Annual Financial Report

RNS Number : 7335Z

Utilico Investments Limited

22 September 2015

 



Date:               21 September 2015

Contact:          Charles Jillings

                        Utilico Investments Limited

                        01372 271 486

Utilico Investments Limited

Audited Statement of Results

for the year to 30 June 2015

Financial Highlights

·   Total return of 6.4%

·   Dividend per ordinary share maintained at 7.50p

Group Performance Summary

	30 June 2015	30 June 2014	Change % 2014/15
Total return(1) (annual) (%)	6.4	18.1	n/a
Annual compound total return (since inception) (%)	7.8	7.9	n/a
Net asset value per ordinary share (pence)	169.00	165.84	1.9
Ordinary share price (pence)	117.00	128.00	(8.6)
Discount (%)	30.8	22.8	n/a
FTSE All-Share Total Return Index	5,614	5,471	2.6
Returns and dividends (pence)
Revenue return per ordinary share	7.84	7.03	11.5
Capital return per ordinary share	2.47	19.85	(87.6)
Total return per ordinary share	10.31	26.88	(61.6)
Dividend per ordinary share	7.50	7.50	0.0
Zero dividend preference ("ZDP") shares(2) (pence)
2014 ZDP shares (repaid 31 October 2014)
Capital entitlement per ZDP share	n/a	163.70	n/a
ZDP share price	n/a	166.25	n/a
2016 ZDP shares
Capital entitlement per ZDP share	175.55	163.70	7.2
ZDP share price	184.63	177.13	4.2
2018 ZDP shares
Capital entitlement per ZDP share	127.09	118.50	7.2
ZDP share price	141.75	128.25	10.5
2020 ZDP shares
Capital entitlement per ZDP share	106.61	n/a	n/a
ZDP share price	122.38	n/a	n/a
Equity holders' funds (£m)
Gross assets(3)	373.4	399.1	(6.4)
Bank debt	34.4	22.2	55.0
ZDP shares	172.4	212.5	18.9
Equity holders' funds	166.6	164.4	1.3
Revenue account (£m)
Income	11.2	10.4	7.7
Costs (management and other expenses)	1.8	2.1	(14.3)
Finance costs	1.1	0.9	22.2
Financial ratios of the Group (%)
Revenue yield on average gross assets	2.9	2.6	n/a
Ongoing charges figure excluding performance fees(4)	2.0	2.2	n/a
Ongoing charges figure including performance fees(4)	2.4	3.1	n/a
Bank loans, overdraft and ZDP shares gearing on net assets	124.1	144.4	n/a

(1) Total return is calculated as change in NAV per ordinary share plus dividends re-invested

(2) Issued by Utilico Finance Limited ("UFL"), a wholly owned subsidiary of Utilico Investments 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 that UIL achieved a total return of 6.4% over the year to 30 June 2015, outperforming the FTSE All Share Total Return of 2.6%. This was mainly comprised of dividends paid of 7.50p plus a gain on NAV from 165.84p to 169.00p.

Over the 12 years since Utilico Investment Trust PLC was launched in August 2003, which rolled into UIL in June 2007, we have distributed £40.7m in dividends, invested £12.8m in share buybacks and added net gains to our NAV of some £66.0m for a total return of 125.3%. This represents an average annual compound total return of 7.8%; marginally behind the FTSE All Share average annual compound total return of 8.4%.

At the interim stage, in the six months to 31 December 2014, we noted rising market volatility and expected this to continue. This has definitely been the case and is a feature of the markets as the world's economies continue to decouple. The US Dollar has been stronger, as has Sterling and both the US and UK central banks head tentatively towards interest rate normalisation. The US equity markets have increased in the year to 30 June 2015, with the S&P 500 gaining 5.2% mainly driven by technology companies. We have seen weaker commodity prices and in particular it is notable that oil has fallen to a low of US$63.59 per barrel at 30 June 2015 from US$112.36 per barrel in June last year. Similarly other commodities have been weak, with gold declining by 11.7% to US$1,172.35/oz at the year end.

For UIL the resources and mining companies in our portfolio were weak and ended the year significantly down: Zeta Resources Limited ("Zeta") was down by 39.4% and Resolute Mining Limited ("Resolute") was down by 51.2%. Against this UIL's financial technology ("FinTech") investments reported strong revenue and EBITDA gains and increases in valuations.

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 in-depth knowledge of segments of the market. Infratil Limited ("Infratil") and Utilico Emerging Markets Limited ("UEM") set the precedent and continue to perform well. In the year to 31 March 2015 Infratil reported an adjusted EBITDAF from continuing activities of NZ$453.4m, an increase of 10.3% and recorded a gain of NZ$337m on the sale of wholly owned Infratil Energy Australia for NZ$671.0m. This was an outstanding result enabling Infratil to pay an increased ordinary dividend and a special dividend. Infratil's total return to UIL over the 12 months was some 52.9%. Pleasingly UEM also reported a strong total return for the year to 31 March 2015 of 12.2%, again an outstanding performance given the tough environment for emerging markets.

Over the last three years UIL has supported the formation of Somers Limited ("Somers") (financial services); Zeta (commodities); and Bermuda First Investment Company Limited ("BFIC") (Bermuda centric assets). In addition, UIL has established a strong track record of investing in the FinTech space and is looking to establish a "platform" to capitalise on this position. Our platforms have made significant progress over the last 12 months.

UIL has, generally, through the Vix Group of companies, taken strategic investments in a number of FinTech companies. Operationally these companies have performed well over the 12 months to 30 June 2015, strengthening their gains over recent years. These investments continue to grow significantly. Touchcorp is the most visible demonstration of the value these businesses can deliver. Touchcorp, which provides payment solutions for a range of mobile applications, listed in March 2015 at A$1.40 and as at 30 June 2015 the shares were trading at A$1.60. At the time of the listing UIL realised A$11.7m of its existing Touchcorp shareholding and now holds 20.7% of Touchcorp's issued share capital.

Vix Technology Limited ("VixTech") has improved the quality of its earnings over recent years and reported an EBITDA from continuing businesses of A$11.6m, up 20.0% year on year on turnover of A$146.6m, which was largely flat. Going forward, VixTech has secured a number of contracts which should result in both a substantial uplift in turnover and further increases in EBITDA margins. The most recent contract won by VixTech was a US$27.0m contract in Malaysia to build a unified public transit ticketing system with the ability to use a single smartcard across all modes of transport.

A negative of the platforms is the discount on discount. UEM's share price on 30 June 2015 was 189.75p, a discount of 6.7% to the reported NAV for UEM of 203.46p. A look-through valuation of UEM, Somers, Zeta and BFIC would increase UIL's NAV by 13.2% to 191.30p per share. If the brokers' look-through valuation for Infratil of some NZ$4.00 per share was reflected in UIL's NAV, this would increase the look-through valuation by a further 7.7% to 204.30p.

This discount encouraged the Investment Managers, supported by the Board, to buy back 0.6m shares during the year at 110.00p and a further 7.9m shares after the year end at 116.00p. All of these buybacks were significantly accretive to UIL's NAV per share. Further buybacks need to be balanced against the need to maintain adequate cover for the ZDP shares in issue and liquidity for the redemption of the ZDP shares when due.

Given the continued diversification of the portfolio away from utilities, the Board considers it appropriate for UIL to change its name from Utilico Investments Limited to UIL Limited. A resolution to achieve this will be proposed at the AGM.

It is pleasing to note that Group revenue return per share is up 11.5% from 7.03p to 7.84p. This has enabled the Board to maintain total dividends at 7.50p per share and represents a yield on the closing share price of 6.4%. Looking forward the Board expects to maintain the current dividend profile. Undistributed revenue reserves carried forward are some 11.78p.

The ZDP liability and bank debt was reduced again this year to £206.8m, down from £234.7m in 2014. This has enabled UIL to buy back shares and to start to look at the 2016 ZDP redemption. Proposals will be put forward to the 2016 ZDP shareholders ahead of the redemption of the 2016 ZDPs on 31 October 2016 which are expected to include the establishment of a new 2022 ZDP class. It is pleasing to see the ZDP shares trade well above their accrued capital entitlements.

UIL has appointed ICMIM as its AIFM, with ICMIM becoming joint portfolio manager with ICM. As explained in the Report of the Directors on page 35 of the Report and Accounts 2015; ICMIM is a UK regulated investment manager controlled by Charles Jillings. The existing Investment Management Agreement ("IMA") with ICM was terminated and replaced with a new agreement (the "AIFM Agreement") on 13 April 2015. There has been no change in the individuals responsible for managing the Company as a consequence of the new arrangements. The management fees remain unchanged and ICM and ICMIM will continue to manage UIL at the reduced annual management fee of 0.25% until such time as the NAV high watermark of 247.58p is regained, when it will revert back to 0.5%.

Ongoing charges, excluding and including performance fees payable by the other companies managed by ICM, were 2.0% and 2.4% respectively. These include operational, recurring costs payable by the Group and a proportion of costs incurred in other investment companies held within the portfolio.

We were saddened to hear the news that Gareth Horner, our former KPMG audit partner, passed away in May.

After 22 years on the boards of UIL and its predecessor companies Utilico Investment Trust PLC and the Special Utilities Investment Trust PLC, including being Chairman of the Board since 2011, I have decided to stand down from the Chairmanship and the Board at the Annual General Meeting ("AGM") in November. It has been a very rewarding and enjoyable experience and I thank my Board colleagues for their support and encouragement over the years. I would also thank Duncan Saville and Charles Jillings who have ably led the management team at ICM. I am delighted that Peter Burrows has agreed to become Chairman of UIL when I retire. Peter will bring his immense knowledge of the investment and broking profession to the Chairmanship. I wish all stakeholders the best for the coming years.

Graham Cole has advised the Board he will not be seeking re-election at the forthcoming AGM. I thank Graham for his valuable contribution to the Board.

The Board is intending to appoint additional Directors in due course.

Outlook

Market volatility has continued to rise throughout the last twelve months and even more so recently. As the US and UK central banks head tentatively towards interest rate normalisation and the introduction of gradual interest rate increases, most other central banks are moving in the opposite direction. The central banks of Europe and Japan have introduced Quantitative Easing ("QE") and China has adopted an accommodative stance towards its markets, as have Australia's and New Zealand's central banks. Against this backdrop global gross domestic product ("GDP") and in particular China's GDP has weakened. This has resulted in weak demand for commodities which, coupled with their oversupply, has seen most commodity prices sharply down. Lower commodity prices and weaker GDP have together driven lower inflation and in some cases deflation. We have seen Switzerland decouple the Franc from the Euro and countries such as Switzerland, Denmark and Sweden move to a negative interest rate environment. These are not normal markets and the fallout from the Global Financial Crisis remains with us and is yet to play out in full. We expect the stresses to result in increased volatility going forward and wider dislocations.

Dr Roger Urwin
Chairman
21 September 2015

Investment Managers' Report

UIL achieved a total return of 6.4% for the twelve months to 30 June 2015, which was a good result in difficult markets.

As noted in the outlook section of the Chairman's statement, market volatility has continued to rise throughout the twelve months. .

The effects of this volatility can be seen both in commodities and currencies. Oil, nickel, iron ore, copper and gold were down by 43.4%, 37.1%, 36.9%, 17.7% and 11.7% respectively over the year to 30 June 2015. The US Dollar has been strong as has Sterling, but the New Zealand Dollar, Australian Dollar and Japanese Yen were all down significantly against Sterling by 15.9%, 11.0% and 9.9% respectively.

The stand out performer in these markets has been technology shares. These stocks have driven the US equity markets higher, while mining shares in comparison have moved sharply lower. This is discussed further below.

For UIL, our technology investments have risen in value as a result of continued good progress at an operating level, with rising EBITDA combined with higher market valuations for our listed technology companies. The uplift has been equally significant. Against this the resource declines measured in Sterling have been significant. This is discussed in detail below.

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.

·      The platforms can draw on UIL's support and financial backing.

·      The platforms can utilise the Investment Managers' wide knowledge across many jurisdictions to optimise investment structures 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 68.4% of the portfolio, amounting to £251.3m.

During the year to 30 June 2015, UIL withdrew £34.2m net from its platform investments, realising £58.8m and investing £24.6m. Key realisations included £24.8m from UEM, £21.7m from Infratil and net £10.7m from Vix Limited. Key investments were £4.1m into Somers, £17.9m debt to Zeta and £1.6m into BFIC. These investments are each reviewed in detail below.

It must be noted that UIL has suffered a discount drag on the platform investments. The initial investments made were 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 dragged UIL's NAV performance down.

As at 30 June 2015 there were discounts to published NAVs of 6.7% for UEM (some £6.0m); 20.3% for Somers (some £13.1m); and 6.3% for Zeta (some £2.7m). In addition, Infratil's shares were trading at NZ$3.15, significantly below the brokers' valuation of NZ$4.00, a discount of 21.3% (some £13.0m). Together this amounts to a discount on these investments of some £34.8m. Adding this back would see UIL's shareholders' funds increase to £201.4m. We hope that as these platforms demonstrate consistent long term returns, the demand for the listed companies' shares will increase, resulting in a narrowing of the discounts.

Unlisted investments

Unlisted investments were valued at £56.6m, 15.5% of the portfolio, as at 30 June 2015, up from £56.3m, 13.9% of the portfolio, as at 30 June 2014. In addition, UIL has made loans to listed platform companies totalling £25.8m, some 7.0% of the portfolio, up from £8.3m, 2.1% at the previous year end. As these companies are listed, these loans are not regarded as an investment in an unlisted company.

Given our FinTech performance and track record we are reviewing how better to achieve value from these investments to maximise our investment opportunity and the establishment of a FinTech platform may be the logical conclusion.

Portfolio

The portfolio continues to move away from infrastructure and utilities with 39.4% invested in these sectors. This has been driven mainly by realisations, as UIL realised 23.2% of its opening holding in UEM for £24.8m and 35.3% of its opening holding in Infratil for £21.7m. Together these accounted for a significant reduction in UIL's utilities and infrastructure exposure. The key investments were loans to Zeta of £17.9m and a Resolute convertible note of £4.9m. The other key change has been the rise in value of UIL's technology company investments.

The effect of the above has seen technology investments almost double to 15.7% of the portfolio versus prior year at 8.8%, (mainly on increased valuations); oil & gas stood still at 13.0%, as increased investment offset declines in valuations; renewables decreased from 12.3% to 8.6% as UIL sold down Infratil and Renewable Energy Generation plc; gold mining reduced from 11.2% to 7.3% mainly as a result of the fall in Resolute's share price. Within geographic allocations, Australia increased from 10.4% to 18.0%, nearly all as a result of the uplift in technology investment valuations, partly offset by the decrease in the Australian Dollar.

As at 30 June 2015 the top ten investments accounted for 87.5% of the portfolio versus prior year 88.2%. It should be noted that for both sector and geographic analysis, we continue to present the portfolio on a look-through basis both as to sector and geographic split.

Platform Investments

UIL currently has six platform investments - UEM, Somers, Infratil, Zeta, BFIC and Vix Investments Limited. Together these investments represent six out of the top 10 investments and account for 68.4% of the portfolio at 30 June 2015, unchanged as a percentage over the year.

UEM is UIL's largest investment accounting for 22.7% of the portfolio at the year end. In the year to 30 June 2015, UEM delivered another solid result, achieving a total return of 4.8%, ahead of the MSCI Emerging Markets Total Return Index (GBP adjusted) which grew by 3.1%. The Investment Managers' stock selection has again been recognised with UEM's performance garnering industry recognition, with the fund winning the Moneywise Investment Trust Awards 2015 for the Global Emerging Markets category for the second year running. UEM was highly commended at the Money Observer Trust Awards 2015 for the Best Diversified Emerging Markets Trust and was one of Money Observer's rated funds for 2015. UEM celebrated its tenth year since flotation in 2015, with a ten-year total return to March 2015 of 159.8%, ahead of the MSCI Emerging Markets Total Return (GBP adjusted) at 149.5%.

Emerging markets indices and currencies were volatile in the period under review, and exceptionally so in the Chinese mainland A-share markets. In what could be justifiably termed "irrational exuberance", retail investors and margin traders pushed the Shanghai Composite up by an astonishing 152.0% in the year, before an abrupt collapse of 17.0% in the final two weeks of June 2015.

Other key emerging markets indices were up both in local currency and Sterling terms, with many currencies reversing most of their weakness from the previous twelve months. In the year to 30 June 2015 the Philippine Peso and Thai Bhat gained 5.4% and 4.5% respectively against Sterling, and the USD-linked Hong Kong Dollar appreciated by 8.9%. By comparison the Malaysian Ringgit and the Brazilian Real were down 7.4% and 28.8% respectively versus Sterling.

In early July 2014, UIL sold 13.8m shares in UEM at 180.00p, reducing its shareholding by almost a quarter. This reflects a re-balancing of the UIL portfolio following a period of outperformance by UEM relative to other constituents of UIL's portfolio and reduced UIL's emerging market exposure back to a level which we believe is appropriate for the Company for the long term.

Somers reported NAV per share had risen to US$17.56 as at 31 March 2015, up from US$16.25 as at 31 March 2014, an increase of 8.1%. Adding back dividends over the 12 months to 31 March 2015 the Somers total return was 10.5%.  Somers, a financial services investment company, is listed on the Bermuda Stock Exchange ("BSX") and its share price has remained virtually unchanged in the 12 months to 30 June 2015, decreasing slightly from US$14.25 to US$14.00 and the discount to the NAV has widened to 25.4% from 18.8% last year. Somers has moved to reporting its results as an investment company under IFRS 10 and has valued its investments at fair value.

Somers' two biggest investments remain Bermuda Commercial Bank Limited ("BCB") and Waverton Investment Management Limited ("Waverton"). BCB reported net profit for the six months to 31 March 2015 of US$2.1m (2014: US$7.9m) on shareholders' funds of US$105.1m. Total customer deposits were US$486.5m.

Waverton's assets under management ("AUM") were £4.6bn as at 31 March 2015 (30 September 2014: £5.2bn). In the first half of the year, Waverton's AUM were impacted by the loss of its European Fund which moved with its fund manager to a specialist fund management business. This was partially offset by the continued strong performance in the global equity markets, particularly in Europe and for the six months ended 31 March 2015, Waverton earned revenue of £16.6m, EBITDA of £5.2m and recorded profit before tax of £3.7m.

Private & Commercial Finance Group plc ("PCFG"), Somers third largest investment, continues to progress well. For the 12 months to 31 March 2015 profit before tax was up by 69.0% to £2.1m (2014: £1.3m) placing PCFG ahead of its targeted 2.0% return on average assets at 2.2%, while its total portfolio grew by 13.0% to £100m. The shares have responded accordingly and over the 12 months to 30 June 2015 had risen by 63.6%.

Infratil has had an exceptional year, with its share price increasing by 29.4% in the year to 30 June 2015 and achieving a total return of 52.9% once dividends are included. This reflects a combination of strong operational performance and further asset realisations at valuations well above market expectations. Infratil's surplus nearly doubled to NZ$384m, while net debt was cut by almost a third following the divestments. Dividends paid totalled NZ$0.33 (including a special dividend) compared to NZ$0.10 in 2014.

It has been a busy year for Infratil. Following the successful IPO of Z Energy in August 2013, Infratil announced a strategic review of its Australian energy assets which resulted in the sale of 100% of Lumo Energy and Direct Connect to Snowy Hydro Ltd for net cash proceeds of NZ$670m. At more than two times the March 2014 carrying value, Infratil realised a net gain on sale of NZ$337m, and part of the proceeds were returned to shareholders through a NZ$0.15 special dividend and an on-market buyback.

In December 2014 Infratil completed the acquisition of 50% of RetireAustralia, the largest privately-held pure-play retirement operator in Australia. RetireAustralia has over 3,700 independent living units and apartments across 28 villages in New South Wales, South Australia and Queensland. Infratil provided cash consideration of NZ$215m, with its partner, the New Zealand Superannuation Fund, acquiring the other 50%.

In its financial year to March 2015, Infratil reported adjusted EBITDAF up 10.3% year-on-year, with a strong performance at Trustpower offsetting slightly weaker financial contributions from Wellington Airport and NZ Bus. Trustpower has now commissioned the Snowtown II wind farm, which saw electricity generation in Australia nearly triple. Meanwhile its New Zealand electricity sales increased by 12% in volume to 8% more customers. By comparison passenger throughput at Wellington Airport was flat year-on-year with a small decline in income per passenger. Wellington Airport and the Wellington City Council have agreed to fund jointly a review of an extension of the runway, and are targeting mid-2016 to have construction consented.

In the year to 30 June 2015 UIL reduced its holding in Infratil by 28.0% with the sale of 13.8m shares at an average price of NZ$3.15, realising £21.7m.

Zeta's net tangible assets ("NTA") per share in the year to 30 June 2015 fell by 55.3%. Over this same period Zeta's share price fell by 39.4%, from A$0.66 to A$0.40. The share price discount to NTA at the end of June 2015 was 6.3%. Zeta's investments were affected by the fall in commodity prices, with the largest exposures being to oil, nickel and gold, which were down over the year by 43.4%, 37.1%, and 11.7% respectively. As Zeta employs debt capital, changes in share prices of its underlying investments have a leveraged effect on Zeta's NTA.

Zeta's three largest investments are Australian nickel producer Panoramic Resources Limited ("Panoramic"), New Zealand oil and gas producer, New Zealand Oil and Gas Limited ("NZOG") and Bermudan oil and gas exploration company, Seacrest L.P. ("Seacrest"). In the wake of the fall in the price of nickel, Panoramic's shares were down by 43.9% during the year; however, the company has experienced exploration success, and has also moved to reduce costs in order to continue to produce positive cashflows. NZOG's shares declined by 28.2%; during the year the company returned an effective NZ$0.15 per share via a buy-back. Seacrest is unlisted, but Zeta's directors determined that a 25% reduction in fair value was appropriate given the fall in the oil price.

BFIC's share price was unchanged over the year to 30 June 2015. BFIC's investee companies continue to face significant challenges as the Bermudan economy remains weak. However, there are signs that the economy is starting to pick up and with events such as the America's Cup due in 2017 there is hope that growth will flow through to BFIC's investee companies.

BFIC's two major investments, KeyTech Limited ("KeyTech") and Ascendant Group Limited ("Ascendant"), both reported tough trading conditions and sharply lower profits. As at 30 June 2015, BFIC had total assets of BM$23.6m and reported an operating loss for the twelve months of BM$1.2m.

During the year KeyTech announced a transformative transaction involving the disposal of its fixed line business, Bermuda Telephone Company ("BTC") and the acquisition of British Overseas Territory Cable & Telecommunications Limited ("BOTCAT"). BOTCAT owns WestStar TV Limited in Cayman and a significant interest in CableVision Holding Limited ("Cablevision") in Bermuda. Post the year end KeyTech acquired the minority interests in Cablevision and has merged Cablevision with its Internet service provider business, Logic Communications Limited.

Vix Investments Limited is an unlisted investment company holding a number of unlisted investments in technology companies, primarily related to FinTech.

The primary holding, accounting for 96.0% of Vix Investments' gross assets, is Optal Limited (formerly PSP International Limited) ("Optal") which continues to perform well with revenues increasing by 82.6% in the year to December 2014 and an almost five-fold increase in profit. Optal provides payment solutions and allows agents to secure and pay through the Mastercard system, using a virtual card number linked to an individual transaction. In the six months to 30 June 2015 Optal saw like for like revenues increase by 62.0% and total revenues increase to £23.4m with EBITDA nearly doubling to £4.4m.

Two of Vix Investments previous holdings, Touchcorp and DTI Group, listed on the ASX during the year. Both shareholdings were distributed by Vix Investments pro rata to its shareholders and UIL now holds these two companies directly. Touchcorp is now in the top ten and is reviewed in more detail below.

Direct investments

UIL has four direct investments in the top ten: Resolute, Touchcorp, VixTech and Augean plc ("Augean").

Resolute is an Australian domiciled gold mining company and its share price in the year ended 30 June 2015 fell by 51.2% to A$0.30. Production in the year to 30 June 2015 of c.329,000/oz of gold was down on the previous year's production of c.343,000/oz following the planned closure of the Golden Pride mine in Tanzania. The company continues to firm up prospects at its Bibiani project in Ghana, with positive results from its underground scoping study set to support a feasibility study at the project in 2016.

Resolute's principal producing assets include the Syama gold mine in Mali and Ravenswood in Australia. Gold ounces produced at Syama increased by 35.9% to 224,911/oz following the successful commissioning of a new oxide circuit, which saw cash costs simultaneously fall by 20.4% to A$800/oz. At Ravenswood gold ounces produced fell by 25.5% to 103,773oz due to increasing hardness of ore requiring greater processing, as well as maintenance of plant. Cash costs per ounce at Ravenswood increased by 13.0% to A$940/oz.

At 30 June 2015 Resolute had cash and bullion on hand of A$54m and total borrowings of A$118m, including the A$15m convertible note offering which was completed in December 2014 and underwritten by ICM and partially sub-underwritten by UIL. Gross cash inflows for the year totalled A$182m, though the majority of this cashflow was re-invested in development capex.

In June 2015 Resolute announced the completion of a pre-feasibility study at Syama which resulted in a material increase in the underground ore reserve to 2.3M/oz, extending the life of the mine to at least 2028. Following the decline in the gold price, Resolute has conducted a review of operations at Syama and determined that the planned Stage 2 mining of the ore body will be best achieved by underground, rather than open pit, mining. The switch to underground mining is expected to result in a significantly smoother cash flow profile and higher return on capital of the project.

Resolute has provided guidance for gold production of 315,000oz at an average cash cost of A$990/oz for the year to 30 June 2016.

Touchcorp is a Bermuda domiciled FinTech company headquartered in Australia, operating in Scandinavia, Europe, South-East Asia and the Australia Pacific regions. Touchcorp provides value-added products and services, including payment services, to retailers and to the providers of prepaid mobile phones, prepaid cards and to health and government organisations, through channels including the internet, mobile devices and retail agents (e.g. convenience stores, newsagents and petrol stations) as well as directly to consumers on behalf of product and service owners.

Touchcorp, which as at 30 June 2014 was held as an unlisted investment by Vix Investments, successfully listed on the ASX in March 2015. Under the IPO, a proportion of the shares in Touchcorp were sold at the IPO price of A$1.40 and the remaining shares held by Vix Investments were distributed to its shareholders, including UIL. UIL received a cash payment of A$11.7m and holds a direct investment of 24.0m shares (representing 20.7% of the issued capital of Touchcorp).

In its financial year to 31 December 2014, the company reported revenue growth of 30.0% to A$24.8m and an increase in pre-tax profits of 59.4% to A$11.7m.

In the six months to 30 June 2015, the company reported revenue growth of 69.0% to A$18.4m and an increase in pre-tax profits (excluding government grants and IPO costs) of 79.3% to A$4.2m.

VixTech is an unlisted company in which UIL has a 39.8% holding. VixTech is a global leader in smart booking, ticketing, payments, real-time information and data management solutions for large-scale transport networks, working with more than 200 customers worldwide. VixTech leverages more than 25 years of industry experience designing, operating and maintaining proven next-generation ticketing, payment and loyalty platforms to help governments and businesses manage around five billion transactions a year and create new ways to connect with their customers. Harnessing the latest technologies, VixTech now also works with major sporting clubs, mining communities and event venues to boost engagement, save resources and enable powerful data-driven loyalty and reward schemes through simple solutions that achieve measurable growth and increase customer satisfaction. VixTech has a long history of successful transit ticketing and payment solutions in regions including Singapore, Hong Kong, USA, UK, Sweden, and France. VixTech developed the world's largest payment central clearing house in Beijing before the 2008 Olympics, capable of processing more than 10 million passenger journeys per day.

Over the year to 30 June 2015, VixTech continued to deliver on its short term objectives to improve the quality of the order book, control costs and expand margins. In the year to 30 June 2015, VixTech reported an EBITDA from continuing businesses of A$11.6m, up 19.9% on the prior year on turnover of A$146.6m, although revenue was largely flat. It was pleasing to see VixTech make significant progress on its medium term objectives to both expand geographic and product offering. To this end, recently winning the US$27.0m contract in Malaysia to build a unified public transit ticketing system with the ability to use a single smartcard across all modes of transport was a significant step forward. The announced launch by VixTech, in partnership with National Rugby League club Melbourne Storm, of Australia's first 'smart-stadium' loyalty and fan engagement technology is a demonstration of VixTech's ability to expand its product base. The Vix SmartSite stadium solution integrates payment, access, loyalty rewards and patron analytics technology at Melbourne's AAMI Park stadium.

VixTech's project pipeline remains robust with core business lines developing a number of material opportunities with major clients. Major contract wins to date should deliver a substantial uplift in turnover and continued cost controls should support further margin expansion in the coming year. Looking forward and based on VixTech's pipeline, VixTech is forecasting a substantial uplift, which if delivered and sustained, would result in a significant revaluation upwards.

In the year to 30 June 2015, VixTech paid a dividend of A$4.0m to its shareholders. In addition, VixTech disposed of its 11.2% stake in Hong Kong listed transportation solutions provider China City Rail Transportation Technology ("CCRTT"), recording a one off gain of A$13.4m, the majority of which was distributed to VixTech shareholders. Together these resulted in distributions to UIL of A$6.5m.

The share price of Augean, a waste treatment company, has strengthened further in the 12 months to June 2015, increasing by 17.8% on the back of continued operational and financial progress after the restructuring of the business in the previous year. In its financial year to December 2014, total revenues increased by 26.5% and EBITDA increased by 27.6% on the back of a recovery in landfill volumes and a robust performance of its North Sea Services business. Dividends were increased by 43.0% on the previous year.

The core Energy & Construction business saw total landfill volumes increase by 14.2% year-on-year to December 2014, boosted by higher-value air pollution control residues ("fly ash"). This reflects Augean's strategy to focus the business away from short-term contracts to higher-value waste streams with longer-term contracts, improving the forward visibility of the order book. Volumes of low level radioactive waste treated declined by 8.4% due to fluctuations in amounts released by the UK nuclear estate, offset by effective rates up by 22.7%. This business line remains heavily reliant on the pace of decommissioning of former nuclear facilities by the Nuclear Decommissioning Authority.

Augean North Sea Services significantly exceeded expectations, with revenues in the year to December 2014 up by 56.7% and EBITDA up by 44.0% following strong traction in moving up the supply chain and directly contracting drilling waste management services with tier-1 oil and gas companies. Recent concerns over the impact of the lower oil price on this business line have been largely dispelled by the operation's continued growth in rigs serviced and a positive trading update to end-June 2015.

Augean's Industry & Infrastructure (oil and solvent recovery) and Integrated Services (total waste management) divisions continue to make progress, with losses narrowing in both business lines. After experiencing operational issues in the previous year, the high temperature incinerator facility in Kent saw improved reliability.

In the year ended 30 June 2015 UIL increased its shareholding in Augean by 6.0%, investing £0.6m at an average price of 45.30p per share.

Sector Reviews

Technology - 15.7%, prior year 8.8%

UIL holds a number of investments in the technology sector, both directly and through Vix Investments Limited. UIL's largest technology investment is Touchcorp, the sixth largest holding in the portfolio at 30 June 2015 which successfully listed in Australia in March 2015 and is reviewed above.

VixTech provides ticketing payment solutions and is UIL's seventh largest investment and is reviewed above.

Vix Investments is UIL's tenth largest holding and has a number of investments in unlisted companies, principally in the FinTech space. Two former holdings by Vix Investments, Touchcorp and DTI Group, listed during the year and UIL now holds these investments direct.

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 - 15.1%, prior year 13.1%

UIL's largest investment in financial services is in Somers, which accounts for 14.0% of UIL's portfolio; Somers is reviewed above.

Oil & Gas - 13.0%, prior year 13.0%

UIL's largest investment in oil & gas is through Zeta which accounts for 11.0% of UIL's portfolio; Zeta is reviewed above.

Renewables - 8.6%, prior year 12.3%

Much of the investment in renewables is through Infratil whose hydro and windfarm assets fall into this category; Infratil is reviewed above. There are two other key investments in this sector, both in the UK. Renewable Energy Generation plc and Renewable Energy Holdings plc. Both of these holdings have reduced in value significantly, partly through disposals of investments by UIL of £7.7m and partly through share price movements. Over the year the value of these two investments has reduced from £15.8m to £3.4m.

Renewable subsidies in the UK over the past year have become increasingly politicised, with their impact on household energy bills being heavily featured in mainstream media. The government's Electricity Market Reform (EMR) policy to incentivise investment in low-carbon electricity and improve affordability for consumers sought to shift the subsidy mechanism from Renewables Obligation Certificates (ROCs) to capacity auctions under Contracts for Difference ("CFD") from 31 March 2017. But following the election of a majority Conservative government, it was announced that the ROCs would no longer be available to new onshore wind power projects after 31 March 2016. Further, Energy Secretary Amber Rudd has made public statements that onshore wind will not be allocated CFDs either, effectively removing all subsidies for onshore wind in the UK. This has dramatically shifted the economics of new-build wind farms effectively making them unviable, and has severely affected the sentiment and prospects of all UK wind farm companies, with commensurate declines in market valuations.

Gold Mining - 7.3%, prior year 11.2%

UIL's largest investment in gold mining is Resolute which is held directly through UIL (6.0% of the portfolio) and indirectly, including through Zeta. Resolute is reviewed above.

Derivatives

Equity: A modest market derivatives portfolio, mainly through S&P500 index options, has resulted in a small loss of £76,000 for the year to 30 June 2015.

Foreign exchange: Currency positions within UIL's portfolio made significant gains of £6.4m. UIL has hedged a mixture of New Zealand Dollar, Australian Dollar and Euro's over the year which realised a net gain in the 12 months to 30 June 2015. At the period end UIL's forward currency sale contracts in place were for nominal NZ$60.0m, €12.0m and A$10.0m. However, Sterling's appreciation against most major currencies has created significant headwinds on UIL's NAV performance. Had exchange rates remained constant throughout the year, the portfolio valuation would have been £13.1m higher. This cost to the Company due to UK Sterling's ongoing strength was reduced by UIL's foreign exchange hedging. However due to UIL's leverage, the movements in currencies represent a 4.0% loss for ordinary shareholders.

Gearing

Gearing (including through the ZDP shares) reduced from 160.4% two years ago to 144.4% last year and to 124.1% at 30 June 2015. This reflects a debt reduction of some £27.9m in the year to 30 June 2015 from £234.7m to £206.8m, together with a small increase in shareholders' equity to £166.6m from £164.4m.

Since the year end UIL has bought back 7.9m ordinary shares at a price of 116.00p, costing £9.2m. Bank debt has been increased and therefore the gearing will also have increased. Notwithstanding this, UIL has a goal of reducing gearing to 100.0%.

ZDP shares

UIL started the year with £212.5m ZDP shares including £76.2m of 2014 ZDP shares, which were redeemed in full in October 2014 by a mixture of asset sales, bank debt and 2020 ZDP issuance.

Following the 2014 ZDP redemption and allowing for the issuance of 25.0m 2020 ZDP shares and their collective compounding annual growth of 7.25%, at the year end the ZDP shares stood at £172.4m, a reduction over the prior year of £40.1m.

UIL will aim to put forward proposals to the 2016 ZDP shareholders ahead of the 2016 ZDP share redemption on 31 October 2016, which is likely to include the issuance of a new class of 2022 ZDP shares.

Debt

Bank debt increased in the year from £22.2m to £50.0m at the time of the 2014 ZDP redemption and subsequently reduced to £34.4m. At year end this was drawn as £20.5m, NZ$21.5m and €6.5m.

The facility is provided by Scotiabank Europe plc ("Scotiabank") and expires on 22 March 2016.

Revenue returns

Income was £11.2m, up by 7.6% on the prior year. Management fees were significantly lower as a result of ICM voluntarily halving its annual fee to 0.25% until such time as the high watermark is regained. Other expenses were up by 6.3% at £1.0m. Finance costs were 16.0% higher than last year at £1.1m reflecting higher average bank debt levels. Tax was £0.5m, prior year £0.4m.

The profit for the year arising from the above was £7.8m, up 11.4% on prior year. The resultant EPS was 7.84p, up 11.5% on the prior year.

Capital returns

Capital returns were positive in the year to 30 June 2015; this comprised income of £15.6m being a gain on investments of £6.3m, together with gains on derivative financial instruments of £6.3m and foreign exchange gains of £3.0m. This income was reduced by finance costs of £13.2m (7.9% lower than in 2014 due to the reduction in the number of ZDP shares in issue), to a profit for the year of £2.4m.

ICM Limited and ICM Investment Management Limited
Investment Managers
21 September 2015

Principal Risks and Risk Mitigation

ICMIM has been appointed as the Company's alternative investment fund manager 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 F&C.

The Board applies the principles and recommendations of the UK Code on Corporate Governance and the AIC's Code on Corporate Governance as described on page 46 of the Report and Accounts 2015. The Company's internal controls are described in more detail on page 41 of the Report and Accounts 2015. 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 27 to the Report and Accounts 2015.

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 is pursued by the Investment Managers. These guidelines include sector and market exposure limits.

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 is aiming 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 2014.

A fuller review of economic and market conditions is included in the Investment Managers' Report section of the Strategic Report of the Report and Accounts 2015.

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 change in overall risk in the year to 30 June 2015.

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 2015, gearing on net assets, including bank loans, any overdrafts and ZDP shares, was 124.1%

No change in overall risk in the year to 30 June 2015.

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 change in overall risk in the year to 30 June 2015.

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 and the recruitment and remuneration package has been developed in order to retain key staff.

Any changes in the senior management team is considered by the Board at its next meeting; the Board discusses succession planning with the Investment Managers at regular intervals.

No change in overall risk in the year to 30 June 2015.

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 94 of the Report and Accounts 2015. The Audit Committee monitors the performance of the service providers.

All listed investments are held in custody for the Company by JPMorgan Chase Bank NA, 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 JP Morgan Chase 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 41 of the Report and Accounts 2015. 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.

Directors' Statement of Responsibilities

The Directors are responsible for preparing the annual report and accounts, which is required to include a Strategic Report, a Corporate Governance Statement, a Directors' Remuneration Report and a Report of the Directors.

The Directors must not approve the Group and Company financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company as at 30 June 2015 and of the results for the year then ended. The Directors are also responsible for ensuring that the annual report and accounts is fair, balanced and understandable and that the accounting records are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and Group and enable them to ensure that the financial statements and the Directors' annual report on remuneration comply with IFRS. They have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

In preparing these financial statements, the Directors are required to:

·       select suitable accounting policies and then apply them consistently;

·       present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

·       make judgements and estimates that are reasonable and prudent;

·       provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance;

·       state that the Company has complied with IFRS, subject to any material departures disclosed and explained in the financial statements; and

·       prepare the accounts on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The Directors of the Company, whose names are shown on page 33 of the Report and Accounts 2015, each confirm to the best of their knowledge that:

·       the financial statements, which have been prepared in accordance with applicable Bermuda law and IFRS, as adopted by the European Union, on a going concern basis, give a true and fair view of the assets, liabilities, financial position and net return of the Company and Group;

·       the annual financial report includes a fair review of the development and performance of the Company and the important events that have occurred during the financial year and their impact on the financial statements, including a description of the principal risks and uncertainties that it faces; and

·       the financial statements and the Report of the Directors' include details of any related party transactions.

Approved by the Board on 21 September 2015 and signed on its behalf by:

Roger Urwin

Chairman

Group Income Statement

	Year to 30 June 2015			Year to 30 June 2014
	Revenue	Capital	Total	Revenue	Capital	Total
	return	return	return	return	return	Return
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Gains on investments	-	6,308	6,308	-	36,709	36,709
Gains/(losses) on derivative financial instruments	-	6,347	6,347	-	(2,247)	(2,247)
Foreign exchange (losses)/gains	(74)	2,989	2,915	36	(519)	(483)
Investment and other income	11,271	-	11,271	10,374	-	10,374
Total income	11,197	15,644	26,841	10,410	33,943	44,353
Management and administration fees	(846)	-	(846)	(1,200)	-	(1,200)
Other expenses	(1,003)	(5)	(1,008)	(944)	(4)	(948)
Profit before finance costs and taxation	9,348	15,639	24,987	8,266	33,939	42,205
Finance costs	(1,082)	(13,195)	(14,277)	(933)	(14,234)	(15,167)
Profit before taxation	8,266	2,444	10,710	7,333	19,705	27,038
Taxation	(500)	-	(500)	(360)	(22)	(382)
Profit for the year	7,766	2,444	10,210	6,973	19,683	26,656
Earnings per ordinary share (basic)  - pence	7.84	2.47	10.31	7.03	19.85	26.88

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 2015			Year to 30 June 2014
	Revenue	Capital	Total	Revenue	Capital	Total
	return	return	return	return	return	return
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Gains on investments	-	6,233	6,233	-	34,925	34,925
Gains/(losses) on derivative financial instruments	-	6,423	6,423	-	(477)	(477)
Foreign exchange (losses)/gains	(74)	2,993	2,919	36	(515)	(479)
Investment and other income	11,271	-	11,271	10,374	-	10,374
Total income	11,197	15,649	26,846	10,410	33,933	44,343
Management and administration fees	(831)	-	(831)	(1,196)	-	(1,196)
Other expenses	(996)	(5)	(1,001)	(942)	(4)	(946)
Profit before finance costs and taxation	9,370	15,644	25,014	8,272	33,929	42,201
Finance costs	(1,082)	(13,237)	(14,319)	(933)	(14,380)	(15,313)
Profit before taxation	8,288	2,407	10,695	7,339	19,549	26,888
Taxation	(500)	-	(500)	(360)	(22)	(382)
Profit for the year	7,788	2,407	10,195	6,979	19,527	26,506
Earnings per ordinary share (basic)  - pence	7.87	2.43	10.30	7.04	19.69	26.73

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 2015
	Ordinary	Share		Non-
	share	premium	Special	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 30 June 2014	9,916	29,020	233,866	32,069	(151,699)	11,268	164,440
Profit for the year	-	-	-	-	2,444	7,766	10,210
Ordinary dividends paid	-	-	-	-	-	(7,426)	(7,426)
Shares purchased by the Company	(60)	(606)	-	-	-	-	(666)
Balance at 30 June 2015	9,856	28,414	233,866	32,069	(149,255)	11,608	166,558

for the year to 30 June 2014
	Ordinary	Share		Non-
	share	premium	Special	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 30 June 2013	9,916	29,020	233,866	32,069	(171,382)	13,591	147,080
Profit for the year	-	-	-	-	19,683	6,973	26,656
Ordinary dividends paid	-	-	-	-	-	(9,296)	(9,296)
Balance at 30 June 2014	9,916	29,020	233,866	32,069	(151,699)	11,268	164,440

Company Statement of Changes in Equity

for the year to 30 June 2015
	Ordinary	Share		Non-
	share	premium	Special	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 30 June 2014	9,916	29,020	233,866	32,069	(151,858)	11,442	164,455
Profit for the year	-	-	-	-	2,407	7,788	10,195
Ordinary dividends paid	-	-	-	-	-	(7,426)	(7,426)
Shares purchased by the Company	(60)	(606)	-	-	-	-	(666)
Balance at 30 June 2015	9,856	28,414	233,866	32,069	(149,451)	11,804	166,558

for the year to 30 June 2014
	Ordinary	Share		Non-
	share	premium	Special	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 30 June 2013	9,916	29,020	233,866	32,069	(171,385)	13,759	147,245
Profit for the year	-	-	-	-	19,527	6,979	26,506
Ordinary dividends paid	-	-	-	-	-	(9,296)	(9,296)
Balance at 30 June 2014	9,916	29,020	233,866	32,069	(151,858)	11,442	164,455

Balance Sheets

at 30 June	GROUP		COMPANY
	2015	2014	2015	2014
	£'000s	£'000s	£'000s	£'000s
Non-current assets
Investments	366,928	402,538	367,609	404,342
Current assets
Other receivables	2,583	783	2,583	782
Derivative financial instruments	3,359	164	2,658	41
Cash and cash equivalents	1,236	721	1,053	716
	7,178	1,668	6,294	1,539
Current liabilities
Loans	(34,351)	(22,239)	(34,351)	(22,239)
Other payables	(560)	(4,045)	(172,994)	(218,198)
Derivative financial instruments	(196)	(989)	-	(989)
Zero dividend preference shares	-	(76,138)	-	-
	(35,107)	(103,411)	(207,345)	(241,426)
Net current liabilities	(27,929)	(101,743)	(201,051)	(239,887)
Total assets less current liabilities	338,999	300,795	166,558	164,455
Non-current liabilities
Zero dividend preference shares	(172,441)	(136,355)	-	-
Net assets	166,558	164,440	166,558	164,455
Equity attributable to equity holders
Ordinary share capital	9,856	9,916	9,856	9,916
Share premium account	28,414	29,020	28,414	29,020
Special reserve	233,866	233,866	233,866	233,866
Non-distributable reserve	32,069	32,069	32,069	32,069
Capital reserves	(149,255)	(151,699)	(149,451)	(151,858)
Revenue reserve	11,608	11,268	11,804	11,442
Total attributable to equity holders	166,558	164,440	166,558	164,455
Net asset value per ordinary share
Basic - pence	169.00	165.84	169.00	165.85

Statements of Cash Flows

	GROUP		COMPANY
for the year to 30 June	2015	2014	2015	2014
	£'000s	£'000s	£'000s	£'000s
Cash flows from operating activities	3,587	5,709	3,613	5,729
Investing activities
Purchases of investments	(42,255)	(75,521)	(43,746)	(78,115)
Sales of investments	86,466	84,190	86,466	90,735
Purchases of derivatives	(887)	(2,243)	-	-
Sales of derivatives	3,246	2,778	2,817	1,482
Cash flows on margin accounts	1	-	-	-
Cash flows from investing activities	46,571	9,204	45,537	14,102
Cash flows before financing activities	50,158	14,913	49,150	19,831
Financing activities
Equity dividends paid	(7,426)	(9,296)	(7,426)	(9,296)
Movement on loans	12,634	(19,251)	12,634	(19,251)
Cash flow from issue of ZDP shares	8,993	6,477	8,993	(69)
Cash flow from redemption of ZDP shares	(62,172)	(1,683)	(61,346)	-
Cost of shares purchased for cancellation	(666)	-	(666)	-
Cash flows from financing activities	(48,637)	(23,753)	(47,811)	(28,616)
Net increase/(decrease) in cash and cash equivalents	1,521	(8,840)	1,339	(8,785)
Cash and cash equivalents at the beginning of the year	(2,689)	7,644	(2,694)	7,581
Effect of movement in foreign exchange	2,393	(1,493)	2,397	(1,490)
Cash and cash equivalents at the end of the year	1,225	(2,689)	1,042	(2,694)

Comprised of:
Cash	1,236	721	1,053	716
Bank overdraft	(11)	(3,410)	(11)	(3,410)
Total	1,225	(2,689)	1,042	(2,694)

Notes

The Directors declared a fourth quarterly dividend in respect of the year ended 30 June 2015 of 1.875p per share which was paid on 16 September 2015 to all ordinary shareholders on the register at close of business on 21 August 2015. The total cost of the dividend, which has not been accrued in the results for the year to 30 June 2015, is £1,700,000 based on 90,653,789 ordinary shares in issue.

This Statement of Results was approved by the Board on 21 September 2015. It is not the Group's or Company's statutory accounts. The statutory accounts for the financial year ended 30 June 2015 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 2014 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 2015 will be posted to shareholders in early October 2015. A copy is available to view and download from the Company's website at www.utilico.bm. Copies may also be obtained during normal business hours from Exchange House, Primrose Street, London, EC2A 2NY.

By order of the Board

ICM Investment Management Limited, Secretary

21 September 2015

 

END

 

 

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