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16/10/2023 15:15

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RNS Number : 2725Q  UIL Limited  16 October 2023

16 October 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
(https://www.uil.limited/investor-relations/factsheet-archive)

 

Monthly commentary

 

PERFORMANCE

UIL's NAV total return was down 3.0% in September, trailing the FTSE All Share
total return Index which was up 1.8% over the month.

 

Equity markets were mostly weaker in September, as the US Federal Reserve's
"higher for longer" stance on interest rates impacted investment flows
worldwide. The surprising resilience of the US economy in the face of rapid
interest rate rises has led the Federal Reserve to indicate that policy will
be biased toward a more restrictive policy, with fewer rate cuts now expected
in 2024. This has seen the yield on 10-year US Treasury bonds reach the
highest levels since before the Financial Crisis and the DXY Dollar Index
continue to appreciate. The S&P 500 Index fell by 4.9% in September.

 

In Europe, inflation dropped sharply to an annual rate of 4.3% from 5.2% in
August, the lowest level in two years. This follows a tenth consecutive
interest rate rise to 4.0%, the highest level since the advent of the Euro in
1999. The Eurostoxx Index declined by 2.8% in the month. In the UK, the MPC
paused rate increases for the first time in almost two years, though inflation
remains elevated at 6.7%. The FTSE 100 was up 2.3%, an increase which reflects
the international nature of the index constituents given material Sterling
weakness. Sterling was down against all major currencies, declining 3.7%
versus the US Dollar, 1.3% against the Euro and 3.3% compared to the
Australian Dollar.

 

In emerging markets, most equity markets softened. In China, the Hang Seng
Index declined by 3.1% and the Shanghai Composite fell by 0.3%, though it is
notable that in September China's factory activity expanded for the first time
in six months. Against this trend, the Indian and Brazilian markets both
managed small positive performances, with the SENSEX up 1.5% and the Bovespa
up 0.7%.

 

In the commodities markets, most industrial metals weakened in September on
concerns of weak global activity and rising surpluses, with copper and nickel
falling 0.9% and 8.0% respectively. Precious metals were also weak, with the
gold price down 4.7% and the silver price dropping by 9.3%. Oil prices were
comparatively robust, up 9.7% over the month, due to Saudi Arabia extending
its production cuts until the end of the year.

 

PORTFOLIO

There were no changes to the top ten constituents of the UIL portfolio in
September.

 

Somers' valuation decreased by 7.5%, reflecting the Resimac share price which
fell by 13.3% in September. Adjusted for trading ex-dividend during the month,
Resimac's share price was down 7.9%, reflecting concerns over higher interest
rates, home affordability, and strong competition in the lending market.
Resimac is also a top ten direct shareholding for UIL.

 

Zeta's share price was unchanged over the month, with a decline in net asset
value per share of 7.2% offset by a narrowing of the discount. Zeta announced
a new on-market buyback program which commenced on 6 September 2023, and
bought back 18.3m shares during the month.

 

UEM's share price declined by 0.9%, as NAV total return of 2.3% was offset by
a widening of the discount and the payment of its quarterly dividend.

 

The Market Herald's share price fell by 27.1% in the month, though this
reflects an idiosyncrasy of the effect of widening spreads on valuations. UIL
uses the bid price for its valuations, and during September the bid-offer
spread on The Market Herald almost doubled to 5.5c (from 3.0c), a material
move in the context of a 21.5c share price. For comparison, the share price
movement on the basis of last traded price was a decline of 11.9% over the
month.

 

Additional moves in UIL's top ten investments were the valuations at Allectus
Capital, which decreased by 1.4%, and West Hamilton Holdings, which increased
by 5.4%.

 

DEBT

Bank and other debt fell from £43.1m to £27.1m in the month, as UIL paid
down part of its senior secured multi-currency facility as agreed with the
Bank of Nova Scotia. Debt was drawn as £25.0m and AUD 4.0m. There were no
foreign exchange hedges as at the end of September 2023.

 

ZDP SHARES

The share prices of the 2024, 2026 and 2028 ZDP shares were all unchanged over
the month, trading at 123.00p, 112.00p and 90.75p respectively.

 

OTHER

UIL's ordinary share price decreased by 13.2% to 122.00p in September and the
discount to NAV widened to 38.3% from 31.8%. A fourth quarterly interim
dividend of 2.00p per ordinary share in respect of the year ended 30 June
2023, was declared in September and was paid on 13 October 2023 to
shareholders on the register on 29 September 2023.

 

 

Name of contact and telephone number for enquiries:

 

Charles Jillings

ICM Investment Management
Limited
+44(0)1372 271486

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