14 June 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 declined by 6.5% in May, underperforming the FTSE All Share total return Index which was down by 4.6% over the same period.

Equity markets were mixed in May, with concerns over the debt ceiling and the prospect of default dominating US headlines, though this was ultimately averted by legislation just after month end. The Federal Bank approved its tenth consecutive interest rate increase, with the European Central Bank also raising rates in the month. The S&P 500 Index was up just 0.2% over the month, while in Europe the Eurostoxx fell 3.2%. Despite weaker inflation readings, the Reserve Bank of Australia surprised economists by increasing its rate as well, with the S&P ASX 200 Index declining 3.0% over the month.

In Emerging Markets, the reopening in China looks to have stalled, with residential sales dropping and factory activity unexpectedly contracting. Hong Kong's Hang Seng Index fell 8.3% whilst the Shanghai Composite was down 3.6% in May. Brazil continued to be a highlight, posting 4.0% GDP growth in Q1 and inflation at just 3.9%, bolstering the Bovespa Index, up 3.7%. Inflation in India also fell to an 18-month low with CPI at 4.7% for April, with the India Sensex firming 2.5% in May.

In the currency markets, the US Dollar rallied, with the DXY Dollar Index strengthening by 2.6% and USD up 1.4% against Sterling over the month. The Australian Dollar weakened by 0.7% versus Sterling. In EM the Brazilian Real and the Chinese Renminbi declined 0.9% and 1.1% respectively against GBP.

Commodities weakened in May, with gold and silver prices falling by 1.4% and 6.5% respectively. Industrial metals were notably weak, with copper and nickel prices down 6.0% and 15.5% respectively, driven by concerns over anaemic global growth. This also impacted the oil markets, with the Brent crude oil price falling 8.6% over the month to levels some 30% lower than the peak a year ago.

PORTFOLIO

There was one change to the top ten constituents of the UIL portfolio in May, with Carebook Technologies replacing Panoramic Resources on relative performance. Carebook is listed on the Toronto Stock Venture Exchange and provides a customer-centric digital health platform. Carebook reported revenue growth of 5.0% and a narrowing adjusted EBITDA loss at CAD 0.5m in Q1, and annual recurring revenue growth of 37.0% as at 31 March 2023.

Somers' valuation declined by 4.5% in May, predominantly reflecting the Resimac share price which fell by 5.3% due to ongoing concerns over net interest margins, compounded by weakness in the Australian Dollar. Resimac is also a top ten direct shareholding for UIL. In the month Waverton, an investee company in Somers, published robust results in its 2022 annual report, maintaining strong inflows with AUM at £9.1bn as at 31 December 2022.

Zeta Resources' share price fell 6.7% over the month, in line with its reduction in net tangible assets, as its investee companies saw widespread declines in share prices reflecting the wider commodity markets. Copper Mountain Mining's share price fell 14.1%, Panoramic Resources dropped 30.0% and Alliance Nickel declined by 3.0%. In the period Zeta's unlisted shareholding in Alliance Mining Commodities ("AMC") was exchanged for an initial AUD 2.6m cash payment and a future revenue stream from AMC's Koumbia bauxite project in Guinea.

The Market Herald's share price increased by 25.0% following the announcement that The Market Herald had successfully refinanced a vendor loan note with Adevinta Oak Holdings to Commonwealth Bank of Australia for its acquisition of Gumtree Australia. UEM's NAV total return increased by 1.9% in May though its share price declined by 0.5% as its discount widened. Allectus Capital's carrying valuation was reduced by 9.1% over the month.

DEBT

Bank borrowings were unchanged over the month at £37.5m drawn in Sterling. There were no foreign exchange hedges in place during the month and as at the end of May 2023.

ZDP SHARES

The share price of the 2024 ZDP shares was unchanged over the month at 123.50p, the 2026 ZDP shares appreciated by 0.4% to 114.50p, while the 2028 ZDP shares declined by 3.6% to 94.00p.

OTHER

UIL's ordinary share price increased by 2.1% to 143.50p in May whilst the discount to NAV narrowed to 26.6% from 32.8%. 

On 22 May 2023, UIL declared a third quarterly interim dividend of 2.00p per ordinary share in respect of the year ending 30 June 2023, which will be paid on 26 June 2023 to shareholders on the register on 2 June 2023.

Name of contact and telephone number for enquiries:

Charles Jillings

ICM Investment Management Limited                                 +44(0)1372 271486