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

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