24 June 2024

Correction: This announcement replaces the announcement 4370T released at 12:29pm on 21 June 2024.  In the first paragraph under 'Portfolio' the text should have referred to UIL (rather than UEM) selling half its shareholding in Novareum.   The full corrected announcement is set out below.

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 3.8% in May, underperforming the FTSE All Share total return Index which increased by 2.4% over the month.

Global stock markets were mixed in May, as inflation in many jurisdictions proved more stubborn than previously expected. In the US the Federal Reserve kept rates on hold, notwithstanding which the S&P 500 Index strengthened by 4.8% as consumer spending held up and the rally in AI stocks continued. European markets were more benign, but also posted positive performances with the European Central Bank signalling that policy rates would be cut for the first time since 2019 in the June meeting. This follows a period of sustained falls in inflation with concern mounting that the European economy was stagnating. The Eurostoxx and FTSE 100 Indices were up 1.3% and 1.6% respectively over the month.

In emerging markets, pre-election jitters saw the India Sensex ease by 0.3% and the Mexico Bolsa IPC decline by 2.7%, though both remain close to all-time highs. India GDP growth again exceeded expectations, coming in at 7.8% in the quarter ended March 2024. In Brazil, the Bovespa Index fell by 3.0% after the Central Bank slowed its pace of interest rate cuts. In China, manufacturing activity unexpectedly contracted in May with the Shanghai Composite Index declining 0.6% over the month. Vietnam was a rare bright spot, with the Ho Chi Minh Index up by 4.3%.

Sterling strengthened against most currencies in May, up 1.7% versus the US Dollar, 3.1% against the Brazilian Real, and 1.7% against both the Indian Rupee and the Chinese Renminbi. Sterling was broadly flat against the Euro and declined by 0.7% versus the Australian Dollar.

In the commodities markets, precious metals continued to appreciate, with the gold price firming another 1.8% and the silver price soaring by 15.6% over the month. Industrial metals were also stronger, with the copper price up 0.8% and nickel price increasing by 2.2% during the month. Concerns over global growth negatively impacted the oil price, with Brent Crude oil falling by 7.1% in May.

PORTFOLIO

There was one change to the top ten constituents of the UIL portfolio in May, with Arria NLG re-entering and replacing Novareum due to UIL selling half its shareholding.

Somers, UIL's largest investment, saw its valuation decline by 0.5%, mainly driven by Resimac's share price which was down 5.6% over the month. UIL also holds a significant direct investment in Resimac, which announced the settlement of an AUD 750m prime Residential Mortgage-Backed Security transaction, its second for the year. It was pleasing to note that the merger between Waverton and London & Capital received FCA approval in early June. Somers is the controlling shareholder of Waverton and the transaction will provide substantial liquidity to Somers which will also retain an ongoing minority position in Waverton. 

Zeta's share price was unchanged over the month, broadly in line with its net tangible assets ("NTA") which increased by 0.1%. Its discount to NTA was unchanged at 22.1%. In May, the share price of Alliance Nickel increased by 27.3% and Horizon Gold's share price firmed by 1.9%.

Although UEM's NAV total return declined by 0.3% over the month, it outperformed the MSCI Emerging Markets total return Index which fell by 1.2% in Sterling terms. UEM's bid price eased by 0.4% in May, with its discount to NAV narrowing to 17.2% from 17.5%.

The Market Limited's share price fell by 13.9% over the month, and Carebook Technologies share price declined by 8.3%. UIL's other top ten holdings were broadly unchanged.

Portfolio purchases amounted to £0.15m and realisations totalled £2.0m.

DEBT

Bank and other debt was unchanged at £11.1m, all drawn in Sterling.

ZDP SHARES

In May, the share prices of the 2024 and 2026 ZDP shares were unchanged, while the 2028 ZDP shares appreciated by 1.0%.

OTHER

UIL's ordinary share price decreased by 1.0% to 103.50p in May while the discount to NAV narrowed slightly to 39.8% from 42.2%.

The second quarterly interim dividend of 2.00p per ordinary share in respect of the year ending 30 June 2024 was paid on 23 May 2024 to shareholders on the register as at 10 May 2024.

Name of contact and telephone number for enquiries:

Charles Jillings

ICM Investment Management Limited                                 +44(0)1372 271486