Util Regulatory News (UTL)

14 November 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 10.6% for the month, underperforming the FTSE All Share total return Index which was up by 3.1% over the same period. The 2022 ZDP shares were redeemed at the end of the month.

There was little change in the global outlook, with investors still focussed on high inflation, rising interest rates, the continuing impact of the war in Ukraine and China's zero-Covid policy. Equity markets were in the most part positive October as a whole, with the US earnings season providing a catalyst for a recovery in valuations towards the end of the month. The S&P 500 advanced by 8.0% in October and the Eurostoxx Index was up by 9.0%. In Australia, the ASX 200 rose by 6.0% in October. However, there was weakness in China over policy concerns, with Hong Kong's Hang Seng Index falling by a further 14.7% in October, having fallen 13.7% in September.

Central banks continue to raise interest rates. The ECB raised rates by 75ps to 2.0% at the end of October, with the Federal Reserve and Bank of England raising rates by 75bps at the beginning of November to 4.0% and 3.0% respectively. The Reserve Bank of Australia's 25bps increase in October was lower than market expectations. Market volatility was driven by speculation about when and at what level interest rates would peak.

President Xi solidified his power at the National Congress of the Chinese Communist Party and commenced his historic third term. Sterling recovered some of September's losses after Liz Truss was replaced as UK Prime Minister. In Brazil, former President Lula da Silva was returned to power.

The US Dollar continued to strengthen against many currencies, although Sterling did appreciate against the US Dollar by 3.1%. Sterling also gained by 3.7% against the Australian Dollar and 2.2% against the Euro in October.

PORTFOLIO

There was one change to the top ten constituents of the UIL portfolio in October, UIL sold its holdings in ICM Mobility Group and Snapper Services (UK) to Somers for cash of £22.3m and Somers' holdings in three listed companies, including West Hamilton Holdings. West Hamilton is a property company with investments in Bermuda. The cash proceeds were used to redeem the 2022 ZDP shares.

Overall performance of the top ten was disappointing. Somers' valuation was down by 4.2% in October and UEM's share price was down 3.8%, despite UEM's NAV increasing by 0.7%. This was a significant outperformance against the MSCI Emerging Market total return Index which was down 6.0% in Sterling terms for the month.

Resimac's share price was down 8.2% as the near-term outlook for the Australian economy and the housing market in particular remains uncertain. UIL's resources investments continue to be pressured by volatile commodity prices with Panoramic Resources down 24.3% and Resolute Mining down 7.1%. Zeta's share price was however unchanged. The Market Herald gained 5.0% and was the only stock in the top ten to advance during the month.

DEBT

During October, the bank borrowings in Australian Dollar, Euro and US Dollar were repaid and the facility fully redrawn as a Sterling loan totalling £50.0m.

The Euro and South African Rand foreign exchange hedges were closed out in full during October, and the Australian Dollar and Canadian Dollar hedges were reduced by 42.7% and 30.0% respectively, ending the month at AUD 26.0m and CAD 17.5m.

ZDP SHARES

The 2022 ZDP shares were redeemed in full at 146.99p per ZDP share, resulting in a total repayment to shareholders of £52.3m. Three classes of ZDP shares remain, expiring on 31 October in 2024, 2026 and 2028.

The share prices of the 2024, 2026 and 2028 ZDP shares all declined. The 2024 ZDP shares reduced to 117.50p, down 4.5%, the 2026 ZDP shares were down 3.2% to 107.00p and the 2028 ZDP shares were down 4.4% to 86.00p. The yields to redemption on the ZDP shares at the end of October were 8.5% for the 2024 ZDP shares, 9.1% for the 2026 ZDP shares and 10.1% for the 2028 ZDP shares.

OTHER

UIL's ordinary share price decreased by 13.3% to 163.50p in October whilst the discount to NAV widened to 29.3%.

Name of contact and telephone number for enquiries:

Charles Jillings

ICM Investment Management Limited +44(0)1372 271486