Net Asset Value(s)

Athelney Trust PLC

Legal Entity Identifier:

213800ON67TJC7F4DL05

The unaudited net asset value of Athelney Trust was 182.5p at 28 February 2025.

Fund Manager's comment for February 2025

In the US, the Federal Reserve maintained a cautious stance on monetary policy, keeping interest rates at 4.25%-4.5% in January. Policymakers noted that rates could remain restrictive if inflation stays elevated but might be eased if economic conditions weaken. Inflation edged up to 3% in January, slightly above expectations, with energy costs rising for the first time in six months. Meanwhile, consumer sentiment fell sharply in February, reaching its lowest level since November 2023, as concerns over tariffs and the economic outlook weighed on expectations.

The manufacturing sector showed modest expansion in February, with the PMI rising, signalling continued recovery despite slowing new orders and cautious hiring. In contrast, the services sector contracted for the first time in over two years, with the PMI falling below expectations. Businesses cited political uncertainty, spending cuts, and rising tariffs as key challenges. Input cost inflation increased due to higher food and wage costs, though heightened competition kept selling prices in check. The data suggests a mixed economic picture, with manufacturing rebounding but services under pressure.

In the Eurozone, business confidence dipped and the ECB responded by cutting interest rates by 25 basis points, aiming to ease borrowing costs while maintaining a cautious, data-driven approach. In February, manufacturing showed signs of improvement, with the PMI indicating the slowest contraction in nine months. However, new business and employment continued to decline, and input costs rose. The services sector expanded for a third consecutive month, albeit at a slower pace, with weakening business sentiment and persistent cost pressures. Despite some stabilisation, challenges remain.

In the UK, manufacturing sentiment dropped in January to its lowest level in over two years, with output and new orders, especially exports, declining sharply. Rising costs and inflation, led to reduced investment and the Manufacturing PMI fell further in February, indicating the sharpest contraction since December 2023.

The UK services sector saw modest growth in February, but new work declined at its fastest pace since late 2022, while rising costs fuelled inflation pressures and employment weakened. Despite this, business activity expectations improved. In response to slowing growth, the Bank of England cut interest rates by 25 basis points to 4.5% in February, marking its third cut since August 2024, while signalling a cautious easing approach.

Global equity markets were under pressure in February, with heightened volatility. The S&P 500 and Nasdaq posted their worst monthly declines since April 2024 and September 2023, falling 1.4% and 4.0% respectively. The MSCI World Index declined by 1.3% while in the UK, the FTSE 100 rose by 1.6%. In stark contrast, the FTSE 250 fell by 3.0%, the Small Cap Index dropped 3.3%, and the AIM All-Share Index declined by 2.0%. The Fledgling Index bucked this trend, rising 0.6%.

Our portfolio was also under pressure in February with the NAV decreasing by 3.6%. We sold our holding in GAMA Communications, reduced our position in Cakebox and Tritax Big Box while adding to our holdings in Impax Asset Management, PayPoint, and S&U. Additionally, we initiated a new position in Dunelm Group, a UK-based home furnishings retailer specialising in furniture, décor, textiles, and homeware. Notable contributors to performance included Alpha Group and NWF Group. The largest detractors from our performance were Impax Asset Management and PayPoint.

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).

www.ecpohl.com

www.ecpam.com

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

www.athelneytrust.co.uk