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RNS Number : 2535D
Utilico Investments Limited
14 May 2012
Utilico Investments Limited
Interim Management Statement
31 March 2012
Quarterly Management Review
Utilico Investments Limited ("Utilico") published its half year
report and accounts for the six month period to 31 December 2011 on
22 February 2012 and has published its monthly fact sheets on its
website: www.utilico.bm.
Set out below is the interim management statement ("IMS") for
the period from 1 January 2012 to 31 March 2012 containing
information that covers this period, and up to the date of
publication of this IMS.
Performance
Equity markets recovered during the first three months of 2012.
The FTSE All Share Index was up 5.0%, the S&P Index (GBP
adjusted) was up 8.6% and the MSCI EM Index (GBP adjusted) was up
10.2%. Utilico underperformed the markets, showing a gain of 4.7%
over the same period. On a total return basis, adding back the
interim dividend of 3.50p paid in March 2012, Utilico was up 6.2%,
in line with the FTSE All Share Total Return Index which was up
6.1% over the three months.
Dividends
An interim dividend of 3.50p was announced in February 2012 and
paid in March 2012.
Issue of new zero dividend preference shares
In January 2012, a new class of ZDP Shares, with an expiry date
of 31 October 2018, were issued to 2012 ZDP holders who elected to
roll their shares into the 2018 ZDPs and to institutional investors
who participated in a placing. In total, 22.25m 2018 ZDPs were
admitted to trading on the London Stock Exchange. The number of
outstanding 2012 ZDPs was reduced by 6,143,391.
In March 2012 a further 10.0m 2014 ZDP shares and 10.0m 2016 ZDP
shares were placed out and began trading on 15 March. Following
admission of the ZDP shares the Group's share capital at 31 March
2012 comprised 99,631,782 ordinary shares, 3,587,343 warrants,
39,342,809 2012 ZDP shares, 47,500,000 2014 ZDP shares, 47,500,000
2016 ZDP shares and 22,250,000 2018 ZDP shares.
Portfolio
Utilico's gross assets less current liabilities (excluding debt)
at the beginning of the period under review were GBP427.2m and
increased by GBP35.8m to GBP463.0m at the end of March 2012. This
increase includes the money raised through the new issue of ZDP
shares. Ordinary shareholders funds increased by GBP10.0m to
GBP239.2m.
The ten largest holdings have remained broadly the same over the
four months although there have been changes in the weightings.
Resolute Mining has seen its share price increase by 9.1% to
AS$1.79 over the period. The share price peaked during March 2012,
rising to AS$2.10, but has subsequently fallen back due to the
political unrest in Mali. Resolute's half year results to December
2011 reported gold production of 185,072 ounces at a cost of
$741/oz, on track for the forecast production of 410,000 ounces for
the full year. The average cash price of gold sold during the six
months was $1,636/oz up from $1,273/oz during the comparable period
of 2010 and profit after tax was up 155% to AS$51.6m. Resolute
Mining is Utilico's largest holding, accounting for 31.7% of
Utilico's gross assets. Resolute has been buying back shares in the
market since the recent fall in the price and continues to do
so.
UEM, Utilico's second largest holding, has seen its share price
rise by 9.5% to 162.00p at 31 March 2012. Since UEM's migration
from AIM to the main market at the London Stock Exchange on 14
October 2011 the share price has risen 14.1%. UEM's net asset value
has increased 10.2% to 175.54p and the discount has narrowed to
6.6%.
Infratil, previously the Company's largest holding, has been
reduced by approximately 25% as a result of sales to an
institutional investor and a company associated with the investment
manager of Infratil. Over the period, Infratil's share price has
increased by 1.1%. Infratil has also been buying back shares in the
market.
Jersey Electricity's share price fell by 3.1%, Bermuda
Commercial Bank's share price remained flat and Renewable Energy
Generation was down 1.0%. Keytech's share price also fell by 0.9%
and Ascendant Group rose by 0.3%.
Augean plc, a UK based hazardous waste company, moved into the
top ten as a result of share price growth of 23.1%. This growth was
partly due to a good set of full year results and partly due to the
company receiving its permit for low level nuclear waste disposal
at one of its plants, which had been subject to court approval.
Market Conditions
Eurozone sovereign and banking issues remain the focus of the
economic and world press. In early March the second bailout package
for Greece was confirmed, which had little "knock-on" effect for
European markets. Signs of tentative recovery in the US helped push
markets higher as unemployment figures fell and spending continued
to advance. In Europe, unemployment figures continued to rise,
reaching a new high as the region struggles to return to growth. As
first quarter growth figures were released, Italy, Spain and the UK
were reported to be back in recession.
Oil prices rose to $103.02 per barrel, up 4.2%. However, prices
peaked at $109.77 during February from a starting low of $98.83. In
March 2012 some of the world's biggest oil buyers co-ordinated a
push to release emergency reserves, raising the prospect of relief
for Europe and America.
Sterling strengthened against the US Dollar, Euro and Australian
Dollar, rising 2.8%, 0.2% and 1.7% respectively, but weakened
against the New Zealand Dollar by 2.1%.
Bank debt
Bank debt was reduced to nil at 31 March 2012, from GBP17.8m at
the end of 2011. Cash balances at the end of the period under
review were GBP18.8m.
Hedging
Put options. At 31 March 2012 Utilico held a small net long put
option position, of S&P500 Index options, with a value of
GBP5.6m providing a gross market protection of approximately
GBP26.0m.
Currency Hedging. At the end of March 2012 Utilico held currency
hedges in New Zealand Dollars, Australian Dollars and Euro's. In
total GBP69.0m of assets are covered by these currency hedges.
Ordinary Shares
During the 3 months Utilico bought back 295,000 ordinary shares
for cancellation at 182.00p per share.
2012 Warrants
The final exercise date for the Company's warrants was 30 April
2012. Holders of 397 warrants exercised their right to receive
ordinary shares and a further 432 ordinary shares were issued on 2
May 2012. The remaining warrants lapsed.
ZDP Shares
Over the 3 months, the traded price of Utilico's 2012 ZDP shares
increased by 0.5% to 173.13p, the 2014 ZDP shares rose 0.6% to
148.75p and the 2016 ZDP shares rose by 1.0% to 148.75p. On 26
January 2012, the new tranche of 2018 ZDP shares began trading at
103.00p, rising to 106.00p by March month end.
Subsequent to the end of the period under review, Utilico has
bought back 575,000 2012 ZDP shares that will be held for
investment purposes until redemption on 31 October 2012.
Share price and NAV
Utilico's share price rose from 159.00p at 31 December 2011 to
178.00p at 31 March 2012, an increase of 11.9%. Utilico's discount
to NAV narrowed to 25.9% at 31 March 2012. A combination of all
Utilico's traded instruments ended March at an 11.1% discount to
underlying asset value.
31 March 31 December
Capital Structure 2012 2011
---------------------------------- -------------- -------------------- --- ---------------
Gross assets less current GBP463.0m GBP427.2m
liabilities
Bank debt and other debt GBP1.2m GBP19.1m
ZDP shares GBP222.5m GBP178.9m
Shareholders' funds (ordinary GBP239.2m GBP229.2m
shares)
-------------------- ---------------
GBP463.0m GBP427.2m
-------------------- ---------------
Effective gearing on
ordinary shares 1.94x 1.86x
31 March 31 December
Ordinary Shares 2012 2011
---------------------------------- -------------- -------------------- --- ---------------
NAV (cum income) 240.12p 229.33p
Share price 178.00p 159.00p
Discount to undiluted
NAV (25.9%) (30.7%)
Annual average compound
return (including dividends) 12.6% 12.3%
Shares in issue 99,631,782 99,926,452
ZDP Shares at 31 March 2012 2014 2016 2018
2012
----------------------------- ------------- ------------------ ------------- --------------
Accrued capital entitlement 170.62p 139.87p 139.87p 101.25p
Share price 173.13p 148.75p 148.75p 106.00p
(Discount)/premium
to NAV 1.5% 6.3% 6.3% 4.7%
ZDP cover* 6.63 3.10 1.92 1.67
Yield to redemption* 4.4% 4.7% 5.8% 6.5%
ZDP redemption value 177.52p 167.60p 192.78p 160.52p
Shares in issue 39,342,809 47,500,000 47,500,000 22,250,000
*based on final redemption
values UTLA.L UTLB.L UTLC.L UTLD.L
----------------------------- ------------- ------------------ ------------- --------------
Performance 31 March 31 December % change
2012 2011
Utilico NAV (cum income) 240.12p 229.33p 4.7%
FTSE All-Share Index 3,002 2,858 5.0%
--------------------------------- ---------------------- ---------------- -------------------
Sectoral Split of 31 March 2012 31 December 2011
Investments *
------------------------- --- --- -------------- -----------------
Gold Mining 33% 32%
Renewable Energy 15% 15%
Electricity 11% 11%
Other 7% 7%
Water and Waste 6% 5%
Toll Roads 5% 5%
Ports 5% 5%
Banks 5% 5%
Airports 5% 5%
Infrastructure IT 5% 6%
Telecoms 3% 4%
100% 100%
Geographical Split of
Investments *
------------------------- --- --- -------------- -----------------
Gold Mining 33% 32%
New Zealand 15% 14%
Asia & Far East 14% 13%
UK and Channel Islands 12% 12%
Bermuda 7% 8%
Latin America 7% 6%
Australia 6% 8%
Europe (excluding UK) 4% 4%
North America 2% 3%
* on a look through
basis 100% 100%
----------------------------------- -------------- -----------------
Top 10 Holdings as % of Gross Assets 31 March 31 December
2012 2011
------------------------------------------- ----------- ----------------
1 Resolute Mining Ltd 31.7% 31.8%
2 Utilico Emerging Markets Limited 20.8% 20.5%
3 Infratil Limited 17.4% 19.3%
4 Bermuda Commercial Bank Limited 3.8% 4.3%
5 Vix Technology Pty Limited 3.3% 4.3%
6 Jersey Electricity Company plc 3.3% 3.7%
7 Renewable Energy Generation Limited 2.9% 2.7%
8 KeyTech Limited 1.6% 1.8%
9 Ascendant Group Ltd 1.4% 1.6%
10 Augean plc 1.3% -
Total Top 10 87.5% 91.1%
---- ------------------------------------- ----------- ----------------
Enquiries
Charles Jillings
+44 1372 271 486
14 May 2012
This information is provided by RNS
The company news service from the London Stock Exchange
END
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