Util Regulatory News (UTL)

18 October 2022

UIL LIMITED

(LEI Number: 213800CTZ7TEIE7YM468)

Publication of monthly factsheet

The latest monthly factsheet for UIL Limited ("UIL" or the "Company") will shortly be available through the Company's website at:

https://www.uil.limited/investor-relations/factsheet-archive

Monthly commentary

PERFORMANCE

UIL's NAV total return was down 8.6% for the month, underperforming the FTSE All Share total return Index which declined by 5.9% over the same period.

Global markets in September were gloomy with the majority of markets witnessing losses. Fighting inflation became paramount on most central banks' agendas, irrespective of the implication for capital markets and was clearly demonstrated by the US Federal Reserve who raised interest rates for a third consecutive 75bps increase in September to 3.25%. The European Central Bank and the UK Central Bank also increased rates, with deposit rates now at 0.75% and 2.25% respectively, as both grapple with inflationary levels estimated at near 10.0%. The shutdown of Nord Steam 1 (natural gas pipeline from Russia to Germany) in September also failed to help calm inflationary nerves, raising concerns over energy supplies as Europe starts to head into the winter. Subsequently the S&P Index was down

9.3%, the Eurostoxx down 5.7% and UK FTSE 100 down 5.4%. The Australian ASX 200 was down 7.3%.

The UK market was further pressured by a questionable 'mini budget', announced by the newly elected UK Prime Minister Liz Truss, which failed to ease market concerns over the rapidly widening current account deficit. Subsequently the Bank of England had to step in temporarily buying long dated gilts, enabling Sterling to recover from an all-time low against the US Dollar.

The Euro was also sent to a 20 year low against the Dollar as the rising US interest rates continue to fuel its strength. Sterling did though manage to appreciate 2.3% against the Australian Dollar.

Commodities were not spared from the market tumble as the deteriorating economic outlook superseded supply concerns. Brent oil fell 8.8% in the month of September, with copper declining 3.0% and gold falling 2.9% succumbing to the pressure of a higher US Dollar and rising yields, ending the month at USD 1,660.61/oz. 

PORTFOLIO

There was one change to the top ten constituents of the UIL portfolio in September, with Carebook Technologies reclaiming its position from Starpharma.

Overall performance of the top ten, in line with the markets, was challenging. Somers was down 4.4% and UEM's share price was down 4.5%, although UEM's NAV decreased 4.4% outperforming the MSCI Emerging Market total return Index which was down 7.8% in Sterling terms for the period.

Resimac was down 22.9% as increasing interest rates continue to put pressure on future housing origination volumes as well as the existing loan book. UIL's resources investments were also pressured by the volatile commodity prices being witnessed with Zeta down 5.1%, Resolute down 26.3% and Panoramic Resources down 15.9%.

Purchases during the month for the portfolio totalled £5.5m and realisations amounted to £5.3m.

DEBT

In September the Australian Dollar and Euro bank debt positions remained unchanged at AUD 24.8m and EUR 10.4m respectively whilst the US Dollar debt position was reduced to USD 13.1m from USD 26.3m and GBP 12.0m was drawn. The total bank debt liability in Sterling terms increased from £46.3m at the end of August to £47.2m as at 30 September 2022.

For September, the Euro foreign exchange hedge position was unchanged at EUR 9.0m, whilst the Australian Dollar position reduced by 12.9% to AUD 45.4m and the Canadian Dollar position reduced by 9.1% to CAD 25.0m. A new position during the month was taken in South African Rand amounting to ZAR 45.0m

ZDP SHARES

The share price of the 2022 ZDP shares increased marginally by 0.3% to 144.50p whilst the share prices of the 2024, 2026 and 2028 ZDP shares all reduced. The 2024 ZDP shares reduced to 123.00p, down 0.8%, the 2026 ZDP shares to 110.50p down 3.1% and the 2026 ZDP shares to 90.00p down 6.3%.

UIL is finalising arrangements for the redemption of the 2022 ZDP shares on 31 October 2022. On the redemption date, the capital repayment amount of 146.99p per share will be paid to holders whose names appear on the register as at the close of business on 27 October 2022.

OTHER

UIL's ordinary share price decreased by 3.6% to 188.50p in September whilst the discount to NAV narrowed to 27.1%.

UIL's fourth quarterly interim dividend of 2.00p per ordinary share in respect of the year ended 30 June 2022, was paid on 30 September 2022 to shareholders on the register on 2 September 2022.

Name of contact and telephone number for enquiries:

Charles Jillings

ICM Investment Management Limited +44(0)1372 271486