Util Regulatory News (UTL)

13 November 2023

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 2.6% in October, outperforming the FTSE All Share total return Index which was down 4.1% over the month.

The majority of markets struggled in October as the market continued to be concerned about the US Federal Reserve's "higher for longer" stance given the continued plethora of strong inflationary data being reported and continued robustness of the US economy. US GDP growth in 3Q23 was 4.9%, higher than the expected 4.3% GDP growth and more than double the real GDP growth of 2.1% reported in 2Q23. Inflationary pressures continued with September's Consumer Price Index reported at 3.7%, no change from the previous month and October's Purchasing Managers Index remaining elevated above 50 (reflecting expansionary territory) at 51.0. This resulted in 10-year US Treasury bonds reaching their highest level since July 2007, a 16 year high, rising over 5.0%. The S&P 500 Index fell by 2.2% in the month.

The sudden renewed conflict in the Middle East further fuelled the downward pressure as risk premiums increased. The Eurostoxx Index was down 2.7% for the month, despite the European Central Bank holding interest rates flat after ten consecutive increases, and inflationary pressures reducing as eurozone inflation fell to 2.9%, the lowest level in more than two years. In the UK, the market was also weak with the FTSE 100 down 3.8% as consumer confidence fell and the Bank of England held interest rates at its highest level for 15 years, at 5.25%. The Consumer Price Index remained unchanged at 6.7%, raising questions marks if the UK may have to face a longer inflationary battle.

The "higher for longer" pressure weighed on emerging markets. In China, the Hong Kong Hang Seng Index and Chinese Shanghai Composite Index were both down by 3.9% and 2.9%, respectively, despite the more positive macro data reported as China's 3Q23 GDP growth of 4.9% versus consensus expectation of 4.5% was a surprise. The Vietnamese Ho Chi Minh Index was down by 10.9%, hampered by shaken retail sentiment, whilst the Thai Set Index and Philippines PSEi Index were down by 6.1% and 5.5% respectively. Latin American markets in October were also bruised, with the Chilean IPSA Index down by 7.3% (also partly affected by the smaller than expected interest rate cut) and the Brazilian Bovespa Index was also down by 2.9% despite yet another Selic rate cut of 50 basis points taking the key interest rate to 12.25%.

During October, the US Dollar continued to remain strong against most currencies with the DXY Dollar Index remaining flat over the month. Sterling was mixed, down 0.6% against the US Dollar and 0.4% against the Euro.

In the commodities markets, most industrial metals continued to see weakness in October with concerns of weak global activity, copper and nickel fell 2.4% and 3.1% respectively. Precious metals increased over the month, as investors once again looked for safe havens on the back of renewed conflict in the Middle East. Gold was up by 7.3% and Silver 3.0%. Oil prices fell in October by 8.3%, despite the sharp escalation in geopolitical risk in the Middle East that caused prices to increase in the early part of October, as concerns around slower economic growth took hold.

PORTFOLIO

There was one change to the top ten constituents of the UIL portfolio in October. Carebook Technologies ("Carebook") replaced Littlepay. Carebook provides an end-to-end digital health platform to companies' employers, pharmacies, insurance providers, businesses, and individuals. The platform currently connects around 3.5 million members to a host of healthcare solutions and providers.

Over the month of October, Zeta's share price was up by 3.3%, reflecting an increase in net tangible assets of 2.1%. Zeta continued its buyback program during October and bought back 13.8m shares during the month.

Allectus Capital's value was down by 9.7%, on the back of a downward revaluation of one its investments whilst UEM's share price was down by 5.9%. UEM's NAV total return was down by 4.7% underperforming the MSCI EM total return Index which was down 3.4% in Sterling terms in the month. UEM's discount to NAV disappointingly widened to 16.2% from 15.1% as at 30 September 2023.

Additional movements in the top ten were The Market Herald, whose share price fell by 7.0% for the month, whilst Resimac's share price was down 0.5%. Somers' valuation was down 0.3% in October.

DEBT

Bank and other debt decreased from £27.1m to £20.0m in the month, as UIL continued to pay down part of its senior secured multi-currency facility as agreed with the Bank of Nova Scotia. Debt was drawn in Sterling at £20.0m. There were no foreign exchange hedges as at the end of October 2023.

ZDP SHARES

The share price of the 2024 ZDP shares increased by 2.0% over the month at 125.50p, whilst the share price of the 2026 and 2028 ZDP shares decreased by 2.2% at 109.50p and 3.0% at 88.00p, respectively.

OTHER

UIL's ordinary share price decreased by 1.6% to 120.00p in October and the discount to NAV narrowed to 37.7% from 38.3%.

Name of contact and telephone number for enquiries:

Charles Jillings

ICM Investment Management Limited +44(0)1372 271486