16 June 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 decreased by 11.3% in May, underperforming the FTSE All Share total return Index which was up by 0.7% over the month.

Markets in May remained volatile as inflationary pressures weighed on consumers and enterprises globally. Central banks continued to raise rates and to signal further increases. The risk of developed economies slipping into recession has increased. Lockdowns in key Chinese cities continued whilst much of the rest of the World continued to ease restrictions. Markets rallied towards the end of the month on speculation that central banks may not increase rates as fast or as far as expected. Given the current macro headwinds, this optimism may prove to be short lived.

The Federal Reserve raised rates from 0.5% to 1.0% in May and signalled further rises of a similar magnitude would "likely be appropriate at the next couple of meetings". The Bank of England increased rates by 25bps to 1.0%. The Reserve Bank of Australia raised rates for the first time since November 2010 to 0.35%, a 25bps rise. The European Central Bank has signalled that it plans to increase rates in July.

Markets remained volatile although the month end rally resulted in many markets posting a positive return for the month. The S&P 500 and Dow Jones Industrial Average were virtually unchanged for the month, whilst the NASDAQ Composite declined by 2.2%. The FTSE 100 was up 0.8% and the German DAX Index advanced by 2.1%. The ASX 200 in Australia was however down by 3.0% in May and the Eurostoxx declined by 0.4%.

Sterling strengthened against the US Dollar in May by 0.4% but fell 1.1% against the Euro. Emerging markets' currencies were also mixed with the Indian Rupee weaker by 1.9% against Sterling despite a surprise rate increase. The Brazilian Real strengthened by 4.1% against Sterling after a 100bps increase in the SELIC rate.

The Brent Crude oil price continued to rise, up 12.3% in May, on the back of ongoing concerns around energy supplies due to the geopolitical issues with Russia, whilst industrial metal prices such as copper fell by 2.3% during the month, prompted by slower economic growth expectations and the continuing Covid-19 lockdowns in China. The price of gold declined by 3.1% to 1,837.35/oz.

PORTFOLIO

There was one change to the top ten constituents in May with Panoramic Resources replacing Orbital. Panoramic Resources is a Western Australian base metal mining company, currently focused on extracting nickel sulphide. UIL's stake in Panoramic was purchased off-market from Zeta Resources.

Somers' valuation declined by 8.2%, primarily due to a 7.7% decline in Resimac's share price, its largest holding. Zeta's NAV declined by 9.3% during the month with its share price down by 10.5%. UEM's NAV increased by 0.6% but its share price declined by 0.9%. Resolute Mining's share price declined by 21.4%, Assetco's share price was down by 30.3% and Starpharma's share price was down 14.8% for the month of May.

The majority shareholders in Somers, including UIL have made an offer to acquire all of Somers' issued shares at a value of USD 21.00 per share. The consideration would be payable in the form of a two-year loan note to be listed on the Bermuda Stock Exchange with an annual interest rate of 6.0%.

Purchases during the month for the portfolio totalled £15.9m and realisations amounted to £16.7m.

DEBT

The bank debt positions were unchanged in underlying foreign currency terms in May, though foreign exchange movements resulted in the overall liability increasing marginally to £51.9m from £51.8m. The facility was drawn as AUD 34.1m, USD 29.7m and EUR 10.6m.

Foreign exchange hedge positions as at the end of May against Sterling were unchanged at AUD 64.6m, CAD 61.8m, USD 61.3m and EUR 9.0m. The Australian Dollar hedge against US Dollar was unchanged at AUD 10.0m. 

OTHER

UIL's ordinary share price decreased by 9.7% to 215.00p. The discount to NAV narrowed slightly to 32.4% as at 31 May 2022.

The share price of the 2022 ZDP shares increased by 0.3% and the 2024 ZDP shares were unchanged. The share prices of the 2026 and 2028 ZDP shares decreased by 0.4% and 0.5%, respectively.

UIL declared a third quarterly interim dividend of 2.00p per ordinary share in respect of the year ending 30 June 2022, which will be paid on 30 June 2022 to shareholders on the register on 6 June 2022.

Name of contact and telephone number for enquiries:

Charles Jillings

ICM Investment Management Limited                                 +44(0)1372 271486