Utilico Emerging Markets Regulatory News (UEM)

Date: 21 November 2023

UTILICO EMERGING MARKETS TRUST PLC

UNAUDITED HALF-YEARLY FINANCIAL REPORT

FOR THE SIX MONTHS TO 30 SEPTEMBER 2023

Utilico Emerging Markets Trust plc ("UEM" or the "Company") today announced its unaudited financial results for the six months to 30 September 2023.

Highlights of results for the six months to 30 September 2023:

· Net asset value ("NAV") total return per share of 6.0%*

· NAV per share of 261.58p per share, up 4.3%

· Gross assets of £529.2m, a decrease of 2.5%

· Annual compound NAV total return since inception of 9.4%*

· Dividends per share totalled 4.30p for the period, an increase of 3.6%. Dividends were fully covered by earnings

· Revenue earnings per share ("EPS") decreased 12.9% to 5.95p

· Total revenue income of £14.8m, an 12.4% decrease

*See Alternate Performance Measures on pages 43 to 45 of the Half-Yearly Financial Report for the six months to 30 September 2023

The Half-Yearly Financial Report for the six months to 30 September 2023 will be posted to shareholders in early December 2023. A copy will shortly be available to view and download from the Company's website at www.uemtrust.co.uk and the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. Please click on the following link to view the document: http://www.rns-pdf.londonstockexchange.com/rns/1537U_1-2023-11-21.pdf

John Rennocks, Chairman of UEM said: "It is pleasing to report that UEM exhibited a strong performance in the half year to 30 September 2023 and delivered a positive NAV total return of 6.0%. This was once again significantly ahead of the MSCI EM total return Index which was down 0.9% over the same period. The long-term annual compound NAV total return since inception to 30 September 2023 was 9.4% exceeding the MSCI EM total return Index of 7.2%.

"UEM has declared two quarterly dividends of 2.15p each, totalling 4.30p per share, a 3.6% increase over the previous half year. Dividends remain fully covered by income. The retained earnings revenue reserves increased by £3.3m to £12.9m as at 30 September 2023, equal to 6.53p per share.

"UEM's share price discount widened further over the half year from 13.5% as at 31 March 2023 to 15.1% as at 30 September 2023. This remains well above the level that the Board expects to see over the medium term. The Company has continued buying back shares for cancellation, with 4.4m shares bought back in the half year to 30 September 2023, at an average price of 222.14p. The Board would like to re-emphasise that UEM's portfolio is predominantly invested in relatively liquid, cash-generative companies which have long-duration operational, infrastructure and utility assets that the Company's Investment Managers believe are structurally undervalued and offer the potential for excellent total returns".

Charles Jillings, Investment Manager of UEM added: "UEM's one year, three years, five years and since inception performance is strongly ahead of the MSCI Index. UEM has delivered this together with a rising dividend; a low beta (as at 30 September 2023, UEM's five year Sterling adjusted beta versus the MSCI EM Index was 0.83); and with a portfolio which is very different from the MSCI EM Index (UEM's active share is over 98.0%). This should be compelling to investors who want exposure to infrastructure megatrends in emerging markets, top performance and comparatively low levels of volatility.

"We have identified four megatrends that should underpin the investment opportunities for UEM - Energy Transition, Digital Infra, Social Infra and Global Trade. There are significant structural shifts underway which will continue irrespective of macro or political pressures. While it is true that urbanisation and the growth of the middle class continues to drive much of the momentum in emerging economies, the megatrends are seeing a determined accelerated shift in economic activity."

Contacts: Joint Portfolio Manager and Company Secretary

ICM Investment Management Limited +44(0)1372 271486

Charles Jillings / Alastair Moreton

Public Relations

Montfort Communications +44(0)20 3770 7913

Gay Collins / Pippa Bailey

utilico@montfort.london

Joint Brokers

Shore Capital +44(0)20 7408 4090

Rose Ramsden / Angus Murphy

Barclays Bank +44(0)20 7623 2323

Dion Di Miceli / Stuart Muress / Louis Reed

BarclaysInvestmentCompanies@barclays.com

PERFORMANCE SUMMARY

(1) See Alternative Performance Measures on pages 43 to 45 of the Half-Yearly Financial Report for the six months to 30 September 2023

(2) The second quarterly dividend declared has not been included as a liability in the accounts

(3) Gross assets less liabilities excluding loans

(4) Percentage change based on comparable six month period to 30 September 2022

(5) For comparative purposes the figures have been annualised

CHAIRMAN'S STATEMENT

The half year to 30 September 2023 has continued to be truly challenging for all, including investors. Multiple wars through to inflation and sharply higher central bank interest rates; to rising geopolitical friction; and to the challenges on climate change and significant natural disasters remain headwinds for investors. To this we can add the tragic events in Israel and the Middle East descending back into conflict. The anticipated recovery in the Chinese economy post Covid-19 has not met expectations and continues to be a drag on global GDP. Understandably, volatility in most markets has been elevated.

Despite all these challenges, it is pleasing to report that UEM exhibited a strong performance in the half year to 30 September 2023 and delivered a positive NAV total return of 6.0%. This was once again significantly ahead of the MSCI EM total return Index which was down 0.9% over the same period.

UEM measures its performance on a total return basis over the long term and the Investment Managers are seeking long term performance to meet or exceed 10.0% per annum including a rising dividend. Over one, three and five years and since inception, UEM has outperformed the MSCI EM total return Index. The long term annual compound NAV total return since inception to 30 September 2023 was 9.4%, exceeding the MSCI EM total return Index of 7.2%.

GLOBAL ECONOMY

As referred to above, there are numerous headwinds currently faced by the markets, each of which is challenging in its own right. We have historically discussed a number of these and they largely remain unresolved. We continue to witness a significant rise in nationalism, wealth inequality and global migration. All of these issues and challenges no doubt continue to tear at the fabric of our societies and institutions.

While Covid-19 is behind us, the legacy of Covid-19 and the West's response to it has undoubtedly led to higher debt and higher inflation in the developed western economies. Furthermore, the war in Ukraine has seen sharply higher commodity prices and accelerating inflation especially in Latin America. The response by the central banks to higher inflation has been to rapidly raise interest rates to bring inflation under control.

The markets are rightly concentrating on the US and the Federal Reserve in particular, given the size of the US market and global dominance of the US Dollar. The Federal Reserve is laser-focused on reducing inflationary pressures by raising interest rates and has encouraged the market to adopt a "higher for longer" outlook. The resilience of the US markets has been unexpected. With GDP growth in the last quarter of over 4.0% and unemployment remaining low, it is unsurprising the Federal Reserve has raised rates to 5.25%. The higher for longer expectation is starting to be seen in longer duration treasuries. They started the half year at 3.5% and stood at 4.6% as at 30 September 2023. This has had two outcomes: first, many central banks reference the Federal Reserve and cannot risk currency weakness by cutting rates in their local currency; and second, investors have been reducing investments in equities and moving into bonds.

Again, as we have noted before, the need to have resilient and diversified supply chains, energy security, green energy and increased defence capabilities will see resources diverted and reinvested with an urgency and scale not previously witnessed in our lifetime. This shift will give rise to new opportunities for investors, including UEM. There are a number of megatrends that should provide many of UEM's investment strong tailwinds.

EMERGING MARKETS

EM were mixed over the half year reflecting local headwinds, higher interest rates and lower valuations. Bucharest's BET Index was up 18.4%, Brazil's Bovespa Index was up 14.4%, the Indian Sensex was up 11.6%, Chile's IPSA Index was up 9.6% and Vietnam's Ho Chi Minh Index was up 8.4%. Meanwhile the Hong Kong Hang Seng Index was down 12.7%, the Mexican Bolsa was down 5.6% and the Philippine PSEI Index was down 2.7%. A common theme has been rising inflation in Latin America and Eastern Europe and weakening consumer confidence in Asia.

Most currencies continued to be weak against UK Sterling, although the exceptions included the Mexican Peso, up 5.3%, the Brazilian Real, up 2.6%, and the Hong Kong Dollar, up 1.5%. Oil rose 19.5% over the six months to 30 September 2023, in response to rising uncertainties and supply constraints.

UNLISTED INVESTMENTS (LEVEL 3 INVESTMENTS)

Over the half year to 30 September 2023, the value of the level 3 investments reduced to £43.8m from £58.7m as at 31 March 2023. This was driven mainly by reduced valuations on two investments Petalite Limited ("Petalite") and Conversant Solutions Pte Ltd ("Conversant"). As at 30 September 2023 the level 3 investments represented 8.2% of the total portfolio.

Petalite is a disruptive technology start up business and gives UEM exposure to the electric vehicle revolution through charging infrastructure. Conversant is a Singapore based provider of internet network and edge computing services.

More details on these investments can be found in the Investment Managers' Report.

REVENUE EARNINGS AND DIVIDEND

It was disappointing to see UEM's revenue earnings per share ("EPS") decrease by 12.9% to 5.95p, in part due to having lower average gearing and selling higher paying dividend investments.

UEM has declared two quarterly dividends of 2.15p each, totalling 4.30p per share, a 3.6% increase over the previous half year. Dividends remain fully covered by income. The retained earnings revenue reserves increased by £3.3m to £12.9m as at 30 September 2023, equal to 6.53p per share.

The Board would like to re-emphasise that UEM's portfolio is predominantly invested in relatively liquid, cash-generative companies which have long-duration operational, infrastructure and utility assets that the Company's Investment Managers believe are structurally undervalued and offer the potential for excellent total returns.

SHARE BUYBACKS

Disappointingly UEM's share price discount widened further over the half year from 13.5% as at 31 March 2023 to 15.1% as at 30 September 2023. This remains well above the level that the Board expects to see over the medium term. The Company has continued buying back shares for cancellation, with 4.4m shares bought back in the half year to 30 September 2023, at an average price of 222.14p.

While the Board is keen to see the discount narrow, any share buyback remains an independent investment decision. Historically the Company has bought back shares if the discount widens in normal market conditions to over 10.0%. Since inception, UEM has bought back 79.3m ordinary shares totalling £148.7m. The share buybacks have contributed 0.3% to UEM's total returns during the six months ended 30 September 2023.

ONGOING CHARGES

Ongoing charges were again unchanged at 1.4% for the year to 30 September 2023, a good result especially given the wider inflationary environment.

BOARD

Your Board has consciously reduced to four Directors. This has seen our gender diversity reduce to 25.0% which we note is below targets set by the wider corporate governance framework. The Board will continue to have regard to boardroom diversity during its consideration of succession planning and future Board appointments.

ADVISER AND INVESTOR COMMUNICATION

UEM is continuing to rejuvenate its marketing presentation and draw attention to a number of megatrend tailwinds benefitting UEM. The drive is to improve investor knowledge and broaden UEM's investor base, especially the retail sector. The breadth of coverage now being achieved by UEM is excellent and we hope that once sentiment turns, there will be a rising trend of retail and high net worth investors who will be inclined to buy into UEM.

OUTLOOK

The megatrends driving most emerging economies are expected to continue and even accelerate over the coming year. The strong results being reported by our investee companies combined with low valuations leads us to remain optimistic that UEM offers significant value to its shareholders.

John Rennocks

Chairman

21 November 2023

INVESTMENT MANAGERS' REPORT

It is good to see UEM deliver another positive NAV gain, with a NAV total return for the half year to 30 September 2023 of 6.0%, building on the 2.1% uplift for the year ended 31 March 2023. This performance was again substantially ahead of the MSCI EM total return Index which was down by 0.9% during the half year to 30 September 2023.

UEM's one year, three years, five years and since inception performance is strongly ahead of the MSCI Index. UEM has delivered this together with a rising dividend; a low beta (as at 30 September 2023, UEM's five year Sterling adjusted beta versus the MSCI EM Index was 0.83); and with a portfolio which is very different from the MSCI EM Index (UEM's active share is over 98.0%). This should be compelling to investors who want exposure to infrastructure megatrends in EM, top performance and comparatively low levels of volatility.

We were surprised and disappointed by the slow response of China's economy to the lifting of Covid-19 restrictions, having expected a surge in demand as China reopened, in line with other economies. We increased our investments in China, including a £7.5m position in Shanghai International Airport Co., Ltd ("SHIA") as at 31 March 2023 and in the half year to 30 September 2023, we added £1.0m to this position. However, the "revenge travel" bounce seen in other economies has been slow to materialise. Reflecting this the shares in SHIA have declined by 32.0% over the six months.

China's continued recovery will be a key factor, not only for investments in China but also for the wider EM given the country's high import/export led economy. It is an undoubted global growth driver, and whilst the Chinese government continues to support the economy, to date the stimulus policies have had limited impact.

The world is still faced with a number of unresolved deep-seated challenges. As noted in the Chairman's Statement these range from inflation to climate change. We have addressed these before, but it is worth emphasising the inflation and interest rate outlook.

INFLATION AND INTEREST RATES

A year ago, we noted most central banks were grappling with strongly rising inflation and the need to raise interest rates higher. Most economies had negative real interest rates (inflation running ahead of interest rates). Today many global economies are faced with inflation subsiding and positive real interest rates. This should mean central banks have room to reduce rates going forward with a number of economies having record positive real rates.

We believe that the US Federal Reserve is key to understanding the outlook for most central banks, who do not want to reduce their local rates, risking currency weakness and thereby imported inflation. While it is true that a number of countries have marginally reduced rates, they will naturally temper further cuts by reference to the Federal Reserve. The US Dollar remains the global reserve currency and will do so for some considerable time. Given the nature of many emerging economies they are sensitive to the US and therefore US Dollar interest rates.

The Federal Reserve in turn is being driven by the resilience in the US economy. GDP increased last quarter at an annual rate of 4.9%; unemployment is under long term trends; and employment is rising. Given the speed of the Federal Reserve interest rate rises and the fact that the rate today of 5.25% is at a 22 year high, it is remarkable that the world's biggest economy is so strong. It is unsurprising the Federal Reserve has encouraged a "higher for longer" stance as it sees the need to weaken the economy. We believe the Federal Reserve could adopt this stance well into next year. As such we see global interest rates remaining elevated.

This is important as it will be a drag on economies, but markets are able to look to the future and we expect many EM to price in these further opportunities to reduce rates. EM are well placed for this gain in markets.

Inflation has not been as much of a challenge in Asia and we suspect this results from higher unemployment levels at the start of Covid-19. Consequently, wage pressures are lower, as is inflation. It is worth noting that China's inflation is running at under 2.0%.

MEGATRENDS

We have identified four megatrends that should underpin the investment opportunities for UEM. These are Energy Transition, Digital Infra, Social Infra and Global Trade. There are significant structural shifts underway which will continue irrespective of world macro or political pressures. While it is true that urbanisation and the growth of the middle class continues to drive much of the momentum in emerging economies, the megatrends are seeing a determined accelerated shift in economic activity.

Energy transition is seeing an enormous investment in renewable energy and the infrastructure which is needed to support it. To grow their economies EM need to invest in energy supply. As an observation energy demand often outstrips GDP growth as economies expand and many EM are choosing to invest in renewables to support that growth. While the developed world is typically shifting from fossil fuels to renewables, emerging economies have an advantage that they can look to renewables rather than fossil fuels to develop. It is no accident that many EM already have a higher renewables mix as a result, with many looking to phase out existing fossil fuel capacity as well. This shift is providing many investment opportunities for UEM including the renewable asset owners, such as Omega Energia; the transmission grid operators connecting up wind and solar farms, such as Power Grid Corporation of India Limited; and legacy power generation companies which are transitioning from coal to renewables, such as Engie Energia Chile S.A.

Digital infra is an enabler of structural change and technological innovation globally and especially in EM. Fast, universal and affordable access to the internet is increasingly considered a necessary utility, even in the least developed markets. There are attractive opportunities to invest in companies offering and improving 4G and 5G mobile connectivity and fibre broadband direct to consumers and in passive infrastructure companies offering mobile towers, fibre connections and data centre services to telecoms operators and other corporate clients. EM companies can deliver IT services and software development to global clients in a cost-effective way, such as FPT Corporation and Telelink Business Services. The continuing rapid growth in data consumption is driving demand for new data centres, such as Korean Internet Neutral Exchange, which is building a new data centre in Seoul, due to complete in 2024.

Social infra development is a critical requirement for EM. Urbanisation is driving significant demand for the essential services which support improved quality of life, such as water and sewerage connections, waste facilities, electricity connections and healthcare. In many EM the social infrastructure outside of the major cities is often under-developed, and governments are committing significant resources towards improving this directly or through incentivised schemes, such as public-private partnerships. Water, waste and electricity distribution businesses are natural monopolies and are typically highly regulated with opportunities such as Aguas Andinas and Cia de Saneamento Basico do Estado de Sao Paulo ("Sabesp") offering predictable, long-term returns. Solid waste operators, such as Orizon Valorizacao de Residuos S.A. ("Orizon"), tend to be more commercial, with opportunities to move up the value chain (e.g. biogas, carbon credits) as well as to consolidate fragmented, nascent markets.

Global trade is continually evolving and historically has been dominated by more developed countries. However, by 2040 EM as a percentage of global GDP is expected to exceed that of developed markets, being driven by increases in EM's GDP per capita, growth in consumption and improvements in productivity. This long term shift towards EM is therefore providing investment opportunities, such as International Container Terminal Services, Inc. ("ICT"). However, over the last two to five years there have been additional forces changing the way in which global trade is conducted. Covid-19 caused manufacturers to reassess their global supply chains, resulting in many now having more than one manufacturing location, to ensure supply chains are more diversified, resilient and stable so they can trade through supply shock disruptions. Countries such as Mexico, India and Vietnam are benefiting from this. Furthermore, there has been a reshaping of the competitive environment; the geopolitical tensions and competition between the US and China has impacted the multilateral trading systems; and the war in Ukraine has also added another dynamic. The desire to bring production of goods closer to the final consumer is driving near shoring and friend shoring. Mexico is one country that is benefiting here.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG")

ESG remains a continued focus for UEM. ICM has implemented a sound and robust framework enabling it to engage with portfolio companies. ICM sees this as a journey on which it expects to see changes in behaviour and outcomes over time. While the key driver for investments by UEM is equity total returns, to UEM the clear expectation is the need for all portfolio businesses to engage in processes which meet global expectations. There can be no doubt that companies will face increased scrutiny from all investors and the public over ESG issues and UEM's portfolio needs to be on that journey.

CLIMATE CHANGE

Climate change remains at the forefront of global debate, heightened by the increased impact of climate disasters worldwide. The past year has provided a stark reminder of the devastation that can arise from climate change-related disasters. We have been aware of the impacts of climate and the El Nino and La Nina phases and have tracked for some time hydrology and the impact on rivers, dams and agricultures in Brazil. Rainfall can and does impact energy pricing and agriculture output.

It is obvious that climate-driven events are becoming more frequent and severe. This can range from days lost at a port due to disruptive weather through to flooding and the evident social impacts on clean water. Climate change risk is monitored across the portfolio, however predicting the likelihood and impact of events remains a difficult task. Currently, we see geographical diversification as the best way to mitigate the risk posed by climate-related disasters.

PORTFOLIO

UEM's gross assets (less liabilities excluding loans) decreased to £529.2m as at 30 September 2023 from £542.5m as at 31 March 2023. This reflects the repayment of bank loans of £22.7m, the share buybacks of £9.9m and net capital returns of £16.5m in the half year.

As at 30 September 2023 the top thirty holdings accounted for 71.5% of the total portfolio (31 March 2023: 67.7%). There have been new entrants into the top thirty holdings over the half year. UEM increased its investment in Sabesp by £2.0m and Omega Energia S.A. by £1.2m. This together with some strong share price performances from PT Pertamina Geothermal Energy Tbk. up by 108.7% and TTS (Transport Trade Services) S.A. up by 73.6%, moved them all into the top thirty holdings. Ocean Wilsons Holdings Limited's share price firmed by 7.9% and this moved it into thirtieth position as we reduced other holdings.

UEM halved its holdings in the Mexican Airports and they continue to perform exceptionally well at an operating level. However, given the strong performance and some uncertainties around the regulation of the concessions as they come up for renewal, this resulted in a reduction of our positions by £12.3m. Fortuitously, an element of the regulatory framework was changed by the government, surprising the market and the shares sold off significantly in October 2023. As noted, SHIA failed to see a strong bounce in international passengers and muted customer spending and its share price declined by 32.0%. Grupo Traxion S.A.B. de C.V.'s share price fell by 20.4% following a clumsy secondary placement. These holdings all fell out of the top thirty as a result.

Purchases in the portfolio decreased to £24.5m in the half year ended 30 September 2023 (30 September 2022: £52.6m) and realisations decreased to £56.4m (30 September 2022: £67.3m). This reflects in part, a reluctance to invest when uncertainties are rising over China's economic recovery, together with the uncertainties over US interest rates. An active decision was therefore taken to slowly decrease UEM's debt. UEM ended the half year with its bank loans at £11.8m, 23.7 % of the available £50.0m facility(31 March 2023: £35.1m).

LEVEL 3 INVESTMENTS

UEM ended the half year to 30 September 2023 with level 3 investments totalling £43.8m (31 March 2023: £58.7m), representing 8.2% of total investments (31 March 2023: 10.8%). The decrease in the half year resulted mainly from reduced valuations for Petalite and Conversant. There were also realisations of £4.3m mainly from the sale of an unlisted renewables company in India which saw £3.7m returned to UEM. The sale resulted in UEM realising an annual rate of return of 24.8% in Sterling terms after tax on the investment.

In 2020 UEM initially invested a modest amount in Petalite and provided additional investment in June 2022 following significant progress as part of the introduction of a strategic partner and investor. Based on the valuation of the June 2022 fundraise, the holding in Petalite was valued upwards to £28.6m as at 31 March 2023. While progress continues to be made, in the wider market comparable valuations for listed peers have softened. In line with this, UEM reduced the Petalite carrying value by 12.9% as at 30 September 2023. Petalite signed a co-development agreement with a major UK charge point operator and in October 2023 UEM provided a temporary £2.5m loan facility to Petalite to support the business whilst it completes a Series A fundraise.

Conversant reported strong operating results and raised new equity at SGD 6.00 per share in 2022. However, UEM has now been more cautious on its near-term prospects following the unexpected death of the founder in late 2022. Based on Conversant's profit expectations for 2023, as well as peer group multiples, UEM has conservatively marked the valuation down by 57.2% to SGD 2.57 per share.

SHARE BUYBACKS

UEM continues to actively buy back its shares. In the half year to 30 September 2023 UEM bought back 4.4m shares at £9.9m. The average price paid over the six months to 30 September 2023 was 222.14p per share. This was enhancing to NAV per share which was 261.58p as at 30 September 2023.

Since inception UEM has bought back 79.3m shares at a cost of £148.7m and an average price of 187.06p.

BANK DEBT

UEM's net debt, being bank loans and overdrafts less cash, decreased significantly over the half year from £36.1m as at 31 March 2023 to £14.0m as at 30 September 2023. UEM's £50.0m committed multicurrency loan facility matures in March 2024.

REVENUE RETURN

Revenue income decreased 12.4% to £14.8m for the six months to 30 September 2023, from £16.9m for the six months to 30 September 2022. This arose from a marginal shift in the portfolio to companies investing for the longer term in companies such as Orizon and selling higher paying dividend investments.

Management fees and other expenses were largely unchanged at £1.6m for the half year. While finance costs doubled, they remained modest at £0.2m. Taxation rose by 10.0% to £1.1m for the period to 30 September 2023, prior half year was £1.0m.

Arising from the above, profit for the half year decreased by 17.4% to £11.9m from £14.4m at the prior half year. EPS decreased by 12.9% to 5.95p compared to the prior half year of 6.83p with the decrease in profit being offset by a reduced average number of shares in issue following buybacks. Dividends per share of 4.30p were fully covered by earnings.

Retained revenue reserves rose to £12.9m as at 30 September 2023, equating to 6.53p per share.

CAPITAL RETURN

The portfolio gained £19.3m during the half year to 30 September 2023 (30 September 2022: loss of £28.6m). There were gains on foreign exchange of £0.4m (30 September 2022: loss of £0.6m). The resultant total income gain on the capital return was £19.7m against prior half year loss of £29.3m.

Management and administration fees were largely unchanged at £2.2m for the half year. Finance costs remain modest at £0.7m but rose by 250.0% in the half year as a result of higher interest rate costs from £0.2m in the prior half year. Taxation was a cost of £0.3m in the half year versus a gain of £0.1m in the prior half year, which arose mainly from increased Indian deferred capital gains tax on unrealised gains in the period. The net effect of the above was a gain on capital return of £16.5m (30 September 2022: a loss of £31.6m).

INVESTOR COMMUNICATION

We have been increasing the marketing of UEM to the wider investment community, including retail investors, through a number of initiatives. These include regular publications of research notes from UEM's broker, Shore Capital and Corporate Limited and Edison Investment Research Limited; utilising the Investor Meet Company platform which provides an excellent recorded video platform for communicating to individual investors; and increasing the content on UEM's website via our 'insights' page.

Charles Jillings

ICM Investment Management Limited and ICM Limited

21 November 2023

HALF-YEARLY FINANCIAL REPORT AND RESPONSIBILITY STATEMENT

The Chairman's Statement and the Investment Managers' Report give details of the important events which have occurred during the period and their impact on the financial statements.

PRINCIPAL RISKS AND UNCERTAINTIES

Most of UEM's principal risks and uncertainties are market related and are similar to those of other investment companies investing mainly in listed equities in emerging markets.

The principal risks and uncertainties were described in more detail under the heading "Principal Risks and Risk Mitigation" within the Strategic Report section of the Annual Report and Accounts for the year ended 31 March 2023 and have not changed materially since the date of that document.

The principal risks faced by UEM include not achieving long term total returns for its shareholders, adverse market conditions leading to a fall in NAV, loss of key management, its shares trading at a discount to NAV, losses due to inadequate controls of third party service providers, gearing risk and regulatory risk. In addition, the Board continues to monitor a number of emerging risks that could potentially impact the Company, the principal ones being geopolitical risk and climate change risk.

The Annual Report and Accounts is available on the Company's website, www.uemtrust.co.uk

RELATED PARTY TRANSACTIONS

Details of related party transactions in the six months to 30 September 2023 are set out in note 9 to the accounts and details of the fees paid to the Investment Managers are set out in note 2 to the accounts. Directors' fees were increased by approximately 5.0% with effect from 1 April 2023 to: Chairman £52,500 per annum; Chair of Audit & Risk Committee £49,100 per annum; and other Directors £38,900 per annum.

The net fee entitlement of each Director is satisfied in shares of the Company, purchased in the market by each Director at around each quarter end.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with Chapter 4 of the Disclosure Guidance and Transparency Rules, the Directors confirm that to the best of their knowledge:

? the condensed set of financial statements contained within the report for the six months to 30 September 2023 has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" on a going concern basis and gives a true and fair view of the assets, liabilities, financial position and return of the Company;

? the half-yearly report, together with the Chairman's Statement and Investment Managers' Report, includes a fair review of the important events that have occurred during the first six months of the financial year and their impact on the financial statements as required by DTR 4.2.7R;

? the Directors' statement of principal risks and uncertainties above is a fair review of the principal risks and uncertainties for the remainder of the year as required by DTR 4.2.7R; and

? the half-yearly report includes a fair review of the related party transactions that have taken place in the first six months of the financial year as required by DTR 4.2.8R.

On behalf of the Board

John Rennocks

Chairman

21 November 2023

CONDENSED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

All items in the above statement derive from continuing operations.

The 'Total' column of this statement is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies.

The net return on ordinary activities after taxation represents the profit for the period and also the total comprehensive Income.

CONDENSED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)

NOTES TO THE ACCOUNTS (UNAUDITED)

1. ACCOUNTING POLICIES

The Company is an investment company incorporated in the United Kingdom with a premium listing on the London Stock Exchange.

The unaudited condensed accounts have been prepared in accordance with UK adopted International Accounting Standards, which comprise standards and interpretations approved by the IASB and International Accounting Standards and Standing Interpretations Committee interpretations approved by the IASC that remain in effect and to the extent that they are in conformity with the requirement of the Companies Act 2006 ("IFRS"), IAS 34 "Interim Financial Reporting" and the accounting policies set out in the audited statutory accounts for the year ended 31 March 2023.

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgements made by the Directors in applying the accounting policies and key sources of uncertainty were the same as those applied to the financial statements as at and for the year ended 31 March 2023.

The condensed Accounts do not include all of the information required for full annual accounts and should be read in conjunction with the accounts of the Company for the year ended 31 March 2023, which were prepared under full IFRS requirements.

2. MANAGEMENT AND ADMINISTRATION FEES

The Company has appointed ICMIM as its Alternative Investment Fund Manager and joint portfolio manager with ICM, for which they are entitled to a management fee. The aggregate fees payable by the Company are apportioned between the Investment Managers as agreed by them.

The relationship between ICMIM and ICM is compliant with the requirements of the UK version of the EU Alternative Investment Fund Managers Directive as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended, and also such other requirements applicable to ICMIM by virtue of its regulation by the Financial Conduct Authority.

The annual management fee is a tiered structure as follows: 1.0% of NAV up to and including £500m; 0.9% of NAV exceeding £500m up to and including £750m; 0.85% of NAV exceeding £750m up to and including £1,000m; and 0.75% of NAV exceeding £1,000m, payable quarterly in arrears. The management fee is allocated 80% to capital return and 20% to revenue return. The investment management agreement may be terminated upon six months' notice.

ICMIM also provides company secretarial services to the Company, with the Company paying £35,000 (30 September 2022: £35,000 and 31 March 2023: £70,000) equivalent to 45% of the costs associated with this office and recharges research fees to the Company based on a budget of £0.3m per annum, paid quarterly in arrears. These charges are allocated 80% to capital return and 20% to revenue return.

JPMorgan Chase Bank N.A. - London Branch has been appointed Administrator and ICMIM has appointed Waverton to provide certain support services (including middle office, market dealing and information technology support services).

3. TAXATION

The revenue return taxation charge of £1,076,000 (30 September 2022: £954,000 and 31 March 2023: £1,638,000) relates to irrecoverable overseas taxation suffered on dividend and interest income.

The capital return taxation expense of £315,000 (30 September 2022: income of £85,000 and 31 March 2023: income of £212,000) relates to capital gains on realised gains on sale of overseas investments and deferred tax in respect of capital gains tax on overseas unrealised investment gains that may be subject to taxation in future years.

4. EARNINGS PER SHARE

Earnings per share is the profit attributable to shareholders and based on the following data:

5. DIVIDENDS

The Directors have declared a second quarterly dividend in respect of the year ending 31 March 2024 of 2.15p per share payable on 15 December 2023 to shareholders on the register at close of business on 1 December 2023. The total cost of the dividend, which has not been accrued in the results for the six months to 30 September 2023, is £4,217,000 based on 196,121,375 shares in issue as at 20 November 2023.

6. BANK LOANS

The Company has an unsecured committed senior multicurrency revolving facility of £50,000,000 with the Bank of Nova Scotia, London Branch expiring on 15 March 2024. Commitment fees are charged on any undrawn amounts at commercial rates. The terms of the loan facility, including those related to accelerated repayment and costs of repayment, are typical of those normally found in facilities of this nature. The existing loan rolls over on a periodic basis subject to usual conditions including a covenant with which the Company is comfortable it can ensure compliance

As at 30 September 2023 £11,837,000 (30 September 2022: £20,185,000 and 31 March 2023: £35,102,000) was drawn down.

7. ORDINARY SHARE CAPITAL

During the period the Company bought back for cancellation 4,441,578 (30 September 2022: 8,560,692 and 31 March 2023: 12,531,811) ordinary shares at a total cost of £9,918,000 (30 September 2022: £18,674,000 and 31 March 2023: £27,159,000). A further 1,649,303 ordinary shares have been purchased for cancellation at a total cost of £3,543,000 since the period end.

8. NET ASSET VALUE PER SHARE

The NAV per share is based on the net assets attributable to the equity shareholders of £517,322,000 (30 September 2022: £501,629,000 and 31 March 2023: £507,374,000) and on 197,770,678 ordinary shares, being the number of ordinary shares in issue at the period end (30 September 2022: 206,183,375 and 31 March 2023: 202,212,256).

9. RELATED PARTY TRANSACTIONS

The following are considered related parties of the Company: the subsidiary undertakings (UEM (HK) Limited and UEM Mauritius Holdings Limited), the associates of the Company (East Balkan Properties plc, Petalite Limited ("Petalite") and Pitch Hero Holdings Limited), the Board of UEM, ICM and ICMIM (the Company's joint portfolio managers), Mr Saville, Mr Jillings (a key management person of ICMIM) and UIL Limited.

As at 30 September 2023 the fair value of the loan held with UEM (HK) Limited was £9,706,000 and loan interest accrued was £71,000 (30 September 2022: £11,871,000 and £77,000 respectively and 31 March 2023: £10,118,000 and £71,000 respectively). In the period £406,000 loan interest was capitalised. As at 30 September 2023, the fair value of the equity holdings held in UEM(HK) Limited was £nil (30 September 2023: £1,128,000 and 31 March 2023 £1,498,000). During the period the Company did not receive any amounts from or make payments to UEM Mauritius Holdings Limited.

There were no transactions with East Balkan Properties plc or Petalite Limited.

Pursuant to an extension and amendment (dated 24 August 2023) of a loan agreement dated 1 March 2021 under which UEM has agreed to loan monies to Pitch Hero, UEM advanced to Pitch Hero £50,000 on 25 August 2023. As at 30 September 2023, the balance of the loan and interest outstanding was £535,000 (30 September 2022: £162,000 and 31 March 2023: £470,000). The loan bears interest at an annual rate of 10% (prior to 24 August 2023 the rate was 5%). The first repayment date is 25 August 2024, with a final repayment date of 25 August 2027.

The Board received aggregate remuneration of £108,000 (30 September 2022: £121,000 and 31 March 2023: £225,000) included within "Other expenses" for services as Directors. As at the period end, £nil (30 September 2022: £nil and 31 March 2023: £nil) remained outstanding to the Directors. In addition to their fees, the Directors received dividends totalling £21,000 (30 September 2022: £26,000 and 31 March 2023: £45,000) during the period under review in respect of their shareholdings in the Company. There were no further transactions with the Board during the period.

There were no transactions with ICM, ICMIM, ICM Investment Research Limited or ICM Corporate Services (Pty) Ltd, subsidiaries of ICM, other than investment management, secretarial costs, research fees as set out in note 2 of £2,701,000 (30 September 2022: £2,770,000 and 31 March 2023: £5,420,000) and reimbursed expenses included within Other Expenses of £30,000 (30 September 2022: £2,000 and 31 March 2023: £134,000). As at the period end £1,345,000 (30 September 2022: £1,382,000 and 31 March 2023: £1,330,000) remained outstanding in respect of management, company secretarial and research fees.

Mr Jillings received dividends totalling £20,000 (30 September 2022: £18,000 and 31 March 2023: £38,000) and UIL Limited received dividends totalling £784,000 (30 September 2022: £1,178,000 and 31 March 2023: £2,051,000).

10. GOING CONCERN

Notwithstanding that the Company has reported net current liabilities of £13,809,000 as at 30 September 2023 (30 September 2022: £4,744,000 and 31 March 2023: £36,663,000), the financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons. The Board's going concern assessment has focused on the forecast liquidity of the Company for at least twelve months from the date of approval of the financial statements. This analysis assumes that the Company would, if necessary, be able to meet some of its short term obligations through the sale of listed securities, which represented 91.8% of the Company's total portfolio as at 30 September 2023. As part of this assessment the Board has considered a severe but plausible downside that reflects the impact of the Company's key risks and an assessment of the Company's ability to meet its liabilities as they fall due assuming a significant reduction in asset values and accompanying currency volatility.

The Board also considered reverse stress testing to identify the reduction in the valuation of liquid investments that would cause the Company to be unable to meet its net liabilities, being primarily the bank loan. The Board is confident that the reduction in asset values implied by the reverse stress test is not plausible even in the current volatile environment. Consequently, the Directors believe that the Company will have sufficient funds to continue to meet its liabilities as they fall due for at least twelve months from the date of approval of the financial statements.

As at the period end, the Company had a £50m unsecured multicurrency loan facility with Bank of Nova Scotia, London Branch, expiring on 15 March 2024. The Company will either extend or replace the facility or repay the outstanding debt when due from portfolio realisations

Accordingly, the Board considers it appropriate to continue to adopt the going concern basis in preparing the accounts.

11. FAIR VALUE HIERARCHY

IFRS 13 'Financial Instruments: Disclosures' require an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the following levels:

Level 1 reflects financial instruments quoted in an active market.

Level 2 reflects financial instruments whose fair value is evidenced by comparison with other observable current market transactions in the same instrument or based on a valuation technique whose variables include only data from observable markets.

Level 3 reflects financial instruments whose fair value is determined in whole or in part using a valuation technique based on assumptions that are not supported by prices from observable market transactions in the same instrument and not based on available observable market data.

The financial assets and liabilities measured at fair value in the statement of financial position are grouped into the fair value hierarchy as follows:

During the period two stocks with a value of £4.6m were transferred from level 1 to level 2 due to the investee company shares trading irregularly. The book cost and fair value was transferred using the 31 March 2023 balances, and all subsequent trades are therefore disclosed in the level 2 column (30 September 2023: one stock with a value of £5.5m was transferred from level 1 to level 2 due to the investee company shares trading irregularly and 31 March 2023: one stock with value of £1.7m was transferred from level 1 to level 2 due to the investee company shares trading irregularly, three stocks with value of £8.0m were transferred from level 2 to level 1 due to the investee companies shares resuming regular trading in the year, one stock with value of £0.8m was transferred from level 3 to level 1 due to the investee company shares becoming listed and one stock transferred from level 1 to level 3 at £nil value due to the investee company shares being suspended from trading. The book cost and fair value was transferred using the 31 March 2022 balances except for the stock that was suspended, the book cost and fair value transferred at the time of suspension).

A reconciliation of fair value measurements in level 3 is set out in the following table:

12. FINANCIAL RISK MANAGEMENT - LEVEL 3 FINANCIAL INSTRUMENTS

Valuation methodology

The objective of using valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date. The Company uses proprietary valuation models, which are compliant with IPEV guidelines and IFRS 13 and which are usually developed from recognised valuation techniques.

The Directors have satisfied themselves as to the methodology used, the discount rates and key assumptions applied, and the valuations. The methodologies used to determine fair value are described in the 2023 Report and Accounts. The level 3 assets comprise of a number of unlisted investments at various stages of development and each has been assessed based on its industry, location and business cycle. The valuation methodologies include net assets, discounted cash flows, cost of recent investment or last funding round, listed peer comparison or peer group multiple, as appropriate. Where applicable, the Directors have considered observable data and events to underpin the valuations. A discount has been applied, where appropriate, to reflect both the unlisted nature of the investments and business risks.

Sensitivity of level 3 financial investments measured at fair value to changes in key assumptions

Level 3 inputs are sensitive to assumptions made when ascertaining fair value. While the Directors believe that the estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different measurements of fair value. The sensitivities shown in the table below give an indication of the effect of applying reasonable and possible alternative assumptions.

In assessing the level of reasonably possible outcomes consideration was also given to the impact on valuations of the increased level of volatility in equity markets since early 2022, principally reflecting concerns about increasing rates of inflation, tightening energy supplies, rising interest rates and the Ukraine war. The impact on the valuations has been varied and largely linked to their relevant sectors and this has been reflected in the level of sensitivities applied.

The following table shows the sensitivity of the fair value of level 3 financial investments to changes in key assumptions.

As at 30 September 2023

As at 30 September 2022

As at 31 March 2023

* Valuation of investment in Petalite

Petalite is an unlisted electric vehicle ("EV") charging infrastructure company based in the UK that has been developing a new technology which enables more reliable and cost effective EV chargers. UEM holds 28.6% of the ordinary shares in Petalite and as at 31 March 2023, carried this investment at £28.6m. Since March 2023, the EV charging sector, as measured by listed stock prices, has weakened and private capital activity has decreased. The Directors consider these events would also apply to Petalite and have accordingly reduced the carrying value of Petalite by an amount equivalent to the average reduction of Petalite's peer group comparable companies, giving a carrying value of £24.9m as at 30 September 2023.

13. RESULTS

The financial information contained in this Half-Yearly Financial Report does not constitute statutory accounts as defined in Sections 434 - 436 of the Companies Act 2006. The financial information for the six months ended 30 September 2023 and 30 September 2022 have neither been audited nor reviewed by the Company's auditors.

The information for the year ended 31 March 2023 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the auditor on those accounts contained no qualification or statement under Section 498(2) or (3) of the Companies Act 2006.

Legal Entity Identifier: 2138005TJMCWR2394O39