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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Uil Limited | LSE:UTL | London | Ordinary Share | BMG917071026 | ORD 10P (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -6.00 | -5.31% | 107.00 | 104.00 | 110.00 | 107.00 | 107.00 | 107.00 | 0.00 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Finance Services | -30.11M | -44.45M | -4445100.0000 | 0.00 | 11 |
TIDMUTL TIDMUTLD TIDMTTM TIDMTTM TIDMTTM
RNS Number : 2042R
UIL Limited
19 September 2017
Date: 19 September 2017 Contact: Charles Jillings
ICM Investment Management Limited
01372 271 486
UIL LIMITED
AUDITED STATEMENT OF RESULTS
for the year to 30 June 2017
FINANCIAL HIGHLIGHTS
Hot Features
Premium
-- Net asset value ("NAV") total return of 7.7%
-- Dividend per ordinary share maintained at 7.50p
GROUP PERFORMANCE SUMMARY
30 June 30 June Change %
2017 2016 2017/16
-------------------------------------------------------- ---------- ---------- -----------
NAV total return(1) (for the year) (%) 7.7 48.9 n/a
Annual compound total return (since inception) (%) 11.9 12.3 n/a
-------------------------------------------------------- ---------- ---------- -----------
NAV per ordinary share (pence) 252.86 241.12 4.9
Ordinary share price (pence) 164.00 130.75 25.4
Discount (%) 35.1 45.8 n/a
FTSE All-Share Total Return Index 6,777 5,737 18.1
-------------------------------------------------------- ---------- ---------- -----------
Returns and dividends (pence)
Revenue return per ordinary share 6.38 6.23 2.4
Capital return per ordinary share 12.46 68.45 (81.8)
Total return per ordinary share 18.84 74.68 (74.8)
Dividend per ordinary share 7.50 7.50 0.0
Zero dividend preference ("ZDP") shares(2) (pence)
2016 ZDP shares
Capital entitlement per ZDP share n/a 188.31 n/a
ZDP share price n/a 191.00 n/a
2018 ZDP shares
Capital entitlement per ZDP share 146.19 136.32 7.2
ZDP share price 154.75 147.25 5.1
2020 ZDP shares
Capital entitlement per ZDP share 122.64 114.35 7.2
ZDP share price 140.38 130.00 8.0
2022 ZDP shares
Capital entitlement per ZDP share 106.37 100.12 6.2
ZDP share price 119.50 104.50 14.4
Equity holders' funds (GBPm)
Gross assets(3) 449.7 440.7 2.0
Bank debt 47.8 24.7 93.5
ZDP shares 173.8 197.4 (12.0)
Equity holders' funds 228.1 218.6 4.3
-------------------------------------------------------- ---------- ---------- -----------
Revenue account (GBPm)
Income 10.7 10.5 1.9
Costs (management and other expenses) 2.9 1.9 52.6
Finance costs 1.8 1.7 5.9
-------------------------------------------------------- ---------- ---------- -----------
Financial ratios of the Group (%)
Revenue yield on average gross assets 2.4 2.9 n/a
Ongoing charges figure excluding performance fees(4) 2.1 3.3 n/a
Ongoing charges figure including performance fees(4) 2.6 3.3 n/a
Bank loans, overdraft and ZDP shares gearing on net
assets 97.2 101.6 n/a
-------------------------------------------------------- ---------- ---------- -----------
(1) Total return is calculated as change in NAV per ordinary share plus dividends reinvested
(2) Issued by UIL Finance Limited ("UIL Finance"), a wholly owned subsidiary of UIL Limited ("UIL")
(3) Gross assets less current liabilities excluding loans and ZDP shares
(4) Expressed as a percentage of average net assets. Ongoing charges comprise all operational, recurring costs that are payable by the Group or
suffered within underlying investee funds, in the absence of any purchases or sales of investments.
CHAIRMAN'S STATEMENT
I am pleased to report in my second year as Chairman that UIL has achieved a NAV total return per ordinary share of 7.7% for the year to 30 June 2017. While underperforming the FTSE All Share Total Return Index for the same period, which was up by 18.1%, over the two years to 30 June 2017, UIL's NAV total return was 60.4%, which represents an uplift in NAV of some GBP60.0m and is well ahead of most indices.
Over the 14 years since inception in August 2003, UIL has distributed GBP54.3m in dividends, invested GBP22.7m in share buybacks and added net gains to our NAV of some GBP160.0m for a total return of 379.1% (adjusted for the exercise of warrants and convertibles). This represents an average annual compound total return since inception of 11.9%. The FTSE All Share Total Return Index average annual compound total return for the same period was 8.6%.
In the first six months to 31 December 2016, we noted the divergence of performance in major economies, had expected higher market volatility and anticipated changes in some trading relationships. This in fact has not been the case at a headline level. Volatility has reduced and the world's gross domestic product ("GDP") looks to be in a positive synchronised growth across most global markets. Inflation remains weak and as such, we are experiencing a "goldilocks" type environment for investors. That noted, we would draw attention to the fact that dispersions within markets is at an all-time high and that technology shares are gaining ground at the expense of more traditional businesses. Given this dispersion in performance this should be a stock pickers' market. We would stress, however, that much of this growth is coming from credit expansion and the world's debt levels continue to rise to worrying levels. We continue to note that a significant proportion of the world's government debt now yields negative returns. Whilst there is significant debate about what is "normal", the end outcome of a return to normal remains a very deep concern.
The gain in UIL's portfolio is a result of the Investment Managers' individual stock selection, strong conviction in the fund's investments and remaining fully invested throughout the period. UIL's investments are driven by three core views which continue to be held by the Investment Managers. First, the world's financial markets are over indebted; second, technological change offers strong investment upside; and third, emerging markets provide higher GDP growth opportunities than developed markets. The Investment Managers are focused on finding investment opportunities at valuations that do not reflect their true long-term value.
Our move to establish UIL as a broader based investor in 2007, with a consequent change in the mandate, has enabled the establishment of several investment platforms which have generally benefited from a sharper focus and more in-depth knowledge of those market segments. It has also enabled UIL to benefit from ICM's broader stock selection abilities.
UIL continues to invest in and develop its platforms: Utilico Emerging Markets Limited ("UEM") (emerging markets); Infratil Limited ("Infratil") (utility infrastructure in Australasia); Somers Limited ("Somers") (financial services); and Zeta Resources Limited ("Zeta") (commodities). In addition, UIL has established a strong track record of investing in the FinTech and PayTech sectors and is looking to establish a "platform" to capitalise on this position. Allectus Capital Limited ("Allectus") is the key focus in this area. Pleasingly, the majority of our existing platforms have made significant progress over the last 12 months.
A negative aspect of the platforms continues to be the 'discount on discount'. UEM's share price on 30 June 2017 was 219.50p, a discount of 9.3% to the diluted NAV for UEM of 241.92p. A look-through valuation of UEM, Somers and Zeta would increase UIL's NAV by 16.7% to 295.01p per share. If some brokers' look-through valuation for Infratil of NZD 4.00 per share was reflected in UIL's NAV, this would increase the look-through valuation by a further 3.2% to 303.10p.
The discount has encouraged the Investment Managers, supported by the Board, to continue to buy back shares. Last year, 8.0% was bought back and this year an additional 0.5m ordinary shares (0.5%) were bought back at an average price of 167.00p, a discount of 34.0% to the closing NAV. These buybacks were accretive to UIL's NAV per share and earnings per share ("EPS"). Further buybacks need to be balanced against the need to maintain adequate cover for the ZDP shareholders and liquidity for the redemption of the ZDP shares when due for repayment.
UIL redeemed the 2016 ZDP shares in full on 31 October 2016. As part of this, UIL drew down on a pre-established GBP25.0m bridge facility with Scotiabank Europe plc which was repaid in May 2017.
Our target in terms of the refinancing of the 2016 ZDP shares was a debt to equity ratio of 1 to 1 or better and we have subsequently delivered on this target. As at 30 June 2017 UIL's gross assets were up by 2.0% on the prior year at GBP449.7m while bank debt and ZDP shares are almost unchanged at GBP221.6m, resulting in equity holders' funds increasing by 4.3% to GBP228.1m and a debt to equity ratio of 1.0 times. It is worth noting that the ZDP shares are lower in absolute terms at GBP173.8m down from GBP197.4m. The 2022 ZDP shares, which replaced in part the 2016 ZDP shares, have a gross redemption yield ("GRY") of 6.25% versus the 2016 ZDP share GRY of 7.25%, lowering our cost of funding. The bank debt has risen, but its margin is 1.6%.
It is pleasing to see our three issues of ZDP shares trading at much tighter GRYs than last year and that the ZDP market remains relatively buoyant. The Board is considering proposals to refinance the 2018 ZDP shares and will announce further details in due course.
Revenue return for the year to 30 June 2017 was GBP5.8m, in line with the prior year of GBP5.7m, (up by 1.5%). This resulted in revenue return EPS of 6.38p versus the prior year's 6.23p, up by 2.4%. The better outcome at an EPS level is due to the share buybacks.
The Board maintained total dividends at 7.50p per share which represents a yield on the closing share price of 164.00p of 4.6%. Looking forward, the Board expects to maintain the current dividend profile. Undistributed revenue reserves carried forward reduced to GBP9.5m from GBP10.5m equal to some 10.50p per share.
The capital return was GBP11.3m. This reflects portfolio gains of GBP31.2m, offset by losses on derivative financial instruments, mainly FX transactions to hedge the Sterling ZDP liability, of GBP11.3m.
Ongoing charges are 2.1% excluding performance fees and 2.6% including performance fees payable by the other companies managed by ICM, (2016: 3.3% both excluding and including performance fees). These include operational, recurring costs payable by the Group and a proportion of costs incurred at other investment companies held within the portfolio.
OUTLOOK
We have made the point for some time that markets in general remain outside normal historic parameters. From a monetary policy perspective, we remain in an environment where unconventional tools are being deployed, such as negative interest rates in a number of countries and quantitative easing ("QE") still being implemented in both Europe and Japan.
From a political perspective, we continue to witness a rise in populist politics with a move away from established parties and candidates as voters seek change. We are also witnessing an increase in geopolitical tensions in places such as North Korea and Turkey.
All of these factors, individually and collectively, create uncertainty and ultimately could have negative implications for markets. These issues are a concern from an investment perspective.
However, despite this uncertain backdrop, it is encouraging to see that most economies are still delivering positive GDP growth with low inflation and especially low wage inflation which should be positive for corporates and in turn investment markets.
While macro and political events will influence markets, UIL's investment approach and performance is driven by individual stock selection. The Board remains confident that the Investment Managers will continue to find attractive long term investments in the prevailing macroeconomic environment.
Peter Burrows AO
Chairman
19 September 2017
INVESTMENT MANAGERS' REPORT
UIL's NAV total return of 7.7% for the twelve months to 30 June 2017 was a pleasing result in challenging markets and builds on last year's 48.9% return.
As noted in the Chairman's Statement, market volatility has markedly reduced. For the year to 30 June 2017, the price of gold was down by 6.1% reversing half of last year's gains of 12.8%, whilst oil was down by 3.5% (prior year down by over 21.0%) and nickel was down by 0.7% (prior year down by over 21.0%). Sterling has been weak but more measured and was down against the US Dollar, Euro, Australian Dollar and New Zealand Dollar by 2.8%, 5.4%, 5.7% and 5.5% respectively for the twelve months to 30 June 2017 (in the prior year, it was down by 15.0%, 14.8% 12.3% and 19.3% respectively). Dispersions within individual markets are at elevated levels and markets remain difficult for investors.
The stand out performers, especially in the last six months, have been our commodity and technology investments. Zeta's share price rose by 105.6% as the portfolio recovered and the discount was eliminated.
UIL has continued its move towards core platform investments, which offer the following benefits:
-- Focused strategy. Each platform has a narrow mandate and as such is driven by the need to find and make investments within its mandate.
-- Dedicated research analysts. The research analysts for each platform are focused on both understanding their portfolio businesses and identifying compelling investments.
-- Financial support. Ability to draw on UIL's support and financial backing.
-- Deep knowledge. Utilising the Investment Managers' knowledge across many jurisdictions to optimise investment opportunities and undertake corporate finance led transactions.
In short, the platforms have been set up to provide sharper focus, leading to better investment opportunities and decisions within their sectors.
We first articulated the platform approach in early 2012 and today these represent 56.5% of the total portfolio, amounting to GBP253.9m.
During the year to 30 June 2017, UIL made net withdrawals of GBP23.5m, (prior year GBP22.4m) from its platform investments. Key realisations included GBP17.7m from UEM, GBP10.1m from Zeta, GBP2.9m from Bermuda First Investment Company Limited ("BFIC") and GBP2.7m from Infratil. Key investments were GBP21.7m into Somers and GBP3.0m into Allectus Capital Limited ("Allectus"), formerly named Vix Investments Limited. In addition, Allectus distributed its Optal Limited ("Optal") holding to its shareholders in specie and as a result UIL received Optal shares to the value of GBP13.6m. These investments are each reviewed in detail below.
It is noted that UIL suffers a discount drag on its platform investments. The initial investments are often made based on NAV. Following this, the shares in the platform companies have traded at a discount. As UIL marks these investments to market there is an immediate negative effect from investments made and this has muted UIL's positive NAV performance.
As at 30 June 2017 there were discounts to published NAVs of 9.3% for UEM (some GBP7.5m) and 26.3% for Somers (some GBP30.6m). In addition, Infratil's shares were trading at NZD 2.97 as at 30 June 2017, significantly below a number of brokers' valuation of NZD 4.00, a discount of 25.8% (some GBP7.3m). Together this amounts to a discount on these investments of some GBP45.3m. Adding this back would see UIL's shareholders' funds increase by 19.9% to 303.10p.
A key driver in shaping the portfolio is the Investment Managers' three core views. First, the world's financial markets are over indebted; second, technological change offers strong investment upside and third, emerging markets offer higher GDP growth opportunities. UIL's Investment Managers' emphasis is about stock selection, remaining fully invested and focused on finding investments at valuations that do not reflect their true long-term value, while being a supportive shareholder of investee companies. The shape of the portfolio has been driven by these core views. Resolute Mining Limited ("Resolute") has offered real defence against the global QE financial response to global indebtedness; Afterpay Touch Group Limited ("APT") and other technology owned investments have provided excellent exposure to disruptive technologies and have delivered strong performances and UEM has demonstrated the benefits of investing in emerging markets through essential infrastructure and utility service companies.
PORTFOLIO
The portfolio exposure to infrastructure and utilities was in line with last year, with 25.8% invested in these sectors. The prior year was 26.4% and the year before 39.4%. The big increases are in technology, up to 22.3% and Financial Services, up to 20.0%.
As at 30 June 2017 the top ten investments accounted for 86.5% of the portfolio versus the prior year's 88.4% and the year before was 87.5% of the total portfolio, although concentration risk is significantly reduced owing to platform holdings on a number of investments. It should be noted that for both sector and geographic analysis, we continue to present the portfolio on a look-through basis.
PLATFORM INVESTMENTS
UIL currently has six platform investments - Somers, UEM, Zeta, Infratil, BFIC and Allectus. Together these investments represent five out of the top ten investments and those five account for 56.5% of the total portfolio as at 30 June 2017, prior year 51.5%.
Somers is now UIL's largest investment, accounting for 19.1% of the total portfolio. Somers reported NAV per share increased to USD 17.63 as at 30 June 2017 from USD 16.71 as at 30 June 2016, an increase of 5.5%. Somers, a financial services investment holding company, is listed on the Bermuda Stock Exchange ("BSX"). During the twelve months to 30 June 2017 Somers' share price decreased from USD 13.75 to USD 13.00. Somers is classified as an investment company under IFRS 10 and, accordingly, values its investments at fair value.
Somers' three largest investments are Bermuda Commercial Bank Limited ("BCB"), Homeloans Limited ("Homeloans") and Waverton Investment Management Limited ("Waverton").
BCB maintained a high capital ratio of 23.2% and a highly liquid balance sheet with 43.0% in cash and high quality liquid assets. BCB has a majority interest in PCF Group plc ("PCF") which reported a 16.0% increase in underlying profits and a 13.0% increase in business volumes in their 31 March 2017 interim results. On 18 July 2017 PCF received notification from its dual regulators, the Prudential Regulation Authority and the Financial Conduct Authority, that it can commence deposit-taking activities as a fully operational bank.
During the year, Somers acquired a 79% shareholding in RESIMAC Limited (which subsequently merged with ASX-listed, Homeloans; Somers' resultant holding in Homeloans was 58.9%) for AUD 88.5m. Homeloans reported normalised profit after tax of AUD 18.7m for the year ended 30 June 2017 and a 20% increase in total settlements to AUD 3.6bn for the year. Homeloans' assets under management ("AuM") were AUD 10.2bn as at 30 June 2017.
Waverton's AuM were GBP5.2bn as at 30 June 2017 (30 September 2016: GBP5.0bn). For the nine months ended 30 June 2017, Waverton earned revenue of GBP26.5m (June 2016: GBP23.7m) and profit before tax of GBP6.8m (June 2016: GBP5.5m). The year on year financial gains were aided by strong global equity markets.
UEM is UIL's second largest investment accounting for 16.4% of the total portfolio as at the year end. UEM's undiluted NAV total return increased by 19.0% in the twelve months to 30 June 2017, a strong performance aided by improved emerging markets ("EM"). This performance lagged the MSCI Emerging Markets Total Return Index (Sterling adjusted) which grew by 27.4%, primarily due to the lack of exposure to more cyclical sector investments. Over the same period, UEM's share price rose by 14.3%, with the discount to diluted NAV widening slightly from 12.4% to 13.1%.
The Investment Managers' stock selection continues to be recognised with UEM being selected as one of Money Observer's rated funds for 2017. UEM's performance over three and five years to 31 March 2017 has remained ahead of the broader Emerging Markets Index, achieving positive total returns of 44.3% and 68.5% respectively versus the MSCI Emerging Markets Total Return Index (Sterling adjusted) which had returns of 38.1% and 32.7% over these timeframes.
The market environment in EM in the year to 30 June 2017 was positive, with some particularly strong returns seen in specific markets such as Brazil, Hong Kong and Romania, with the Ibovespa, Hang Seng and Bucharest BET indices up by 22.1%, 23.9% and 21.3% respectively. In addition, there were some positive currency movements against Sterling, including the Romanian Leu and Indian Rupee up by 4.9% and 7.0% respectively. However, it is worth noting that the major impact of Sterling depreciation occurred immediately following the Brexit vote on 23 June 2016, which meant that in the twelve months to 30 June 2017 several EM currencies to which UEM is exposed weakened versus Sterling, such as the Philippine Peso and Malaysian Ringgit, which fell by 4.0% and 3.3% respectively.
In the year to 30 June 2017 UIL reduced its holding in UEM by 21.3% with the sale of 8.7m shares, realising GBP17.7m.
Zeta is UIL's fourth largest investment at 12.1% of the total portfolio. Zeta's net tangible assets ("NTA") per share in the year to 30 June 2017 rose by 19.7%. Over this same period, Zeta's share price rose by 105.6%, from AUD 0.18 to AUD 0.37. The share price was at a 0.3% premium to NTA at the end of June 2017. During the year, the commodity prices of Zeta's major investments were all down in varying degrees, with Brent oil down by 3.5%, USD gold down by 6.1% (AUD gold down by 9.0%), and nickel down by 0.7%. In this context, the underlying performance of Zeta's investments overall was pleasing.
Aside from Resolute (discussed below), Zeta's three largest investments are oil and gas producer New Zealand Oil and Gas Limited ("NZOG"), Australian-based oil junior Pan Pacific Petroleum NL ("PPP"), and Australian nickel company, Panoramic Resources Limited ("Panoramic"). During the year, NZOG received an offer to purchase its major producing asset at a price in excess of its entire market capitalisation. After concluding the sale, NZOG returned NZD 100.0m in cash to shareholders by way of a share cancellation. During the year to June 2017, NZOG's share price rose 33.3%. Similarly, PPP sold their key assets and near the end of the year announced an agreement with Zeta to merge via a scheme of arrangement. PPP's shares closed the year up 27.6%. During the year, Panoramic successfully listed its gold assets via an initial placing offer ("IPO") of Horizon Gold on ASX. Panoramic's share price closed the financial year up by 76.0%.
Infratil is UIL's sixth largest investment. Infratil had a positive year of operating performance and capital allocation, reporting consolidated underlying EBITDAF from continuing operations up by 12.4% in the year to 31 March 2017, ahead of guidance. The period saw an exceptionally active investment programme, with Infratil investing NZD 728.0m in existing assets and new acquisitions, more than three times the level of its previous financial year. This included the acquisition of 48.0% of Canberra Data Centres (CDC) (AUD 386.0m) and NZD 85.0m in the ANU Student Accommodation acquisition. In addition, NZD 79.0m was invested in the expansion of the main terminal, land-transport hub and onsite hotel at Wellington Airport and NZD 33.0m was invested in a 45.0% stake in Longroad Energy, a USA-based wind and solar start-up with a targeted 10GW pipeline.
In the period under review Infratil's major asset Trustpower was split into two listed businesses, with the renewable wind farm assets spun off into a new entity named Tilt Renewables and the "residual" Trustpower retaining its hydro power assets and also its gas, electricity and telecoms retail business. Residual Trustpower was a major contributor to the improved EBITDAF performance at a group level as very strong hydro inflows in the year to 31 March 2017 were experienced, with energy production up by 41.0% from its Australian hydro stations.
In April 2017, Infratil sold its 19.9% investment in Metlifecare for NZD 238.0m realising an annualised return of 15.8% on this investment after accounting for dividends. In that period Infratil has continued to maintain the growth in dividends per share, which increased by 10.5%.
UIL further reduced its holding in Infratil by 10.7% with the sale of 1.5m shares at an average price of NZD 3.29, realising GBP2.7m, in a year where Infratil's share price declined by 6.9%.
BFIC's is UIL's seventh largest investment. Bermuda's economy continued to emerge from a deep recession with GDP growing in 2016 by 0.75%. In the first half of 2017 Bermuda benefitted from the hosting of the 35th America's Cup. Combined with double digit increases in tourism and increased infrastructure development the economic outlook is generally positive. BFIC's two major investments remain One Communications Limited ("OCL"), formerly KeyTech Limited and Ascendant Group Limited ("Ascendant"). OCL has focused in the last year on significant investment in its fixed line and wireless networks in Bermuda and the fixed line network in the Cayman Islands. Its core financial results are starting to show the results of the corporate transactions completed in the previous year with the company benefitting from the 100% ownership of CellOne (one of Bermuda's two mobile phone operations) and the reduction in net debt. Ascendant continued to report improved financial results following strong sales at the power company, BELCO. A significant capital investment programme to improve BELCO's generation and transmission and distribution network, including moving to liquefied natural gas as a power source, has recently been submitted to the regulator and a positive response should set the company on a positive growth trend. During the year BFIC disposed of its entire holding in Argus Group Limited (generating a profit of USD 0.8m) and used USD 3.6m of the proceeds to reduce UIL's loan note exposure to USD 4.3m.
As at 30 June 2017, BFIC had net assets of USD 30.3m. BFIC's shares voluntarily de-listed from the BSX in late May 2017 due to the lack of liquidity. As such the holding in BFIC has been moved from level two to level three. In order to value the underlying assets, UIL has looked to the fair value of both Ascendant and OCL, its two significant investments.
Allectus is an unlisted investment company, holding a number of unlisted investments in technology companies, primarily related to Fintech.
DIRECT INVESTMENTS
UIL has five direct investments in the top ten: Resolute, APT, Vix Technology Limited ("VixTech"), Optal and Vix Verify Global Pty Ltd ("Vix Verify").
Resolute is UIL's third largest investment accounting for 14.2% of the portfolio as at year end. Resolute is an Australian-domiciled gold mining company and its share price in the year ended 30 June 2017 fell by 7.4% to AUD 1.19 on the back of lower gold prices. Production in the year to 30 June 2017 of c.330,000oz of gold was up on the previous year's production of c.315,000oz.
Resolute's principal producing assets include the Syama gold mine in Mali and Ravenswood in Australia. Gold ounces produced at Syama increased by 13.5% to 237,830oz. Production benefited from earlier refurbishment and technical improvements to the roaster, and with significant stockpiles having accumulated in the previous year, throughput was up this year. Cash costs at Syama rose by 8.0% to AUD 896oz. At Ravenswood gold ounces produced fell by 12.8% to 92,004oz. Production volumes are expected to continue to decline until the Ravenswood expansion project ramps up in 2019. Cash costs per ounce at Ravenswood increased by 21.2% to AUD 1,252oz.
As at 30 June 2017 Resolute had cash and bullion on hand of AUD 282.5m, up from AUD 102.0m the prior year following a fund raising. Total borrowings were AUD 35.0m.
During the year, Resolute completed a feasibility study for the Ravenswood expansion project, which is expected to increase the life of that mine by a further 13 years. The company is currently working through the process of obtaining regulatory approvals, and is hoping to commence work during the coming financial year.
At Bibiani in Ghana, following the completion of a feasibility study, Resolute continues drilling to prove up resources and hopefully increase reserves.
Resolute has provided guidance for gold production of 300,000oz at an All-In-Sustaining-Cost of AUD 1,280oz (USD 960oz) for the year to 30 June 2018.
APT is UIL's fifth largest investment accounting for 6.3% of UIL's total portfolio as at the year end. APT was formed at the end of June 2017, with the merger of Afterpay Holdings Limited ("Afterpay") and Touchcorp Limited.
Afterpay had an extremely strong year, growing approximately ten-fold in terms of customers and transaction volumes between June 2016 and June 2017. Afterpay allows Australian consumers the option to pay for goods in instalments over an eight week period with no interest charges and funded by supplier discounts. It is offered by over 7,200 merchants both in-store and online with 1.0m unique customers having used the service since launch. The company believes that there is still potential for further strong growth both in Australia and internationally.
Historically, the companies had a close relationship, with Touchcorp owning 27.7% of Afterpay. However, the merger brings the technology behind Afterpay (developed by Touchcorp) fully in house. Touchcorp will continue to develop its own payment processing systems and service its existing clients.
While holders of Afterpay had a share price return of 87.4% for the year to 30 June 2017, the original Touchcorp holders experienced only a 0.9% gain over the same period.
VixTech is UIL's eighth largest investment, accounting for 3.9% of the total portfolio at the year end. VixTech is an industry leader in smart-booking, transport ticketing, automated fare collection, payments, and access and passenger information systems, partnering with transport authorities in more than 200 cities and regions across the globe.
As part of a drive to improve the long-term efficiency of global operations, the company is currently undergoing a major restructuring focused on the transition to a more product-focused business model.
The 2017 financial year marked the launch of the company's OneVix strategy, promoting greater integration, the outsourcing of non-core functions and a commitment to the common technology SaaS platform.
Four large client projects have already committed to the new SaaS platform, however deferred revenues associated with those projects as the new product is being developed together with material investment costs and one off restructuring costs all contributed to a significant deterioration in short-term earnings, with negative EBITDA for the year. The SaaS product will remain a priority over the course of the next year and development costs are likely to remain elevated, however profitability is expected to improve significantly with the returns from existing and new project revenue streams.
Optal is UIL's ninth largest investment and is a developer of global payment solutions. Its key application is providing services to eNett, a virtual payment card solution for the travel industry. The system allows travel agents to make payments to service providers (e.g. hotels, airlines, tour operators) over the universally accepted Mastercard system in a secure, cost effective and efficient way using a virtual account number (VAN) created solely for a single transaction. Optal is the primary VAN issuer for eNett, which is majority owned by the US listed Travelport, with Optal owning 23.5% of the company. eNett's management expects its revenues to grow at a 20-30% CAGR over the next 5 years, although growth in recent years has been higher, albeit from a smaller base.
Despite being a fast growing fintech business, Optal is profitable, cash generative and paid a substantial dividend to shareholders during the year. The company is attempting to develop other solutions outside of the travel payments industry. In addition, they are exploring options to provide a potential liquidity event for shareholders in 2018, given that it is currently unlisted.
Optal was previously the largest investment within Allectus but UIL now holds shares in Optal directly.
Vix Verify is an unlisted global business based in Australia, which provides identity verification products to customers such as banks, telecommunications providers, online gaming companies and government agencies, particularly when transacting online. Vix Verify's systems are used to check identities and verify the validity of identification documents, for various purposes including fraud reduction, the prevention of money laundering and terrorism financing and checking immigration statuses.
The company's Australian and New Zealand based business continues to perform well. In the year to June 2017, revenues grew by 18.8%.
UIL hold its shares in Vix Verify through a CFD, which confer the same economic benefit as if the shares had been held directly by UIL.
UIL exited Augean and Allectus moved out of the top ten following the in specie distribution of Optal.
UNLISTED INVESTMENTS
Unlisted investments were valued at GBP92.2m, 20.5% of the total portfolio, as at 30 June 2017, up from GBP65.5m (14.5% of the portfolio), as at 30 June 2016. Much of the increase comes from BFIC delisting and revaluations. In addition, UIL has made loans to listed platform companies totalling GBP16.8m, some 3.7% of the portfolio, down from GBP30.6m, 6.8% of the total portfolio as at the previous year end. As these companies are listed, these loans are not regarded as an investment in an unlisted company.
Together the unlisted investments and the loans to the listed platforms are reported as level 3 investments amounting to GBP109.0m, as compared to the prior year of GBP96.1m.
SECTOR REVIEWS
Technology - 22.3%, prior year 21.0%
UIL holds a number of investments in the technology sector, both directly and through Allectus (seventeenth largest Investment). APT is UIL's fifth largest holding in the portfolio as at 30 June 2017, which successfully listed in Australia in March 2015 and is reviewed above. While VixTech provides ticketing payment solutions and is UIL's eighth largest investment and Optal is the ninth largest.
Outside of the top ten, UIL holds shares in a small number of listed and unlisted technology companies which offer a range of software, hardware and specialist engineering solutions.
Financial Services - 20.0%, prior year 15.4%
UIL's largest investment in financial services is in Somers, which accounts for 19.1% of UIL's portfolio as at 30 June 2017, prior year 14.7%; Somers is reviewed above. The increase is nearly all due to further investment into Somers.
Gold Mining - 18.1%, prior year 23.7%
UIL's largest investment in gold mining is in Resolute, which is held directly through UIL (14.2% of the total portfolio) and indirectly through Zeta. Resolute is reviewed above.
The fall in gold mining is due to realisations and value decline.
Oil & Gas - 9.1%, prior year 9.6%
UIL's largest investment in oil & gas is through Zeta, which accounts for 12.1% of UIL's portfolio as at 30 June 2017; Zeta is reviewed above.
Oil & gas was little changed during the year.
DERIVATIVES
Equity: UIL continued to hold a modest market derivatives portfolio, mainly through S&P500 index options which resulted in a loss of GBP1.0m for the year to 30 June 2017.
Foreign exchange: Currency hedging resulted in losses of GBP10.3m due to Sterling's weakness. UIL has hedged a mixture of New Zealand Dollar, Australian Dollar, Euro and US Dollar to ensure ZDP liabilities were matched with certain assets. At the period end UIL's forward currency sale contracts in place were for nominal NZD 56.3m, AUD 140.9m, EUR 22.5m and USD 62.3m.
UIL has run a Sterling liability neutral policy and therefore hedged its predominantly Sterling liabilities with an appropriate mix of portfolio asset currency exposures.
GEARING
UIL's initial goal set four years ago of reducing gearing to 100.0% or below has been delivered and is pleasing to note.
Gearing (including the ZDP shares) has steadily reduced from 160.4% four years ago, 124.1% two years ago, 101.6% last year and 97.2% as at 30 June 2017.
ZDP SHARES
UIL's wholly owned subsidiary, UIL Finance, started the year with GBP197.4m of ZDP shares in issue, including GBP62.7m of 2016 ZDP shares due for redemption on 31 October 2016.
The 2016 ZDP shares were repaid on time and in full from cash including a bridging facility of GBP25.0m provided by Scotiabank, which was repaid in May 2017.
The ZDP cover has risen through the year and the yield to maturity reduced. This is a positive result and it was pleasing to see the 50m new 2022 ZDP shares trading at 119.50p as at 30 June 2017 which implied a yield to maturity of 4.0%. Further details on the ZDP shares are included in note 16 to the accounts.
DEBT
Bank debt increased from GBP24.7m at the start of the financial year to GBP75.0m as at 31 December 2016 in connection with the redemption of the 2016 ZDP shares and then reduced to GBP47.8m as at 30 June 2017.
Scotiabank's GBP50.0m facility expires on 22 March 2018 and UIL intends to start discussions on extending the facility early in the new year.
REVENUE RETURNS
Revenue returns were GBP5.8m, in line with the previous year's GBP5.7m. The total income increased by 2.0%. Management fees increased by 95.1% reflecting the move from a voluntarily reduced fee of 0.25% per annum to the original fee of 0.5% per annum. The revenue return EPS of 6.38p was up from the prior year's 6.23p, an increase of 2.4% mainly driven by the lower number of average shares in issue after the buy backs last year.
The Investment Managers' management fees were unchanged throughout the year to 30 June 2016. In July 2016 the UIL NAV exceeded the adjusted high watermark and as a result the management fee discount no longer applied and the fee reverted back to 0.5% per annum.
CAPITAL RETURNS
Capital returns were GBP11.3m. This return builds on the prior year's return of GBP62.3m and reflects portfolio gains of GBP31.2m offset by losses on derivative financial instruments, mainly FX transactions to hedge the short Sterling ZDP share positions of GBP11.3m.
Ongoing charges, excluding performance fees, were 2.1%.
ICM Investment Management Limited and ICM Limited
Investment Managers
19 September 2017
PRINCIPAL RISKS AND RISK MITIGATION
ICMIM was appointed as the Company's AIFM with effect from 13 April 2015 and has sole responsibility for risk management subject to the overall policies, supervision, review and control of the Board.
The Board carefully considers the Company's principal risks and seeks to mitigate these risks through continual and regular review, policy setting, compliance with and enforcement of contractual obligations and active communication with the Investment Managers and the Company's Administrator.
The Board applies the principles and recommendations of the UK Code on Corporate Governance and the AIC's Code on Corporate Governance (the "AIC Code") as described on page 50 of the Report and Accounts. The Company's internal controls are described in more detail on page 44 of the Report and Accounts. Through these procedures, and in accordance with Internal Control: Revised Guidance for Directors on the Combined Code (the "FRC guidance"), the Board has established an on-going process for identifying, evaluating and managing the significant risks faced by the Company and has regularly reviewed the effectiveness of the internal control systems for the year. This process has been in place throughout the year under review and to the date hereof and will continue to be regularly reviewed by the Board going forward.
Most of the Company's principal risks are market-related and similar to those of other investment companies which invest globally in various currencies around the world. The principal ongoing risks and uncertainties currently faced by the Company, and the controls and actions to mitigate those risks are described below. Further details of risks and risk management policies as they relate to the financial assets and liabilities of the Company are detailed in note 31 to the accounts.
Investment risk: the risk that the investment strategy does not achieve long-term total returns for the Company's shareholders
The Board monitors the performance of the Company and has established guidelines to ensure that the investment policy that has been approved is pursued by the Investment Managers.
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 sound balance sheets, good cash flows, the ability to pay and sustain dividends, good asset bases and market conditions. The political risks associated with investing in these countries are also assessed. Overall, the investment process aims to achieve absolute returns through an active fund management approach.
The Company's results are reported in Sterling, whilst the majority of its assets are priced in foreign currencies. The impact of adverse movements in exchange rates can significantly affect the returns in Sterling of both capital and income. 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.
In addition, the ordinary shares of the Company may trade at a discount to their NAV. The Board monitors the price of the Company's shares in relation to their NAV and the premium/discount at which they trade. The Board may buy back shares if there is a significant overhang of stock in the market, having regard to the percentage of shares in public hands.
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. Periodically the Board holds a separate meeting devoted to strategy, the most recent one being held in November 2016.
A fuller review of economic and market conditions is included in the Investment Managers' Report section of the Report and Accounts.
There is no guarantee that the Company's strategy and business model will be successful in achieving its investment objective. The value of an investment in the Company and the income derived from that investment may go down as well as up and an investor may not get back the amount invested. Past performance of the Company is not necessarily indicative of future performance.
No material change in overall risk in the year.
Gearing: the risk that the use of gearing may adversely impact on the Company's performance
The ordinary shares rank behind the bank debt and ZDP shares, making them a geared instrument.
The gearing level is high due to the capital structure of the balance sheet. Whilst the gearing 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. As at 30 June 2017, gearing on net assets, including bank loans, any overdrafts and ZDP shares, was 97.2%. The Board reviews the level of gearing at each Board meeting.
No material change in overall risk in the year.
Banking: a breach of the Company's loan covenants might lead to funding being summarily withdrawn
ICMIM monitors compliance with the banking covenants when each drawdown is made and at the end of each month. The Board reviews compliance with the banking covenants at each Board meeting.
No material change in overall risk in the year.
Key staff: loss by the Investment Managers of key staff could affect investment returns
The quality of the management team is a crucial factor in delivering good performance. There are training and development programs in place for employees of the Investment Managers and the recruitment and 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.
No material change in overall risk in the year.
Reliance on the Investment Managers and other service providers: inadequate controls by the Investment Managers or Administrator or other third party service providers could lead to misappropriation of assets
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 106 of the Report and Accounts. The Audit Committee monitors the performance of the service providers.
All listed investments are held in custody for the Company by JPMorgan Chase Bank N.A., Jersey ("JPMorgan"); the unlisted investments are held in custody by BCB (together "the Custodians").
Following the appointment of J.P. Morgan Europe Limited ("JPMEL") as the Company's Depositary services provider, JPMEL also monitors the movement of cash and assets across the Company's accounts.
The Audit Committee reviews the Administrator's annual internal control report which details the controls around the reconciliation of the Administrator's records to those of the Custodians. The Administrator reviews the control reports published by JPMorgan and draws any issues to the attention of the Board.
The Board reviews operational issues at each Board meeting and the Audit Committee receives reports on the operation of internal controls and the risk of cybercrime, as explained in more detail within "Internal Controls" on page 44 of the Report and Accounts. The risk of cybercrime is high, as it is with most organisations, but the Board regularly seeks assurances from the Investment Managers and other service providers on the preventative steps that they are taking to reduce this risk.
Although there has been no change in overall risk in the year, the possibility of cybercrime continues to be a concern. The Company's assets are considered to be relatively secure, so the risk is the inability to transact investment decisions for a period of time and reputational risk.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
in respect of the report and accounts and the financial statements
The directors are responsible for preparing the Report and Accounts and the Group and parent Company financial statements in accordance with applicable law and regulations.
The directors are required under Bermudan law to prepare Group and parent Company financial statements for each financial year. The Group financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and applicable law and the directors have elected to prepare the parent Company financial statements on the same basis.
Under Bermudan company law the financial statements are required to 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 IFRS as adopted by the EU;
-- 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.
They are responsible for such internal control 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.
Under applicable law and regulations, the directors are also responsible for preparing a Directors' Report and a Corporate Governance Statement that complies with that law and those regulations. The directors have decided to prepare voluntarily a Directors' Remuneration Report as if the Company were required to comply with the requirements of Schedule 8 to The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008 No. 410) made under the UK Companies Act 2006.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Bermuda Companies Act (1981). They have a 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.
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 annual report includes a fair review of the development and performance of the business and the position of the issuer 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 on 19 September 2017 and signed on its behalf by:
Peter Burrows
Chairman
GROUP INCOME STATEMENT
Year to 30 June 2017 Year to 30 June 2016
Revenue Capital Total Revenue Capital Total
return return return return return return
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
----------------------------------------------- --------- --------- --------- --------- --------- ---------
Gains on investments - 31,238 31,238 - 103,464 103,464
Losses on derivative financial instruments - (11,346) (11,346) - (22,013) (22,013)
Foreign exchange (losses)/gains (67) 3,058 2,991 181 (6,388) (6,207)
Investment and other income 10,775 - 10,775 10,318 - 10,318
Total income 10,708 22,950 33,658 10,499 75,063 85,562
Income not receivable - - - (887) - (887)
Management and administration fees (1,656) - (1,656) (849) - (849)
Other expenses (1,205) (3) (1,208) (1,083) (2) (1,085)
----------------------------------------------- --------- --------- --------- --------- --------- ---------
Profit before finance costs and taxation 7,847 22,947 30,794 7,680 75,061 82,741
Gains on sales of ZDP shares held intra group - 617 617 - - -
Finance costs (1,837) (12,273) (14,110) (1,739) (12,734) (14,473)
Profit before taxation 6,010 11,291 17,301 5,941 62,327 68,268
Taxation (250) (30) (280) (268) - (268)
----------------------------------------------- --------- --------- --------- --------- --------- ---------
Profit for the year 5,760 11,261 17,021 5,673 62,327 68,000
----------------------------------------------- --------- --------- --------- --------- --------- ---------
Earnings per ordinary share - pence 6.38 12.46 18.84 6.23 68.45 74.68
----------------------------------------------- --------- --------- --------- --------- --------- ---------
The Group does not have any income or expense that is not included in the profit for the year and therefore the profit 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
Year to 30 June 2017 Year to 30 June 2016
Revenue Capital Total Revenue Capital Total
return return return return return return
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------------------------------------- --------- --------- --------- --------- --------- ---------
Gains on investments - 31,001 31,001 - 103,674 103,674
Losses on derivative financial instruments - (10,346) (10,346) - (21,944) (21,944)
Foreign exchange (losses)/gains (67) 3,053 2,986 181 (6,420) (6,239)
Investment and other income 10,775 - 10,775 10,318 - 10,318
Total income 10,708 23,708 34,416 10,499 75,310 85,809
Income not receivable - - - (887) - (887)
Management and administration fees (1,641) - (1,641) (834) - (834)
Other expenses (1,196) (3) (1,199) (1,075) (2) (1,077)
-------------------------------------------- --------- --------- --------- --------- --------- ---------
Profit before finance costs and taxation 7,871 23,705 31,576 7,703 75,308 83,011
Finance costs (1,837) (12,697) (14,534) (1,739) (12,745) (14,484)
Profit before taxation 6,034 11,008 17,042 5,964 62,563 68,527
Taxation (250) (30) (280) (268) - (268)
-------------------------------------------- --------- --------- --------- --------- --------- ---------
Profit for the year 5,784 10,978 16,762 5,696 62,563 68,259
-------------------------------------------- --------- --------- --------- --------- --------- ---------
Earnings per ordinary share - pence 6.40 12.15 18.55 6.25 68.71 74.96
-------------------------------------------- --------- --------- --------- --------- --------- ---------
The Company does not have any income or expense that is not included in the profit for the year and therefore the profit 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 2017
Ordinary Share Non-
share premium Special distributable Capital Revenue
capital account reserve reserve reserves reserve Total
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------------------- --------- --------- --------- -------------- --------- --------- ---------
Balance at 30 June 2016 9,065 20,031 233,866 32,069 (86,928) 10,482 218,585
Profit for the year - - - - 11,261 5,760 17,021
Ordinary dividends paid - - - - - (6,774) (6,774)
Shares purchased by the
Company (45) (718) - - - - (763)
Balance at
30 June 2017 9,020 19,313 233,866 32,069 (75,667) 9,468 228,069
-------------------------- --------- --------- --------- -------------- --------- --------- ---------
for the year to 30 June 2016
Ordinary Share Non-
share premium Special distributable Capital Revenue
capital account reserve reserve reserves reserve Total
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------------------- --------- ---------- --------- -------------- ---------- --------- ----------
Balance at 30 June 2015 9,856 28,414 233,866 32,069 (149,255) 11,608 166,558
Profit for the year - - - - 62,327 5,673 68,000
Ordinary dividends paid - - - - - (6,799) (6,799)
Shares purchased by the
Company (791) (8,383) - - - - (9,174)
Balance at
30 June 2016 9,065 20,031 233,866 32,069 (86,928) 10,482 218,585
-------------------------- --------- ---------- --------- -------------- ---------- --------- ----------
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year to 30 June 2017
Ordinary Share Non-
share premium Special distributable Capital Revenue
capital account reserve reserve reserves reserve Total
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------------------- --------- --------- --------- -------------- --------- --------- ---------
Balance at 30 June 2016 9,065 20,031 233,866 32,069 (86,888) 10,701 218,844
Profit for the year - - - - 10,978 5,784 16,762
Ordinary dividends paid - - - - - (6,774) (6,774)
Shares purchased by the
Company (45) (718) - - - - (763)
--------------------------
Balance at
30 June 2017 9,020 19,313 233,866 32,069 (75,910) 9,711 228,069
-------------------------- --------- --------- --------- -------------- --------- --------- ---------
for the year to 30 June 2016
Ordinary Share Non-
share premium Special distributable Capital Revenue
capital account reserve reserve reserves reserve Total
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------------------- --------- ---------- --------- -------------- ---------- --------- ----------
Balance at 30 June 2015 9,856 28,414 233,866 32,069 (149,451) 11,804 166,558
Profit for the year - - - - 62,563 5,696 68,259
Ordinary dividends paid - - - - - (6,799) (6,799)
Shares purchased by the
Company (791) (8,383) - - - - (9,174)
--------------------------
Balance at
30 June 2016 9,065 20,031 233,866 32,069 (86,888) 10,701 218,844
-------------------------- --------- ---------- --------- -------------- ---------- --------- ----------
BALANCE SHEETS
GROUP COMPANY
at 30 June 2017 2016 2017 2016
GBP'000s GBP'000s GBP'000s GBP'000s
-------------------------------------------- ---------- ---------- ---------- ----------
Non-current assets
Investments 449,116 452,197 449,261 462,624
-------------------------------------------- ---------- ---------- ---------- ----------
Current assets
Other receivables 25,190 2,945 25,190 2,945
Derivative financial instruments 818 1,067 818 -
Cash and cash equivalents 3,573 174 3,423 11
-------------------------------------------- ---------- ---------- ---------- ----------
29,581 4,186 29,431 2,956
-------------------------------------------- ---------- ---------- ---------- ----------
Current liabilities
Loans (47,846) - (47,846) -
Other payables (26,472) (1,101) (200,245) (207,467)
Derivative financial instruments (2,532) (14,637) (2,532) (14,570)
Zero dividend preference shares - (61,327) - -
(76,850) (77,065) (250,623) (222,037)
-------------------------------------------- ---------- ---------- ---------- ----------
Net current liabilities (47,269) (72,879) (221,192) (219,081)
-------------------------------------------- ---------- ---------- ---------- ----------
Total assets less current liabilities 401,847 379,318 228,069 243,543
Non-current liabilities
Loans - (24,699) - (24,699)
Zero dividend preference shares (173,778) (136,034) - -
-------------------------------------------- ---------- ---------- ---------- ----------
Net assets 228,069 218,585 228,069 218,844
-------------------------------------------- ---------- ---------- ---------- ----------
Equity attributable to equity holders
Ordinary share capital 9,020 9,065 9,020 9,065
Share premium account 19,313 20,031 19,313 20,031
Special reserve 233,866 233,866 233,866 233,866
Non-distributable reserve 32,069 32,069 32,069 32,069
Capital reserves (75,667) (86,928) (75,910) (86,888)
Revenue reserve 9,468 10,482 9,711 10,701
-------------------------------------------- ---------- ---------- ---------- ----------
Total attributable to equity holders 228,069 218,585 228,069 218,844
-------------------------------------------- ---------- ---------- ---------- ----------
Net asset value per ordinary share - pence 252.86 241.12 252.86 241.41
-------------------------------------------- ---------- ---------- ---------- ----------
STATEMENTS OF CASH FLOWS
GROUP COMPANY
for the year to 30 June 2017 2016 2017 2016
GBP'000s GBP'000s GBP'000s GBP'000s
---------------------------------------- ----------- ---------- ----------- ----------
Cash flows from operating activities 1,314 4,217 1,340 4,238
---------------------------------------- ----------- ---------- ----------- ----------
Investing activities:
Purchases of investments (67,267) (46,049) (72,371) (46,582)
Sales of investments 109,560 65,169 124,709 65,169
Purchases of derivatives (23,202) (8,302) (23,202) (4,716)
Sales of derivatives - 3,022 - -
Cash flows from investing activities 19,091 13,840 29,136 13,871
---------------------------------------- ----------- ---------- ----------- ----------
Cash flows before financing activities 20,405 18,057 30,476 18,109
---------------------------------------- ----------- ---------- ----------- ----------
Financing activities:
Equity dividends paid (6,774) (6,799) (6,774) (6,799)
Movements on loans 25,148 (11,483) 25,148 (11,483)
Cash flows from issue of ZDP shares 27,258 12,435 17,208 12,435
Cash flows from redemption of ZDP
shares (62,741) - (62,744) -
Cost of shares purchased for
cancellation (599) (9,174) (599) (9,174)
Cash flows from financing activities (17,708) (15,021) (27,761) (15,021)
---------------------------------------- ----------- ---------- ----------- ----------
Net increase in cash and
cash equivalents 2,697 3,036 2,715 3,088
Cash and cash equivalents at the
beginning of the year (114) 1,225 (277) 1,042
Effect of movement in foreign
exchange 990 (4,375) 985 (4,407)
---------------------------------------- ----------- ---------- ----------- ----------
Cash and cash equivalents at the
end of the year 3,573 (114) 3,423 (277)
---------------------------------------- ----------- ---------- ----------- ----------
Comprised of:
Cash 3,573 174 3,423 11
Bank overdraft - (288) - (288)
---------------- ------ ------ ------ ------
Total 3,573 (114) 3,423 (277)
---------------- ------ ------ ------ ------
NOTES
The Directors declared a fourth quarterly dividend in respect of the year ended 30 June 2017 of 1.875p per share which will be paid on 22 September 2017 to all ordinary shareholders on the register at close of business on 8 September 2017. The total cost of the dividend, which has not been accrued in the results for the year to 30 June 2017, is GBP1,691,000 based on 90,197,208 ordinary shares in issue.
This Statement of Results was approved by the Board on 19 September 2017. It is not the Group's or Company's statutory accounts. The statutory accounts for the financial year ended 30 June 2017 have been approved and audited, and received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report. The statutory accounts for the financial year ended 30 June 2016 received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report.
The Report & Accounts for the year ended 30 June 2017 will be posted to shareholders in early October 2017. A copy is available to view and download from the Company's website at www.uil.limited
Copies may also be obtained during normal business hours from Exchange House, Primrose Street, London, EC2A 2NY.
Legal Entity Identifier: 213800CTZ7TEIE7YM468
By order of the Board
ICM Limited, Secretary
19 September 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLFVEAIIALID
(END) Dow Jones Newswires
September 19, 2017 11:36 ET (15:36 GMT)
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