Half Yearly Report

RNS Number : 7274P

UIL Limited

22 February 2016

 

Date:                22 February 2016

Contact:           Charles Jillings                                              

                        ICM Investment Management Limited               

                        01372 271 486                                               

UIL Limited

Unaudited Statement of Results

for the six months to 31 December 2015

Financial Highlights

·      Revenue return  per ordinary share 2.91p (2.58p)

·      Capital return per ordinary share -11.21p (-5.89p)

·      Total return per ordinary share -8.30p (-3.31p)

·      Dividends per ordinary share 3.75p (3.75p)

·      Annualised dividend yield 7.0% (6.8%)

Figures in brackets are 31 December 2014

Chairman's Statement

UIL had a negative total return of 2.2% in the six months to 31 December 2015. Whilst the FTSE All Share Total Return Index was also negative 2.0%, we are seeking an absolute positive return and will remain focused on this outcome.

In the June 2015 year-end report and accounts we noted the rising volatility as the world's major economies diverged. Over the last six months this divergence has continued, with the US Federal Bank announcing a 25 basis points increase on 16 December 2015, whilst Europe and Japan continue to pursue quantitative easing ("QE").  These divergences have produced significant economic dislocations which have been exacerbated by a weakening Chinese economy, which in turn has led to weakening commodity prices. The combination of factors has seen extraordinary volatility and price movements across most asset classes and currencies.

The financial global dynamic is also being challenged by the emergence of disruptive businesses with a number of them dominating the markets, and by rising concerns over the Middle East and migration and more recently the Zika virus.

We have seen the US Dollar strengthen by 6.7% against Sterling in the six months to 31 December 2015. Oil has fallen by 41.4% from US$63.59 per barrel to US$37.28 per barrel and nickel fell by 26.4%. This makes for one of the most difficult investment environments of recent times.

For UIL it has meant continued positives within its Fintech and US Dollar based investments and continued negatives in its commodities and energy market investments. The overall result was a small positive outcome with the investment portfolio gaining £3.2m over the six months. However, UIL's predominantly UK Sterling debt and gearing has seen losses outweigh gains and a loss on the Capital account for the six months of £10.3m.

In July 2015 UIL bought back 7.9m ordinary shares at 116.00p, a discount of 23.7%. This buyback was significantly accretive to UIL's NAV per share.

Pleasingly the Revenue account saw profit up on the prior half-year at £2.7m (31 December 2014: £2.6m). Given the substantial buyback in the six months, earnings per share ("EPS") were up by 12.8% from 2.58p to 2.91p. This has enabled the Board to maintain the dividends.

The Board announced a first quarterly dividend of 1.875p per ordinary share in respect of the year ending 30 June 2016 which was paid on 21 December 2015. For the second quarterly dividend I am pleased to have announced a maintained dividend of 1.875p being paid on 8 March 2016.

Following the retirement of Roger Urwin and Graham Cole at the annual general meeting in November 2015, I am pleased to welcome Alison Hill, Christopher Samuel and David Shillson to the Board and look forward to their contributions in these challenging times.

The Board is developing proposals with regard to the redemption of the 2016 ZDP shares on 31 October 2016. These proposals are likely to follow past proposals and involve the creation of a further class of 2022 ZDP shares.

On 16 November 2015, Utilico Investments Limited changed its name to UIL Limited and Utilico Finance Limited changed its name to UIL Finance Limited.

OUTLOOK

The divergence of so much of the world's economic activity will inevitably lead to higher market volatility and price movements. While we fundamentally believe the world's GDP continues to be positive, the next six months will be challenging. UIL's stock selection focus should enable UIL and its platforms to identify niche investment opportunities.

Peter Burrows

Chairman

22 February 2016

Investment Managers' Report

UIL's NAV total return decreased by 2.2% over the six months to 31 December 2015 and the FTSE All-Share Total Return Index was also down by 2.0% over the same period.

As noted in the Chairman's Statement this has been a challenging six months as volatility has risen sharply across most asset classes. We are currently in an investment world where QE is a feature in Europe and Japan, interest rates are rising in the US, most of the developed world's interest rates are under 2.0% and some even have negative borrowing rates. Inflation threatens to become deflation, global GDP is weak, borrowings continue to rise, and political tensions are increasing. We are concerned "normalisation" of a number of the above features could prove very volatile for the wider markets.

For the six months many currencies firmed against UK Sterling, (US Dollar was up by 6.7%; Yen, up by 8.6%; New Zealand Dollar, up by 7.6%; and the Australian Dollar was up by 0.8%), while markets weakened (S&P 500, down by 0.9%; FTSE All Share, down by 3.5%; NZX, down by 0.9%). The most significant moves were in commodities where oil was down by 41.4%; iron ore and nickel fell by 26.6% and 26.4% respectively; copper was down by 18.6%; and gold fell by 9.5%. These are very significant moves in both magnitude and timing.

PORTFOLIO

Over the six months there have been two divergent trends. UIL's Fintech investments have performed very well, with Touchcorp and Vix Technology up by 57.5% and 43.4% respectively. Against this UIL's resources and emerging markets investments are down significantly with Utilico Emerging Markets Limited ("UEM"), Zeta Resources Limited ("Zeta") and Resolute Mining Limited's ("Resolute") share prices all down by 11.7%, 50.0% and 16.7% respectively. Overall gains on the investment portfolio over the six months were £3.2m, a credible performance.

UIL's challenge has been structural, arising from its leverage of some 150%, together with the added mismatch of predominantly Sterling borrowings versus predominantly non Sterling assets. This has shown up in two ways, the derivatives and foreign exchange losses of £7.2m and funding costs for the six months of £6.3m impeding UIL's performance.

MAJOR PLATFORM INVESTMENTS

The major platform investments continue to develop.

UEM invests in utility and infrastructure assets in the emerging markets and is listed in the UK and traded on the London Stock Exchange.  Emerging market stock markets and currencies were volatile and ended the period weaker. Sentiment towards emerging markets was poor, driven by a slowdown in many parts of the Chinese economy and Brazil and Russia falling into recession. The MSCI Emerging Markets Total Return Index in Sterling terms declined by 11.6% over the six months to 31 December 2015. UEM continues to outperform its peer group and over the six months UEM's total NAV return declined by 5.5%.

Generally, UEM's investee companies continue to report good results and fundamentals remain solid, but weakness in macro environments, currencies and market confidence have in many cases eroded valuations, especially in Sterling terms.

UEM's share price has come under pressure, with the discount widening from 6.7% to 12.1%. The share price total return was down by 10.7% for the six months to 31 December 2015, with the share price declining from 189.75p to 166.25p. During the six month period, UEM has increased its quarterly dividend to 1.625p and issued a one for five bonus Subscription share to shareholders. The Subscription share price as at 31 December 2015 was 11.00p.

Infratil Limited ("Infratil") predominantly invests in utility and infrastructure assets in Australasia and is listed on the New Zealand Stock Exchange. Infratil's share price increased by 3.8% to NZ$3.27 in the six months under review. This reflects a period of consolidation after an exceptionally strong performance in the previous twelve months.

In the six months to September 2015 Infratil's net parent surplus increased by 13.4% to NZ$435m, while net debt halved following disposal of its remaining stake in Z Energy for net gain on book value of NZ$392m. In the six months to 31 December 2015 dividends paid totalled NZ$0.0525 compared to NZ$0.195 in the comparable prior period, which included a special dividend of NZ$0.15.

Infratil continues to report strong operational figures, with consolidated EBITDAF from continuing operations up 13.9% year-on-year in the six months to September 2015. On a like-for like basis EBITDAF grew by 7.3%, with the headline figure benefitting from the contribution of recently-acquired RetireAustralia.

All investments with the exception of Perth Energy saw solid improvement in financial performance. In the six months to September 2015 Trustpower's EBITDAF grew by 6.3% on retail customer growth and higher wind and hydro power generation in both New Zealand and Australia. Wellington Airport saw three new international services and the announcement that Jetstar is to expand its domestic services, coinciding with significant investment in the expansion of the domestic terminal by Infratil. At the same time Metlifecare has made very solid progress and saw EBITDAF contribution nearly double. Only Perth Energy posted a decline in EBITDAF, down by 77.6%, as the one-off benefit of the change in the Renewable Energy Certificate regime last year was not repeated in this period.

In the six months to 31 December 2015 UIL reduced its holding in Infratil by 15.5% with the sale of 5.5m shares at an average price of NZ$3.19, realising £7.6m.

Somers Limited ("Somers") is a financial services sector investment holding company listed on the Bermuda Stock Exchange. Somers' shares declined by 7.1% in the six months to US$13.00. Somers' two main investments are Bermuda Commercial Bank ("BCB") (one of Bermuda's four licensed banks), which is a wholly owned subsidiary, and a 62.5% interest in Waverton, a UK private wealth manager with £4.3 billion of assets under management. For the year ended 30 September 2015, Somers reported a net loss of US$4.1m on total equity of US$209.2m. Somers' diluted NAV per share was US$17.74 as at 30 September 2015 (September 2014: US$18.96). The decrease in NAV was driven by reduced valuations at BCB and Waverton and Sterling depreciation against the US Dollar.

UIL elected for a share dividend and increased its holding in Somers to 49.6% as at 31 December 2015.

Zeta is a resource-focused investment company which is listed on the Australian Stock Exchange. Over the six months to 31 December 2015 Zeta's share price halved to A$0.20.

During the six month period, commodity prices again fell significantly. Oil continued to decline in price, down by 41.4% to US$37.28 per barrel. The gold price was down by 9.5% to US$1,061/oz, while the nickel price was down by 26.4%. As a result, the share prices of most of Zeta's investments fell. As a leveraged fund, Zeta's net assets per share fell by 60.2% during the period to A$0.17 per share. Zeta's shares closed at A$0.20 on 31 December 2015, representing a premium to net tangible assets of 17.6%.

During the six months Zeta shareholders approved the issuance of shares and options to UIL in partial repayment for debt owed to UIL.  Following this transaction UIL holds 95.3% of Zeta on a fully diluted basis. UIL continues to support Zeta and its loan facility at 31 December 2015 was some A$40.0m.

Bermuda First Investment Company Limited ("BFIC") is an investment company focused on Bermudan investments and its shares and loan notes are listed on the Bermuda Stock Exchange. Its largest investments are in KeyTech Limited ("KeyTech") (valued at US$13.9m as at 31 December 2015) and Ascendant (valued at US$6.4m as at 31 December 2015).

BFIC's policy is to build strategic investments in local Bermudan companies whilst working closely, where appropriate, with the board and senior management of those companies to increase the long term value of these investments and to encourage the introduction of shareholder friendly initiatives. In October 2015, KeyTech announced that it had entered into an agreement with Atlantic Tele-Network, Inc. ("ATN") to merge CellOne (one of Bermuda's two mobile providers) with KeyTech. This will create a full service provider of mobile, fixed and international telecommunication services in Bermuda. As part of the agreement, KeyTech will receive ATN's shares in CellOne and approximately $42 million in cash. ATN, which has jointly owned and operated CellOne with KeyTech since May 2011, will receive a 51% interest in KeyTech.  In connection with the proposed transaction, current KeyTech shareholders will receive a one-time special dividend of $0.75 per share, conditional upon successful completion of the proposed transaction.

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

The primary holding, accounting for 87.0% of Vix Investments' gross assets continues to be Optal Limited ("Optal").  Optal provides payments 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.

MAJOR DIRECT HOLDINGS

Gold production by Resolute in the six months to 31 December 2015 was 153,191oz, up 11.4% on the same period in the prior year following the installation of a new 1Mtpa oxide processing circuit at Syama, which joined the existing 2Mtpa sulphide processing circuit. Production cash costs during the period averaged A$909/oz. For the year to 30 June 2016 Resolute has forecast production of 315,000oz, at an average cash cost of A$990/oz.

In the six months to 31 December 2015, Resolute sold 158,540oz of gold at an average price of A$1,561/oz, generating a gross operating cash flow of A$101.5m. Cash and bullion on hand and liquid investments were A$75m as at 31 December 2015 (2014: A$23m); total borrowings were A$96m (2014:A$122m). In November 2015 Resolute announced an accelerated repayment schedule had been agreed with its major lenders, with a US$50m facility to be repaid in full by 30 June 2016.

Mainly reflecting the fall in the gold price (down by 9.5%) during the six months to 31 December 2015, the share price of Resolute fell by 16.7% from A$0.30 at the end of June 2015 to A$0.25 at the end of December 2015.

Vix Technology is an unlisted company in which UIL has a 39.8% holding. Vix Technology 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. Vix Technology 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, Vix Technology 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. Vix Technology has a long history of successful transit ticketing and payment solutions in regions including Singapore, Hong Kong, USA, UK, Sweden and France. Vix Technology 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.

In the year to 30 June 2015, Vix Technology 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.  Over the quarter to 30 September 2015, Vix Technology continued to deliver on its short term objectives to improve the quality of the order book and control costs. Turnover was A$41.9m and EBITDA was A$5.4m. Vix Technology followed up the US$27.0m contract in Malaysia to build a unified public transit ticketing system by signing a similar agreement with Dallas Area Rapid Transit which adds to the growing pipeline of the business. It was pleasing to see Vix Technology make significant progress on its medium term objectives to both expand geographic and product offering.

Major contract wins to date should deliver a substantial uplift in turnover and continued cost controls should support further margin expansion in the medium term as it will take time for the benefit to flow to the bottom line.

Augean plc's ("Augean") share price modestly weakened in the six months to 31 December 2015, falling by 1.4%. In its interim results to June 2015, total revenues increased by 26.6% and EBITDA by 23.8% on the back of a strong recovery in landfill volumes and the continued robust performance of its North Sea Services division.

The Energy & Construction business saw total landfill volumes increase by 37.7% year-on-year in the six months to 30 June 2015, with significant increases in both hazardous and non-hazardous waste material. Importantly, gate prices on these waste materials remained steady. Volumes of low level radioactive waste treated continue to be affected by the amounts released by the UK nuclear estate, falling by 28.8%, though this was more than offset by very firm pricing. Augean North Sea Services significantly exceeded expectations, with revenues in the six months to 30 June 2015 up by 39.3%. Progress at Augean's Industry & Infrastructure (oil and solvent recovery) and Integrated Services (total waste management) businesses continues to be more challenging, with both divisions remaining loss-making.

There was no change in UIL's shareholding in Augean in the period under review.

Touchcorp's share price has continued to advance strongly, following its successful IPO in March 2015. The share price increased by 57.5% in the six months to 31 December 2015 to A$2.52.

The company released strong interim results for the six months to 30 June 2015, with 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. The company is confident that market expectations for the full year will be met.

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. The company has customers across Europe, South East Asia and Australasia.

UIL's shares remain in lock-up until Touchcorp releases its FY 2015 results in late February 2016.

PORTFOLIO ACTIVITY

During the six months to 31 December 2015 UIL invested £32.3m, including £3.7m into Zeta and £1.8m into Vix Investments.

UIL realised £29.1m, including £7.6m from Infratil.

The geographical split on a look-through basis, saw Australia increase to 22.2% of total investments (June 2015: 18.0%) mainly as a result of the increased valuation of Touchcorp.  In the sector split, technology rose to 23.2% (June 2015: 15.7%) mainly as a result of rising valuations.  

INVESTMENT IN UNLISTED COMPANIES

The unlisted portfolio comprises investments accounting for £62.9m as at 31 December 2015 (June 2015: £56.6m), representing 16.8% of the portfolio. UIL's investment policy limits investments in unlisted companies to 20%. These investments together with the loans to listed companies are all classed as level 3 investments under note 6 to the Report and Accounts for the six months to 31 December 2015. Further details on the valuation methodology and application to the significant unlisted investments is included in the financial risk management note to the Report and Accounts (note 13).

LOANS TO LISTED COMPANIES

Loans to listed companies account for £19.3m as at 31 December 2015 (June 2015: £25.8m) representing 5.2% of the portfolio.  Zeta accounts for £18.4m of these loans. 

GEARING

Gearing has risen over the six months from 143.1% to 157.7% mainly as a result of the buyback of 7.9m ordinary shares at a cost of £9.2m. This broadly increased our debt by £9.2m and reduced UIL's equity by £9.2m. Our medium term gearing target remains at 100.0%.

With effect from 31 January 2016, in line with the disclosure to investors' requirements of the AIFMD Directive Level II Regulations, UIL has changed the maximum gross and commitment leverage limits from 325% to 425%.

ZDP SHARES

There were no changes to the ZDP shares in issue in the six months. Proposals are being developed to redeem the 2016 ZDP shares and this will likely involve the creation of 2022 ZDP shares.

DEBT

Bank debt rose from £34.4m at 30 June 2015 to £52.1m at 31 December 2015, substantially to fund the share buyback and ongoing investments.

At 31 December 2015 the Scotiabank facility was fully drawn down as €13.4m, NZ$21.5m and A$65.4m. The liability in Sterling terms increased due to movement in exchange rates.

The term of the bank facility with Scotiabank is until 22 March 2016. UIL is in discussions with Scotiabank with a view to extending the facility.

DERIVATIVES

During the six months to 31 December 2015 there was limited investment in the S&P put position. There continued to be significant currency hedges with NZ$60.0m, €10.0m and A$72.0m. These generated a loss on the Capital account of £4.8m (December 2014: gain of £1.1m).

REVENUE RETURN

Revenue total income rose by 10.6% from £4.1m to £4.5m. Management and administration fees and other expenses were largely unchanged. Finance costs increased from £0.5m to £0.8m as a result of higher borrowings. The combined effect resulted in revenue profit rising marginally to £2.7m. EPS was much stronger as a result of the substantial share buyback, rising by 12.8% from 2.58p to 2.91p.

CAPITAL RETURN

Capital total income was negative £4.0m (December 2014: positive £1.4m). This represented gains on investments of £3.2m, offset by derivative and exchange losses of £7.2m. The finance costs were £6.3m (December 2014: £7.2m).

The resultant loss for the six months to 31 December 2015 on the Capital return was £10.3m (December 2014: loss of £5.8m) and the EPS loss was 11.21p (December 2014: loss of 5.89p).

EXPENSE RATIO

The ongoing charges figure rose to 2.6% from 2.3% mainly as a result of the reduced capital base following the share buyback.

ICM Investment Management Limited and ICM Limited

22 February 2016

Half-Yearly Financial Report and Responsibility Statement

The Chairman's Statement and the Investment Managers' Report give details of the important events which have occurred during the period and their impact on the financial statements.

PRINCIPAL RISKS AND UNCERTAINTIES

Most of UIL's principal risks and uncertainties are market related and are similar to those of other investment companies investing mainly in listed equities in developed countries.

The principal risks and uncertainties were described in more detail under the heading "Principal Risks and Risk Mitigation" within the Business Review section of the Annual Report and Accounts for the year ended 30 June 2015 and have not changed materially since the date of that report.

The principal risks faced by UIL include not achieving long-term total returns for its shareholders, the adverse impact gearing could have, the sudden withdrawal of the bank facility, loss of key management and losses due to inadequate controls of third party service providers.

The Annual Report and Accounts is available on the Company's website, www.uil.limited

RELATED PARTY TRANSACTIONS

Details of related party transactions in the six months to 31 December 2015 are set out in note 12 to the Report and Accounts, and details of the fees paid to the Investment Managers are set out in note 2 to the Report and Accounts.

Directors' fees were increased with effect from 1 July 2015 to:

Chairman £42,000 per annum

Chair of Audit £40,000 per annum

Directors £31,000 per annum

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with Chapter 4 of the Disclosure and Transparency Rules, the Directors confirm that to the best of their knowledge:

• The condensed set of financial statements contained within the report for the six months to 31 December 2015 has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and gives a true and fair view of the assets, liabilities, financial position and return of the Group;

• The half-yearly financial report, together with the Chairman's Statement and Investment Managers' Report, includes a fair review of the important events that have occurred during the first six months of the financial year and their impact on the financial statements as required by DTR 4.2.7R;

• The Directors' statement of principal risks and uncertainties above is a fair review of the principal risks and uncertainties for the remainder of the year as required by DTR 4.2.7R; and

• The half-yearly report includes a fair review of the related party transactions that have taken place in the first six months of the financial year as required by DTR 4.2.8R.

On behalf of the Board

Peter Burrows

Chairman

22 February 2016

Unaudited Performance Summary

	Half-year 31 Dec 2015	Half-year 31 Dec 2014	Year 30 Jun 2015	% change Jun-Dec 2015
Total return(1) (%)	(2.2)(2)	(2.0)(2)	6.4	n/a
Annual compound total return (since inception)(3) (%)	7.4	7.4	7.8	n/a
Ordinary shares
Net asset value per ordinary share (pence)	161.48	158.78	169.00	(4.4)
Ordinary share price (pence)	107.50	110.50	117.00	(8.1)
Discount (%)	33.4	30.4	30.8	n/a
FTSE All-Share Total Return Index	5,502	5,449	5,614	(2.0)
Zero dividend preference (ZDP) shares(4) (pence)
2016 ZDP shares
Capital entitlement per ZDP share	181.85	169.57	175.55	3.6
ZDP share price	189.25	183.25	184.63	2.5
2018 ZDP shares
Capital entitlement per ZDP share	131.65	122.75	127.09	3.6
ZDP share price	144.50	137.25	141.75	1.9
2020 ZDP shares
Capital entitlement per ZDP share	110.43	102.97	106.61	3.6
ZDP share price	124.13	108.50	122.38	1.4
Equity holders' funds (£m)
Gross assets(5)	377.2	373.9	373.4	1.0
Bank debt	52.1	50.0	34.4	51.5
ZDP shares	178.7	166.5	172.4	3.7
Equity holders' funds	146.4	157.4	166.6	(12.1)
Revenue account (£m)
Income	4.5	4.1	11.2	n/a
Costs (management and other expenses)	0.9	0.9	1.8	n/a
Finance costs	0.8	0.5	1.1	n/a
Financial ratios of the Group(6) (%)
Revenue yield on average gross assets	2.4	2.1	2.9	n/a
Ongoing charges figure(7)	2.6	2.3	2.0	n/a
Bank loans, net bank overdraft and ZDP shares gearing on net assets	157.7	143.1	124.1	n/a
Returns and dividends(2)
Revenue return per ordinary share (pence)	2.91	2.58
Capital return per ordinary share (pence)	(11.21)	(5.89)
Total return per ordinary share (pence)	(8.30)	(3.31)
Dividends per ordinary share (pence)	3.75	3.75
Ordinary annualised dividend yield (%)	7.0	6.8

(1)  Total return is calculated as change in NAV per ordinary share, plus dividends reinvested

(2)  For the six months to 31 December

(3)  Since inception includes data relating to Utilico Investment Trust plc, UIL's predecessor, which started trading in August 2003

(4)  Issued by UIL Finance Limited, a wholly owned subsidiary of UIL

(5)  Gross assets less current liabilities excluding loans and ZDP shares

(6)  For comparative purposes the figures have been annualised

(7)  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

Unaudited Condensed Group Income Statement

for the six months to 31 December			2015			2014
	Revenue	Capital	Total	Revenue	Capital	Total
	return	return	return	return	return	return
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Gains/(losses) on investments	-	3,223	3,223	-	(1,022)	(1,022)
(Losses)/gains on derivative instruments	-	(4,752)	(4,752)	-	1,138	1,138
Foreign exchange gains/(losses)	23	(2,446)	(2,423)	(19)	1,280	1,261
Investment and other income	4,521	-	4,521	4,126	-	4,126
Total income	4,544	(3,975)	569	4,107	1,396	5,503
Management and administration fees	(417)	-	(417)	(423)	-	(423)
Other expenses	(480)	(1)	(481)	(450)	(3)	(453)
Profit/(loss) before finance costs and taxation	3,647	(3,976)	(329)	3,234	1,393	4,627
Finance costs	(842)	(6,279)	(7,121)	(450)	(7,234)	(7,684)
Profit/(loss) before taxation	2,805	(10,255)	(7,450)	2,784	(5,841)	(3,057)
Taxation	(146)	-	(146)	(226)	-	(226)
Profit/(loss) for the period	2,659	(10,255)	(7,596)	2,558	(5,841)	(3,283)
Earnings per ordinary share  - pence	2.91	(11.21)	(8.30)	2.58	(5.89)	(3.31)

The Group does not have any income or expense that is not included in the profit/(loss) for the period, and therefore the "profit/(loss) for the period" is also the "total comprehensive income/(expense) for the period", 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.

Unaudited Condensed Group Statement of Changes in Equity

for the six months to 31 December 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 2015	9,856	28,414	233,866	32,069	(149,255)	11,608	166,558
(Loss)/profit for the period	-	-	-	-	(10,255)	2,659	(7,596)
Ordinary dividends paid	-	-	-	-	-	(3,400)	(3,400)
Shares purchased by the Company	(791)	(8,384)	-	-	-	-	(9,175)
Balance at 31 December 2015	9,065	20,030	233,866	32,069	(159,510)	10,867	146,387

for the six months to 31 December 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 2014	9,916	29,020	233,866	32,069	(151,699)	11,268	164,440
(Loss)/profit for the period	-	-	-	-	(5,841)	2,558	(3,283)
Ordinary dividends paid	-	-	-	-	-	(3,718)	(3,718)
Balance at 31 December 2014	9,916	29,020	233,866	32,069	(157,540)	10,108	157,439

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

Unaudited Condensed Group Balance Sheet

	31 Dec 2015	31 Dec 2014	30 Jun 2015
	£'000s	£'000s	£'000s
Non-current assets
Investments	373,416	383,597	366,928
Current assets
Other receivables	1,836	1,239	2,583
Derivative financial instruments	366	320	3,359
Cash and cash equivalents	6,139	138	1,236
	8,341	1,697	7,178
Current liabilities
Loans	(52,088)	-	(34,351)
Other payables	(695)	(10,217)	(560)
Derivative financial instruments	(3,867)	(1,159)	(196)
Zero dividend preference shares	(86,448)	-	-
	(143,098)	(11,376)	(35,107)
Net current liabilities	(134,757)	(9,679)	(27,929)
Total assets less current liabilities	238,659	373,918	338,999
Non-current liabilities
Loans	-	(49,999)	-
Zero dividend preference ("ZDP") shares	(92,272)	(166,480)	(172,441)
Net assets	146,387	157,439	166,558
Represented by
Ordinary share capital	9,065	9,916	9,856
Share premium account	20,030	29,020	28,414
Special reserve	233,866	233,866	233,866
Non-distributable reserve	32,069	32,069	32,069
Capital reserves	(159,510)	(157,540)	(149,255)
Revenue reserve	10,867	10,108	11,608
Total attributable to equity holders	146,387	157,439	166,558
Net asset value per ordinary share
Basic - pence	161.48	158.78	169.00

Unaudited Condensed Group Statement of Cash Flows

	Six months to	Six months to	Year  to
	31 December 2015	31 December 2014	30 June 2015
	£'000s	£'000s	£'000s
Cash flows from operating activities	3,510	1,300	3,587
Investing activities
Purchases of investments	(32,114)	(38,952)	(42,255)
Sales of investments	29,064	58,254	86,466
Purchases of derivatives	(2,235)	-	(887)
Sales of derivatives	4,147	1,152	3,246
Cash flows on margin accounts	-	-	1
Cash flows from investing activities	(1,138)	20,454	46,571
Cash flows before financing activities	2,372	21,754	50,158
Financing activities
Equity dividends paid	(3,400)	(3,718)	(7,426)
Movement on loans	15,757	28,191	12,634
Cash flows from issue of ZDP shares	-	8,993	8,993
Cash flows from redemption of ZDP shares	-	(62,172)	(62,172)
Cost of shares purchased for cancellation	(9,175)	-	(666)
Cash flows from financing activities	3,182	(28,706)	(48,637)
Net increase/(decrease) in cash and cash equivalents	5,554	(6,952)	1,521
Cash and cash equivalents at the beginning of the period	1,225	(2,689)	(2,689)
Effect of movement in foreign exchange	(640)	830	2,393
Cash and cash equivalents at the end of the period	6,139	(8,811)	1,225
Comprised of:
Cash	6,139	138	1,236
Bank overdraft	-	(8,949)	(11)
Total	6,139	(8,811)	1,225

NOTES

The Directors have declared a second quarterly dividend in respect of the year ending 30 June 2016 of 1.875p per ordinary share payable on 8 March 2016 to shareholders on the register at close of business on 19 February 2016. The total cost of this dividend, which has not been accrued in the results for the six months to 31 December 2015, is £1,700,000 based on 90,653,789 ordinary shares in issue at the date of this report.

The half-yearly report is available on the website www.uil.limited and will be posted to shareholders at the beginning of March 2016. Copies may be obtained during normal business hours from Exchange House, Primrose Street, London, EC2A 2NY.

 

END

 

 

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