Caledonia Investments Share Discussion Threads

[skyship] 12/4/2021 08:35

Bought in at 2875p this morning. IMO these are likely to move back up to the 3100 level in the near term.


free stock charts from uk.advfn.com

[glavey] 12/4/2021 06:34

So overall around 7% over valued then.

[joedjoed] 10/4/2021 21:26

27% discount overall. Lets say that the one third quoted part of the portfolio should trade about flat to NAV. That means the other two thirds PE part is about 40% discount to NAV.

[qs99] 10/4/2021 17:48

should increase over this year IMO, COVID year why increase it more? I reckon 3% yield is possible, and you can get 0.001% in the bank.....let's comment on yield in 2021 based on what they pay out this year.....cheers all and glad I have bought in here in mid 20s.....

[jaf111] 10/4/2021 10:23

LOL SKYSHIP.....but re your 3 points - agree 100% / absolutely right / I'll second that!!!!!

[skyship] 10/4/2021 09:10

QS99 - GREAT YIELD!! -- 2.1%. You're an easy one to please it would seem...or have you perhaps just miscalculated? To find a yield divide the annual dividend by the share price. Quite simple really.

What was great was the asset performance; so CLDN cheap on a 27% discount; but the disappointing yield continues.

CJ - could you perhaps not trash the thread with what you've posted above. Sensible surely just to refer to the RNS in the Header or post the link. Thnx...

[contrarian joe] 09/4/2021 21:06

That's an excellent update considering Buzz bingo,Liberation group.Got really lucky yesterday & bought quite a few more at 2645,never expected that uplift in nav.


REG - Caledonia Investmnts - Unaudited net asset value and portfolio update
Caledonia InvestmentsCaledonia Investments
Announcement
9:01 am

RNS Number : 9684U
Caledonia Investments PLC
09 April 2021



Caledonia Investments plc



Unaudited net asset value and portfolio update



Caledonia Investments plc ("Caledonia") announces its unaudited diluted net asset value per share ("NAV") as at 31 March 2021, calculated on a cum-income basis was 3940p. This incorporates the biannual revaluation of the Private Capital portfolio.



The NAV total return ("NAVTR") for the year to 31 March 2021 was 24.0%. A final dividend of 44.5p per ordinary share for the year ended 31 March 2020 was paid to shareholders on 6 August 2020; an interim dividend of 17.0p per ordinary share for the current year was paid on 7 January 2021.



This announcement provides an update on Caledonia's portfolio and should be read in conjunction with the factsheet dated 31 March 2021, a copy of which is available at www.caledonia.com. Caledonia will announce its audited full year results on 27 May 2021.



Summary



The strong NAVTR performance includes positive returns from each part of the portfolio. The Quoted Equity pool delivered an annual return of 30.3%, reflecting the rebound in global equity markets, the focus towards US public equities and its portfolio of high quality companies. Private Capital investee companies, with the exception of Buzz Bingo, adapted well to the challenges of Covid-19 with impressive performance through the second half of the year to produce a total return of 21.8% for the year, inclusive of a full write-down of the investment in Buzz Bingo. The Funds portfolio delivered an annual return of 30.9% following the release of the adjustment made in March 2020 to account for the potential impact of Covid-19 and good underlying results, particularly from the Asian PE funds.



There were two notable adverse impacts on investment returns for the year. Caledonia supported an initial financial restructure of Buzz Bingo in the summer of 2020, before choosing not to participate in a further fundraising in March 2021, which resulted in the sale of our interest for a nominal sum as announced on 17 March 2021. This created a total write-down for the year of £68m. In addition, with approximately 45% of our assets denominated in US dollars, the strengthening of Sterling by some 11% over the year negatively impacted the annual return by more than six percentage points.



We continued to invest in the portfolio throughout the year, which resulted in a net cash outflow of £116m. Investee companies in the Private Capital pool have been supported with £56m of capital to make three bolt-on acquisitions. There was a modest net investment into the Funds pool, with stronger distributions in the second half of the year following a higher level of drawdowns in the first half, reflecting actions taken by managers in the early stages of the pandemic to bolster liquidity levels in their portfolios.



Total liquidity remains satisfactory with £249m available at 31 March 2021, reflecting the full value of our banking facilities and £0.9m of net debt. The £250m of banking facilities include £137.5m expiring in May 2025 and the balance of £112.5m expiring in July 2022.



Caledonia pool performance

Net asset value - year to 31 March 2021



£m





Opening

balance


Net

investment

/(disposal)

Capital

gains /

(losses)

Other


Closing

balance


Income


Total

Return













Quoted Equity

574.0


(14.8)

157.0

-


716.2


17.1


30.3%

Private Capital

611.3


90.1

110.2

-


811.6


22.7


21.8%

Funds

450.1


21.8

146.8

-


618.7


0.7


30.9%

Investments

1,635.4


97.1

414.0

-


2,146.5


40.5



Other assets

151.9


(97.1)

-

(9.2)


45.6

















Net assets

1,787.3


-

414.0

(9.2)


2,192.1


NAVTR


24.0%



Caledonia's March 2020 NAV incorporated additional price adjustments within the valuations of both the Private Capital and Funds portfolios to account for the potential impact of Covid-19. Valuations have now reverted to a more standard approach: the biannual valuation of the Private Capital businesses were based on a normalised earnings multiple basis for most investee companies and the most recent managers' NAV were used for the valuation of the Funds portfolio.



Caledonia Quoted Equity - Capital and Income portfolios (33% of NAV)



The total return of the Quoted Equity portfolio was 30.3% for the year. This strong performance reflected the significant rebound in global public equity markets and considered stock selection within both the Capital and Income portfolios, which delivered total returns of 35.9% and 17.5% respectively. The performance of the US public equities in both portfolios was particularly notable and was responsible for a majority of the returns.



Trading activity over the year has been limited, in line with our long-term investment approach. In the Capital portfolio there was one significant disposal of Waters Corporation, a laboratory and software company, alongside reduced positions in a small number of other holdings. The evolution of the Income portfolio has included developing new positions in Fortis Inc, a North American utilities business, and in international consumer business Reckitt Benckiser and the sale of our holdings in Direct Line and Tritax Big Box.



Caledonia Private Capital (37% of NAV)



Caledonia's Private Capital portfolio includes significant positions in five UK businesses and one private European investment company. These six investments represent over 90% of its value. The portfolio generated a total return of 21.8% for the year, including the absorption of the write-down of £68m relating to the holding in Buzz Bingo. The industrial and financial services business have adapted well to the Covid-19 environment and have been trading strongly. The impact of the pandemic has been felt more acutely by Liberation Group and, prior to disposal, Buzz Bingo. The investment in Cobehold and its diverse portfolio continues to perform well. The private equity market is currently very active and the pricing of high-quality private companies has increased in line with quoted markets.



The holding in Buzz Bingo, the UK's biggest omni-channel bingo business, was sold for a nominal sum in March 2021 after a very challenging year. In summer 2020, following a period of retail club closures caused by the Government's response to the Covid-19 pandemic, the business successfully completed a company voluntary arrangement. Retail trading post re-opening was good but renewed opening restrictions through the late autumn and winter periods resulted in further significant losses which led Buzz Bingo to review its funding options once again. Caledonia, having carefully assessed the available investment opportunity, chose not to participate in the resulting funding round and disposed of its interest.



Liberation Group ("Liberation"), a pub, restaurant and drinks business with operations in the Channel Islands and the South West of the UK has been heavily impacted by Covid-19 restrictions. While the business traded well through the summer and autumn periods, it has suffered further pandemic related closures of its pubs and restaurants over recent months. However, the UK brewery has operated throughout the period, supporting trade and growing online sales. The wholesale businesses in Jersey and Guernsey also remained open and traded strongly. In November 2020, Caledonia invested £36m of new equity to support Liberation's acquisition of a substantial portfolio of pubs from Wadworth, complementing the existing UK estate, and various value accretive capital projects across the enlarged estate. This investment, backed by the strong trading performance last summer, reflects our confidence in the long-term prospects for the business.



The financial services businesses, Seven Investment Management ("7IM") and Stonehage Fleming, have developed well during the year. Both businesses have seen strong growth in the level of assets under management achieved through a mix of fund performance, fund inflows and acquisitions which has resulted in good trading performances. 7IM acquired Partners Wealth Management, a high net worth financial planning business, at the end of September, and Stonehage Fleming acquired Cavendish Asset Management in July 2020.



Deep Sea Electronics ("DSE") and Cooke Optics, our industrial businesses, have traded successfully through the year. The performance of DSE has been particularly strong, with good growth, product development and cash generation. The control technology developed by DSE should have wide applications in the development of mixed source power provision, providing further growth opportunities. Performance at Cooke improved in the second half of the year due to better operational planning and controls, new senior appointments and an uplift in demand as film related activity returned to more normal levels.



Caledonia Funds (28% of NAV)



The total return on the Funds portfolio was 30.9% for the year. This reflects good underlying fund performance, which reverted to valuations based on managers' NAV, without the need to reflect the potential Covod-19 impact as was the case in March 2020. Caledonia's valuation policy is to utilise the latest valuations reported by managers of the funds in which it is invested. 70% of the NAV is based on valuations dated 31 December 2020, primarily the directly owned funds. The remainder, mostly fund of funds holdings, are dated 30 September 2020.



Caledonia's fund investments are principally in third party managed private equity funds operating in the US and Asia. The feedback from the fund managers is currently positive, with a clear majority of the investee businesses progressing in line with or ahead of internal plans. The level of transactional activity picked up strongly in the second half of the year with several successful exits delivered through trade sales or IPOs. Over the year, Sterling has strengthened by 11% compared to the US dollar, creating a significant headwind to the positive returns from this portfolio.



The strategy for the Funds portfolio involves committing around US$100m per annum to new fund opportunities. During the year, £109m was invested and distributions of £87m were received. As noted earlier, there was a notable pick up in distributions as we progressed through the year, with 84% of the distributions received in the second half of the year.





Company contacts


Caledonia Investments plc



[phone]

Will Wyatt,

Chief Executive



Tim Livett,

Chief Financial Officer




Media contacts


Tulchan Communications

Tom Murray

[e-mail]



[phone]



9 April 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 31 March 2021.



Caledonia Private Capital: the holdings are valued biannually, on a normalised EBITDA x market multiple basis where appropriate (in line with the latest IPEV guidelines). This approach was applied to the majority of the portfolio at 31 March 2021. However, trading for several businesses in the portfolio in the current year has been impacted by Covid-19. Our valuations would use normalised LTM EBITDA as a key input under standard circumstances; however, we have also used historic and forecast earnings information in order to address this issue and provide a more balanced view of valuation.



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. This approach has been applied for 31 March 2021 valuations, in contrast to the year ended 31 March 2020 when a Covid-19 adjustment was applied to December 2019 fund managers' NAVs in light of the uncertainty created by the Covid-19 pandemic.



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 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










This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END


PFUGRGDSRUGDGBC
Caledonia Investments
Caledonia Investments Closed Fund

[riverman77] 09/4/2021 16:43

It is actually a 13% uplift from the Feb NAV, so on that basis the share price rise today looks quite contained. Even after today's rise it is on a 28% discount which compares with typical 15-20% discount - so looks cheap on that basis. Also, markets been strong since end March so today's NAV should even be a bit higher - perhaps putting CLDN on 30% discount

I can see this getting some good write ups in the press in the next few days, which could push the discount to the 10-15% range.

Worth noting that discounts on the other private equity funds have come in a lot recently (CLDN is two thirds private equity so fair comparison I think), so hopefully CLDN will follow these after this update.

[stevegrass777] 09/4/2021 16:27

Glad to see CLDN share price move upwards, but it's no surprise based on such a great update, considering the turmoil over the last year CLDN have done very well.
The NAV has increased and I'm impressed with the performance of all the investments except buzz of course.
But who could see total door closure coming.
Anyway this update should show investors that CLDN can be reliable even in rough times.
The NAV discount should really start to narrow over the next few weeks after the media starts reporting on these updates.

[spoole5] 09/4/2021 11:35

All they can do is grow the NAV which they are doing

[qs99] 09/4/2021 11:25

Have bought more, great yield, IMO will continue to see great returns this year, a 25%++ discount to NAV just looks really wrong. DYOR

[arja] 09/4/2021 10:38

off topic, PSH is similar with a big discount to NTA and now a NOR situation , ie all time high . lovely looking chart .

[arja] 09/4/2021 10:35

as an old aussie mate used to say , sell when hot which might apply today although it is not exactly a liquid high volume stock with widish spread. This is now on my watchlist with it's massive discount to NAV.

[jaf111] 09/4/2021 09:56

Quite why this continues to trade at such a significant discount remains a real mystery to me......very unwarranted....

[qs99] 09/4/2021 09:44

Just topped up on that RNS, really good and lovely yield and well run IT IMO

DYOR

[arja] 09/4/2021 09:33

just took off like a rocket and I am so irritated because I did not have enough in my CFD account to open a position . anyway , well done to those holding some .

[stevegrass777] 17/3/2021 12:08

It's difficult for CLDN to narrow the discount to NAV on its own because the Cyzer family owns to much stock already, so buybacks push this already problematic % higher, so mainly CLDN is stuck with the natural discount or premium of supply and demand /markets.
Some it for instance can purchase there own shares if the NAV gets above a certain discount to NAV, but CLDN can't really.
Anyway BUZZ bingo is no more!
Quite supprised that Buzz is going just before everything opens up again, but pleased that buzz was already held at zero on the NAV calcs.
I take it nominal fee means a pound or something like that.
Oh well, it's hard to get it right every time especially when covid runs a coach and horses through a business.

[arja] 15/2/2021 08:25

a big discount to NAV abd is it because there are a lot of unlisted investments ??,. chart wise it is in short term uptrend and a little more to go I reckon.

[contrarian joe] 05/2/2021 15:40

Been adding from 2800, took some more at 2700,discount seems very generous considering alternatives.

[qs99] 05/2/2021 15:27

thanks

as we exit lockdown, hopefully some of these private holdings will start generating value again and the plc holdings likewise with rise of the stockmarket.....looking for a move back over £30 IMo....sitting at c.25% discount looks odd

DYOR

QS99

[tykethat] 08/1/2021 12:23

Whilst I can see I'm in the minority here, I will take my next opportunity to sell. Performance over last 3 years is poor, 5 years little better.
I've waited almost 10 years for the discount to move towards zero, it probably will after I sell!

[topvest] 08/1/2021 11:40

Agreed. Its a hold forever type of holding!

[stevegrass777] 08/1/2021 11:33

Great update, very pleased with the long term growth of CLDNs nav and the way it approaches investing.

[qs99] 03/12/2020 09:11

Definitely a narrowing of the discount it would seem. Maybe because of the continued delivery and dividend, track record etc and rising equity markets / valuations at the moment?