
the average small company
rate of corporation tax 20%
(2015: 20%) 67,492 93,885
Effects of:
UK dividend income
not taxable (34,430) (36,876)
Revaluation of shares
not taxable 11,578 (11,765)
Capital gains not
taxable (58,850) (66,530)
Unrelieved management
expenses 14,210 21,286
Current tax charge
for the year - -
========== ===================
The Company has unrelieved excess revenue management expenses of GBP92,354 at 31 December 2016 (2015: GBP83,051) and GBP102,597 (2015: GBP102,597) of capital losses for Corporation Tax purposes and which are available to be carried forward to future years. It is unlikely that the Company will generate sufficient taxable profits in the future to utilise these expenses and therefore no deferred tax asset has been recognised.
For the year ended 31 December 2015, the Company received approval from HM Revenue and Customs under Section 1158 of the Corporation Tax Act 2010, therefore the Company was not liable to Corporation Tax on any realised investment gains for 2015. The Directors intend to continue to meet the conditions required to obtain approval and therefore no deferred tax has been provided on any capital gains or losses arising on the revaluation or disposal of investments.
6. Return per Ordinary Share
The calculation of earnings per share has been
performed in accordance with FRS 102.
2016 2015
GBP GBP GBP GBP GBP GBP
Revenue Capital Total Revenue Capital Total
Attributable
return on
ordinary activities
after taxation 211,428 126,031 337,459 184,378 285,049 469,427
Weighted average
number of shares 2,104,868 1,983,081
Return per
ordinary share 10p 6p 16p 9.3p 14.4p 23.7p
7. Dividend
2016 2015
GBP GBP
Final dividend in respect
of 2015 of 7.9p (2015:
a final dividend of 6.7p
was paid in respect of
2014) per share 156,663 132,866
======== ========
Set out below is the total dividend payable in respect of the financial year, which is the basis on which the requirements of Section 1158 of the Corporation Tax Act 2010 are considered.
It is recommended that a final dividend of 8.6p (2015: 7.9p) per ordinary share be paid amounting to a total of GBP185,578. For the year 2015, a final dividend of 7.9p was paid on 14 April 2016 amounting to a total of GBP156,663.
2016 2015
GBP GBP
Revenue available for
distribution 211,428 184,378
Final dividend in respect
of financial year ended
31 December 2016 (185,578) (156,663)
Undistributed Revenue
Reserve 25,850 27,715
========== ==========
8. Investments
2016 2015
GBP GBP
Movements
in year
Valuation at beginning
of year 4,709,749 4,432,113
Purchases
at cost 741,319 755,023
Sales - proceeds (570,157) (868,860)
- realised gains
on sales 294,251 332,648
(Decrease)/Increase in unrealised
appreciation (57,894) 58,825
Valuation
at end of
year 5,117,268 4,709,749
========== ==========
Book cost
at end of
year 3,264,509 2,799,096
Unrealised appreciation at
the end of the year 1,852,759 1,910,653
5,117,268 4,709,749
========== ==========
UK Main Market
listed investments 4,109,077 4,089,885
UK AIM-traded
shares 1,008,191 619,864
5,117,268 4,709,749
========== ==========
8. Investments (continued)
Gains on investments
2016 2015
GBP GBP
Realised gains
on sales 294,251 332,648
(Decrease)/Increase in unrealised
appreciation (57,894) 58,825
236,357 391,473
========= ========
The purchase costs and sales proceeds above include transaction costs of GBP3,695 (2015: GBP5,796) and GBP1,344 (2015: GBP3,605) respectively.
9. Debtors
2016 2015
GBP GBP
Investment transaction
debtors 249,295 119,311
Other debtors 7,669 5,057
256,964 124,368
======== ========
10. Creditors: amounts falling due within one year
2016 2015
GBP GBP
Social security
and other taxes 2,623 3,056
Other creditors 172 172
Accruals and
deferred income 12,037 12,151
14,832 15,379
======= =======
11. Called Up Share Capital
2016 2015
GBP GBP
Authorised
10,000,000 Ordinary Shares
of 25p 2,500,000 2,500,000
========== ==========
Allotted, called up and fully
paid
2,157,881 Ordinary Shares
of 25p 539,470 495,770
========== ==========
(2015: 1,983,081 Ordinary
Shares of 25p)
12. Financial Instruments
The Company's financial instruments comprise equity investments, cash balances and debtors and creditors that arise directly from its operations, for example, in respect of sales and purchases awaiting settlement.
The major risks associated with the Company are market, credit and liquidity risk. The Company has established a framework for managing these risks. The directors have guidelines for the management of investments and financial instruments.
Market Risk
Market price risk arises mainly from uncertainty about future prices of financial investments used in the Company's business. It represents the potential loss the Company might suffer through holding market positions by way of price movements other than movements in exchange rates and interest rates.
The Company's investment portfolio is exposed to market price fluctuations which are monitored by the Investment Manager who gives timely reports of relevant information to the Directors.
Adherence to the investment objectives and the internal controls on investments set by the Company mitigates the risk of excessive exposure to any one particular type of security or issuer.
The Company's exposure to other changes in market prices at 31 December on its investments is as follows:
A 20% decrease in the market value of investments at 31 December 2016 would have decreased net assets attributable to shareholders by 47.4 pence per share (2015: 47.5 pence per share). An increase of the same percentage would have an equal but opposite effect on net assets available to shareholders.
2016 2015
GBP GBP
Fair value through profit or
loss investments 5,117,268 4,709,749
Market risk also arises from changes in interest rates and exchange risk. All of the Company's assets are in sterling and accordingly the Company has limited currency exposure. The majority of the Company's financial assets are non-interest bearing, as a result the Company's financial assets are not subject to significant risk due to fluctuations in the prevailing levels of market interest rates.
The carrying amounts of financial assets best represent the maximum credit risk exposure at the balance sheet date. Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to securities held with the custodian to be delayed.
Liquidity Risk
Liquidity Risk is the risk that the Company may have difficulty in meeting obligations associated with financial liabilities. The Company is able to reposition its investment portfolio when required so as to accommodate liquidity needs. However it may be difficult to realise its investment portfolio in adverse market conditions.
Maturity Analysis of Financial Liabilities
The Company's financial liabilities consist of creditors as disclosed in note 10. All items are due within one year.
12. Financial Instruments (continued)
Capital management policies and procedures
The Company's capital management objectives are:
-- to ensure the company's ability to continue as a going concern; -- to provide an adequate return to shareholders; -- to support the company's stability and growth; -- to provide capital for the purpose of further investments.
The Company actively and regularly reviews and manages its capital structure to ensure and optimal capital structure, taking into consideration the future capital requirements of the company and capital efficiency, projected operating cash flows and projected strategic investments opportunities. The management regards capital as total equity and reserves, for capital management purposes.
Fair values of financial assets and financial liabilities
Fixed asset investments (see note 8) are valued at market bid price where available which equates to their fair values. The fair values of all other assets and liabilities are represented by their carrying values in the balance sheet.
Financial instruments by category
The financial instruments of the Company fall into the following categories
31 December 2016 Assets at
fair value
through
At Amortised profit or
Cost loss Total
GBP GBP GBP
Assets as per the
balance sheet
Investments - 5,117,268 5,117,268
Debtors 256,964 - 256,964
Cash at bank 59,133 - 59,133
------------------------- ------------------------ -----------------------
Total 316,097 5,117,268 5,433,365
========================= ======================== =======================
Liabilities as per
the balance sheet
Creditors 14,832 - 14,832
------------------------- ------------------------ -----------------------
Total 14,832 - 14,832
========================= ======================== =======================
31 December 2015 Assets at
fair value
through
At Amortised profit or
Cost loss Total
GBP GBP GBP
Assets as per the
balance sheet
Investments - 4,709,749 4,709,749
Debtors 124,368 - 124,368
Cash at bank 39,493 - 39,493
------------------------- ------------------------ -------------------------
Total 163,861 4,709,749 4,873,610
========================= ======================== =========================
Liabilities as per
the balance sheet
Creditors 15,379 - 15,379
------------------------- ------------------------ -------------------------
Total 15,379 - 15,379
========================= ======================== =========================
12. Financial Instruments (continued)
Fair value hierarchy
In accordance with FRS 102, the Company must disclose the fair value hierarchy of financial instruments.
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 and 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 (2015: classification A investments only).
13. Net Asset Value per Share
The net asset value per share is based on net assets of GBP5,418,533 (2015: GBP4,858,231) divided by 2,157,881 (2015: 1,983,081) ordinary shares in issue at the year end.
2016 2015
Net asset value 251.1p 245.0p
======= =======
14. Dividends paid to directors
During the year the following dividends were paid to the directors of the Company as a result of their total shareholding:
Mr Robin Boyle GBP32,485(2) Dr. Manny Pohl GBP-(1) Mr Simon Moore GBP2,030
Notes:
1. Dr Manny Pohl's relationship with Global Masters Fund Limited is described in Note 1 to the table of Directors' interests on page 29. During the year a dividend of GBP23,491 was paid to Global Masters Fund Limited.
2. This figure includes GBP30,936 paid to Trehellas House Limited. Mr Robin Boyle's interest in Trehellas House Limited is described in Note 2 to the table of Directors' interest on page 29.
For further information:
Robin Boyle, Managing Director
Athelney Trust plc
020 7628 7937
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UARORBNAUUAR
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February 24, 2017 02:00 ET (07:00 GMT)
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