Athelney Tst. Regulatory News (ATY)

31 Aug 2006 07:00

Athelney Trust PLC31 August 2006 ATHELNEY TRUST plc: NAV CONTINUES TO RISE AT INTERIM STAGE Athelney Trust plc, the AIM-traded investor in small companies and juniormarkets, announces its unaudited interim results for the six months ended 30June 2006. Highlights: • Net Asset Value ("NAV") up 17.3 per cent at 164.5p per share (2005: 140.2p) • Gross revenue increased 14.1 per cent to £45,165 (2005: £39,600) • Revenue return per ordinary share up 41.7 per cent at 1.7p (2005: 1.2p) • Long term case for investment in small caps remains Chairman Hugo Deschampsneufs said: "As is the Board's practice consideration ofa dividend will be left until the final results are known. Nevertheless, theBoard wishes it to be known that it is keen to continue Athelney's record ofincreasing the dividend steadily and progressively. ""My worry is that the central banks will go on increasing interest rates to thestage where low growth/mild recession is more or less guaranteed just so theycan convince the markets of their anti-inflation credentials. The fact is that,barring the effects of strong energy and metal prices, inflation is low in mostmajor economies. "Furthermore auto and house sales are falling in America and growth in theEurozone is already patchy. Against this background, as opaque as I can everremember, it would be foolish to be aggressively optimistic. I believe, though,that the long term case for investment in equities, and especially small caps,remains intact". -ends- For further information: Robin Boyle, Managing DirectorAthelney Trust plc 020 7628 7937 Paul Quade 020 7248 8010CityRoad Communications 07947 186694 CHAIRMAN'S STATEMENT I have pleasure in announcing the unaudited results for the six months to 30June 2006. The salient points are as follows: •Unaudited Net Asset Value ("NAV") is 164.5p per share (31 December 2005: 154p, 30 June 2005: 140.2p - as restated, see Note 2 on page 10), a rise of 6.8 per cent over six months and an increase of 17.3 per cent over the past year. •Gross Revenue rose by 14.1 per cent to £45,165 compared with the half year ended 30 June 2005 of £39,600 and the full year to 31 December 2005 of £86,265. •Revenue return per ordinary share was 1.7p, up 41.7 per cent from the previous half year (31 December 2005: 2.7p, 30 June 2005: 1.2p). •A dividend of 2.5p was paid in May 2006 (2005: 2p) and, as is the Board's practice, no further dividend will be paid until the full year's results are known. The Market It would seem that the days of 30 per cent annual growth are well and trulybehind us: unaudited net asset value (NAV) rising by 6.8 per cent in the firstsix months of 2006. True, January to April seemed to be a period of tranquilgrowth - unaudited NAV rose by about 10 per cent during that period but May andJune proved to be difficult, volatile and, in the main, unprofitable. In myreport to you in April, I mentioned a number of factors that made me feelcautious at the time: rising Japanese interest rates which spoiled things forthose borrowing in yen and re-investing in high-yield markets like Dubai andReykjavik; seventeen successive rises in American interest rates could well beeighteen by the time you read this statement; furthermore, the determination ofthose in Frankfurt to raise rates just at a time when some European economiesare beginning to struggle was, I must say, rather alarming. As far as international markets are concerned, the six months to 30 Juneproduced wildly differing results: Dubai (down 58.4 per cent), Egypt (down 24.9per cent), Saudi Arabia (down 23 per cent), Turkey (down 14.5 per cent) andSouth Korea (down 8 per cent). The biggest rises included Venezuela (up 49.7 percent), Shanghai (up 44 per cent) and Russia (up 28.6 per cent) so it was not allbad news, especially for those countries exporting oil. Sterling continued to perform really quite well: global reserve holdings ofsterling have doubled over the past two years, thus supplanting the yen as theworld's third-largest reserve currency. Not really surprising, when you rememberthat it has risen by 18 per cent against the dollar and 30 per cent against theyen over the last ten years and, giving an average three-month yield of 5.25 percent, sterling has been nicely profitable, too. Central banks of Sweden, UAE,Switzerland, Qatar and Italy are all believed to have cut dollar exposure to buypounds although, being highly secret organizations, it is never easy to becertain about their currency dealings. Having said that, I expect the yen toperform well in the months ahead: Bank of Japan Governor Fukui has alreadypushed through a rise in rates from 0.001 to 0.25 per cent and is clearly aimingat a rate of, say, 1.5 per cent by the end of 2007. As far as the United Statesis concerned, the new Chairman of the Fed., Ben Bernanke, has a very difficultjob to do to balance falling consumer confidence with rising interest rates andmay push rates up too far. As it is, I am expecting economic growth to slowsharply in the second half of this year - perhaps to 3-3.5 per cent. Growth will be slower than that in the U.K., perhaps 2.4 per cent in 2006 and2.5 per cent in 2007 so, in my opinion, there is absolutely no need to increaseinterest rates (in fact, five weeks after Athelney's balance sheet date, rateswere increased by 0.25 per cent). Finally, under this sub-heading, it isstriking just how well parts of the UK economy are faring; for instance, outputin the financial sector grew by 31 per cent from 2000 to 2005, double theprevious estimate of 15 per cent and, since most of this extra output wasexported, previously grim current-account deficits have narrowed from 2 per centto a revised 1.6 per cent in 2004 and 2.6 per cent to 2.2 per cent in 2005. Results Gross Revenue rose by a thoroughly satisfactory 14.1 per cent compared with thesix months to 30 June 2005. A breakdown of the companies paying dividends isgiven below. Number Companies paying dividends 58 Companies sold (therefore no true comparison) 0 Companies purchased (therefore no true comparison) 11 Increased total dividends in the half year 38 Reduced total dividends in the half year 2 No change in dividend 7 Corporate Activity Cash takeovers were completed in respect of three holdings: PD Ports, BrandonHire and Wyevale Garden Centres, producing a profit of 64.3 per cent, 96.2 percent and 794.7 per cent respectively. Since 30 June, Richmond Foods has beenacquired for cash. Portfolio Review The following were purchased for the first time or were existing holdings whichhave been increased in size: Acertec, Arbuthnot Banking Group, AT CommunicationsGroup, Belgravium Technologies, Biotrace International, Chime Communications,City Lofts Group, Corporate Synergy Group, Davenham Group, Flying Brands,Huntsworth, Idox, Litho Supplies, Nichols and Richmond Foods. Goldshield Group, Watermark, Landround, Fountains and Clinton Cards have allbeen sold. Galliford Try, Stanley Gibbons Group, WSP Group, European Motor Holdings andJames Fisher were all top-sliced. Dividend As is the Board's practice, consideration of a dividend will be left until thefinal results are known. Nevertheless, the Board wishes it to be known that itis keen to continue Athelney's record of increasing the dividend steadily andprogressively. Update The unaudited NAV at 31 July was 165.3p per share. On that same date, Athelneyshares were quoted at 125p so the discount to NAV was 24.4 per cent comparedwith 23.4 per cent as at 28 February. Outlook My worry is that the central banks will go on increasing interest rates to thestage where low growth / mild recession is more-or-less guaranteed just so thatthey can convince markets of their anti-inflation credentials. The fact of thematter is that, barring the effects of strong energy and metal prices partlybecause of the strength of the economies of China, India and Brazil, inflationrates are low in most major economies. Furthermore, auto and house sales arefalling in America and growth in the Eurozone is already patchy. Nor do Isuspect that I am alone in worrying about the international tension emanatingfrom Iraq, Iran, Lebanon, Israel, Syria and so on. Against this background, asopaque as I can ever remember, it would be foolish to be aggressivelyoptimistic. I believe, though, that the long-term case for investment inequities, and especially small caps., remains intact. I particularly enjoyedreading the results of American research which demonstrated that the probabilityof losing money when investing for a day is 46 per cent, 42 per cent for oneweek, 35 per cent for a month, 27 per cent for one quarter, 18 per cent for oneyear, 17 per cent for five years and zero per cent for 10 years. The message isclear. H. B. DeschampsneufsChairman ATHELNEY TRUST PLC INTERIM INCOME STATEMENT (incorporating the revenue account) FOR THE SIX MONTHS ENDED 30 JUNE 2006 Unaudited Results Unaudited Results 6 months ended 30 June 2006 6 months ended 30 June 2005 Revenue Capital Total Revenue Capital Total £ £ £ £ £ £Profits oninvestments - 178,417 178,417 - 174,698 174,698 Income 45,165 - 45,165 39,600 - 39,600 Investmentmanagementexpenses (4,015) (11,787) (15,802) (3,875) (10,375) (14,250) Other expenses (17,352) - (17,352) (17,946) - (17,946) ________ _________ _________ ________ _________ _________ Return onordinaryactivitiesbeforetaxation 23,798 166,630 190,428 17,779 164,323 182,102 Taxation 6,537 (29,002) (22,465) 3,692 (28,799) (25,107) ________ ________ _________ ________ ________ _________Return onordinaryactivitiesafter taxation 30,335 137,628 167,963 21,471 135,524 156,995 ________ ________ _________ ________ ________ _________ DividendsPaid: Dividend (45,070) - (45,070) (36,056) - (36,056) ________ ________ _________ ________ ________ _________Transfer toreserves (14,735) 137,628 122,893 (14,585) 135,524 120,939 ________ ________ _________ ________ ________ _________ Return perordinaryshare 1.7p 7.6p 9.3p 1.2p 7.5p 8.7p Dividend paidper ordinaryshare - Finaldividend 2.5p 2.0p The revenue column of this statement is the profit and loss account for theCompany. All revenue and capital items in the above statement derive from continuingoperations. No operations were acquired or discontinued during the above financial years. There have been no recognised gains or losses, other than the results for thefinancial years shown above. ATHELNEY TRUST PLC INTERIM BALANCE SHEET AS AT 30 JUNE 2006 2006 2005 (Unaudited) (Unaudited) £ £Fixed assetsInvestments 3,180,278 2,759,392 _________ _________ Current assets Debtors 103,535 90,852Cash at bank and in hand 30,007 21,884 _________ _________ 133,542 112,736 Creditors: amounts falling due within one year (40,826) (296,900) _________ _________ Net current assets 92,716 82,836 _________ _________Total assets less current liabilities 3,272,994 2,842,228 Provisions for liabilities and charges (307,934) (253,600) _________ _________Net assets 2,965,060 2,588,628 _________ _________ Capital and reserves Called up share capital 450,700 450,700Share premium account 405,605 405,605Other reserves - non distributableCapital reserve - realised 590,450 479,588Capital reserve - unrealised 1,427,789 1,174,839Revenue reserve 90,517 77,896 _________ _________ Shareholders' funds - all equity 2,965,061 2,588,628 _________ _________ Net Asset Value per share 164.5p 143.6p ATHELNEY TRUST PLC CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2006 Unaudited Unaudited 6 Months ended 30 6 Months ended 30 June 2006 June 2005 £ £ £ £ Net cash inflow fromoperating activities 60,642 (3,372) Servicing of finance Dividends paid (45,070) (36,056) ________ ________Net cash (outflow)from servicing of finance (45,070) (36,056) Taxation Corporation tax paid - - Investing activities Purchases ofinvestments (433,030) (269,360)Sales ofinvestments 407,417 269,361 ________ ________Net cash (outflow)frominvestingactivities (25,613) 1 ________ ________ (Decrease) /increase incash in theyear (10,041) (39,427) ________ ________ Notes: 1. The figures included in the above statement are an abridged version of Athelney's unaudited results for the six months ended 30 June 2006 and do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985, as amended. 2. The calculation for the return per ordinary share is based on the return on ordinary activities after taxation shown below and on the average weighted number of shares in issue during the period of 1,802,802 (2005: 1,802,802 ). 2006 2005 Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ 30,335 137,628 167,963 21,471 135,524 156,995 3. Copies of this announcement are available, free of charge, for a period of one month from Athelney's Nominated Advisor: Noble & Company Limited, 76 George Street, Edinburgh, EH2 3BU Copies of the Interim Accounts will be posted to shareholders on 1 September 2006. This information is provided by RNS The company news service from the London Stock Exchange