17 October 2024

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 3.5% in September, underperforming the FTSE All Share total return Index which decreased by 1.3% over the month.

Global markets in September ended the month on the whole in positive territory. The US market (the S&P Index) ended the month up by 2.0%, despite witnessing a slow start on the back of softer macro data. Retail sales and new home sales weakened, nonfarm payrolls rose less than expected and private consumption expenditure growth was revised lower. The market however was driven by the long anticipated start of the US Federal Reserve rate cutting cycle. The outsized interest rate cut of 50bps, the first rate cut since 2020 bringing rates to 4.75-5.0%, helped to push the US market higher. The European central bank also lowered its interest rate by 25bps as the European economic outlook deteriorated whilst the Bank of England held rates.

The Chinese market started the month sluggishly as retail sales and industrial production all continued to slow. However, on 24 September the Chinese central bank, the PBoC, announced a number of measures to revive growth. These included lowering the seven day reverse repo rate and lowering mortgage rates as part of its stimulus measures. The epic stimulus package helped to boost the markets with the Hang Seng and Shanghai Composite Index both recovering at the end of the month, up by 17.5% and 17.4% respectively.

The easing of the US and Chinese monetary policy helped many other markets deliver solid market performances during the month. The Philippines PSEi Index was up by 5.4%, benefitting from the Philippines central bank cutting interest rates as inflationary pressure continue to trend downwards, whilst the Thailand Set Index was up by 6.6%. The Indian Sensex Index was up by 2.3% as macro conditions remain favourable.

Brazil was one of the outliers for the month with the Bovespa Index down by 3.1%. The Brazilian central bank bucked the trend witnessed in most countries and raised interest rates - the first time in over two years - to 10.75% with the central bank indicating that there are more increases ahead Further, the Brazilian market was not helped by concerns around the government loosening fiscal discipline.

In the commodities markets, Brent Crude oil further declined by 8.9% in September, on the back of continued expectation of slower global demand, albeit since the month end, oil prices have increased as geopolitical tension in the Middle East has driven prices upwards again. Copper prices for September were up by 9.8%, hitting a two month high during the month, helped by the US interest rate cut and the Chinese stimulus measures. Gold also continued its rally upwards exceeding USD 2,600/oz, yet again another all-time high.

PORTFOLIO

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

Somers' valuation for the month increased marginally by 0.7% whilst Carebook Technologies was the strongest performer in the top ten, up by 27.3% on the back of more positive 2Q24 results. The Australian listed companies had mixed performances with WT Financial up by 8.1% and The Market Limited down by 15.6%. Resimac was also down by 4.4% in September.

Allectus Quantum was down by 10.1% whilst Allectus Capital was up by 12.9%.

UEM's NAV total return for the month was down marginally by 0.1% whilst UEM's share price decreased by 2.7% and the discount widened to 18.4%. 

There were realisations of £0.3m during the month and purchases of £0.7m.

Subsequent to the month end, Zeta announced that it would receive approximately USD 41.0m from its investment in Koumbia Bauxite Investments Limited ("KBI"), an unlisted, Bermuda based company which had terminated its commercialisation deed with Alliance Mining Commodities.  UIL also announced that it had acquired the Zeta shares held by General Provincial Life Pension Fund ("GPLPF") at NAV (£28.7m in aggregate), satisfied through the transfer to GPLPF of UIL's investment in Allectus Capital at its latest valuation and the issue of new UIL ordinary shares at NAV. As a result, UIL held over 95% of Zeta and gave notice to acquire the remaining Zeta shares by compulsory acquisition at NAV. The compulsory acquisition completed on 16 October 2024. Zeta thereby became a 100% subsidiary of UIL and enables the KBI proceeds to be distributed to UIL in full.

DEBT

Debt was at £7.3m as at 30 September 2024, drawn in Sterling and US Dollars. UIL also had cash balances of £4.9m at month end.

ZDP SHARES

In September, the share price of the 2024 ZDP shares appreciated by 1.1%. The price of the 2026 ZDP shares was unchanged and the 2028 ZDP shares increased by 0.5%.

UIL Finance Limited announced in October that the 2024 ZDP shares will be redeemed on 31 October 2024. The capital repayment amount for the 2024 ZDP Shares is 138.35p per share.

OTHER

UIL's ordinary share price decreased by 6.8% from 103.00p to 96.00p in September and the discount to NAV widened from 34.8% to 36.2%.

In September, UIL declared a fourth quarterly interim dividend of 2.00p per ordinary share in respect of the year ended 30 June 2024, which will be paid on 8 November 2024 to shareholders on the register as at 27 September 2024.

On 8 October 2024, UIL published its report and accounts for the year ended 30 June 2024.

Name of contact and telephone number for enquiries:

Charles Jillings

ICM Investment Management Limited                                  +44(0)1372 271486