Athelney Trust PLC
Legal Entity Identifier:
213800ON67TJC7F4DL05
The unaudited net asset value of Athelney Trust was 192.7p at 29 February 2024.
Fund Manager's comment for February 2024
Recent UK data indicated that the February composite PMI rose further to 53.3, reflecting a modest expansion in an environment where costs have continued to increase due in part to higher labour costs as well as rising freight costs linked to the Red Sea crisis. In Europe, the ECB has made significant progress in reducing the February inflation rate to 2.6% after it peaked in October 2022 at 10.7% with lower natural gas prices contributing to the decline. However, with unemployment at record lows, policymakers are wary of moving too aggressively in lowering interest rates, and have indicated an increasingly clear preference to see how wages trend before making a decision to adjust interest rates. This was made clear by the US Federal Reserve member, Christopher Waller, when he said on Thursday that policymakers should delay interest rate cuts for at least another couple of months to see if the recent uptick in inflation signals a stalling of progress towards price stability, or whether it is just a bump in the road.
These cautious comments appeared to be ignored by the stock markets as the NASDAQ continued to power along, up by 6.12% for the month. The S&P500 also benefited from the positive sentiment in the equity markets, reporting an 5.17% improvement over the month as did the MSCI which was up by 4.11%. The UK markets remained in the doldrums, with the FTSE down by 0.01%, the FTSE 250 down by 1.57%, the Small Cap Index down by 0.62% and the AIM All-Share index down by 2.42%. The Athelney portfolio declined by 5.6%, during the month and after allowing for expenses, including additional audit and related fees, the NAV reflected a decline of 5.86%.
The under-performance in February for the most part was due to a material decline in the value of our holding in Close Brothers (CBG) following an announcement by the FCA of a review of historical motor finance commission arrangements. The financial impact of this on the group is difficult to determine and when the CBG board decided to not pay any dividends on its ordinary shares for the current financial year and indicated that the reinstatement of dividends will only be reviewed once the FCA has concluded its review, we sold our entire holding. We also sold our holding in Target Healthcare and top sliced our holding in 4Imprint and the NWF Group, adding to our position in XP power, London Metric Property and introducing WISE to the portfolio.
Wise is a high-growth, high-margin, founder-led tech business focused on reducing the cost of cross-border money movement in an extremely inefficient legacy banking network. The intermediary-heavy nature of this network creates pressure to keep fees high, as does banks' short-term profit motive to continue earning the highly profitable income stream from the cross-border transactions.
Our cash holding at month end increased to 6.2% of the portfolio.
Fact Sheet
An accompanying fact sheet which includes the information above as well as wider details on the portfolio can be found on the Fund's website www.athelneytrust.co.uk under "About" then select "Latest Monthly Fact Sheet".
Background Information
Dr. Emmanuel (Manny) Pohl AM
Manny is Chairman and Chief Investment Officer of E C Pohl & Co ("ECP"), an investment management company and has been a major shareholder in Athelney trust for many years.
E C Pohl & co is licensed by the Australian Financial services (license no.421704).
Manny Pohl and the ECP group has AUD2.7bn (£1.5 billion) under its management including four listed investment companies, three listed in Australia and one in the UK:
· Flagship Investments (ASX code:FSI)
AUD95m https://flagshipinvestments.com.au
· Barrack St Investments (ASX code: BST)
AUD37m www.barrackst.com
· Global Masters Fund Limited (ASX code: GFL)
AUD33m www.globalmastersfund.com.au
· Athelney Trust plc (LSE code: ATY)
GBP6m www.athelneytrust.co.uk
Athelney Trust plc Investment Policy
The investment objective of the Trust is to provide shareholders with prospects of long-term capital growth 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.
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 ISDX. 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, the market rating is favourable when compared to future earnings and dividends; second, to those companies whose shares are standing at a favourable level compared with the value of land, buildings or cash in the balance sheet.
Athelney Trust was founded in 1994. In 1996 it was one of the ten pioneer members of the Alternative Investment Market ("AIM"). In 2008 the shares became fully listed on the main market of the London Stock Exchange. Athelney Trust has a successful progressive dividend growth record and the dividend has grown every year since 2004. According to the Association of Investment Companies (AIC) Athelney Trust is a "Dividend Hero" being one of only a few investment companies that have increased their dividend every year for 20 years or more. See link
https://www.theaic.co.uk/income-finder/dividend-heroes
Website
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