ATHELNEY TRUST PLC:
PRELIMINARY RESULTS
Athelney Trust Plc ("Athelney"), the AIM-listed investor in small companies and
junior markets, announces its audited results for the year ended 31 December
2002.
The main points are:
* Net Asset Value ("NAV") is 83.2p per share (restated 31 December 2001 :
95.9p), a fall of 13.2 per cent.
* Gross Revenue down by 30.2 per cent to �60,328 (31 December 2001: �86,424).
* On a like for like basis revenue was actually up by 5.8 per cent and dividend
income rose by 13.3 per cent
* Revenue return per ordinary share was 1.3p, a decrease of 53.6 per cent ( 31
December 2001: 2.8p).
Athelney chairman, Hugo Deschampsneufs, said: "When discussing one of the worst
years for stock market performance in living memory, it is difficult to find
optimistic, positive things to say, beyond the fact that prospects for 2003 and
especially 2004 look considerably more intriguing.
"As far as 2002 is concerned, however, the main market indices fell by about 25%
and the AIM index (at 31 December 2002, Athelney held as much as 23% of its
portfolio in AIM-traded shares) declined by over 30%. In these circumstances, it
was always going to be difficult to show a good absolute performance, even
though the relative performance looks to be acceptable.
"The Board believes that there is every chance of a significant rally starting
in 2003 to be extended into the following year. Shares are much cheaper than a
year ago. Profit expectations have been scaled back, so the number of profit
warnings is likely to diminish as the year progresses, finances are being
improved at the expense of ambitious expansion plans and, above all, the Board
expects a resumption of corporate activity later this year. In short, the Board
believes that recovery prospects for smaller companies in general, and for
Athelney in particular, are excellent."
-ends-
For further information:
Robin Boyle, Managing Director 020 7222 8989
Athelney Trust Plc
Paul Quade 020 7334 0243
CityRoad Communications
ATHELNEY TRUST PLC
AUDITED RESULTS AND CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2002
I enclose the results for the twelve months to 31 December 2002. The key points
are as follows:
* Audited Net Asset Value ("NAV") is 83.2p per share (31 December 2001 : 95.9p),
a fall of 13.2 per cent.
* Gross Revenue down by 30.2 per cent to �60,328 (31 December 2001: �86,424).
* On a like for like basis revenue was actually up by 5.8 per cent and dividend
income rose by 13.3 per cent.
* Revenue return per ordinary share was 1.3p, a decrease of 53.6 per cent ( 31
December 2001: 2.8p).
* Recommended dividend for the year 1.7p per share (2001: 1.7p).
The Market
When discussing one of the worst years for stock market performance in living
memory, it is difficult to find optimistic, positive things to say, beyond the
fact that prospects for 2003 and especially 2004 look considerably more
intriguing.
As far as 2002 is concerned, however, the main market indices fell by about 25%
and the AIM index (at 31 December 2002, Athelney held as much as 23% of its
portfolio in AIM-traded shares) declined by over 30%. In these circumstances, it
was always going to be difficult to show a good absolute performance, even
though the relative performance looks to be acceptable.
The current unease in markets is due to the twin factors of political
uncertainty and increasing worries about the economic outlook both at home and
abroad. Last year's corporate scandals in the U.S. have not helped either with
plenty of examples of financial chicanery, accounting irregularities and
business failures to spook the market. At home, the continued fall in the FTSE
100 index brought into question the financial health of the life assurance
companies, although it is encouraging to note that over-zealous regulators are
now apparently happy to make the rules of financial adequacy more flexible.
Above all, the year 2002 was dominated by a huge number of profit warnings, thus
illustrating the typical problem of static or declining sales and remorselessly
rising costs. In the second half of 2002, there were a total of 192 profit
warnings of which 86 occurred in the third quarter and 106 in the fourth. A
typical profit warning was accompanied by a fall in the relative share price of
25-40 per cent. Some companies have even managed a second and third profit
warning in 2002.
You do not need me to tell you how the threat of terrorist activity has badly
affected the business and social life of the country recently. In particular,
the leisure and tourist industries suffered greatly from the aftermath of the
11th September attacks and there has been (and may be again) a huge spike in the
price of crude oil as we move towards a final decision on the Iraq question.
The Market (continued)
Looking overseas, the global economy is in a mess. The U.S. is hooked on credit,
Japan and Germany are facing deflation and recession and China is happily
exporting deflation via impossibly low-priced manufactured goods. In the U.K.,
New Labour has metamorphosed into Old Labour with a tax and spend policy just as
unrealistic as all those of previous Labour Chancellors. And as a final comment,
fifty-six small quoted companies went bust last year - the highest level for a
number of years.
Results
Against the above background, the Board is not displeased with the 13.2% fall in
NAV to 83.2p, after full allowance has been made for Capital Gains Tax
liabilities in the event that the entire portfolio of investments were sold. On
the face of it, Gross Revenue fell by 30.2% to �60,328 compared with �86,424 in
2001. However, we actually received a large exceptional dividend from William
Nash, a former holding, in 2001 so that, in fact, Gross Revenue (i.e. dividend
income plus bank interest) rose by 5.8% on a like for like basis and dividend
income actually increased by a highly satisfactory 13.3%.
Dividend
Even though Return per Ordinary Share was just 1.3p for the year 2002, the Board
has decided to recommend an unchanged dividend of 1.7p. The balance will be
taken from Revenue reserve which stood at �28,033 as at 31 December 2001 and
�21,492 (assuming the proposed dividend is, in fact, paid) at the equivalent
date in 2002.
The main reason for recommending an unchanged dividend is the Board's confidence
in the ability of the companies in the Athelney portfolio to generate higher
dividends in the future. The following statistics for 2002 make interesting
reading:
Number
Companies paying dividends 74
Companies sold (therefore no true comparison) 11
Companies purchased (therefore no true comparison) 14
Increased total dividend in the calendar year 32
Reduced total dividend in the calendar year 7
No change in dividend 10
The Board expects a similarly positive outcome for 2003 and, in the absence of
unforeseen circumstances, expects to pay a similar dividend for 2003.
Portfolio Review
Sadly Mettoni succumbed to harsh economic conditions and its shares are
consequently worthless. SFI shares were suspended and, again, it is highly
unlikely that anything will be recovered for shareholders; in its case, however,
there is an apparent discrepancy of �20 million in the accounts which must be
explained to SFI's shareholders.
Portfolio Review (continued)
In a typically busy year, the following shares were sold or top-sliced: Ann
Street Group, Compel Group, Enterprise Inns, Folkes Group, Gowrings, Simon
Group, Wyevale Garden Centres, together with Comprop and Enterprise from the
list of AIM-traded shares. The following were purchased for the first time or an
existing holding was increased: Flying Brands, Merrydown, Reed Health Group, SCS
Upholstery, Severfield-Rowen, Watermark Group; from the AIM market Fountains,
Pennant International and Wynnstay Group from OFEX.
Update
The unaudited NAV as at 28 February 2003 was 79.4p per share.
The Board is also proposing to amend the Articles of Association by means of a
special resolution to allow the company to continue as an investment company
after 2005. The effect of this is to remove the requirement to seek a
shareholders' resolution in that and every subsequent five years.
Outlook
The Board believes that there is every chance of a significant rally starting in
2003 to be extended into the following year. Shares are much cheaper than a year
ago. Profit expectations have been scaled back so the number of profit warnings
is likely to diminish as the year progresses, finances are being improved at the
expense of ambitious expansion plans and, above all, the Board expects a
resumption of corporate activity later this year. In short, the Board believes
that recovery prospects for smaller companies in general, and for Athelney in
particular, are excellent.
Hugo Deschampsneufs
Chairman
7 April 2003
ATHELNEY TRUST PLC
STATEMENT OF TOTAL RETURN (incorporating the revenue account)
FOR THE YEAR ENDED 31 DECEMBER 2002
Audited results to 31
December 2002 Audited results to 31 December
2001
Revenue Capital Total Revenue Capital Total
As As
restated restated
� � � � � �
(Losses) on - (275,430) (275,430) - (9,071) (9,071)
investments
Income 60,328 - 60,328 86,424 - 86,424
Investment
management
expenses (10,868) (10,869) (21,737) (9,071) (9,070) (18,141)
Other expenses (33,532) - (33,532) (34,406) - (34,406)
________ ________ ________ ________ ________ ________
Return on
ordinary
activities before 15,928 (286,299) (270,371) 42,947 (18,141) 24,806
taxation
Taxation 8,179 63,485 71,664 7,342 3,573 10,915
________ ________ ________ ________ ________ ________
Return on
ordinary
activities after 24,107 (222,814) (198,707) 50,289 (14,568) 35,721
taxation
Dividend (30,648) - (30,648) (30,648) - (30,648)
________ ________ ________ ________ _______ ________
Transfer (from) (6,541) (222,814) (229,355) 19,641 (14,568) 5,073
to reserves
________ ________ ________ ________ _______ ________
Return per
ordinary
share 1.3p (12.3)p (11.0)p 2.8p (0.8)p 2.0p
Dividend per
ordinary
share 1.7p 1.7p
The revenue column of this statement is the profit and loss account for the
Company.
Continuing operations
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued during the above financial years.
ATHELNEY TRUST PLC
BALANCE SHEET AS AT 31 DECEMBER 2002
2002 2001
as
restated
(audited)
(audited)
� �
Fixed assets 1,497,461 1,798,443
_________ _________
Current assets
Debtors 54,241 15,535
Cash at bank and in hand 60,144 112,457
_________ _________
114,385 127,992
Creditors: amounts falling due (40,833) (54,067)
within one year
_________ _________
Net current assets 73,552 73,925
_________ _________
Total assets less current 1,571,013 1,872,368
liabilities
Provisions for liabilities and (71,000) (143,000)
charges
_________ _________
Net assets 1,500,013 1,729,368
_________ _________
Capital and reserves
Called up share capital 450,700 450,700
Share premium account 405,605 405,605
Other reserves - non
distributable
Capital reserve - realised 248,817 204,361
Capital reserve - unrealised 373,399 640,669
Revenue reserve 21,492 28,033
_________ _________
Shareholders' funds 1,500,013 1,729,368
_________ _________
Net Asset Value per share 83.2p 95.9p
ATHELNEY TRUST PLC
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2002
2002 2001
(audited) (audited)
� � � �
Net cash (outflow) /
inflow from
operating activities (487) 38,369
Servicing of finance
Dividends paid (30,648) (28,845)
________ ________
Net cash (outflow) from
servicing
of finance (30,648) (28,845)
Taxation
Corporation tax paid (8,009) (51)
Investing activities
Purchases of investments ( 359,428) (554,529)
Sales of investments 346,259 553,083
________ ________
Net cash (outflow) from
investing activities ( 13,169) ( 1,446)
________ ________
(Decrease) / increase in (52,313) 8,027
cash in the year
_________ ________
Notes:
1. The figures included in the above statement are an abridged version of Athelney's audited results for the year ended
31 December 2002 and do not constitute statutory accounts within the meaning of Section 240 of the Companies Act
1985, as amended. The figures for the year ended 31 December 2001 are extracted from the statutory accounts filed
with the Registrar of Companies and which contained an unqualified audit report.
2. The figures for the year ended 31 December 2001 have been restated to comply with the requirements of Financial
Reporting Standard 19 Deferred Taxation which requires full provision to be made for deferred tax arising from
timing differences between the recognition of gains and losses in the financial statements and their recognition in
the tax computations.
Consequently the interest of Athelney's shareholders at 31 December 2001, as published last year have been reduced
by �143,000 to reflect the recognition of the additional provision in respect of deferred tax.
3. The calculation for the return per Ordinary Share is based on the return on ordinary activities after taxation and
on the average weighted number of shares in issue during the period of 1,802,802 (2001: 1,802,802 ).
4. The dividend will be paid on May 19 2003 to shareholders on the register at 22 April 2003.
5. Copies of this announcement are available, free of charge, for a period of one month from Athelney's Nominated
Adviser: Noble & Company Limited, 76 George Street, Edinburgh, EH2 3BU. Copies of the full financial statements
will be posted to shareholders on 8 April 2003.
8 April 2003
END