Final Results

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

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