ATHELNEY TRUST PLC: INTERIM RESULTS
TO 30 JUNE 2003
Athelney Trust PLC, the AIM-listed investor in junior markets and small companies, announces its unaudited interim
results for the six months to 30 June 2003.
Highlights:
Unaudited Net Asset Value ("NAV") is 92.2p per share (30 June 2002: 99.4p, 31 December 2002: 83.2p)
Gross Revenue rose by 32.9 per cent to �32,092 (2002: �24,156). On a like for like basis, after allowing for
a dividend received early and a special dividend, Gross Revenue increased by 14.1 per cent
Revenue return per ordinary share was 0.7p (2002: 0.3p), a rise of 133 per cent
Dividend decision to be made at year end
Athelney Chairman, Hugo Deschampsneufs, said: "The market bottomed out on 12 March with the NAV improving steadily so
that it finished the half year at 92.2p, a rise of 16 per cent or so since the end of February. Much of this rise
could be attributed to the so called Baghdad Bounce which came about because many of the dire warnings regarding the
cost and impact of the military campaign proved ill-founded.
"So-called stealth taxes, it is estimated, have raised the overall tax burden from 34.3 per cent to 38.5 per cent of
GDP, while the cost of red tape, largely borne by the small business sector, has increased by �20 billion since 1997.
The Chancellor reckons that borrowing will be about �24 billion per annum between 2003/4 and 2007/8, whereas the
Institute of Fiscal Studies estimate a figure of �40 billion in 2004/5. Either way, this Government of New Labour has
embarked on a course of tax, borrow and spend which will put all previous spendthrift Old Labour governments into the
shade.
"Consideration of the dividend for 2003 will be left until the final results are known. However, in the absence of
unforeseen circumstances, it is the Board's firm intention to recommend a payment of at least 1.7p per share.
"Although we are probably due to pause for a period of quiet contemplation and consolidation after such a strong rise
in the market, I return to what I said on 7 April this year, namely 'there is every chance of a significant rally
starting in 2003 to be extended into the following year'. I can say no more".
-ends-
For further information:
Robin Boyle, Managing Director
Athelney Trust 020 7222 8989
Paul Quade
CityRoad Communication
ATHELNEY TRUST PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2003
CHAIRMAN'S STATEMENT
I have pleasure in enclosing the unaudited results for the six months to 30 June 2003. The salient points are as
follows:-
Unaudited Net Asset Value ("NAV") is 92.2p per share (31 December 2002 : 83.2p, 30 June 2002: 99.4p), a rise of 10.8
per cent over six months, but a fall of 7.3 per cent over the past year.
Gross Revenue rose by 32.9 per cent to � 32,092 compared with the half year ended 30 June 2002 of �24,156 and the full
year to 31 December 2002 of �60,328.
On a like for like basis (after allowing for a dividend received early and a special dividend) Gross Revenue increased
by 14.1 per cent.
Revenue return per ordinary share was 0.7p, an increase of 133 per cent (31 December 2002: 1.3p, 30 June 2002: 0.3p).
As is the Board's practice, consideration of a dividend for 2003 will be left until the final results are known.
The Market
I am pleased to report that the view the Board held in respect of prospects for markets in 2003 has proved to be well
founded. Athelney's Net Asset Value ("NAV"), which stood at 99.4p on 30 June 2002, fell to 83.2p as at 31 December
2002, with a further sickening lurch down to 79.4p only two months later at 28 February. However, the market bottomed
out on 12 March with the NAV improving steadily so that it finished the half-year at 92.2p, a rise of 16 per cent or so
since the end of February.
Clearly, much of that rise could be attributed to the so-called Baghdad Bounce, which came about because many of the
dire warnings regarding the cost and impact of the military campaign proved to be ill-founded, even though Mr Gordon
Brown has earmarked �3 billion for the conflict. Elsewhere, the Budget was largely ignored by the market, although
there are certainly some points worth making The Chancellor's GDP forecast of 2-2.5 per cent growth for 2003/4 still
looks too high, as does 3-3.5 per cent for 2004/5. Higher National Insurance contributions will certainly affect
consumer spending since it is designed to take an extra �4 billion from individuals. So-called stealth taxes, it is
estimated, have raised the overall burden of tax from 34.3 per cent to 38.5 per cent of GDP, while the cost of red
tape, largely borne by the small business sector, has increased by �20 billion since 1997. The Chancellor reckons that
borrowing will be about �24 billion per annum between 2003/4 and 2007/8 whereas the Institute of Fiscal Studies
estimate a figure of �40 billion in 2004/5. Either way, this Government of New Labour has embarked on a course of tax,
borrow and spend which will put all previous spendthrift Old Labour governments into the shade.
Corporate activity has picked up recently, although this has yet to have much impact on the Athelney portfolio with the
exception of Reed Executive, which was bought out by the controlling family and Mallett, where we turned down a low
tender offer.
Results
Gross Revenue rose by 32.9 per cent in the six months ended 30 June 2003 but, this figure rather overstated the actual
position in that Athelney received a dividend from Amalgamated Metals in June, whereas it is normally paid in the
second half of the year. Furthermore, Gibbs & Dandy paid a special dividend of �3,000 which is unlikely to be repeated
in future years. Taking account of these special factors, Gross Revenue moved ahead by a highly satisfactory 14.1 per
cent, which has even exceeded the equivalent figure for the whole of 2002, namely 13.3 per cent. This, coupled with the
rise in NAV of 10.8 per cent, points to what the Board believes is a satisfactory overall performance so far this year.
Portfolio Strategy
As always, the Managing Director and Investment Manager, Robin Boyle, is seeking undervalued small companies which
other fund managers may have overlooked. Furthermore, he is looking for companies which are capable of distributing
significantly higher dividends to their shareholders over the next few years.
Portfolio Review
Since January, Genus and Enterprise Inns shares have been top-sliced, Plasmon, Radstone Technology, Intelek, NBA
Quantum, Estates & Agency, CRC Group, Alphameric, Gowrings and Delcam have all been sold. Existing holdings of Braemar
Seascope, T Clarke, Galliford Try, Waterman Partnership, Wintrust, WSP Group, CA Coutts Holdings, Fountains, Pennant
International, Private & Commercial Finance and Universe Group have been increased and new interests acquired in James
Beattie and Rok Property Solutions.
Dividend
Consideration of the dividend for 2003 will be left until the final results are known. However, in the absence of
unforeseen circumstances, it is the Board's firm intention to recommend a payment of at least 1.7p per share (1.7p in
2002).
Update
The unaudited NAV at 31 July 2003 was 96.2p per share.
Outlook
Although we are probably due to pause for a period of quiet contemplation and consolidation after such a strong rise in
the market, I return to what I said on 7 April this year, namely that "there is every chance of a significant rally
starting in 2003 to be extended into the following year". I can say no more.
Hugo Deschampsneufs
Chairman
28 August 2003
ATHELNEY TRUST PLC
INTERIM STATEMENT OF TOTAL RETURN
(INCORPORATING THE REVENUE ACCOUNT)
FOR THE SIX MONTHS ENDED 30 JUNE 2003
Year ended
Unaudited Unaudited 31
December
6 months ended 30 June 6 months ended 30 June 2002 2002
2003
Revenue Capital Total Revenue Capital Total Total
� � � � � � �
Gains / (losses) on - 184,039 184,039 - 65,051 65,051 (275,430)
investments
Income 32,092 - 32,092 24,156 - 24,156 60,328
Investment management (5,808) (5,808) (11,616) (5,739) (5,739) (11,478) (21,737)
expenses
Other expenses (17,849) - (17,849) (17,225) - (17,225) (33,532)
Return on ordinary
activities before 8,435 178,231 186,666 1,192 59,312 60,504 (270,371)
taxation
Taxation 4,310 (29,036) (24,726) 4,372 (2,147) 2,225 71,664
Return on ordinary
activities after 12,745 149,195 161,940 5,564 57,165 62,729 (198,707)
taxation
Dividend - - - - - - (30,648)
Transfer to reserves 12,745 149,195 161,940 5,564 57,165 62,729 (229,355)
Return per ordinary 0.7p 8.3p 9.0p 0.3p 3.2p 3.5p (11.0)p
share
ATHELNEY TRUST PLC
INTERIM BALANCE SHEET AS AT 30 JUNE 2003
Unaudited Unaudited
30 June 30 June 31 December
2003 2002 2002
� � �
Fixed assets
Investments 1,659,727 1,886,408 1,497,461
Current assets
Debtors 78,427 11,931 54,241
Cash at bank and in hand 29,303 53,987 60,144
107,730 65,918 114,385
Creditors: amounts falling due (9,778) (32,229) (40,833)
within one year
Net current assets 97,952 33,689 73,552
Total assets less current 1,757,679 1,920,097 1,571,013
liabilities
Provisions for liabilities and (95,726) (128,000) (71,000)
charges
Net assets 1,661,953 1,792,097 1,500,013
Capital and reserves
Called up share capital 450,700 450,700 450,700
Share premium account 405,605 405,605 405,605
Other reserves - non distributable
Capital reserve - realised 257,003 295,464 248,817
Capital reserve - unrealised 514,408 606,731 373,399
Revenue reserve 34,237 33,597 21,492
Shareholders' funds 1,661,953 1,792,097 1,500,013
Net assets per share 92.2p 99.4p 83.2p
ATHELNEY TRUST PLC
CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2003
Unaudited Unaudited Year ended
6 months ended 6 months ended 31 December
2002
30 June 2003 30 June 2002
� � � � �
Net cash (outflow) from
operating activities (192) (14,861) (487)
Servicing of finance
Dividends paid (30,647) (30,643) (30,648)
Net cash (outflow) from servicing (30,647) (30,643) (30,648)
of finance
Taxation
Corporation tax paid - - (8,009)
Investing activities
Purchases of investments (125,525) (38,439) (359,428)
Sales of investments 125,523 25,473 346,259
Net cash (outflow) from
investing
activities (2) (12,966) (13,169)
(Decrease) in cash in the year (30,841) (58,470) (52,313)
Reconciliation of operating net
revenue to net cash (outflow) from
operating activities � � �
Revenue on ordinary activities 8,435 1,192 15,928
before taxation
(Increase)/ decrease in debtors (2,411) (6,344) 15
(Decrease) in creditors (408) (3,970) (5,561)
Management expenses charged to (5,808) (5,739) (10,869)
capital
(192) (14,861) (487)
ATHELNEY TRUST PLC
NOTES TO THE INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 30 JUNE 2003
1. The financial information contained in this report is unaudited and does not
constitute statutory accounts within the meaning of Section 240 of the Companies
Act 1985 (as amended). The results for the year ended 31 December 2002 were
reported on by the auditors and received an unqualified report and contained no
statement under Section 237(2) or (3) of the Companies Act 1985 (as amended) and
a copy of this has been filed with the Registrar of Companies.
2. The unaudited results have been prepared on the basis of the accounting policies
adopted in the audited accounts for the year ended 31 December 2002.
3. The calculation of the return per ordinary share for the six months ended 30
June 2003 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 (6
months ended 30 June 2002:1,802,802).
4. Copies of the interim results for the six months ended 30 June 2003 will be sent
to all shareholders as soon as practicable. Copies of the interim results will
be available free of charge for one month from the Company's Nominated Advisor:
Noble & Company, 76 George Street, Edinburgh EH2 3BU.