TIDMCLDN
RNS Number : 3579O
Caledonia Investments PLC
07 October 2021
Caledonia Investments plc
Unaudited net asset value and portfolio update
Caledonia Investments plc (" Caledonia ") announces that its
unaudited diluted net asset value per share (" NAV ") as at 30
September 2021, calculated on a cum-income basis, was 4592p. This
incorporates the biannual revaluation of the Private Capital
portfolio.
The NAV total return (" NAVTR ") for the six months to 30
September 2021 was 16.1%. A final dividend of 45.9p per ordinary
share for the year ended 31 March 2021 was paid to shareholders on
5 August 2021, amounting to a payment of GBP25m.
This announcement provides a further update on Caledonia's
portfolio and should be read in conjunction with the factsheet
dated 30 September 2021 and released on 7 October 2021, a copy of
which is available at www.caledonia.com . Caledonia will announce
its half year results on 23 November 2021.
Summary
The first half of the year has seen healthy levels of return
generated by all three investment pools. The Quoted Equity
portfolio has benefited from the continued strength of public
equity markets, producing a return of 13.5%. The Private Capital
portfolio produced a return of 20.1% following the biannual
revaluation of our holdings. All the principal investee companies
are progressing well and together with the sale of Deep Sea
Electronics (" DSE ") in early June, as previously announced,
delivered healthy returns for the first half of the year. The Funds
portfolio returned 24.3% based on strong valuation growth and
turned net cash positive for the first time since the strategy was
introduced.
Performance for the first half is summarised in the table
below.
Caledonia pool per f o rmance
Net asset value - Half year to 30 September 20 21
GBPm NAV Net Capital Other NAV Income Total
31/3/21 investment gains 30/9/21 Return
/(disposal) /
(losses)
Quoted Equity 716.1 (20.7) 82.3 - 777.7 14.7 13.5%
Private Capital 826.8 (232.6) 112.2 1.9 708.3 21.4 20.1%
Funds 637.1 (32.8) 147.2 - 751.5 3.1 24.3%
--------- ------------- ---------- -------- --------- ------- --------
Portfolio 2,180.0 (286.1) 341.7 1.9 2,237.5 39.2
-------
Net Cash/(debt) (0.8) 286.1 - (17.6) 267.7
Other assets 46.1 (11.5) 34.6
Net assets 2,225.3 - 341.7 (27.2) 2,539.8 NAVTR 16.1%
--------- ------------- ---------- -------- --------- --------
Caledonia has continued to invest and dispose of assets, in line
with our active approach to portfolio management, with a net cash
inflow of GBP269m in the first half of the year. As noted above,
DSE was sold in June generating cash proceeds of GBP242m including
a pre-disposal dividend. The Quoted Equity portfolio reduced its
holdings in three companies and refined positions in a number of
others, generating net investment proceeds of GBP21m. The Funds
portfolio benefitted from elevated levels of fund distributions,
particularly from US based funds. There was a net cash inflow of
GBP33m, including GBP9m from the sale of an existing fund position
in the period.
Total liquidity remains healthy with cash of GBP268m plus
undrawn bank facilities of GBP250m as at 30 September 2021.
Caledonia's GBP250m banking facilities include GBP137.5m expiring
in May 2025, with the balance of GBP112.5m expiring in July
2022.
The Company has undertaken share buy-backs since early June. In
the period to the end of September, around 512,000 shares were
purchased for GBP16.8m at attractive levels of discount to NAV.
Caledonia Quoted Equity - Capital and Income portfolios (30% of
NAV)
The total return on the Quoted Equity pool was 13.5% over the
first half of the year. This strong performance reflected the
positive movement in global public equity markets and our stock
selection within both the Capital and Income portfolios, delivering
total returns of 17.0% and 5.6% respectively. The performance was
driven by good returns from a broad range of sectors and across
both UK and US holdings; five holdings - Oracle, Thermo Fisher,
Spirax Sarco, Croda and Big Yellow - delivered returns of over 25%
during the period.
Trading activity has been relatively limited, in line with our
long-term investment approach. The main activity was in the Capital
portfolio, with an increase in our holding in Philip Morris
International and a reduction in our holdings in A G Barr, Spirax
Sarco and Polar Capital. Other activity was restricted to refining
positions in existing investments.
Caledonia Private Capital (28% of NAV)
Caledonia's Private Capital portfolio is dominated by
significant positions in four UK centric businesses, one US
co-investment and one private European investment company. These
six investments represent over 95% of the portfolio value. Investee
companies are revalued in March and September each year. The
portfolio generated a total return of 20.1% in the first half of
the year.
On 1 June 2021, Caledonia announced that portfolio company DSE,
a leading provider of backup power control systems, had been
acquired by Generac Holdings Inc. ("Generac"). Generac is listed on
the New York Stock Exchange (NYSE: GNRC) and is a leading global
designer and manufacturer of energy technology solutions and other
power products. DSE was acquired by Caledonia in October 2018 and
had grown strongly. Caledonia received net proceeds of GBP242m in
cash, net of fees, for the sale of its 84.2% fully diluted stake.
This included a pre-disposal dividend of GBP12.6m. DSE was valued
at GBP193m in Caledonia's accounts as at 31 March 2021.
Seven Investment Management ("7IM"), a vertically integrated
multi-asset class investment manager continues to perform well. The
successful integration of the Partners Wealth Management business
has been a major contributor to performance, alongside growth in
the Funds & Models business. 7IM's assets under management
exceeded GBP20bn at the end of August 2021, up from GBP18bn as at 1
January 2021, reflecting a mix of positive investment performance
and net fund inflows. Valuation at end September was GBP138.8m, a
return of 8.7% for the first half of the year.
Liberation Group, a pub, restaurant and drinks business with
operations in the Channel Islands and the South West of the UK has
traded well as Covid-19 restrictions have been gradually relaxed.
Its portfolio, with a focus on destination pubs, a strong food
offering, large outdoor spaces and, in some cases, quality
accommodation, has been well positioned as demand has grown
strongly through the late spring and summer, supported by the
popularity of UK-based holidays. The pubs recently acquired from
Wadworth are performing well following a programme of investment.
Overall, the business is trading well ahead of internal plans and
performance in July and August was particularly strong, with a
return to pre Covid-19 trading levels. Valuation at end September
was GBP135.1m, a return of 5.9% for the first half of the year.
Cobepa, the Belgian based investment company, owns a diverse
portfolio of private global investments. The businesses within the
Cobepa portfolio continue to develop well, with many delivering
strong performance and valuation progression. This is reflected in
the valuation of Cobehold (the holding company of Cobepa); the
valuation of Caledonia's holding at end September was GBP127.4m, a
return of 15.3% for the first half of its year.
Stonehage Fleming, the international multi-family office,
continues to deliver good organic growth. This growth has been
supplemented by the successful integration of Cavendish Asset
Management, acquired in summer 2020. Valuation at end September was
GBP121.8m, a return of 9.0% for the first half of the year.
Cooke Optics, a leading manufacturer of cinematography lenses,
has traded well having maintained production despite the challenges
created by Covid-19 constraints. The market is strong as global
demand for both streaming and cinema content remains elevated. The
business has invested in capacity to fulfil this demand and has
plans to bring several innovative new products to the market.
Valuation at the end September was GBP104.0m, an equity return of
13.3% for the first half of the year.
BioAgilytix, a co-investment with Cobepa, specialises in
bioanalytical testing solutions for large molecule research and
development. The business is a market leader in its sector and has
grown strongly through a mix of acquisition and organic growth, and
currently has further acquisitions in progress. The valuation is
determined by Cobepa, as majority shareholder. At the end of
September this was GBP51.0m, a return of 94.7% for the first half
of the year.
Caledonia Funds (30% of NAV)
Caledonia Funds' investments are principally in third party
managed private equity funds operating in the USA and in Asia. The
total return on the Funds portfolio was 24.3% for the first half of
the year. This reflects very strong valuation growth across the
maturing portfolio of US and Asia based funds. Our investments with
fund of funds managers - Aberdeen US private equity funds, Axiom
Asia funds and Asia Alternatives funds - have shown particularly
healthy returns. 100% of funds, by value, are valued as at 30 June
2021.
During the first half of the year, GBP53m was invested and
GBP86m was received, comprising distributions of GBP77m and GBP9m
from the sale of a fund position in the secondary market. The level
of distributions remains positive, particularly from US funds,
reflecting merger, acquisition and IPO activity in broader private
equity markets.
Company contacts
Caledonia Investments plc +44 20 7802 8080
Will Wyatt,
Chief Executive
Tim Livett,
Chief Financial Officer
Media contacts
Tulchan Communications +44 20 7353 4200
Tom Murray
caledonia@tulchangroup.com
7 October 2021
Notes
Valuation approach and methodology
The valuation approach utilised for each asset portfolio is
summarised below.
Caledonia Quoted Equity : all listed companies are valued based
on the closing bid price on the relevant exchange as at 30
September 2021.
Caledonia Private Capital : the holdings are valued biannually,
principally on a normalised EBITDA x market multiple basis (in line
with the latest IPEV guidelines). This approach was applied to the
majority of significant assets in the portfolio on 30 September
2021. There were two exceptions to this approach; firstly
Liberation Group where fair value was based on a market based
multiple of fixed assets and secondly our holding in Cobehold,
where fair value was derived from the external valuation prepared
by Cobepa.
Caledonia Funds : the fund valuations are based on the most
recent valuations provided by the fund managers, subject to cash
movements from the valuation date. Valuations are received 60 to
180 days from the valuation date.
Caledonia Investments plc
Caledonia is a self-managed investment trust company. Its aim is
to grow net assets and dividends paid to shareholders, whilst
managing risk to avoid the permanent loss of capital. This is
achieved by investing in proven, well-managed businesses that
combine long term growth characteristics with an ability to deliver
increasing levels of income. Investments are held in both listed
and private markets, a range of sectors and, particularly through
the fund investments, with a global reach.
For additional information on Caledonia, please visit
www.caledonia.com .
END
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END
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