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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Caledonia Investments Plc | LSE:CLDN | London | Ordinary Share | GB0001639920 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
25.00 | 0.71% | 3,560.00 | 3,555.00 | 3,570.00 | 3,560.00 | 3,560.00 | 3,560.00 | 2,717 | 10:48:39 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Trust,ex Ed,religious,charty | 183M | 142.9M | 2.6117 | 13.54 | 1.93B |
TIDMCLDN
RNS Number : 3893A
Caledonia Investments PLC
29 May 2019
Caledonia Investments plc
Final results for the year ended 31 March 2019
Financial highlights
31 Mar 2019 31 Mar 2018 Change Net asset value total return +10.9% +1.4% Net asset value 3582p 3285p +9.0% Net assets GBP2,002m GBP1,837m +9.0% Annual dividend per share 59.3p 57.0p +4.0%
Highlights
-- +10.9% NAV total return for the year (+8.1% excluding currency gains) Strong returns from the Quoted, Unquoted and Funds pools and a small positive return from the Income pool; returns enhanced by the strengthening US dollar -- Continued growth in dividends to shareholders 4% increase in annual dividend per share to 59.3p 52nd consecutive year of increasing dividends -- Strong NAV growth over the year of +9.0% -- GBP491m realised from the portfolio including GBP92m from sale of Choice Care Group -- GBP560m investment in new and follow-on opportunities including GBP117m in Deep Sea Electronics equity and GBP50m in debt (subsequently repaid) and GBP93m in Cooke Optics -- Significant capacity to capitalise on market opportunities GBP112m of cash available Unutilised facilities of GBP250m at year end
Will Wyatt, Chief Executive, commented:
"Caledonia's investment portfolio delivered positive performance across all four pools, underpinning the +10.9% increase in NAV total return for the year. The Quoted pool in particular performed strongly, demonstrating the strength of Caledonia's conservative, long term approach.
"We are proposing a 4% increase in the annual dividend, marking the 52nd year of successive increases, a record of which we continue to be proud.
"Whilst we foresee a continuation of geopolitical tensions affecting markets in the coming year, we remain confident that our portfolio construction and underlying investments leave us well positioned to deliver our long term return targets and dividend growth."
29 May 2019
Enquiries
Caledonia Investments plc Tulchan Communications Will Wyatt, Chief Executive Lisa Jarrett-Kerr Tim Livett, Chief Financial Officer Martin Pengelley +44 20 7802 8080 +44 20 7353 4200
Chairman's and Chief Executive's report
Aim
Caledonia's objective is to grow net assets and dividends over the long term, whilst managing risk to avoid permanent loss of capital.
Results
Our net asset value per share total return ('NAVTR'), which measures how the company has performed considering both capital returns and dividends paid to shareholders, was 10.9% over the year. This was in excess of the board's annual performance target of RPI+3% to RPI+6% and reflected the healthy growth in value of both our listed and unquoted portfolios. Investors have been aided by strong market and economic fundamentals, although the sharp falls witnessed in most asset classes in the last quarter of 2018 was a sharp reminder that confidence remains fragile at what could prove to be a late stage in a long bull market cycle.
Markets and volatility
Caledonia is somewhat unusual, as its investment portfolio combines listed holdings and direct unquoted investment, together with funds. It is designed to give shareholders a less volatile journey that protects their capital, but aims to grow it over the long term without taking undue risk. This strategy was put to the test during the steep market falls in the last quarter of 2018 and I am pleased to report that the portfolio did indeed suffer proportionately less than markets in general. This gives a degree of confidence that our portfolio construction and our underlying investee companies are giving shareholders the designed risk adjusted returns. We also retain an ungeared balance sheet, although individual companies within our portfolio do have borrowings secured on their own assets.
Investment performance
In the short term, Caledonia aims to deliver NAVTR ahead of inflation, as measured by RPI, by 3% to 6%. Over ten years, the board believes it is more appropriate to compare performance against the FTSE All-Share Total Return index, which the board regards as a reasonable indicator of what UK based shareholders might consider an acceptable long term return.
The table below shows that our investment performance is currently ahead of the various measures described above, outperforming both the FTSE All-Share Total Return by 4.5% and the top end of our target range by 2.5% in the year. Caledonia has also outperformed these measures over the longer term, with the exception of a minor under-performance against the FTSE All-Share Total Return over ten years.
1 year 3 years 5 years 10 years % % % % ---------------------------- ------- ------- ------- -------- NAV total return 10.9 32.7 55.6 185.9 Total shareholder return 14.8 41.2 78.2 200.2 ---------------------------- ------- ------- ------- -------- RPI+3% to RPI+6% target 5.4-8.4 6.0-9.0 5.3-8.3 6.0-9.0 NAVTR annualised 10.9 9.9 9.2 11.1 Performance vs RPI+3% Above Above Above Above ---------------------------- ------- ------- ------- -------- FTSE All-Share Total Return 6.4 31.3 34.5 186.8 NAVTR vs FTSE All-Share TR 4.5 1.4 21.1 (0.9) Performance vs FTSE Over Over Over Under ---------------------------- ------- ------- ------- --------
Total return for the year was GBP229m, consisting of GBP177m of capital gains and GBP52m of income.
Income
Income from a portfolio is often perceived as less important than capital returns although, over the long term, it has a far more significant impact than is often assumed. Over the past ten years, for instance, the FTSE All-Share index increased by 100.5% on a capital basis, but on a total return basis, by 186.8%. Caledonia needs to pay its internal costs and a dividend annually and we aim to ensure that there is sufficient income flowing from our portfolio to achieve this on a covered basis. Income for the year amounted to GBP52m, an increase over the previous year of 13.3% and our dividend cover was 1.1x.
Asset allocation
Pool allocations Return Strategic 2019 2018 2017 2016 target Pool % % % % % % --------- --------- ---- ---- ---- ---- ------ Quoted 25-40 23 25 25 27 10.0 Income 15-20 11 11 11 12 7.0 Unquoted 35-45 33 25 30 39 14.0 Funds 15-20 24 25 21 19 12.5 Cash etc (10)-10 9 14 13 3 --------- --------- ---- ---- ---- ---- ------
The allocation ranges expressed in the table above are a guide to ensure that our overall investment portfolio remains proportionately balanced. There will be times when the pools move outside their strategic ranges, often for extended periods, due for example to market movements, underlying performance, liquidity issues, unavailability of suitable target investments or the age profile of our existing investments.
Our portfolio is currently some 60% invested in unquoted businesses and funds and 40% in companies listed on stock exchanges. We have gradually reduced exposure to listed equities, taking profits as markets have risen over the past three years. Following a couple of years of exercising financial discipline, when no suitable new investments were found, the Unquoted pool invested in three new businesses this year and agreed a fourth, which is currently awaiting regulatory approval. Once this completes, the pool will return to within its expected allocation range. The Funds pool allocation remains above its target range, driven by its continued strong run of performance and the maturing of its private equity funds portfolio.
At Mar Invest- Realis- Gains/ At Mar 2018 ments ations losses 2019 Income Return GBPm GBPm GBPm GBPm GBPm GBPm % -------------------- ------- -------- -------- ------- ------- ------ ------ Pool Quoted 452 29 (96) 79 464 10 21.0 Income 195 107 (71) (7) 224 13 2.9 Unquoted 464 315 (159) 36 660 28 11.4 Funds 470 109 (165) 69 483 1 15.0 -------------------- ------- -------- -------- ------- ------- ------ ------ Total pools 1,581 560 (491) 177 1,831 52 13.6 Non-pool 29 (2) 2 - 29 - (0.4) -------------------- ------- -------- -------- ------- ------- ------ ------ Investments 1,610 558 (489) 177 1,860 52 13.4 Cash 208 112 Other items 19 30 -------------------- ------- -------- -------- ------- ------- ------ ------ Net assets 1,837 2,002 10.9 -------------------- ------- -------- -------- ------- ------- ------ ------ 1. Non-pool investments comprised legacy investments and cash and receivables in subsidiary investment entities. 2. Returns for investments are calculated using the modified Dietz methodology and the overall return is the company's NAVTR. 3. Unquoted pool realisations included the transfer of a non-core investment valued at GBP1m to Non-pool investments and the
valuations at 31 March 2019 included accrued income of GBP4m.
Pool performance
The performance of the portfolio was strong across all pools with the exception of the Income pool, with its majority exposure to UK assets which remain out of favour with investors, in large part due to Brexit.
The table below shows the annualised three and five year pool performance and aggregate net cash generated including income.
Returns annualised Cash generated over 3 years 5 years 3 years 5 years % % GBPm GBPm ---------- --------- --------- ---------- --------- Quoted 14.8 7.8 171 208 Income 2.9 3.8 (13) (2) Unquoted 12.2 14.2 177 247 Funds 15.2 18.6 4 16 ---------- --------- --------- ---------- --------- Portfolio 12.3 11.5 339 469 ---------- --------- --------- ---------- ---------
Quoted pool
The Quoted pool is substantially invested in high quality compounding businesses in the US (55% of the portfolio) and its return of 21.0% for the year was nothing short of exceptional, returning double its target, considering the turmoil in markets only three months before the year under review ended. The portfolio has been constructed with market volatility in mind such that the full effect of downturns is mitigated. The performance during the fourth quarter downturn demonstrated this resilience, ending the calendar year 2018 up 5.0%, compared with falls in the FTSE All-Share of 9.5% and the S&P 500 of 4.4%. Risk has been well managed with GBP96m of divestments made during the year when individual holdings either became too large or too highly valued. Our main concern is one of extended valuations, especially of high quality, reliable companies that produce consistently good returns. There are few opportunities to put capital to work, although we expect that this could change if interest rate expectations start to anticipate increases in base rates or other macro-economic factors unsettle markets.
Income pool
Income for the year, the generation of which is the primary purpose of this pool, was GBP13m, equating to a yield of 5.7%. Capital performance was somewhat disappointing, although this was a year in which it proved difficult to avoid the vacillations of the market. High yielding UK equities, in which 74% of the pool's assets were invested, remained at the lower end of historic valuation ranges. Our longer-term outlook allows us to weather such storms and the income generated enables greater flexibility in investment in the remainder of Caledonia's portfolio.
Unquoted pool
The Unquoted pool's total return for the year was a healthy 11.4%. The past twelve months have been exceptionally busy, with the team involved in purchasing three businesses, including a co-investment with Cobepa, and selling one. In October 2018, our investment in the residential care homes operator, Choice Care Group, was sold to a fund managed by iCON for GBP99m (including GBP7m of pre-sale dividend), which represented a return of 1.9x on our capital and an IRR of 14.3%.
In July 2018, we purchased an 89% stake in Cooke Optics, a Leicester based manufacturer of cinematography lenses, for GBP63m and advanced GBP30m of debt to this long-established business. The underlying growth in the market for lenses is being driven by the demand for new content by companies such as Netflix, Apple and Amazon, as well as the fast-developing Chinese film industry.
We also purchased in October 99% of the equity of Deep Sea Electronics ('DSE'), a world leading, Yorkshire based manufacturer of controllers for electricity generators and battery chargers, for GBP117m. DSE has a high share of the global market for its products and is expanding into the market for controllers for off-highway and utility vehicles.
In February, we invested GBP23m in BioAgilytix alongside Cobepa, owned by Cobehold. BioAgilytix is a US headquartered bioanalytical testing solutions provider.
A fourth acquisition, when completed, will be a minority shareholding in Stonehage Fleming & Partners, which provides family office services to high net worth families. Caledonia will purchase 36.7% of the equity of the business for approximately GBP92m, with deferred consideration of up to an additional GBP21m if certain financial targets are achieved. Stonehage Fleming is one of the leaders in the fast-growing ultra-high net worth market. The acquisition of this holding is dependent on receiving approval from regulators in the various jurisdictions in which the company operates.
The companies in the Unquoted pool's existing portfolio have performed in line with expectations. Seven Investment Management completed the acquisition of Tcam Asset Management, though overall profits fell in a year strongly influenced by volatile markets. Buzz Bingo completed a rebranding exercise from its previous name of Gala Bingo, which involved significant investment into its retail estate, as well as launching its online bingo platform. Liberation went through a year of consolidation of the previous year's pub acquisitions, strengthened its management team led by new CEO, Jonathan Lawson, and opened a new bottling and distribution centre in Polden, Somerset. Cobehold, the Belgian investment company, had a strong year, driven by the profitable sale of one of its portfolio companies, Exclusive Group. We exited some smaller, legacy businesses and several properties were sold profitably by Brookshire Capital, a joint venture property investment and trading group managed capably by Alex Wildman and Neil Taylor. In addition to net capital gains of GBP36m, the Unquoted pool produced GBP28m of income during the year.
Funds pool
The Funds pool returned 15.0% for the year which, compared with previous years, was driven by a wider base of funds as the pool matures. The US and Asian private equity portfolios are driving growth in valuations, although we are still some way from seeing substantial net receipts of cash. Particularly strong growth came from JF Lehman, our fund of funds investments and also from Boyne Capital, a Florida-based private equity firm focused on investments in lower middle market companies. We reduced our holdings in quoted market funds to provide cash flow for the private equity portfolio and it is likely this pattern will continue in subsequent years.
It is worth noting that the extraordinarily successful Capital Today China fund, which has been the backbone of our Asian portfolio, has made a return of over 10x the commitment of $20m made in 2006.
Discount and dividend
Our share price rose by some 12.5% over the year and our discount reduced by 2.5% to 16.8%. The month end discounts have ranged between 22.1% and 13.9%, the latter being reached during the stock market falls in late 2018.
The board is recommending a final dividend of 43.2p per share to shareholders at the AGM in July. Together with the interim dividend of 16.1p per share this will give a total for the year of 59.3p at a cost of GBP32.5m. This would represent an increase of 4.0% over 2018 and would be our 52nd year of consecutive growth of the dividend, a considerable achievement. Although Caledonia's dividend yield, which averaged about 2% for the year, is not particularly high, our history of sharing with shareholders via occasional special dividends periodic gains from investing brings the overall pay-out levels to above 3% taken over a ten year period.
Board
After almost ten years as our Finance Director, Stephen King stepped down from the board at the end of November last year to pursue a non-executive career. We would like to extend our thanks to Stephen for his contribution to Caledonia over that time and to wish him well in his future roles.
In March, we welcomed Tim Livett to the board as Chief Financial Officer. Tim joined us from a similar position at the Wellcome Trust, where his knowledge and insight gained from overseeing the risk and performance of its asset management division, responsible for the Trust's GBP23bn mixed asset portfolio, should greatly assist our own investment team.
Outlook
There is an unavoidable sense of 'fin de siècle' with this bull market in equities, now in its tenth year. The strongest influence on investor confidence seems to be the direction of interest rates, particularly in the US. There is, of course, a direct effect on earnings of companies should the cost of capital increase. The Federal Reserve, having been gradually raising interest rates to their current 2.5%, signalled that it would not raise rates further in the near future. This provided the impetus for the market recovery in January. It will be worth following closely the signals coming from both the US and UK central banks, as they have a direct effect on listed markets. With US tax cuts now in the past and trade talks with China showing no signs of resolution, there is much of which the investor should be wary.
We have been active over the past year in UK unquoted markets and have been fortunate to find companies that value our differentiated proposition over the simple measure of price. We have a relatively immature unquoted portfolio that will take a combination of time and further capital to develop and grow. In the meantime, our portfolio of fund assets and high-quality listed companies offers prospects for further growth. Whilst we anticipate continued periods of turbulence, especially in quoted markets, over the medium term we are confident that our portfolio and measured, long term approach will continue to achieve the aims set by the board.
David Stewart Will Wyatt Chairman Chief Executive
Investments summary
Holdings over 1% of net assets at 31 March 2019 were as follows:
Net Value assets Name Pool Geography Business GBPm % ---------------------------- ----------- ------------ -------------------------- ------- ------ Deep Sea Electronics Unquoted UK Control systems 117.2 5.9 Seven Investment Management Unquoted Jersey Investment management 107.7 5.4 Cobehold Unquoted Belgium Investment company 104.9 5.2 Cooke Optics Unquoted UK Cine lens manufacturer 92.5 4.6 Buzz Bingo Unquoted UK Bingo operator 89.9 4.5 Aberdeen US PE funds Funds US Funds of funds 86.5 4.3 Liberation Group Unquoted Jersey Pubs and restaurants 83.2 4.2 Microsoft Quoted US Infrastructure technology 43.2 2.2 AG Barr Quoted UK Soft drinks 40.4 2.0 Spirax Sarco Quoted UK Steam engineering 40.3 2.0 JF Lehman funds Funds US Private equity funds 38.2 1.9 Axiom Asia funds Funds Asia Funds of funds 34.4 1.7 Asia Alternatives funds Funds Asia Funds of funds 33.2 1.7 Oracle Quoted US Infrastructure technology 31.5 1.6 Thermo Fisher Scientific Quoted US Biotechnology development 31.3 1.6 Becton Dickinson Quoted US Medical technology 30.2 1.5 Arlington AVM Ranger fund Funds US Quoted market fund 29.7 1.5 Polar Capital Quoted UK Fund manager 29.1 1.5 British American Tobacco Quoted/Inc UK Tobacco 27.8 1.4 Charter Communications Quoted US Cable telecommunications 27.4 1.4 Hill & Smith Quoted UK Infrastructure products 27.1 1.4 Nestlé Quoted Switzerland Packaged foods 24.7 1.2 Overlook Partners fund Funds Asia Quoted market fund 24.7 1.2 Waters Quoted US Chemical testing services 24.5 1.2 Bioanalytical testing BioAgilytix Unquoted US services 23.0 1.1 Sports Information Services Unquoted UK Broadcasting services 20.7 1.0 Pacific Alliance fund Funds Asia Private equity fund 20.6 1.0 Other investments 547.2 27.3 ----------------------------------------------------------------------------------- ------- ------ Investment portfolio 1,831.1 91.5 Non-pool investments 28.9 1.4 Cash and other 142.0 7.1 ----------------------------------------------------------------------------------- ------- ------ Net assets 2,002.0 100.0 ----------------------------------------------------------------------------------- ------- ------ 1. Geography is based on the country of listing, country of domicile for unlisted investments and underlying regional analysis for funds. Pool distribution Geographic distribution Asset class distribution -------------------- ------------------------- -------------------------- Quoted 23% United Kingdom 35% Listed equities 34% Income 11% Europe 19% Private companies 33% Private equity Unquoted 33% North America 27% funds 20% Quoted market Funds 24% Asia 10% funds 4% Cash and other 9% Cash and other 9% Cash and other 9% --------------- --- ------------------- ---- --------------------- --- 1. Cash and other in the distributions above included non-pool investments.
Risk management
Effective risk management is a key component of the company's business model and assists in ensuring that the different parts of the group operate within strategic risk parameters. The board has overall responsibility for setting and monitoring the company's risk appetite.
Principal risks Mitigation Key developments ---------------------------- ------------------------------ ------------------------------- Strategic Risks in relation to The company's business Caledonia reviews its the appropriateness model and strategy investment strategy of the business model are reviewed periodically, annually, taking into to deliver long term against market conditions consideration the current growth in capital and and target returns. and potential future income. The performance of investing environment Strategic risks include the company and its and discussions with the allocation of capital key risks are monitored executives. The investment in relation to geography, regularly by management strategy is reviewed sector, currency, yield and the board. and approved by the and liquidity. board. Investment Risks in respect of Investment opportunities Pool managers have specific investment are subject to rigorous continued to develop and realisation decisions. appraisal and a multi-stage their own risk management Investment risks include approval process. Pool processes during the the appropriate research managers have well-developed year. The board regularly and due diligence of networks through which reviews investment new investments and they attract proprietary risk at both pool and the timely execution deal flow. Target entry company portfolio level. of both investments and exit events and and realisations for prices are monitored optimising shareholder and updated regularly, value. in relation to market conditions and strategic aims. Market Risk of losses in value Market risks and sensitivities Caledonia has continued of investments arising are reviewed weekly to operate a diversified from sudden and significant and actions taken, geographical portfolio movements in market where appropriate, that provides a longer prices, particularly to balance appropriately term hedge to geographical in highly volatile risk and return. market risk and foreign markets. A regular review of exchange. Caledonia's principal market and portfolio Caledonia has a well-developed market risks are therefore volatility is conducted and wide ranging contact equity price volatility, by the board. Reviews base, which, together foreign exchange rate also consider investment with formal advisers, movements and interest concentration, currency ensures that it understands rate volatility. exposure and portfolio the landscape arising liquidity. from the impending market changes and how this might impact its business. Liquidity Risk that liabilities Detailed cash forecasting We have continued to cannot be met or new for six months ahead manage our investment investments made due is updated and reviewed process to ensure that to a lack of liquidity. weekly, including the access to our available Such risk can arise expected drawdown of facilities is on a from not being able capital commitments. short term basis only. to sell an investment Loan facilities are At 31 March 2019, we due to lack of a market maintained to provide had net cash of GBP112m, or from not holding appropriate liquidity together with undrawn, cash or being able headroom. The liquidity committed borrowing to raise debt. of the portfolio is facilities of GBP250m. reviewed regularly. Operational Risks arising from Systems and control Caledonia has implemented
inadequate or failed procedures are developed a policy addressing processes, people and and reviewed regularly. GDPR requirements in systems or from external They are tested to the year. It has also factors. ensure effective operation. updated the staff handbook Operational risks arise Appropriate remuneration ensuring compliance from the recruitment, and other policies with the 'speak up development and retention are in place to encourage about company concerns' of staff, systems and the retention of key provisions of the 2018 procedures and business staff. Business continuity UK Corporate Governance disruption. plans are maintained Code. and updated as the business evolves. Regulatory and legal Risk arising from exposure Caledonia has internal Caledonia produced to litigation or fraud resources to consider the required Key Information or failure to adhere regulatory and tax Document, in compliance to the tax and regulatory matters as they arise. with the EU PRIIPs environment. Caledonia Use is made of advisers Regulation. This is operates across a number where necessary to available on the company's of jurisdictions and supplement internal website. in an industry that knowledge in specialised has been subject to areas. Caledonia is increasing regulatory a member of the Association oversight. of Investment Companies and is represented on its self-managed investment trust committee. Regular training is undertaken. Potential Brexit scenarios Risk arising from changing Continued monitoring Our review of the continuing consumer spending trends of directly held unquoted business models of and impact of trade investment performance our directly held unquoted regulation and tariffs. and business model investments have not Potential volatility exposure to potential revealed significant to quoted markets due Brexit impacts. exposures to European to uncertainty as to Continued monitoring regulatory or trading any Brexit outcome of quoted market responses environments that might and impacts. to Brexit impacts. be impacted by Brexit scenarios. We continue to monitor potential impacts to quoted markets as the potential Brexit position develops.
Group statement of comprehensive income
for the year ended 31 March 2019
2019 2018 Revenue Capital Total Revenue Capital Total GBPm GBPm GBPm GBPm GBPm GBPm -------------------------------- ------- ------- ------ ------- ------- ------ Revenue Investment income 52.1 - 52.1 46.0 - 46.0 Other income 0.1 0.9 1.0 0.2 - 0.2 Net gains and losses on fair value investments - 176.7 176.7 - 6.8 6.8 Net gains and losses on fair value property - (5.3) (5.3) - (5.9) (5.9) -------------------------------- ------- ------- ------ ------- ------- ------ Total revenue 52.2 172.3 224.5 46.2 0.9 47.1 Management expenses (17.9) (8.6) (26.5) (16.9) (5.9) (22.8) Profit before finance costs 34.3 163.7 198.0 29.3 (5.0) 24.3 Treasury interest receivable 0.5 - 0.5 0.6 - 0.6 Finance costs (2.1) - (2.1) (2.1) - (2.1) Exchange movements 0.5 - 0.5 (0.6) - (0.6) -------------------------------- ------- ------- ------ ------- ------- ------ Profit before tax 33.2 163.7 196.9 27.2 (5.0) 22.2 Taxation 1.4 (0.1) 1.3 4.3 - 4.3 -------------------------------- ------- ------- ------ ------- ------- ------ Profit for the year 34.6 163.6 198.2 31.5 (5.0) 26.5 Other comprehensive income items never to be reclassified to profit or loss Gain on acquisition of pension scheme 1.4 - 1.4 - - - Re-measurements of defined benefit pension schemes - (0.1) (0.1) - (0.8) (0.8) Tax on other comprehensive income - 0.2 0.2 - (0.3) (0.3) -------------------------------- ------- ------- ------ ------- ------- ------ Total comprehensive income 36.0 163.7 199.7 31.5 (6.1) 25.4 -------------------------------- ------- ------- ------ ------- ------- ------ Basic earnings per share 63.0p 297.9p 360.9p 57.4p -9.1p 48.3p Diluted earnings per share 61.9p 292.8p 354.7p 56.3p -9.1p 47.4p -------------------------------- ------- ------- ------ ------- ------- ------
The total column of the above statement represents the group's statement of comprehensive income, prepared in accordance with IFRSs as adopted by the European Union.
The revenue and capital columns are supplementary to the group's statement of comprehensive income and are prepared under guidance published by the Association of Investment Companies.
The profit for the year and total comprehensive income for the year is attributable to equity holders of the parent.
Statement of financial position
at 31 March 2019
Group Company 2019 2018 2019 2018 GBPm GBPm GBPm GBPm --------------------------------------- ------- ------- ------- ------- Non-current assets Investments held at fair value through profit or loss 1,860.0 1,609.9 1,864.2 1,613.6 Investments in subsidiaries held at cost - - 0.9 0.8 Investment property 6.7 10.4 - - Property, plant and equipment 28.4 29.2 - - Deferred tax assets 3.6 3.2 - - Employee benefits 2.6 2.3 - - Non-current assets 1,901.3 1,655.0 1,865.1 1,614.4 --------------------------------------- ------- ------- ------- ------- Current assets Trade and other receivables 21.3 3.9 50.8 38.0 Current tax assets 5.3 5.4 5.2 4.7 Cash and cash equivalents 112.3 207.8 111.3 207.4 --------------------------------------- ------- ------- ------- ------- Current assets 138.9 217.1 167.3 250.1 --------------------------------------- ------- ------- ------- ------- Total assets 2,040.2 1,872.1 2,032.4 1,864.5 --------------------------------------- ------- ------- ------- ------- Current liabilities Trade and other payables (28.1) (26.5) (34.3) (34.0) Employee benefits (2.8) (2.2) - - --------------------------------------- ------- ------- ------- ------- Current liabilities (30.9) (28.7) (34.3) (34.0) --------------------------------------- ------- ------- ------- ------- Non-current liabilities Employee benefits (7.3) (6.6) - - Deferred tax liabilities - (0.2) - - Non-current liabilities (7.3) (6.8) - - --------------------------------------- ------- ------- ------- ------- Total liabilities (38.2) (35.5) (34.3) (34.0) --------------------------------------- ------- ------- ------- ------- Net assets 2,002.0 1,836.6 1,998.1 1,830.5 --------------------------------------- ------- ------- ------- ------- Equity Share capital 3.2 3.2 3.2 3.2 Share premium 1.3 1.3 1.3 1.3 Capital redemption reserve 1.3 1.3 1.3 1.3 Capital reserve 1,748.4 1,584.9 1,754.2 1,585.6 Retained earnings 292.4 284.1 282.7 277.3 Own shares (44.6) (38.2) (44.6) (38.2) --------------------------------------- ------- ------- ------- ------- Total equity 2,002.0 1,836.6 1,998.1 1,830.5 --------------------------------------- ------- ------- ------- ------- Undiluted net asset value 3645p 3344p
Diluted net asset value 3582p 3285p --------------------------------------- ------- ------- ------- -------
The financial statements were approved by the board and authorised for issue on 28 May 2019 and were signed on its behalf by:
Will Wyatt Tim Livett Chief Executive Chief Financial Officer
Statement of changes in equity
for the year ended 31 March 2019
Capital redemp- Share Share tion Capital Retained Own Total capital premium reserve reserve earnings shares equity GBPm GBPm GBPm GBPm GBPm GBPm GBPm -------------------------------- ------- ------- ------- ------- -------- ------ ------- Group Balance at 31 March 2017 3.2 1.3 1.3 1,591.0 332.9 (30.9) 1,898.8 -------------------------------- ------- ------- ------- ------- -------- ------ ------- Total comprehensive income Profit for the year - - - (5.0) 31.5 - 26.5 Other comprehensive income - - - (1.1) - - (1.1) -------------------------------- ------- ------- ------- ------- -------- ------ ------- Total comprehensive income - - - (6.1) 31.5 - 25.4 -------------------------------- ------- ------- ------- ------- -------- ------ ------- Transactions with owners of the company Contributions by and distributions to owners Exercise of share options - - - - - 0.2 0.2 Share-based payments - - - - 5.0 - 5.0 Own shares purchased - - - - - (7.5) (7.5) Dividends paid - - - - (85.3) - (85.3) -------------------------------- ------- ------- ------- ------- -------- ------ ------- Total transactions with owners - - - - (80.3) (7.3) (87.6) -------------------------------- ------- ------- ------- ------- -------- ------ ------- Balance at 31 March 2018 3.2 1.3 1.3 1,584.9 284.1 (38.2) 1,836.6 -------------------------------- ------- ------- ------- ------- -------- ------ ------- Total comprehensive income Profit for the year - - - 163.6 34.6 - 198.2 Other comprehensive income - - - 0.1 1.4 - 1.5 -------------------------------- ------- ------- ------- ------- -------- ------ ------- Total comprehensive income - - - 163.7 36.0 - 199.7 -------------------------------- ------- ------- ------- ------- -------- ------ ------- Transactions with owners of the company Contributions by and distributions to owners Share-based payments - - - - 3.9 - 3.9 Own shares cancelled - - - (0.2) - - (0.2) Own shares purchased - - - - - (6.4) (6.4) Dividends paid - - - - (31.6) - (31.6) -------------------------------- ------- ------- ------- ------- -------- ------ ------- Total transactions with owners - - - (0.2) (27.7) (6.4) (34.3) Balance at 31 March 2019 3.2 1.3 1.3 1,748.4 292.4 (44.6) 2,002.0 -------------------------------- ------- ------- ------- ------- -------- ------ ------- Company Balance at 31 March 2017 3.2 1.3 1.3 1,594.2 326.1 (30.9) 1,895.2 Profit and total comprehensive income - - - (8.6) 31.5 - 22.9 -------------------------------- ------- ------- ------- ------- -------- ------ ------- Transactions with owners of the company Contributions by and distributions to owners Exercise of share options - - - - - 0.2 0.2 Share-based payments - - - - 5.0 - 5.0 Own shares purchased - - - - - (7.5) (7.5) Dividends paid - - - - (85.3) - (85.3) -------------------------------- ------- ------- ------- ------- -------- ------ ------- Total transactions with owners - - - - (80.3) (7.3) (87.6) -------------------------------- ------- ------- ------- ------- -------- ------ ------- Balance at 31 March 2018 3.2 1.3 1.3 1,585.6 277.3 (38.2) 1,830.5 Profit and total comprehensive income - - - 168.8 33.1 - 201.9 -------------------------------- ------- ------- ------- ------- -------- ------ ------- Transactions with owners of the company Contributions by and distributions to owners Share-based payments - - - - 3.9 - 3.9 Own shares cancelled - - - (0.2) - - (0.2) Own shares purchased - - - - - (6.4) (6.4) Dividends paid - - - - (31.6) - (31.6) -------------------------------- ------- ------- ------- ------- -------- ------ ------- Total transactions with owners - - - (0.2) (27.7) (6.4) (34.3) Balance at 31 March 2019 3.2 1.3 1.3 1,754.2 282.7 (44.6) 1,998.1 -------------------------------- ------- ------- ------- ------- -------- ------ -------
Statement of cash flows
for the year ended 31 March 2019
Group Company 2019 2018 2019 2018 GBPm GBPm GBPm GBPm ------------------------------------------- ------- ------- ------- ------- Operating activities Dividends received 45.9 46.6 45.9 46.6 Interest received 1.6 0.9 1.6 0.5 Cash received from customers 0.1 0.2 - - Cash paid to suppliers and employees (19.2) (17.2) (25.9) (23.3) Taxes received - 0.2 - 0.2 Taxes paid (0.1) (0.1) (0.1) (0.1) Group tax relief received 2.5 1.6 2.5 2.0 Group tax relief paid (1.5) - (1.5) - ------------------------------------------- ------- ------- ------- ------- Net cash flow from operating activities 29.3 32.2 22.5 25.9 ------------------------------------------- ------- ------- ------- ------- Investing activities Purchases of investments (558.2) (218.4) (558.2) (215.9) Proceeds from disposal of investments 473.7 305.3 476.9 288.3 Purchases of property, plant and equipment (2.0) (10.9) - - ------------------------------------------- ------- ------- ------- ------- Net cash flow from/(used in) investing activities (86.5) 76.0 (81.3) 72.4 ------------------------------------------- ------- ------- ------- ------- Financing activities Interest paid (1.8) (2.7) (1.8) (2.3) Dividends paid to owners of the company (31.6) (85.3) (31.6) (85.3) Loan receipts from subsidiaries 1.7 - 7.0 24.7 Loan payments to subsidiaries - (12.4) (4.3) (26.3) Exercise of share options - 0.2 - 0.2 Purchase of own shares (6.6) (7.5) (6.6) (7.5) ------------------------------------------- ------- ------- ------- ------- Net cash flow used in financing activities (38.3) (107.7) (37.3) (96.5) ------------------------------------------- ------- ------- ------- ------- Net increase/(decrease) in cash and cash equivalents (95.5) 0.5 (96.1) 1.8 Cash and cash equivalents at year start 207.8 207.3 207.4 205.6 ------------------------------------------- ------- ------- ------- ------- Cash and cash equivalents at year end 112.3 207.8 111.3 207.4 ------------------------------------------- ------- ------- ------- -------
Notes to the final results announcement
1. General information
Caledonia Investments plc is an investment trust company domiciled in the United Kingdom and incorporated in England in 1928, under the Companies Acts 1908 to 1917. The address of its registered office is Cayzer House, 30 Buckingham Gate, London SW1E 6NN. The ordinary shares of the company are premium listed on the London Stock Exchange.
The financial information included in this announcement has been prepared using accounting policies consistent with International Financial Reporting Standards ('IFRSs') as adopted by the European Union.
In the current year, the group has adopted IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers. Neither adopted IFRS impacted the financial position of the group.
2. Dividends
Amounts recognised as distributions to owners of the company in the year were as follows:
2019 2018 p/share GBPm p/share GBPm ------------------------------------- ------- ---- ------- ---- Final dividend for the year ended 31 March 2018 (2017) 41.5 22.8 39.9 21.9 Special dividend for the year ended 31 March 2017 - - 100.0 54.9 Interim dividend for the year ended 31 March 2019 (2018) 16.1 8.8 15.5 8.5 57.6 31.6 155.4 85.3 ------------------------------------- ------- ---- ------- ----
Amounts proposed after the year end and not recognised in the financial statements were as follows:
Proposed final dividend for the year ended 31 March 2019 43.2 23.7 ------------------------------------- ---- ----
The proposed final dividend for the year ended 31 March 2019 was not included as a liability in these financial statements. This dividend, if approved by shareholders at the annual general meeting to be held on 24 July 2019, will be payable on 8 August 2019 to holders of shares on the register on 28 June 2019. The ex-dividend date will be 27 June 2019.
The deadline for elections under the dividend reinvestment plan offered by Link Asset Services will be the close of business on 18 July 2019.
For the purposes of section 1158 of the Corporation Tax Act 2010 and associated regulations, the dividends payable for the year ended 31 March 2019 are the interim and final dividends for that year, amounting to GBP32.5m (2018 - GBP31.3m).
3. Earnings per share
Basic and diluted earnings per share
The calculation of basic earnings per share of the group was based on the profit attributable to shareholders and the weighted average number of shares outstanding during the year. The calculation of diluted earnings per share included an adjustment for the effects of dilutive potential shares.
The profit attributable to shareholders (basic and diluted) was as follows:
2019 2018 GBPm GBPm -------- ----- ----- Revenue 34.6 31.5 Capital 163.6 (5.0) -------- ----- ----- Total 198.2 26.5 -------- ----- -----
The weighted average number of shares was as follows:
2019 2018 000's 000's --------------------------------------------------------- ------ ------ Issued shares at the year start 55,381 55,381 Effect of shares cancelled (6) - Effect of shares held by the employee share trust (451) (464) --------------------------------------------------------- ------ ------ Basic weighted average number of shares in the year 54,924 54,917 Effect of performance shares, share options and deferred bonus awards 960 984 --------------------------------------------------------- ------ ------ Diluted weighted average number of shares in the year 55,884 55,901 --------------------------------------------------------- ------ ------
4. Operating segments
The following is an analysis of the profit before tax for the year and assets analysed by primary operating segments:
Profit before Total assets tax 2019 2018 2019 2018 GBPm GBPm GBPm GBPm -------------------------- ------- ------ ------- ------- Quoted pool 88.9 16.3 464.4 452.3 Income pool 6.7 (21.2) 224.5 194.6 Unquoted pool 63.4 24.5 659.5 463.5 Funds pool 69.9 34.1 482.7 470.5 Investment portfolio 228.9 53.7 1,831.1 1,580.9 Other investments (4.4) (6.6) 28.9 29.0 -------------------------- ------- ------ ------- ------- Total revenue/investments 224.5 47.1 1,860.0 1,609.9 Cash and cash equivalents 0.5 0.6 112.3 207.8 Other items (28.1) (25.5) 67.9 54.4 -------------------------- ------- ------ ------- ------- Reportable total 196.9 22.2 2,040.2 1,872.1 -------------------------- ------- ------ ------- -------
5. Share-based payments
In the year to 31 March 2019, participating employees in the performance share scheme were awarded options over 261,816 shares at nil-cost (2018 - 222,068 shares).
Also in the year to 31 March 2019, participating employees received deferred awards over 493 shares (2018 - 52,664 shares).
The IFRS 2 expense included in profit or loss for the year was GBP6.6m (2018 - GBP5.0m).
7. Net asset value
The group's undiluted net asset value is based on the net assets of the group at the year end and on the number of ordinary shares in issue at the year end less ordinary shares held by the Caledonia Investments plc Employee Share Trust. The group's diluted net asset value assumes the calling of performance share and deferred bonus awards.
2019 2018 Net Number Net Number assets of shares NAV assets of shares NAV GBPm 000's p/share GBPm 000's p/share -------------- ------- --------- ------- ------- --------- ------- Undiluted 2,002.0 54,929 3645 1,836.6 54,927 3344 Share options - 960 (63) - 984 (59) -------------- ------- --------- ------- ------- --------- ------- Diluted 2,002.0 55,889 3582 1,836.6 55,911 3285 -------------- ------- --------- ------- ------- --------- -------
Net asset value total return is calculated in accordance with AIC guidance, as the change in NAV from the start of the period, assuming that dividends paid to shareholders are reinvested at NAV at the time the shares are quoted ex-dividend.
2019 2018 p p ------------------------------ ----- ---- Diluted NAV at year start 3285 3395 ------------------------------ ----- ---- Diluted NAV at year end 3582 3285 Dividends payable in the year 58 155 Reinvestment adjustment 3 2 ------------------------------ ----- ---- 3643 3442 ------------------------------ ----- ---- NAVTR over the year 10.9% 1.4% ------------------------------ ----- ---- 1. The reinvestment adjustment is the gain or loss resulting from reinvesting the dividends in NAV at the ex-dividend date.
8. Capital commitments
At the reporting date, the group and company had entered into unconditional commitments to limited partnerships, committed loan facility agreements and a conditional loan and purchase agreement, as follows:
Group Company 2019 2018 2019 2018 GBPm GBPm GBPm GBPm -------------------------- ----- ----- ----- ----- Investments Contracted but not called 330.6 320.1 339.0 324.8 Conditionally contracted 167.6 24.3 167.6 24.3 -------------------------- ----- ----- ----- ----- 498.2 344.4 506.6 349.1 -------------------------- ----- ----- ----- -----
Conditionally contracted commitments at 31 March 2019 included GBP142.6m in respect of the acquisition of a minority holding in Stonehage Fleming, subject to regulatory approval.
9. Performance measures
Caledonia uses a number of performance measures to aid the understanding of its results. The performance measures are standard within the investment trust industry and Caledonia's use of such measures enhances comparability. Principal performance measures are as follows:
Net assets
Net assets provides a measure of the value of the company to shareholders and is taken from the IFRS group net assets.
Net asset value ('NAV')
NAV is a measure of the value of the company, being its assets - principally investments made in other companies and cash held - minus any liabilities expressed as pence per share. NAV is calculated by dividing net assets by the number of shares in issue, adjusted for shares held by the Employee Share Trust and for dilution by the exercise of outstanding share awards. NAV takes account of dividends payable on the ex-dividend date.
NAV total return ('NAVTR')
NAVTR is a measure of how the net asset value per share has performed over a period, considering both capital returns and dividends paid to shareholders. NAVTR is calculated as the increase in NAV between the beginning and end of the period, plus the accretion from assumed dividend reinvestment during the period. NAVTR assumes that dividends are reinvested at the NAV on the ex-dividend date.
Annual dividends
Annual dividends are dividends declared as part of the company's recurring dividend cycle and are typically paid out of earnings in a financial year. Annual dividend growth is the compound annual dividend growth rate over the period.
Total shareholder return ('TSR')
TSR measures the return to shareholders through the movement in the share price and dividends paid during the measurement period.
10. Financial information
The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2019 or 2018 but is derived from those accounts. Statutory accounts for 31 March 2018 have been delivered to the Registrar of Companies, and those for 31 March 2019 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The statutory accounts for the year ended 31 March 2019 will be delivered to shareholders on 18 June 2019 and made available for download from the company's website on that date. Also, a copy will be delivered to the Registrar of Companies in accordance with section 441 of the Act, following approval by shareholders.
The statutory accounts for the year ended 31 March 2019 include a 'Directors' statement of responsibility' as follows:
We confirm that, to the best of our knowledge:
- the group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the group - the strategic report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties that it faces.
Signed on behalf of the board by:
Will Wyatt Tim Livett Chief Executive Chief Financial Officer 28 May 2019 28 May 2019
FTSE International Limited ('FTSE') (c) FTSE 2019. 'FTSE(R)' is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE's express written consent.
END
Copies of this statement are available at the company's registered office, Cayzer House, 30 Buckingham Gate, London SW1E 6NN, United Kingdom, or from its website at www.caledonia.com.
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 rns@lseg.com or visit www.rns.com.
END
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May 29, 2019 02:00 ET (06:00 GMT)
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