UTL : Utilico on track to repay zeros
Utilico Investments results for the year to 30 June 2014 show the fund generating a total return per share of 18.1%. This compares to 13.1% for the FTSE All-Share Index over the same period.
The Board has decided to reduce the fund’s gearing by cutting the overall debt from £255m at end December 2013 to £200m. They realised £20m from the holding in Infratil (a New Zealand based infrastructure company)and £7m from their investment in Renewable Energy Generation : WIND (acquired by Premier Energy & Water : PEW). the absolute level of debt at the end of June was £235m. Utilico’s 2014 ZDPs fall due for repayment in October. Since the end of June, Utilico has sold a portion of its Utilico Emerging Markets : UEM shares for£25m and has an undrawn £50m bank facility – it feels confident therefore of meeting the £62m payment for the zeros.
The manager reduced its fee to 0.25% in March (backdated to 1 January) until such time as the fund reaches the high watermark of 284.81p set in.
Utilico has invested in a number of quoted “platforms” (holding companies for groups of businesses). These trade at a discount to NAV which Utilico estimates is £46m in aggregate. The platforms are: Infratil (which IPOd its investment in Z Energy, an NZ fuel distribution business, during the year making 4x its original investment), Somers (which recently acquired Waverton), Zeta (which has invested in Panoramic Resources, a Nickel miner, and New Zealand Oil & Gas during the year), BFIC, Vix and Utilico Emerging Markets.