Interim Management Statement

RNS Number : 3178X
Utilico Emerging Markets Limited
13 February 2012
 



 

Utilico Emerging Markets Limited

Interim Management Statement

31 December 2011

 

Quarterly Management Review

Utilico Emerging Markets Limited ("UEM") published its interim report and accounts for the period to 30 September 2011 on 24 November 2011. UEM has published monthly fact sheets on its website: www.uem.bm.

 

Set out below is the interim management statement ("IMS") for the period from 1 October 2011 to 31 December 2011 containing information that covers this period, and up to the date of publication of this IMS.

 

Performance

Equity markets showed some recovery over the three months. The MSCI Emerging Markets Total Return Index (Sterling adjusted) was up 4.7% over the period, underperforming the UEM net asset value cum income total return which was up 6.5%.

 

Dividends

UEM paid its interim dividend of 3.75p on 16th December 2011.

 

Portfolio

UEM's gross assets less current liabilities (excluding debt) at the beginning of the period under review were £341.6m and increased by £10.2m to £351.8m at the end of December 2011. Ordinary shareholders funds increased by £13.4m to £342.8m.

 

The ten largest holdings have remained broadly the same over the three months although there have been changes in the weighting.  Eight of the ten companies had increases in share prices over the last three months.

 

Malaysia Airports Holdings Berhad's share price was up 8.7% along with International Container Terminal Services Inc, up 12.9%. However, Ocean Wilsons Holdings Limited, the third largest holding in the portfolio, fell 17.0%, mainly due to concerns over growth in world markets.

 

The remainder of the top ten's share prices were all up, with the exception of Cia de Concessoes de Rodovoarias (CCR) which remained flat.

 

Stock markets continued to be concerned by the Eurozone crisis over the three months to 31 December 2011. The yield on Italian debt topped 7%, a level that is widely viewed as unsustainable and "the point of no return" Proposals from the EU for a financial transaction tax were rejected by the UK and protests and violence broke out on the streets of Italy and Greece as the new governments moved forward with already unpopular austerity measures and economic reforms.

At the end of November, six major central banks announced a co-ordinated action to ease strains in financial markets by lowering the pricing on the existing US Dollar liquidity swap in order to provide liquidity support to the global financial system.

In China the deposit reserve ratio, required by major banks, was reduced in a bid to encourage lending and Brazilian interest rates were lowered for the third time in recent months.

 

Bank debt

During the period under review UEM reduced its bank debt from £12.2m to £9.1m. This was drawn £4.8m in US Dollars and £4.3m in Sterling.

 

Hedging

Put options. UEM had reduced its equity market option positions to nil at the end of September. However, during the three months the investment managers took steps to re-establish a put position. At 31 December 2011 UEM held S&P500 net put options with a value of £10.5m providing market protection of approximately £24.6m.

 

 

Migration from AIM to the official list

On 14 October 2011 UEM migrated its ordinary shares from the Alternative Investment Market ("AIM") to the official list at the London Stock Exchange and were included in the FTSE 250 Index.

 

Share price and NAV

UEM's share price rose from 137.00p at 30 September 2011 to 148.75p at 31 December 2011, an increase of 8.6%. UEM's discount to NAV narrowed from 10.4% at 30 September 2011 to 6.5% at 31 December 2011.

 

Outlook

The investment environment is challenging and is likely to remain so. A great deal of uncertainty surrounds Greece, Italy, Spain and Portugal and Eurozone leaders seem perpetually locked in crisis talks. However, UEM and emerging markets generally seem to be faring well against this backdrop of difficulties.

 

 

 

 

Capital Structure



31 December

2011


30 September

2011

Gross assets less current liabilities



£351.8m


£341.6m

Bank debt and other debt



£9.1m


£12.2m







Shareholders' funds (ordinary shares)



£342.8m


£329.4m

Effective gearing on ordinary shares



1.02x


1.03x

 

 

 

 






Ordinary Shares

 



31 December

2011


30 September

2011

NAV (cum income)



159.04p


152.83p

Share price



148.75p


137.00p

Discount to undiluted NAV



(6.5%)


(10.4%)







Shares in issue



215,528,793


215,528,793







 

 






 

Performance

 


31 December

2011

30 September

2011


% change

UEM NAV total return (cum income)


162.79p

152.83p


6.5%

MSCI EM  Index (Sterling adjusted) total return


1085.71

1036.99


4.7%

 

 

 

Sectoral Split of Investments *

 



31 December 2011


30 September 2011

Ports

Water & Waste

Toll Roads

Airports

Electricity

Other

Infrastructure  Investment Funds

Gas

Satellites

Telecoms

Other Infrastructure

Renewables

Infrastructure IT

Post Office



23.0%

20.5%

12.2%

10.4%

10.0%

5.9%

4.4%

4.0%

3.5%

2.3%

2.1%

1.0%

0.4%

0.3%


26.4%

19.1%

11.4%

9.9%

10.4%

6.3%

4.5%

2.5%

3.1%

2.2%

1.9%

1.5%

0.5%

0.3%




100%


100%

Geographical Split of Investments *

 






Brazil

China

Malaysia

Philippines

Other Asia

Thailand

Eastern Europe

Middle East/Africa

Other Latin America

 



30.7%

21.8%

14.8%

11.1%

9.1%

6.5%

4.1%

1.4%

0.5%


32.3%

18.4%

14.5%

13.2%

8.7%

5.8%

5.1%

1.5%

0.5%

 




100%


100%

 

 

Top 10 Holdings as % of Gross Assets

 


31 December

2011


30 September

2011

1

2

3

4

5

6

7

8

9

10

 

Malaysia Airports Holdings Bhd

Intl Container Terminal Services Inc.

Ocean Wilsons Holdings Limited

Eastern Water Resources PCL

Cia Saneamento Minas Gerais (Copasa)

Santos Brasil Part.

Infrastructure India

Tractabel Energia

Cia de Concessoes Rodovoarias (CCR)

Asia Satellite Telecoms

 


9.5%

8.8%

7.0%

6.0%

4.9%

3.2%

2.9%

2.9%

2.9%

2.7%

 


8.9%

10.9%

8.7%

5.5%

4.5%

3.2%

3.0%

2.6%

3.2%

-

 

 

 

Enquiries

Charles Jillings

+44 1372 271 486


This information is provided by RNS
The company news service from the London Stock Exchange
 
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