Utilico Emerging Markets (UEM) has released its annual results for its fincial year ending 31 March 2023.
- UEM reported a NAV total return of 2.1%, ahead of the -5.0% of the MSCI Emerging Markets Index. UEM’s performance is in large part due to the strong recovery it saw during the second half of its financial year.
- UEM has declared a total dividend of 8.45p per share, a 5.6% increase over the previous year. Its dividend remains fully covered by its revenues.
- UEM’s discount widened over its financial year, ending on 13.5% on the 31 March, and trading on a 12.3% discount currently. UEM’s board repurchased 15.1m shares, equal to £138.8m.
- UEM’s unlisted investments represented 10.8% of its NAV, as of 31 March 2023, with the its growth being primarily driven by the revaluation of Petalite Limited, a technology start up. Given that UEM has unlisted exposure limit of 10% of gross assets, it is currently unable to invest in any new unlisted opportunities.
UEM’s chairman commented:
“The year to 31 March 2023 has continued to be truly challenging for all, including investors. From the war in Ukraine through to inflation and sharply higher central bank interest rates; to rising geopolitical friction; and to the challenges on climate change and significant natural disasters. Understandably, volatility in most markets has been elevated as uncertainty has dominated.
“There are numerous headwinds currently faced by the markets, each of which is challenging in its own right. We have historically discussed a number of these and they largely remain unresolved. We continue to witness a significant rise in nationalism, wealth inequality and global immigration. All of these issues and challenges no doubt tear at the fabric of our societies and institutions.
“One positive is that Covid looks to be behind us. The World Health Organisation finally declared the Covid emergency over in May 2023. At the time of publishing UEM’s half yearly report in November 2022, we were deeply concerned about the challenges faced by China given their zero Covid policy. The about-turn by China on Covid was a surprise in both its timing and approach. We had expected China to vaccinate its population and slowly lift restrictions in the summer this year.
“Unfortunately the same cannot be said of the war in Ukraine. It remains devastating on a number of levels. The harshness of the Russian army will be a wound on liberal societies for decades to come.
“The megatrends driving much of the global growth in emerging markets are strengthening. We see UEM’s portfolio as well placed to benefit from these megatrends.
“The investee company’s management teams have demonstrated an enviable ability to seize the opportunity even in these challenging markets. We remain optimistic for UEM.”
UEM: UEM posts positive growth against a more gloomy emerging markets