Utilico is reporting a return on net assets of 6.4% for the year to the end of June 2015, ahead of the 2.6% return on the FTSE All-Share Index. However the discount widened from 22.8% to 30.8% over the year and so the return to shareholders was negative – the share price fell by 8.6% and the dividend was maintained at 7.5p.
Given the continued diversification of the portfolio away from utilities, the Board considers it appropriate for the company to change its name from Utilico Investments Limited to UIL Limited. A resolution to achieve this will be proposed at the AGM.
Infratil made a substantial contribution to the company’s performance. 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. Infratil’s total return to Utilico over the 12 months was some 52.9%.
In the year to 30 June 2015, Utilico Emerging Markets, the largest investment, achieved a total return of 4.8%, ahead of the MSCI Emerging Markets Total Return Index which grew by 3.1%.
Somers’ share price 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. Its two biggest investments remain Bermuda Commercial Bank Limited (“BCB”) and Waverton Investment Management Limited. 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 were GBP4.6bn as at 31 March 2015 (30 September 2014: GBP5.2bn). They say Private & Commercial Finance Group, Somers third largest investment, continues to progress well. Its shares have responded accordingly and over the 12 months to 30 June 2015 had risen by 63.6%.
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 Utilico realised A$11.7m of its existing Touchcorp shareholding and now holds 20.7% of Touchcorp’s issued share capital.
Zeta’s net tangible assets 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 discount 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 asset value.
They stress that many of the underlying investments trade at discounts to asset value and say, as at 30 June 2015, there were discounts to published NAVs of 6.7% for Utilico Emerging Markets (some GBP6.0m); 20.3% for Somers (some GBP13.1m); and 6.3% for Zeta (some GBP2.7m). 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 GBP13.0m). Together this amounts to a discount on these investments of some GBP34.8m. Adding this back would see Utilico’s shareholders’ funds increase to GBP201.4m.
UTL : Utilico plans name change as it moves away from utilities