**Summary of Athelney Trust PLCs Annual Financial Report (2025)**
**Overview**
Athelney Trust PLC, an investor in small companies and junior markets, released its final results for the 12 months ended 31 December 2025. The report highlights financial performance, strategic decisions, and future outlook, with a focus on maintaining long-term value and progressive dividends.
**Financial Performance**
**NAV Total Return**-8.4% (2024: -10.4%), underperforming the UK Smaller Companies Sector average of 6.7% and the FTSE 100s 21% rise.
**Revenue Return per Share**Increased to 11.4p (2024: 7.4p), a 54% rise.
**Total Return per Share**-6.6p (2024: -13.1p).
**Share Price**Declined by 5.7% to 165.0p (2024: 175.0p).
**Net Asset Value (NAV) per Share**Fell by 8.9% to 169.5p (2024: 186.1p).
**Dividends**Recommended final dividend of 7.6p per share, bringing the total for 2025 to 10.0p (2024: 9.9p), marking the 23rd year of progressive dividends and reinstating the Trust to the "Dividend Heroes" list.
**Strategic Decisions**
**External Fund Management**Transitioned to external management under EC Pohl & Co Pty in January 2025, introducing a performance-based fee structure. This saved £31,325 in management fees in 2025 due to poor comparative performance.
**Cost Control**Froze non-executive director fees at £10,500 and reduced the Ongoing Charges Figure (OCF) by £27,480, though overall OCF increased to 3.91% due to higher dealing and other expenses.
**Market Context**
**UK Small Caps**Remain undervalued, trading at a 40% discount to US counterparts and a 10x forward P/E ratio (vs. 14x long-term average).
**Economic Headwinds**UK Governments struggles with growth, increased business burdens (taxes, regulations), and declining business confidence have impacted small companies.
**Geopolitical Risks**Uncertainty from US-UK trade tensions, particularly regarding tariffs and Jaguar Land Rovers future, adds to market volatility.
**Portfolio Review**
**Additions**New holdings in companies like 4Imprint, AJ Bell, Boku, Dunelm Group, and others.
**Sales/Trims**Sold or trimmed positions in AEW UK REIT, Alpha Group, Cake Box Holdings, and others.
**M&A Activity**Lower deal value in 2025 compared to 2024, but potential for increased deal volume in 2026 due to Autumn Budget clarity on CGT.
**Outlook**
**Optimism for 2026**Despite challenges, the Trust remains confident in its value-based approach and believes UK small caps offer long-term potential.
**Geopolitical Uncertainty**Ongoing risks from US-UK trade tensions, global conflicts, and shifting international relations may impact markets.
**AI and Productivity**Increased adoption of AI and data-driven technologies could enhance productivity and profitability in small and mid-cap companies.
**Corporate Governance**
**Compliance**Adherence to AIC and UK Corporate Governance Codes.
**Environmental, Social, and Governance (ESG)**: Considered in investment decisions, though the Trust has no direct environmental or social policies due to its outsourced operations.
**Conclusion**
Athelney Trust PLC faced a challenging year in 2025, with underperformance relative to benchmarks and external headwinds. However, strategic changes, cost control, and a focus on undervalued UK small caps position the Trust for potential recovery in 2026, supported by its commitment to progressive dividends and long-term value creation.