UIL swings to capital returns in latter half of 2016

UIL posted its unaudited statement of results for the six months to 31 December on Tuesday, reporting a revenue return per ordinary share of 2.76p, slipping from 2.91p year-on-year.

The London-listed firm did swing to a capital return per ordinary share of 20.69p, compared to losses of 11.21p a year earlier, with a total return per ordinary share of 23.45p, also swinging from a loss of 8.30p.

Dividends per ordinary share during the period were precisely in line with the prior year at 3.75p, and the company reported an annualised dividend yield of 5.2%, compared to 7.0% at the same time in 2015.

“The overall result was a positive outcome with the investment portfolio gaining £35.0m over the six months,” said chairman Peter Burrows.

“However, UIL's FX hedges and derivatives position gave rise to losses of £9.0m, reducing the capital account income gains to £25.2m.

“UIL's NAV rose by over 100.00p to 352.50p in September but fell back to 261.14p as at 31 December 2016.”

On 31 October, Burrows said UIL redeemed all the outstanding 2016 ZDP shares, and it was continuing to sell the remaining 2020 and 2022 ZDP shares it held in the market.

“Over the six months UIL bought back 0.4m shares.

“However, UIL will not buy back any further shares until the Scotiabank bridge facility is repaid.”

The profit on the revenue account in the half year was £2.5m, down from £2.7m, Burrows confirmed.

“The divergence of the world's major economies will inevitably lead to higher market volatility and more price movements.

“Add to that significant changes in trading relationships and rising populism and we can expect continuing volatility.”

Burrows said, while the world's GDP continued to be positive and may even improve, the board noted the world's debt levels were continuing to rise.

“The next six months will be challenging. UIL's stock selection focus and portfolio mix should enable UIL and its platforms to identify niche growth investment opportunities.”