REG - UIL Limited UIL Finance Ltd Utilico Limited 2014 UIL Finance - UTLG Utilico Finance (D) - Annual Financial Report
08/10/2024 16:30
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RNS Number : 4147H UIL Limited 08 October 2024
Date: 8 October 2024
Contact: Charles Jillings
ICM Investment
Management Limited
01372 271 486
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
UIL LIMITED
ANNUAL FINANCIAL REPORT
for the year to 30 June 2024
UIL Limited ("UIL" or the "Company") today announced its audited financial
results for the year to 30 June 2024.
FINANCIAL HIGHLIGHTS
· Revenue earnings per ordinary share of 10.15p (2023: 6.68p)
· Dividends per ordinary share of 8.00p (2023: 8.00p)
· Net asset value ("NAV") total return per ordinary share* of -15.3%
(2023: -20.6%)
· Share price total return per ordinary share* of -24.8% (2023: -18.5%)
· NAV discount as at 30 June 2024* of 36.9% (2023: 27.5%)
· Gearing* 73.6% (2023: 83.5%)
*See Alternate Performance Measures on pages 104 to 106 of the Report and
Accounts
Extract from the Chairman Statement:
"FUTURE OF THE COMPANY
While we have a number of potentially exciting investments within the
portfolio, such as the merged Waverton Investment Management Group
("Waverton") and London & Capital Group ("London & Capital"), and
Diraq Pty Ltd ("Diraq"), our quantum computing investment, we recognise that
recent poor investment performance has resulted in UIL not having the scale to
build up a sufficiently diversified portfolio. In addition, the liquidity of
the ordinary shares on the market, given the significant major shareholder
ownership, is problematic while our general investment mandate does not
provide the focused offering which the investor base in the UK now prefers.
Given this, the logical conclusion is to work towards taking the Company
private and cancelling its stock exchange listings following the redemption of
the 2028 ZDP shares.
The Investment Managers and majority shareholder both recognise this and have
combined to put forward proposals, which the Board supports, to manage UIL
over the next four years with a view to realising sufficient investments to
enable the redemption of the ZDP shares and provide an opportunity for the UIL
minority shareholders to exit.
To facilitate this, it is the intention to simplify the platform structures.
This is likely to result in merging the Somers and Zeta investment vehicles
into UIL, thereby consolidating the investments of Somers and Zeta with those
of UIL. Such proposals will increase UIL's asset base, although the external
minority interests in UIL will decrease as a percentage of the shares in
issue, owing to the UIL majority shareholder's current shareholding in Somers
and Zeta. It is proposed that these consolidations will be implemented at NAV
to NAV.
It is UIL's current intention, in the absence of unforeseen circumstances, to
maintain the annual dividend at 8.00p, payable quarterly.
Furthermore, it is UIL's aim to provide each year, through a cost effective
mechanism, the opportunity for minority shareholders to exit a significant
proportion of their shares at a discount to NAV of approximately 20%. Starting
in the second half of 2025, this will provide liquidity for minority
shareholders before the 2028 privatisation and, in addition, UIL plans to
continue to buy back ordinary shares and ZDP shares in the market. It is hoped
that these steps will lead to improved liquidity in UIL's shares, provide
improved choice for ordinary shareholders to exit, whilst maintaining an
income yield to 2028, for those shareholders who prefer regular income. It
also provides improved asset cover for the outstanding ZDP shareholders.
As a first step, UIL and General Provincial Life Pension Fund Limited who
together hold 95.0% of the outstanding share capital in Zeta, have formally
notified Zeta on 12 July 2024 that they are considering acquiring the shares
in Zeta that they do not currently own, by compulsory acquisition in
accordance with s103 of the Companies Act 1981 of Bermuda. It is contemplated
that such offer would be at or near Zeta's NAV at the time the offer is made."
The Report & Accounts for the year ended 30 June 2024 will be posted to
shareholders in mid October 2024. A copy will shortly be available to view and
download from the Company's website at www.uil.limited
(http://www.uil.limited) and the National Storage Mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) . Please click on the
following link to view the
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GROUP PERFORMANCE SUMMARY
30 June 30 June % change
2024 2023 2024/23
NAV total return per ordinary share1 (for the year) (%) (15.3) (20.6) n/a
Share price total return per ordinary share1 (for the year) (%) (24.8) (18.5) n/a
Annual compound NAV total return1 (since inception2) (%) 6.5 7.8 n/a
NAV per ordinary share (pence) 164.04 199.87 (17.9)
Ordinary share price (pence) 103.50 145.00 (28.6)
Discount1 (%) 36.9 27.5 n/a
Returns and dividends (pence)
Revenue return per ordinary share 10.15 6.68 51.9
Capital return per ordinary share (39.99) (59.70) 33.0
Total return per ordinary share (29.84) (53.02) 43.7
Dividends per ordinary share 8.003 8.00 0.0
FTSE All-Share total return Index 9,729 8,611 13.0
Equity holders' funds (£m)
Gross assets1 240.2 304.9 (21.2)
Loans 2.9 42.7 (93.2)
ZDP shares 99.8 94.6 5.5
Equity holders' funds 137.5 167.6 (18.0)
Revenue account (£m)
Income 12.2 10.2 19.6
Costs (management and other expenses) 1.5 1.7 (11.8)
Finance costs 2.2 2.9 (24.1)
Net income 8.5 5.6 51.8
Financial ratios of the Group (%)
Ongoing charges figure1 2.8 2.8 n/a
Gearing1 73.6 83.5 n/a
(1) See Alternate Performance Measures on pages 104 to 106 of the Report and
Accounts
(2) All performance data relating to periods prior to 20 June 2007 are in
respect of Utilico Investment Trust plc, UIL's predecessor.
(3) The third and fourth quarterly dividend of 2.00p has not been included as
a liability in the accounts
CHAIRMAN'S STATEMENT
It has been another challenging year for UIL with its focus on smaller, value
stocks. Investment performance has been disappointing with UIL's NAV total
return down 15.3% for the year to 30 June 2024. UIL's annual compound NAV
total return since inception in 2003 is 6.5% per annum.
Over the twelve months to 30 June 2024 inflation has reduced significantly in
most countries and markets have moved higher as investors have gained
confidence in the economic outlook and the reduction in interest rates for
most markets. However, the Australian market fell 4.8% over the year which,
given UIL's 47.6% weighting to Australia and New Zealand, has been a headwind.
A small positive is the reduction in UIL's net debt to £101.2m from £139.9m
as at 30 June 2023, which has seen UIL's gearing decline. As at 30 June 2024
UIL's gearing stood at 73.6% (30 June 2023: 83.5%).
Since inception in August 2003, UIL has distributed £99.7m in dividends,
invested £36.9m in ordinary share buybacks and made net gains of £184.0m for
a total return of 276.3% (adjusted for the exercise of warrants and
convertibles).
The Board is disappointed to see the ordinary shares discount to NAV widen to
36.9% at the end of the year (30 June 2023: 27.5%). This is partially
explained by the focus of applying cash resources to the repayment of the
outstanding bank loans and planning for the 2024 ZDP shares redemption.
Consequently, no buybacks were undertaken in the year ended 30 June 2024.
Since the year ended 30 June 2024, the Company has bought back a modest amount
of ZDP shares and ordinary shares.
UIL's 2024, 2026 and 2028 ZDP shares are trading at significantly higher gross
redemption yields compared to those as at 30 June 2023, being 12.4%, 10.9% and
10.7% respectively. As at 30 June 2024, UIL's average blended rate of funding
costs had decreased from 5.7% to 5.2%, mainly as a result of the lower bank
borrowings.
Total revenue income for the year to 30 June 2024 was £12.2m, an increase of
19.6% from £10.2m in the prior year, a good outcome given the reduced level
of investments. Revenue finance costs decreased significantly in the year to
30 June 2024 to £2.2m, down 24.1% from the prior year at £2.9m. This
resulted in revenue return earnings per share ("EPS") of 10.15p, representing
a increase of 51.9% from 30 June 2023 of 6.68p.
The Board declared unchanged third and fourth quarterly dividends of 2.00p per
ordinary share which maintains the total for the year at 8.00p, and a yield on
the closing ordinary share price of 7.7%. It is UIL's current intention to
maintain the annual dividend at 8.00p, payable quarterly, in the absence of
unforeseen circumstances.
The revenue reserves carried forward increased to £15.2m as at 30 June 2024
from £11.7m as at 30 June 2023, representing revenue reserves per share of
18.15p (30 June 2023: 14.00p).
The capital return loss for the year ended 30 June 2024 was £33.5m.
GROUP DEBT REDUCTION
There have been significant realisations in UIL's platform companies Somers
Limited ("Somers") and Zeta Resources Limited ("Zeta") helping UIL to repay
its Bank of Nova Scotia debt facility in full. In addition, Somers paid
dividends to its shareholders, of which UIL received £9.5m, while Zeta
offered to buy back shares on the market from all its shareholders and UIL
received £4.7m from its tendered shares.
Within UIL's portfolio there were realisations of £52.4m, of which sales of
Utilico Emerging Markets Trust plc ("UEM") (£19.8m), Permanent Investment
Limited (holder of 16.7% of Littlepay Mobility Limited ("Littlepay"))
(£4.7m), Somers (£4.3m) and West Hamilton Holdings Limited's ("West
Hamilton") capital distribution of £8.4m were the largest.
ZDP REDEMPTION
The redemption of the 2024 ZDP shares will take place on 31 October 2024.
GLOBAL EVENTS
Several themes continue to dominate global events: heightened geopolitical
tensions, elections, China's emerging dominance, the outlook for inflation and
interest rates, climate change, technology and Artificial Intelligence ("AI").
Most of these are well understood, but thinking evolves and opportunities
emerge.
The emergence of a strong China focused on moving up the value chain is being
achieved by encouraging innovation and technology, and seeking resilience for
their economy and equality for their citizens. The Chinese government has
actively supported businesses which achieve its aims resulting in China
dominating a number of world class research and industrial manufacturing
processes from solar to electric vehicles ("EV"). China has shifted from being
the world's supplier of high volume lower technology products (shoes to tennis
rackets) to lower volume higher technology products (solar, wind and EV's)
investing to meet not only its own but the world's demands.
The challenge for most economies is the inability to respond at scale. That
has led to rising protectionism such as Canada's imposition of 100% tariffs on
EVs and Chile's imposition of steel tariffs. China wants to build its middle
class wealth while many of the world's countries want to protect their middle
class.
We fully expect the ongoing friction between the USA and China to continue to
deepen and it is now difficult to see how this reverses direction. Given the
USA and China are the two largest economies globally this must pose
significant risks at some point in the future, especially for technology
businesses on each side of the Pacific Ocean.
The wars in Ukraine and Gaza have both gone on longer than expected and today
there continues to be no clear way forward. Over time a solution will emerge,
but the risk of a wrong decision leading to escalation remains high.
Inflation has moved markedly lower for most economies over the year in the
face of high interest rates and central banks are now starting to cut rates.
This will no doubt be beneficial to markets as risk assets are priced higher.
Despite the high interest rate environment labour markets have remained
remarkably strong. We believe that a number of factors are driving this such
as nearshoring, green investments and the emerging digital economy which
enable companies such as Airbnb and others to utilise underused economic
assets to generate returns.
An ever increasing factor for investors is climate change. It has clearly had
devastating impacts on a number of communities from wildfires in Canada to
floods in Germany. We are seeing whole ecosystems being impacted by prolonged
droughts and record temperatures. As investors we need to prepare for these
outcomes to continue across our portfolios.
There is a very perceptible shift to embrace AI by most businesses and as with
most technological developments, those without legacy businesses benefit the
most, but eventually all businesses will need to adapt or risk failure. This
has been our experience in the fintech sector. UIL has a number of investments
with significant exposure to AI, blockchain and quantum computing.
BOARD
As noted in the half yearly financial report, Peter Burrows stepped down as
Chairman of the Board on 31 March 2024 and I was appointed Chairman. Peter
Burrows has been an excellent Chairman since his appointment in 2015 and his
chairmanship during this challenging time was exemplary. We thank him warmly
for his contribution.
Peter Durhager joined the Board at the end of March and has agreed to chair
the Audit & Risk Committee. Peter brings significant operational
experience to UIL which will be invaluable to the Board.
FUTURE OF THE COMPANY
While we have a number of potentially exciting investments within the
portfolio, such as the merged Waverton Investment Management Group
("Waverton") and London & Capital Group ("London & Capital"), and
Diraq Pty Ltd ("Diraq"), our quantum computing investment, we recognise that
recent poor investment performance has resulted in UIL not having the scale to
build up a sufficiently diversified portfolio. In addition, the liquidity of
the ordinary shares on the market, given the significant major shareholder
ownership, is problematic while our general investment mandate does not
provide the focused offering which the investor base in the UK now prefers.
Given this, the logical conclusion is to work towards taking the Company
private and cancelling its stock exchange listings following the redemption of
the 2028 ZDP shares.
The Investment Managers and majority shareholder both recognise this and have
combined to put forward proposals, which the Board supports, to manage UIL
over the next four years with a view to realising sufficient investments to
enable the redemption of the ZDP shares and provide an opportunity for the UIL
minority shareholders to exit.
To facilitate this, it is the intention to simplify the platform structures.
This is likely to result in merging the Somers and Zeta investment vehicles
into UIL, thereby consolidating the investments of Somers and Zeta with those
of UIL. Such proposals will increase UIL's asset base, although the external
minority interests in UIL will decrease as a percentage of the shares in
issue, owing to the UIL majority shareholder's current shareholding in Somers
and Zeta. It is proposed that these consolidations will be implemented at NAV
to NAV.
As referred to above, it is UIL's current intention, in the absence of
unforeseen circumstances, to maintain the annual dividend at 8.00p, payable
quarterly.
Furthermore, it is UIL's aim to provide each year, through a cost effective
mechanism, the opportunity for minority shareholders to exit a significant
proportion of their shares at a discount to NAV of approximately 20%. Starting
in the second half of 2025, this will provide liquidity for minority
shareholders before the 2028 privatisation and, in addition, UIL plans to
continue to buy back ordinary shares and ZDP shares in the market. It is hoped
that these steps will lead to improved liquidity in UIL's shares, provide
improved choice for ordinary shareholders to exit, whilst maintaining an
income yield to 2028, for those shareholders who prefer regular income. It
also provides improved asset cover for the outstanding ZDP shareholders.
As a first step, UIL and General Provincial Life Pension Fund Limited who
together hold 95.0% of the outstanding share capital in Zeta, have formally
notified Zeta on 12 July 2024 that they are considering acquiring the shares
in Zeta that they do not currently own, by compulsory acquisition in
accordance with s103 of the Companies Act 1981 of Bermuda. It is contemplated
that such offer would be at or near Zeta's NAV at the time the offer is made.
OUTLOOK
The outlook for worldwide economies increasingly rests with global leadership,
both political and central bankers. The polarising of views to the left and
right of the political spectrum is driving fractures through nations as
leaders seek to navigate through escalating challenges. The rising pressure to
meet social expectations and the impact of climate change, natural disasters
and conflict will be difficult to navigate. Clearly the US election is a
pivotal moment as are the decisions by the US central bank. We remain focused
on reducing risk and helping investee companies through these challenges to
emerge stronger
Stuart Bridges
Chairman
8 October 2024
INVESTMENT MANAGERS' REPORT
The need to repay UIL's bank debt of £37.5m during the year to 30 June 2024
created continued pressure on substantial portfolio realisations in difficult
markets. Consequently, this has been a difficult year for the Company to
navigate.
UIL's loss for the year to 30 June 2024 was £25.0m resulting in NAV per share
of 164.04p, a decline of 17.9%. This has dragged UIL's annual compound NAV
total return since inception in 2003 down to 6.5% per annum, a disappointing
outcome. Total net debt reduced by £38.8m to £101.2m and gearing reduced by
9.9% to 73.6%, which was positive.
PORTFOLIO
There was significant activity over the year including realisations within the
top ten holdings, which enabled them to fund capital distributions, dividends
and buybacks. The investment portfolio reduced from £308.3m to £238.8m, with
the reduction comprising £28.2m from losses on investments and £41.3m being
net proceeds of portfolio sales.
It should be noted that UEM and Zeta's share price discounts to NAV widened
and now represent a £13.3m reduction to the underlying valuations.
Somers' valuation was largely unchanged in the year to 30 June 2024, being up
by 0.4%. However, Somers distributed material dividends to its shareholders
and adding these back, Somers' total return was 8.9% for the year. Within
Somers' portfolio a significant transaction completed on 28 June 2024, when
Waverton merged its business with London & Capital creating a £19.3bn
wealth and asset management business. This is a transformative transaction for
Waverton and we remain excited about its prospects. The combined business has
the scale, capability and momentum to significantly outperform the market. As
part of the merger, Somers reduced its investment in Waverton by two thirds
and now owns an 18.0% interest in the enlarged wealth and asset management
group. The cash released from the transaction allowed Somers to repay its debt
and distribute dividends to its shareholders and UIL received £9.2m. In
addition, UIL sold 302,000 of its Somers shares at fair value to a fellow
shareholder, Union Mutual Pension Fund Limited ("UMPF"). During the year,
Waverton gained in value for a total return of 9.9%.
Within the Somers portfolio, Resimac Group Limited ("Resimac") largely stood
still with its share price declining by 2.3% which was more than offset by
dividend distributions of 8.5%. It should be noted that UIL holds a direct
investment in Resimac, which continues to be in UIL's top ten investments, in
addition to Somers' investment in Resimac.
Zeta's NAV per share decreased by 22.8% over the year and its share price
declined by 18.0%. This is mainly due to the collapse in nickel prices, the
consequent valuation decline of Panoramic Resources Limited which entered
administration, and the share price decline of 61.9% at Alliance Nickel
Limited. Together these two investments contributed losses of AUD 48.9m in the
year to Zeta.
Hudbay Minerals gained £2.5m in the year and Zeta took the opportunity to
profitably exit its holding realising £23.3m. Zeta used the funds to buy back
shares from shareholders and UIL successfully tendered 8.2% of its holding
realising £4.7m for UIL.
UEM's NAV total return over the twelve months was up 7.6%. However, UEM's
share price discount widened over the year from 14.0% to 18.6% reducing the
total returns to UIL to 2.5%. UIL reduced its shareholding in UEM selling
nearly half of its holding, realising £19.8m given the need for UIL to repay
its bank loan.
The valuation of Allectus Quantum Holdings Limited ("Allectus Quantum") was
flat over the year. Its sole investment is Diraq, a next generation quantum
computing company. Diraq continues to meet its milestones including raising
external funding in these challenging markets. Globally there is significant
interest in quantum computing from the technology industry, investors and
governments. Diraq is seen as an industry leader and its valuation remains
modest relative to its market position, competitors and the amount of patents
and intellectual property owned.
Allectus Capital Limited's ("Allectus Capital") valuation reduced by 40.9% due
to write downs which mirrored sharp declines in peer group multiple
valuations.
West Hamilton, a listed Bermuda property developer, completed the sale of its
major asset in Bermuda. It used the proceeds to reduce its debt and to fund a
significant distribution to its shareholders of which UIL's share was £8.4m.
The Market Limited continues to underwhelm and its share price decline of
48.3% during the year to 30 June 2024 was reflective. However, it has a strong
Australian digital footprint and good brand positioning in Gumtree, Carsguide
and Autotrader, with over AUD 2.0bn in annual transactions on its platforms,
but unlocking of this ecommerce platform value will be challenging.
UIL sold Permanent Investments Limited, which held 16.7% in Littlepay, to
Somers. It should be noted that UIL on a look through basis holds 19.8% of
Littlepay as at 30 June 2024.
Carebook Technologies Inc ("Carebook") and WT Financial Group Limited ("WT
Financial") entered into the top ten holdings due to the sale of Littlepay and
reduced valuation of Arria NLG Limited.
As we have highlighted before, within the Somers' portfolio is an investment
in AK Jensen Group Limited ("AKJ") which comprises a platform for both
traditional hedge funds and hedge funds trading digital assets. In addition,
AKJ has issued tokens, a crypto currency, which have been sold to investors
and hedge fund managers in the crypto platform. Valuing the token is difficult
as few metrics allow comparability and the industry has not settled on a
methodology we can readily adopt. While investors and hedge fund managers on
the AKJ platform are buying AKJ tokens at EUR 0.37 the volume held by Somers
would likely see a discount driven by lower liquidity opportunities and
reduced fee discount benefits held by these hedge fund managers. Somers holds
75.0m AKJ tokens directly and holds further AKJ Tokens indirectly through its
investments in AKJ group companies who in turn hold AKJ Tokens in treasury.
Somers values these tokens at EUR 0.185 per token. Each EUR 0.05 represents
£5.7m swing in valuation for Somers and £2.3m for UIL. Further details on
AKJ can be found on their website and note 29 to the accounts.
FOREIGN EXCHANGE
As at 30 June 2024 UIL held no forward FX derivative positions. Last year we
noted that UIL was expected to be less vulnerable to volatility in the FX
markets for the coming year. This has turned out to be correct. In the year
ended 30 June 2024, forward contract FX and currency losses amounted to £0.1m
(30 June 2023: £3.6m).
COMMODITIES
Commodities were stronger during the year to 30 June 2024, with one exception,
nickel was down 16.2%. Oil, copper and gold were all up by 15.4%, 17.4% and
21.2% respectively.
PORTFOLIO ACTIVITY
During the year to 30 June 2024, UIL invested £11.1m and realised £52.4m.
The realisations include UEM, £19.8m, West Hamilton capital distribution of
£8.4m and Zeta's buy back of £4.7m.
PLATFORM INVESTMENTS
UIL currently has three platform investments, Somers, Zeta and Allectus
Capital in its top ten holdings. These investments account for 66.8% of the
total portfolio as at 30 June 2024 (30 June 2023: 58.6%). During the year to
30 June 2024, net withdrawals from these platforms, including dividends,
amounted to £16.7m (30 June 2023: £36.0m). We have excluded UEM as a
platform given the reduction in shareholding following the sale of 49.1% of
UIL's holding in UEM.
DIRECT INVESTMENTS
UIL has seven direct investments in its top ten holdings, UEM, Resimac,
Allectus Quantum, West Hamilton, The Market Limited, Carebook and WT
Financial.
GEOGRAPHIC AND SECTOR REVIEW
The geographical and sector split as set out on page 12 of the Report and
Accounts reflects movements as a result of the above, the halving of the
investment in UEM and 20.2% loss of value at Zeta, and the realisation of two
thirds of Waverton sees Australia and New Zealand rise. Financial Services was
up, and Infrastructure nearly halved due to the partial divestment of UEM.
LEVEL 3 INVESTMENTS
UIL's investment in level 3 companies amounted to 61.3% (30 June 2023: 56.0%)
of the total portfolio. The total value reduced from £172.7m as at 30 June
2023 to £146.3m as at 30 June 2024, mainly as a result of West Hamilton's
capital distribution, Somers' dividend and a further mark down in the Allectus
Capital portfolio. The level 3 investments are revalued twice a year, but
where there is a material event that impacts a level 3 investment, it is
revalued at the time, thereby keeping the valuations current.
GEARING
Notwithstanding the significant pull back in portfolio valuations during the
year, this was more than offset by the reduction in bank debt. As a result,
gearing decreased to 73.6% as at 30 June 2024 from 83.5% as at 30 June 2023
and this remains well inside UIL's target gearing of under 100.0%. At an
absolute level UIL's net debt decreased over the year from £139.9m to
£101.2m as at 30 June 2024. UIL's debt has almost halved over the last two
years.
The blended costs of borrowing as at 30 June 2024 decreased from 5.7% in the
previous year to 5.2% as a result of the lower loan debt.
ZDP SHARES
On a consolidated basis the ZDP shares increased by 5.5% from £94.6m to
£99.8m, reflecting the compounding capital return. The 2024 ZDP shares are
due for redemption on 31 October 2024 and UIL is taking steps to fund the
redemption. The liability of £40.8m as at 30 June 2024 has been moved to
current liabilities in the Group balance sheet.
UIL continues to hold 2.3m 2026 ZDP shares and 0.6m 2028 ZDP shares as at 30
June 2024.
BANK AND OTHER DEBT
Bank and other loans decreased to £2.9m as at 30 June 2024 (30 June 2023:
£42.7m). The Bank of Nova Scotia's £37.5m committed senior secured
multi-currency revolving facility was repaid in the year to 30 June 2024 and
today UIL has no bank facility.
As at 30 June 2024, UMPF had loaned £2.9m to UIL. This loan was repaid in
August 2024.
REVENUE RETURNS
Revenue income for the year to 30 June 2024 increased to £12.2m from £10.2m,
an increase of 19.6%.
Management and administration fees and other expenses were down 11.8% at
£1.5m (30 June 2023: £1.7m). Finance costs were significantly lower, down by
24.1% at £2.2m for the year to 30 June 2024 from £2.9m in the prior year,
mainly as a result of the repayment of loans.
Revenue profit increased by 51.8% to £8.5m (30 June 2023: £5.6m) and EPS
increased by 51.9% to 10.15p (30 June 2023: 6.68p).
CAPITAL RETURNS
Capital total income reported a loss of £28.3m (30 June 2023: loss of
£44.0m) which was driven mainly by the £28.2m loss on investments,
representing losses of 9.1% on the opening portfolio.
Finance costs reduced by 14.8% to £5.2m (30 June 2023: £6.1m) largely
reflecting the lower number of ZDP shares in issue following the redemption of
the 2022 ZDP shares in October 2022.
The resultant capital return loss for the year to 30 June 2024 was £33.5m (30
June 2023: loss of £50.0m) and EPS loss was 39.99p per ordinary share (30
June 2023: loss of 59.70p).
EXPENSE RATIO
The ongoing charges figure, including and excluding performance fees, was
unchanged at 2.8% for the year ended 30 June 2024 (30 June 2023: 2.8%). No
performance fee was earned at the UIL level or the platform companies.
All expenses are borne by the ordinary shareholders.
Charles Jillings
ICM Investment Management Limited
and ICM Limited
8 October 2024
PRINCIPAL RISKS AND RISK MITIGATION
During the year ended 30 June 2024, ICMIM was the Company's AIFM and had sole
responsibility for risk management subject to the overall policies,
supervision, review and control of the Board.
As required by the Association of Investment Companies ("AIC") Code of
Corporate Governance, the Board has undertaken a robust assessment of the
principal risks facing the Company. It seeks to mitigate these risks through
regular review by the Audit & Risk Committee of the Company's risk
register which identifies the risks facing the Company and the likelihood and
potential impact of each risk, together with the controls established for
mitigation.
During the year the Audit & Risk Committee also discussed and monitored a
number of emerging risks that could potentially impact the Company, the
principal ones being geopolitical risk and climate change risk. The Audit
& Risk Committee has determined that they are not currently sufficiently
material to be categorised as separate key risks and are considered within
investment risk and market risk below.
The principal risks and uncertainties currently faced by the Company and the
controls and actions to mitigate those risks, are described below. There have
been no significant changes to the principal risks during the year.
INVESTMENT RISK: The risk that the investment strategy does not achieve
long-term positive total returns for the Company's shareholders. Insufficient
consideration of ESG factors could lead to poor performance and/or a reduction
in demand for the Company's shares.
The Board monitors the performance of the Company and has established
guidelines to ensure that the approved investment policy is pursued by the
Investment Managers. The Board regularly reviews strategy in relation to a
range of issues including the balance between quoted and unquoted stocks, the
allocation of assets between geographic regions and sectors and gearing.
The investment process employed by the Investment Managers combines assessment
of economic and market conditions in the relevant countries with stock
selection. Fundamental analysis forms the basis of the Company's stock
selection process, with an emphasis on an investment's balance sheet, cash
flows and dividends, as well as market conditions. In addition, ESG factors
are also considered when selecting and retaining investments and political
risks associated with investing in specific countries are also assessed.
Overall, the investment process aims to achieve absolute returns through an
active fund management approach and the Board monitors the implementation and
results of the investment process with the Investment Managers.
MARKET RISK: Adverse market movements in the prices of equity and fixed
interest securities, interest rates and foreign currency exchange rates and
adverse liquidity could lead to a fall in NAV.
The Company's portfolio is exposed to equity market risk, interest rate risk,
foreign currency risk and liquidity risk. Adverse market conditions may result
from factors such as economic conditions, political change, geopolitical
confrontations, climate change, natural disasters and health epidemics. At
each Board meeting the Board reviews the composition of the portfolio, asset
allocation, stock selection, unquoted investments and levels of gearing and
has set investment restrictions and guidelines which are monitored and
reported on by the Investment Managers.
The Company's results are reported in Sterling, although the majority of its
assets are priced in foreign currencies and therefore any rise or fall in
Sterling will lead, respectively, to a fall or rise in the Company's reported
NAV. Such factors are out of the control of the Board and the Investment
Managers and may give rise to distortions in the reported returns to
shareholders. It can be difficult and expensive to hedge some currencies.
KEY STAFF RISK: Loss by the Investment Managers of key staff could affect
investment returns.
The quality of the investment management team is a crucial factor in
delivering good performance. There are training and development programs in
place for employees and the remuneration packages have been developed in order
to retain key staff. Any material changes to the management team are
considered by the Board at its next meeting; the Board discusses succession
planning with the Investment Managers at regular intervals.
DISCOUNT RISK: The Company's shares may trade at a discount to their NAV and a
widening discount may undermine investor confidence in the Company.
The Board monitors the price of the Company's shares in relation to their NAV
and is focused on reducing the discount at which they trade. The Board may
agree to buy back shares if there is a significant overhang of stock in the
market; it targets a discount to NAV of approximately 20% over the medium
term.
OPERATIONAL RISK: Failure by any service provider to carry out its obligations
to the Company in accordance with the terms of its appointment could have a
materially detrimental impact on the operation of the Company and could affect
the ability of the Company to successfully pursue its investment policy.
The Company's main service providers are listed on page 103 of the Report and
Accounts. The Audit & Risk Committee monitors the performance and controls
(including business continuity procedures) of the key service providers at
regular intervals.
Most of UIL's investments are held in custody for the Company by JPMorgan
Chase Bank N.A., Jersey. JPMEL, the Company's depositary services provider,
also monitors the movement of cash and assets across the Company's accounts.
The Audit & Risk Committee reviews the JP Morgan SOC1 reports, which are
reported on by Independent Service Auditors, in relation to its
administration, custodial and information technology services.
The Board reviews the overall performance of the Investment Managers and all
the other service providers on a regular basis. The risk of cyber-crime is
high, as it is with most organisations, but the Board regularly seeks
assurances from the Investment Managers and other key service providers on the
preventative steps that they are taking to reduce this risk.
GEARING RISK: Whilst the use of borrowings should enhance total return where
the return on the Company's underlying securities is rising and exceeds the
cost of borrowing, it will have the opposite effect where the underlying
return is falling.
The ordinary shares rank behind borrowings and ZDP shares, making them a
geared instrument.
The gearing level is high due to the capital structure of the balance sheet.
As at 30 June 2024, gearing on net assets, including borrowings and ZDP
shares, was 73.6% (30 June 2023: 83.5%). The Board reviews the level of
gearing at each Board meeting.
REGULATORY RISK: Failure to comply with applicable legal and regulatory
requirements could lead to suspension of the Company's Stock Exchange
listings, financial penalties, a qualified audit report or the Company being
subject to tax on capital gains.
The Investment Managers and the Company's professional advisers monitor
developments in relevant laws and regulations and provide regular reports to
the Board in respect of the Company's compliance.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
in respect of the Annual Report and Financial Statements
The Directors are responsible for preparing the Annual Report and the Group
and parent Company Accounts in accordance with applicable law and regulations.
The Directors are required to prepare Group and parent Company financial
statements for each financial year. They have elected to prepare the Group
financial statements in accordance with IFRS Accounting Standards and
applicable law and have elected to prepare the parent Company financial
statements on the same basis.
The Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Group and parent Company and of their profit or loss for that period. In
preparing each of the Group and parent Company financial statements, the
Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and estimates that are reasonable, relevant and
reliable;
· state whether they have been prepared in accordance with
applicable accounting standards;
· assess the Group and parent Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern;
and
· use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to cease operations, or
have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the parent Company's transactions and disclose
with reasonable accuracy at any time the financial position of the parent
Company and enable them to ensure that its financial statements comply with
the Companies Act 1981 of Bermuda. They are responsible for such internal
controls as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or
error, and have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Group and to prevent and detect
fraud and other irregularities.
The Directors have decided to prepare voluntarily a Directors' Remuneration
Report in accordance with Schedule 8 to The Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008 made under the UK Companies
Act 2006, as if those requirements applied to the Company. The Directors have
also decided to prepare voluntarily a Corporate Governance Statement under the
UK Corporate Governance Code as if the Company were required to comply with
the Listing Rules of the Financial Conduct Authority applicable to UK
companies admitted to listing in the closed-ended investment funds category of
the Official List.
In accordance with Disclosure Guidance and Transparency Rule 4.1.15R, the
financial statements will form part of the annual financial report prepared
using the single electronic reporting format under the TD ESEF Regulation. The
auditor's report on these financial statements provides no assurance over the
ESEF format.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK and Bermuda governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL FINANCIAL
REPORT
We confirm that to the best of our knowledge:
· the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company and
the undertakings included in the consolidation taken as a whole; and
· the Strategic Report and Directors' Report include a fair review
of the development and performance of the business and the position of the
Company, and the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and uncertainties that they
face.
We consider the annual report and accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Group's position and performance, business model
and strategy.
Approved by the Board and signed on its behalf by:
Stuart Bridges
Chairman
8 October 2024
GROUP INCOME STATEMENT
for the year to 30 June 2024 2023
Revenue Capital Total Revenue Capital Total
return return return return return return
£'000s £'000s £'000s £'000s £'000s £'000s
Losses on investments - (28,212) (28,212) - (40,342) (40,342)
Losses on derivative financial instruments - (35) (35) - (2,038) (2,038)
Foreign exchange losses - (73) (73) - (1,604) (1,604)
Investment and other income 12,227 - 12,227 10,229 - 10,229
Total income/(loss) 12,227 (28,320) (16,093) 10,229 (43,984) (33,755)
Management and administration fees (565) - (565) (758) - (758)
Other expenses (906) (2) (908) (977) (5) (982)
Profit/(loss) before finance costs and taxation 10,756 (28,322) (17,566) 8,494 (43,989) (35,495)
Finance costs (2,242) (5,207) (7,449) (2,897) (6,059) (8,956)
Profit/(loss) before taxation 8,514 (33,529) (25,015) 5,597 (50,048) (44,451)
Taxation - - - - - -
Profit/(loss) for the year 8,514 (33,529) (25,015) 5,597 (50,048) (44,451)
Earnings per ordinary share - pence 10.15 (39.99) (29.84) 6.68 (59.70) (53.02)
The Group does not have any income or expense that is not included in the
profit/(loss) for the year and therefore the profit/(loss) for the year is
also the total comprehensive income for the year, as defined in International
Accounting Standard 1 (revised).
All items in the above statement derive from continuing operations.
All income is attributable to the equity holders of the Company. There are no
minority interests.
COMPANY INCOME STATEMENT
for the year to 30 June 2024 2023
Revenue Capital Total Revenue Capital Total
return return return return return return
£'000s £'000s £'000s £'000s £'000s £'000s
Losses on investments - (28,131) (28,131) - (40,411) (40,411)
Losses on derivative financial instruments - (35) (35) - (2,038) (2,038)
Foreign exchange losses - (73) (73) - (1,604) (1,604)
Investment and other income 12,227 - 12,227 10,229 - 10,229
Total income/(loss) 12,227 (28,239) (16,012) 10,229 (44,053) (33,824)
Management and administration fees (565) - (565) (758) - (758)
Other expenses (906) (2) (908) (977) (5) (982)
Profit/(loss) before finance costs and taxation 10,756 (28,241) (17,485) 8,494 (44,058) (35,564)
Finance costs (2,242) (5,393) (7,635) (2,897) (6,260) (9,157)
Profit/(loss) before taxation 8,514 (33,634) (25,120) 5,597 (50,318) (44,721)
Taxation - - - - - -
Profit/(loss) for the year 8,514 (33,634) (25,120) 5,597 (50,318) (44,721)
Earnings per ordinary share - pence 10.15 (40.11) (29.96) 6.68 (60.02) (53.34)
The Company does not have any income or expense that is not included in the
profit/(loss) for the year and therefore the profit/(loss) for the year is
also the total comprehensive income for the year, as defined in International
Accounting Standard 1 (revised).
All items in the above statement derive from continuing operations.
All income is attributable to the equity holders of the Company.
GROUP STATEMENT OF CHANGES IN EQUITY
for the year to 30 June 2024
Ordinary Share
share premium Special Capital Revenue
capital account reserve reserves reserve Total
£'000s £'000s £'000s £'000s £'000s £'000s
Balance as at 30 June 2023 8,384 37,874 233,866 (124,278) 11,735 167,581
(Loss)/profit for the year - - - (33,529) 8,514 (25,015)
Ordinary dividends paid - - - - (5,031) (5,031)
Balance as at 30 June 2024 8,384 37,874 233,866 (157,807) 15,218 137,535
for the year to 30 June 2023
Ordinary Share
share premium Special Capital Revenue
capital account reserve reserves reserve Total
£'000s £'000s £'000s £'000s £'000s £'000s
Balance as at 30 June 2022 8,384 37,874 233,866 (74,230) 12,846 218,740
(Loss)/profit for the year - - - (50,048) 5,597 (44,451)
Ordinary dividends paid - - - - (6,708) (6,708)
Balance as at 30 June 2023 8,384 37,874 233,866 (124,278) 11,735 167,581
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year to 30 June 2024
Ordinary Share
share premium Special Capital Revenue
capital account reserve reserves reserve Total
£'000s £'000s £'000s £'000s £'000s £'000s
Balance as at 30 June 2023 8,384 37,874 233,866 (124,781) 11,735 167,078
(Loss)/profit for the year - - - (33,634) 8,514 (25,120)
Ordinary dividends paid - - - - (5,031) (5,031)
Balance as at 30 June 2024 8,384 37,874 233,866 (158,415) 15,218 136,927
for the year to 30 June 2023
Ordinary Share
share premium Special Capital Revenue
capital account reserve reserves reserve Total
£'000s £'000s £'000s £'000s £'000s £'000s
Balance as at 30 June 2022 8,384 37,874 233,866 (74,463) 12,846 218,507
(Loss)/profit for the year - - - (50,318) 5,597 (44,721)
Ordinary dividends paid - - - - (6,708) (6,708)
Balance as at 30 June 2023 8,384 37,874 233,866 (124,781) 11,735 167,078
STATEMENTS OF FINANCIAL POSITION
Group Company
as at 30 June 2024 2023 2024 2023
£'000s £'000s £'000s £'000s
Non-current assets
Investments 238,822 308,347 242,033 311,477
Current assets
Other receivables 296 62 296 62
Derivative financial instruments - 110 - 110
Cash and cash equivalents 1,485 5,234 1,485 5,234
1,781 5,406 1,781 5,406
Current liabilities
Loans (2,850) (42,691) (2,850) (42,691)
Other payables (422) (8,892) (41,200) (8,892)
Zero dividend preference shares (40,778) - - -
(44,050) (51,583) (44,050) (51,583)
Net current liabilities (42,269) (46,177) (42,269) (46,177)
Total assets less current liabilities 196,553 262,170 199,764 265,300
Non-current liabilities
Other payables - - (62,837) (98,222)
Zero dividend preference shares (59,018) (94,589) - -
Net assets 137,535 167,581 136,927 167,078
Equity attributable to equity holders
Ordinary share capital 8,384 8,384 8,384 8,384
Share premium account 37,874 37,874 37,874 37,874
Special reserve 233,866 233,866 233,866 233,866
Capital reserves (157,807) (124,278) (158,415) (124,781)
Revenue reserve 15,218 11,735 15,218 11,735
Total attributable to equity holders 137,535 167,581 136,927 167,078
Net asset value per ordinary share - pence 164.04 199.87 163.31 199.27
STATEMENTS OF CASH FLOWS
Group Company
for the year to 30 June 2024 2023 2024 2023
£'000s £'000s £'000s £'000s
Loss before taxation (25,015) (44,451) (25,120) (44,721)
Deduct investment income - dividends (11,869) (9,904) (11,869) (9,904)
Deduct investment income - interest (348) (320) (348) (320)
Deduct bank interest (10) (5) (10) (5)
Add back bank interest charged 2,242 2,897 2,242 2,897
Add back losses on investments 28,212 40,342 28,131 40,411
Add back losses on derivative financial instruments 35 2,038 35 2,038
Add back foreign exchange losses 73 1,604 73 1,604
Increase in other debtors (2) (10) (2) (10)
Decrease in creditors (6) (60) (6) (60)
Add back ZDP shares finance costs 5,207 6,059 - -
Add back intra-group loan account finance costs - - 5,393 6,260
Net cash outflow from operating activities
before dividends and interest (1,481) (1,810) (1,481) (1,810)
Dividends received 11,869 3,580 11,869 3,580
Investment income - interest received 117 166 117 166
Bank interest received 10 5 10 5
Interest paid (2,836) (2,375) (2,836) (2,375)
Taxation paid - - - -
Cash flows from operating activities 7,679 (434) 7,679 (434)
Investing activities:
Purchases of investments (10,130) (17,588) (10,130) (17,588)
Sales of investments 48,071 92,285 48,071 92,285
Net settlement of derivatives 75 (4,090) 75 (4,090)
Cash flows from investing activities 38,016 70,607 38,016 70,607
Financing activities:
Equity dividends paid (5,031) (6,708) (5,031) (6,708)
Drawdowns of bank loans 9,814 55,231 9,814 55,231
Repayment of bank loans (46,336) (66,070) (46,336) (66,070)
Cash flows from redemption of ZDP shares - (52,283) - -
Cash flows from repayment of intra-group loan account - - - (52,283)
Cash flows from financing activities (41,553) (69,830) (41,553) (69,830)
Net increase in cash and cash equivalents 4,142 343 4,142 343
Cash and cash equivalents at the beginning of the year (2,638) (3,827) (2,638) (3,827)
Effect of movement in foreign exchange (19) 846 (19) 846
Cash and cash equivalents at the end of the year 1,485 (2,638) 1,485 (2,638)
Comprised of:
Cash 1,485 5,234 1,485 5,234
Bank overdraft - (7,872) - (7,872)
Total 1,485 (2,638) 1,485 (2,638)
NOTES
1. DIVIDENDS
The Directors declared a third quarterly dividend in respect of the year ended
30 June 2024 of 2.00p per share, paid on 31 July 2024 to all ordinary
shareholders on the register at close of business on 5 July 2024. The total
cost of the dividend, which has not been accrued in the results for the year
to 30 June 2024, is £1,677,000 based on 83,842,918 ordinary shares in issue.
The Directors declared a fourth quarterly dividend in respect of the year
ended 30 June 2024 of 2.00p per share payable on 8 November 2024 to all
ordinary shareholders on the register at close of business on 27 September
2024. The total cost of the dividend, which has not been accrued in the
results for the year to 30 June 2024, is £1,675,000 based on 83,755,585
ordinary shares in issue.
2. RELATED PARTY TRANSACTIONS
The following are considered related parties of UIL:
Ultimate parent undertaking:
UIL's majority shareholder General Provincial Life Pension Fund Limited
("GPLPF") holds 65.4% of UIL's shares. Union Mutual Pension Fund Limited
("UMPF") holds 10.2% of UIL's shares. The ultimate parent undertaking of GPLPF
and UMPF is Somers Isles Private Trust Company Limited as referred to in note
25 in the Report and Accounts.
Subsidiaries of UIL:
Coldharbour Technology Limited ("Coldharbour"), Energy Holdings Ltd, Newtel
Holdings Limited ("Newtel"), Northbrook Resources Limited, West Hamilton
Holdings Limited ("West Hamilton") and Zeta Resources Limited ("Zeta"). On
consolidation, transactions between the Company and UIL Finance have been
eliminated.
Joint ventures of UIL
Allectus Capital Limited ("Allectus Capital") and Allectus Quantum Holdings
Limited ("Allectus Quantum").
Associated undertakings:
Carebook Technologies Inc ("Carebook"), DTI Group Ltd ("DTI"), Novareum
Blockchain Asset Fund Ltd ("Novareum"), Orbital Corporation Limited
("Orbital"), Resimac Group Limited ("Resimac"), Serkel Solutions Pty Ltd
("Serkel"), Smilestyler Solutions Pty Ltd ("Smilestyler"), Somers Limited
("Somers"), SportEngaged Ltd and The Market Limited.
Subsidiaries of the above subsidiaries and associated undertakings:
Allectus Capital: Own Solutions AC Limited, Own Solutions Financial Services
Limited, Aplauz CH GmbH, Aplauz NL B.V., Stiching
Aplauz Foundation
Allectus Quantum: Allectus Quantum Ltd and Diraq Pty Ltd.
Newtel: Newtel Limited.
Resimac: Access Home Loans Pty Ltd, Access Network Management Pty Ltd, Auspak
Financial Services Pty Ltd, FAI First Mortgage
Pty Ltd, Independent Mortgage Corporation Pty Ltd, Resimac Est Pty Ltd and
Resimac Limited.
Somers: Dfinitive Capital Limited, PCF Group plc, Snapper Services (UK)
Limited, Somers Pte Ltd, Somers Treasury Pty Ltd and
Somers UK (Holdings) Limited and Waverton Investment Management Limited.
Zeta: Horizon Gold Limited, Kumarina Resources Pty Ltd, Zeta Energy Pte Ltd,
Zeta Investments Limited and Zeta Minerals Ltd.
Key management entities and persons:
ICM and ICMIM and the board of directors of ICM, Alasdair Younie, Charles
Jillings, Duncan Saville and of ICMIM, Charles Jillings and Sandra Pope. ICM
Corporate Services (Pty) Ltd is a wholly owned subsidiary of ICM.
Persons exercising control of UIL:
The Board of UIL.
Company controlled by key management persons:
Mitre Investments Limited and Permanent Mutual Limited ("PML").
The following transactions were carried out during the year to 30 June 2024
between the Company and its related parties above:
UIL Finance
Loans from UIL Finance to UIL of £98.2m as at 30 June 2023 increased by
£5.4m, to £103.6m as at 30 June 2024. The loans are
repayable on any ZDP share repayment date.
Subsidiaries of UIL
Coldharbour: There were no transactions during the year.
Energy Holdings Ltd: UIL paid fees of £0.1m incurred by Energy Holdings Ltd.
Newtel: Pursuant to a loan agreement dated 28 January 2020, under which UIL
agreed to loan monies to Newtel, UIL advanced to Newtel £0.2m. The loan was
converted to equity and in April 2024 the equity shares were sold to the CEO
of Newtel for nil proceeds. As at 30 June 2024, the balance of the loan was
£nil (2023: £nil).
Northbrook Resources Ltd: Pursuant to a loan agreement dated 1 January 2019
under which UIL agreed to loan monies to Northbrook, the outstanding loan
balance of £1.6m brought forward was re-assigned to SKAC Ltd at nil proceeds,
as part of an ongoing process to liquidate Northbrook. Interest was charged on
the loan at 6.0% per annum. UIL paid fees of £33k incurred by Northbrook as
part of the liquidation process.
West Hamilton: West Hamilton made a capital distribution of £8.3m and a
dividend distribution of £0.7m to UIL during the year.
Zeta: Pursuant to a loan agreement dated 28 July 2023, under which Zeta Energy
Pte Ltd (a 100% subsidiary of Zeta) agreed to loan monies to UIL, Zeta Energy
Pte Ltd advanced to UIL AUD 13.5m in the year. UIL repaid the AUD 13.5m in the
year and as at 30 June 2024 the balance was £nil. The loan bears interest at
an annual rate of 8.3% and UIL paid interest of AUD 136k to Zeta Energy Pte
Ltd during the year.
During the year, Zeta bought back 28,132,739 Zeta shares from UIL as part of
the Zeta's buy back plan. UIL received AUD 9.0m
Joint Ventures of UIL
Allectus Capital: Pursuant to a loan agreement dated 1 September 2016 under
which UIL agreed to loan monies to Allectus
Capital, UIL advanced to Allectus Capital a loan of USD 1.1m. The balance of
the loan as at 30 June 2024 was USD 3.2m (30 June 2023: USD 2.1m). The loan is
interest free and repayable on twelve months notice given by UIL.
Allectus Quantum: UIL paid fees of £28k incurred by Allectus Quantum.
Associated undertakings
Carebook: Pursuant to a loan agreement dated 22 December 2021, the balance of
the loan and interest outstanding as at 30 June 2024 was CAD 1.0m (2023: CAD
1.0m). UIL received interest of CAD 0.1m in the year. Pursuant to a loan
agreement dated 15 December 2022, the balance of the loan and interest
outstanding as at 30 June 2024 was CAD 1.5m (2023: CAD 1.3m). Pursuant to a
convertible loan agreement dated 5 December 2023, under which UIL has agreed
to loan monies to Carebook, UIL advanced to Carebook a loan of CAD 2.0m. As at
30 June 2024, the balance of the loan and interest outstanding is CAD 2.2m.
All three loans bear interest at an annual rate of the Canadian variable rate
+10.0% and are repayable by 22 December 2026.
DTI: There were no transactions during the year
Littlepay: See Somers transactions.
Novareum: UIL redeemed 11,419 units at the NAV price on 30 April 2024,
receiving £2.0m.
Orbital: In September 2023, UIL committed to take part in Orbital's AUD 4m
share placement at AUD 0.14 per share, agreeing to subscribe for 25% of the
shares offered at a cost of AUD 1.0m. This was subject to shareholder approval
and the purchase completed in November after approval was received. UIL
received 7,142,857 shares.
Resimac: There were no transactions during the year.
Serkel: There were no transactions during the year.
SmileStyler: There were no transactions during the year.
Somers: Pursuant to loan agreements dated 1 September 2016 (USD loan), 5
September 2019 (AUD loan) and 22 June 2018 (GBP loan), under which UIL agreed
to loan monies to Somers, in the year UIL advanced to Somers loans of USD
5.0m, AUD 1.2m and £1.9m, UIL received interest of USD 17k, AUD 4k and £25k
and received from Somers repayments of USD 5.0m, AUD 1.2m and £1.9m. As at 30
June 2024, the balance of the loans outstanding were USD nil, AUD nil and £
nil. The loans bear interest at an annual rate of 6.0% and are repayable on
not less than 12 months' notice.
In October 2023, UIL purchased 149 shares in Permanent Investment Limited
("PIL") for USD 1 from Prime Life Common Fund Limited, holding 100% of the
shares. The holding of Littlepay was gifted into PIL. Subsequently Somers
purchased UIL's holding in PIL at fair value for £4.7m.
SportEngaged Ltd: There were no transactions during the year.
The Market Limited: There were no transactions during the year.
Subsidiaries of the above subsidiaries and associated undertakings
Except for the loan UIL received from Zeta Energy Pte Ltd (see Zeta above),
there were no transactions during the year to 30 June 2024 with any of the
subsidiaries of the above subsidiaries and associated undertakings.
Key management entities and persons
ICM and ICMIM are joint portfolio managers of UIL. Other than investment
management fees, secretarial costs and performance fees as set out in note 4
to the Report and Accounts, and reimbursed expenses of £7,000, there were no
other transactions with ICM or ICMIM or ICM Corporate Services (Pty) Ltd. At
the period-end £88,000 remained outstanding to ICM and ICMIM in respect of
management and company secretarial fees and £nil in respect of performance
fees.
Mr Younie is a director of PML, Somers and West Hamilton. Mr Jillings is a
director of Allectus Capital, PML, Somers and Waverton.
Mr Jillings received dividends from UIL of £33,000.
Mr Saville is a director of Allectus Capital, GPLPF, PML, Resimac, West
Hamilton and Zeta Energy Pte Ltd. There were no other transactions in the year
with Alasdair Younie, Charles Jillings, Duncan Saville and Sandra Pope and
UIL.
The Board
Fees paid to Directors were: Chairman £52,500 per annum; Chairman of Audit
& Risk Committee £50,150 per annum and Directors £38,850 per annum. The
Board received aggregate remuneration of £180,000 for services as Directors.
As at 30 June 2024, £nil remained outstanding to the Directors. In addition
to their fees, the Directors received dividends totalling £67,000 during the
year. In aggregate the Directors held 552,808 ordinary shares of the Company
as at 30 June 2024. There were no other transactions in the year with the
Board and UIL.
Ultimate parent undertaking and companies controlled by key management
persons:
GPLPF received dividends of £3,291,000 from UIL, UMPF received dividends of
£506,000 from UIL, Mitre Investments Limited received dividends of £150,000
from UIL and PML received dividends of £2,000 from UIL.
As at 30 June 2023, UMPF had loaned USD 6.6m to UIL. In August 2023, UIL sold
302,000 Somers shares at fair value for USD 4.3m and paid USD 2.3m in cash to
UMPF to repay the loan. In March 2024 UMPF provided a £5.0m loan facility to
UIL and at 30 June 2024 UIL had drawn £2.9m, see note 14 to the Report and
Accounts for details. The loan bears interest at an annual rate of 8.3% and
UIL paid interest of USD 63k to UMPF during the period.
There were no other transactions between companies controlled by key
management and UIL during the year to 30 June 2024.
3. RESULTS
This statement was approved by the Board on 8 October 2024. The financial
information set out above does not constitute the Group's or Company's
statutory accounts for the years ended 30 June 2024 or 2023 but is derived
from those accounts. The auditor has reported on those accounts; their reports
were (i) unqualified and (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis without qualifying their
report.
Annual General Meeting Arrangements
The Annual General Meeting ("AGM") of the Company will be held at its
registered office, Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda
on Thursday, 14 November 2024 at 5.00pm (local time) and notice is set out at
the end of the Report & Accounts.
Legal Entity Identifier: 213800CTZ7TEIE7YM468
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