Util Regulatory News (UTL)

7 March 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 12.9% in February, underperforming the FTSE All Share total return Index which was up by 1.5% over the month.

Unlike the positive "risk-on" market rally witnessed in January, fuelled by falling inflation data and expectations that key central banks are nearing the end of their aggressive interest rate rising cycle, February saw the majority of markets experience weakness and becoming "risk-off". This swing in markets was driven by stronger than expected economic data, such as indications of a continued tight labour market from the US, indicating that a recession may not be on the horizon and subsequently inflationary pressures could persist for longer, resulting in the reduction of interest rate cuts to come later and possibly at a slower pace than anticipated. The US Federal Reserve Bank's Chairman Jay Powell also indicated that further rate increases are likely, especially if strong macro data continues to persist. During February, the Federal Bank increased rates by 25bps to 4.75%, whilst both the Bank of England and the European Central Bank increased by 50bps raising interest rates to 4.0% and 2.5% respectively. The S&P Index was therefore down for the month by 2.6%. The Eurostoxx Index however performed better, up by 1.8%, along with other European Indices and continues to be one of the best performing equity markets year to date due to a more positive outlook.

Emerging markets were also weak. The Hang Seng Index declined in February by 9.4%, despite the expectation that the re-opening of China post Covid-19 might lead to a rapid consumption boom due to the high amount of savings built up during lock down. Continued geopolitical tension led to some profit taking. The Chinese A-share market weathered the geopolitical pressures better as the Shanghai Composite was essentially flat for February, up marginally by 0.7%. The Brazilian Bovespa declined by 7.5% in February, due to deterioration of investors' sentiment in the face of uncertain economic policy.

Sterling was mixed, strengthening 2.8% against the Australian Dollar and 0.7% against the Euro, but weakened 1.7% against the US Dollar, and 1.5% against the Hong Kong Dollar. Notably the US Dollar had its first positive month since September 2022, benefitting from the expectation of an extended US monetary policy tightening cycle. Commodities also saw weakness, with gold down by 5.3% and copper down by 3.0%. The Brent crude oil price weakened slightly, down by 0.7% in February.

PORTFOLIO

There was one change to the top ten constituents of the UIL portfolio in February. Allectus Quantum Holdings replaced Panoramic Resources due to share price weakness and a reduction in position. Allectus Quantum is an investment holding company investing in quantum technology.

Somers' valuation was down 11.1% in February, partly reflecting the weakness of Resimac's share price that was down by 17.2% for the month. Resimac's share price was down following its half year results, as management guided towards lower margins in the second half of 2023 and expected increased competition from major banks and higher funding rates. AssetCo's share price was also down 9.5% after reporting a loss for the full year 2022.

DEBT

Bank borrowings of £50.0m drawn in Sterling remained unchanged over the month. There were no foreign exchange hedges in place during the month.

ZDP SHARES

The share price of the 2028 ZDP shares increased by 5.4% to 98.00p whilst the 2024 ZDP shares remined flat for the period at 123.50p. The 2026 ZDP shares declined marginally by 0.4% to 114.00p. The yields to redemption on the ZDP shares at the end of February were 7.0% for the 2024 ZDP shares, 8.1% for the 2026 ZDP shares and 8.1% for the 2028 ZDP shares.

OTHER

UIL's ordinary share price decreased by 11.7% to 143.00p in February whilst the discount to NAV narrowed slightly to 38.1% from 38.9%.

A second quarterly interim dividend of 2.00p per ordinary share in respect of the year ending 30 June 2023 was declared, which will be paid on 31 March 2023 to shareholders on the register on 3 March 2023.

Name of contact and telephone number for enquiries:

Charles Jillings

ICM Investment Management Limited +44(0)1372 271486