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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 | |
---|---|---|---|---|---|---|---|---|---|---|
70.00 | 2.00% | 3,565.00 | 3,530.00 | 3,570.00 | 3,565.00 | 3,565.00 | 3,565.00 | 6,929 | 10:42:30 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Trust,ex Ed,religious,charty | 183M | 142.9M | 2.6117 | 13.65 | 1.95B |
TIDMCLDN
RNS Number : 9650Z
Caledonia Investments PLC
27 May 2021
Caledonia Investments plc
Final results for the year ended 31 March 2021
Financial highlights
31 Mar 2021 31 Mar 2020 Change Net asset value total return 25.9% -8.1% Net asset value 4000p 3236p +23.6% Net assets GBP2,225m GBP1,787m +24.5% Annual dividend per share 62.9p 61.1p +2.9%
Hi ghlights
-- 25.9% NAV total return for the year. -- 2.9% increase in the dividend to 62.9p per share, 54th consecutive year of increase. -- Strong investment returns across whole portfolio. -- Negative impact from exchange rates on NAV total return of 6%. -- Strong balance sheet with GBP249m of available resources (GBP14m cash and GBP235m undrawn facilities).
Quoted Equity
-- Strong performance from Quoted Equity portfolios, up by 30.3% in the year reflecting significant rebound in global public equity markets and considered stock selection within both the Capital and Income portfolios. -- Performance of US public equities was particularly notable.
Private Capital
-- Private Capital portfolio performed well, generating total return of 23.2%, despite loss on sale of holding in Buzz Bingo. -- Two substantial strategic bolt-on acquisitions made by portfolio businesses during the year. -- Portfolio companies recovering well from Covid-19 related disruption.
Funds
-- Funds portfolio generated total return of 34.8% for the year. -- Good underlying performance from PE fund investments -- Reversion to fund valuations based on managers' NAV, without GBP86m Covid-19 valuation adjustment applied last year.
Will Wyatt, Chief Executive , commented:
"Through what has been a challenging and uncertain period, our diversified holdings have continued to perform, supporting our strategy of growing net assets and dividends over the long term.
"We remain confident that the strength of our portfolio, invested in high-quality businesses across a range of geographies and sectors, combined with our strong balance sheet and long-term approach, will ensure that we can continue to deliver for our shareholders."
26 May 2021
Enquiries Caledonia Investments plc Tulchan Communications Will Wyatt, Chief Executive Tom Murray Tim Livett, Chief Financial Officer +44 20 7353 4200 +44 20 7802 8080
Chairman's statement
Results
The NAV total return ('NAVTR') for the year of 25.9% was strong and included positive returns from each part of our portfolio. The Quoted Equity pool delivered an annual return of 30.3%, aided by the rebound in global equity markets. Investee companies within the Private Capital portfolio, with the exception of Buzz Bingo, adapted well to the challenges presented by Covid-19 to produce a total return of 23.2%. The Funds portfolio delivered an annual return of 34.8%, buoyed by good underlying fund performance. We have retained a strong, largely ungeared balance sheet with total liquidity of GBP249m available at 31 March 2021.
Income and dividend
Total income was GBP 45 m, a reduction of 16% from the previous year. This reflects the negative impact of the pandemic on economic activity in a small number of investee companies and the change in focus of the Quoted Equity Income portfolio towards higher quality businesses with slightly lower yields. The Board is recommending a final dividend of 45.9p per share, which represents a full year dividend of 62.9 p, an increase of 2.9% when compare to the previous year. While this payment is not covered by the income generated this year, the Board, cognisant of Caledonia's significant retained earnings, believes the dividend is a crucial element of the total return for our shareholders and that it is appropriate to utilise the company's available reserves.
It also should be noted that no dividends have been received during the year from The Liberation Group or Buzz Bingo, the only two beneficiaries of the UK Government's job retention scheme in our portfolio.
Covid-19
The pandemic has created uncertainty and financial hardship for many people in the UK and overseas. Caledonia responded by establishing a fund focused on assisting those employees working for investee companies negatively impacted by Covid-19. The safety and well-being of our staff, together with those working for our investee companies, have been important priorities for the board throughout this challenging period.
In response to the pandemic, central banks have provided additional liquidity to alleviate these effects which has benefitted the portfolio as a whole. As we look forward, The Liberation Group, our remaining consumer leisure focussed business is expected to benefit from pent up demand from customers, particularly as trading restrictions ease.
The Caledonia team has excelled in adapting to remote working, with IT colleagues ensuring systems and controls continued to function seamlessly. We continue to believe that the office has an important role to play to facilitate training and development and to ensure that Caledonia's values and culture continue to permeate amongst new recruits. We are now working on plans, following official guidelines, to enable staff to return to the office via increased use of a hybrid working model which recognises that many have welcomed the flexibility that some home working has brought.
Board and staff
On behalf of the board I would like to thank all Caledonia staff for their outstanding response to the challenges faced over the past year. Our strong financial performance speaks for itself but this potentially understates the volatile market conditions experienced and the hard work which has been required to respond proactively to the many challenges faced.
The effectiveness of the board has been appraised in a recent external review . This review, alongside a skills analysis of current directors, will enable us to continue to refresh the board with new non-executive directors. Caledonia remains committed to increasing board diversity and this will be an important factor as we commence a search for a new audit chair to replace Stuart Bridges who is expected to retire during 2022.
Outlook
There are positive signs that vaccines will provide the answer to society being able to live with Covid-19. However, there remains a risk that new mutations of the disease will require further adaptations of both vaccines and governmental response in order to control their spread.
We continue to be confident that Caledonia's portfolio is invested in assets that are of sufficient quality to weather most storms and enable us to achieve our purpose of growing assets and dividends over the long term. We also believe that the strength of Caledonia's balance sheet will enable us to continue to take advantage of opportunities as they arise.
David Stewart
Chairman
Chief Executive's report
Purpose
Caledonia's purpose is to grow net assets and dividends paid to shareholders over the long term, whilst managing risk to avoid permanent loss of capital.
Results for the year
The rapid recovery of markets from the sharp falls witnessed towards the end of our previous financial year provided a supportive backdrop to these results. The NAV total return for the year was 25.9% which included positive results from each part of our portfolio. The strength derived from our diversified holdings in listed equities, directly owned private companies and funds, helped to mitigate the effect of the pandemic. Overall, our investments responded positively to the impact of Covid-19 on the operating environment to deliver good growth in revenues and earnings. The companies with a technology or healthcare focus have witnessed particularly high levels of demand for their products and services, leading to marked uplifts in growth, profits and valuations.
There were two notable adverse impacts on investment returns for the year. Caledonia supported an initial financial restructure of one of the Private Capital portfolio businesses, Buzz Bingo, which was particularly affected by the Government-enforced shutdown in the summer of 2020, before choosing not to participate in a further fundraising in March 2021. This resulted in the sale of our interest for a nominal sum as previously announced, creating a write-down in the year of GBP69m. 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.
Investment income in the year fell by 16% to GBP45m. This was the result of a reduction in dividends received from portfolio companies and from the Quoted Equity Income portfolio. The revenue account of our income statement reflected this fall in income, with the pre-tax profit for the year down by 34% to GBP22m. Total pre-tax profit of GBP456m was recorded for the year, dominated by net gains on investments of GBP437m (prior year GBP206m loss).
Maintaining a strong balance sheet remains a key component of strategy, providing us with the flexibility to support our portfolio (especially the illiquid assets) without being forced to sell at a time not of our choosing. Caledonia's balance sheet remains strong, with minimal gearing and access to bank facilities of GBP250m. At the year-end there was a net debt position of GBP1m, consisting of GBP15m of drawn facilities and a cash balance of GBP14m. New or follow-on investments of GBP246m were made during the year alongside divestments totalling GBP138m.
Investment performance
Caledonia aims to grow NAVTR by 3-6% ahead of inflation over the short-term, leading to results over the long-term that exceed the FTSE All-Share index. However, we incentivise the management and the investment teams in line with these objectives on an absolute, rather than a relative, return basis. The table below shows our investment performance over one, three, five and ten years. Performance of 8-9% per annum over three, five and ten year period is ahead of the short-term target and long-term performance remains satisfactory and within the target range, significantly outperforming the FTSE All-Share index.
Years to 31 March 1 year 3 years 5 years 10 years % % % % ------------------- ------- -------- -------- --------- NAVTR 25.9 28.2 53.4 129.2 FTSE All-Share 26.7 9.9 35.7 79.0 NAVTR v FTSE All-Share TR -0.8 +18.3 +17.7 +50.2 Annualised NAVTR 25.9 8.6 8.9 8.6 RPI 1.6 2.2 2.6 2.5 NAVTR v RPI +24.3 +6.4 +6.3 +6.1 FTSE All-Share TR 6.3 6.0 NAVTR v FTSE All-Share TR +2.6 +2.6 ------------------- ------- -------- -------- ---------
Strategy and allocation
The investment portfolio consists of the following three pools of capital:
Pool name 2021 2020 Strategic allocation % % % ----------------- ----- ----- --------------------- Quoted Equity 32.2 32.1 35-50 Private Capital 37.2 34.2 35-45 Funds 28.6 25.2 20-30 Cash and other 2.0 8.5 +/-10 Net assets 100 100 ----------------- ----- ----- ---------------------
The strategic allocation ranges shown in the table above are a guide to ensure that the portfolio remains proportionately balanced. During the year, the top end of the allocation to funds was increased by 5% to 30%.
The table below summarises the pool targets and strategic allocation:
Pool name Description Return requirements Strategic allocation ------------------- ----------------------------- --------------------- ------------ 10% total return, no yield target Capital strategy 7% total return, Caledonia Quoted 3.5% yield (on Equity Income strategy cost) 30-50% Majority and minority investments predominantly in UK mid-market companies with equity values Caledonia Private of between GBP25m 14% total return, Capital and GBP125m 5% yield 35-45% US and Asian private equity funds and funds Caledonia Funds of funds 12.5% total return 20-30% ------------------- ----------------------------- --------------------- ------------
Pool performance
Years to 31 1 year 3 years 5 years 10 years March Pool name % % % % Quoted Equity 30.3 48.9 76.7 139.7 Capital portfolio 35.9 66.6 108.2 178.3 Income portfolio 17.5 16.3 23.0 n/a Private Capital 23.2 12.5 42.6 153.7 Funds 34.8 50.6 100.3 247.4 Portfolio 30.0 36.0 69.7 166.4
Caledonia Quoted Equity
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 the majority of the returns. As can be seen in the table above, the three and five year performance of the Capital portfolio has been outstanding, with comparative five year returns from the S+P500 of 116% and FTSE100 of 32%.
Trading activity over the year has been limited, in line with our long-term investment approach. In the Capital portfolio Waters Corporation, a laboratory and software company, was the single significant disposal, 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 and the sale of our holdings in Direct Line and Tritax Big Box.
Caledonia Private Capital
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 recovered strongly and generated a total return of 23.2% for the year, including the absorption of the write-down of GBP69m relating to the holding in Buzz Bingo. The industrial and financial services businesses 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 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 we disposed of our interest. Lessons have been learnt from this disappointing outcome particularly in regard to the scale of business that we invest in and the structuring of debt within investee companies.
The Liberation Group, a pub, restaurant and drinks business with operations predominantly 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 Government-enforced 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 GBP36m of new equity to support the acquisition of a substantial portfolio of pubs from Wadworth, complementing existing UK sites, 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 ('Cooke'), 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.
The market for private businesses remains buoyant, and we regularly receive offers for our businesses from interested parties there being three such approaches of note in the past year. These conversations often lead nowhere but can develop into a process which might conclude in a sale of a business. The insight gained from these indicative offers is incorporated into our valuation process and can lead to a situation where the range of reasonable fair value estimates for a given asset can be significant. The private equity industry has raised a substantial amount of capital to deploy and we anticipate further mergers and acquisitions in the future.
Caledonia Funds
The total return for the Funds portfolio was 34.8% for the year. This reflects good underlying fund performance, which reverted to valuations based on managers' NAV, without the need to reflect the potential Covid-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.
Our 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, GBP109m was invested and distributions of GBP87m 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.
Covid-19
Covid-19 has had a major impact on our businesses and the people who work within them. We have made every effort to keep our staff safe, motivated and able to fulfil their roles effectively despite the challenges they have faced from lockdowns, social distancing and remote working. We have deployed technology to allow staff to work effectively from home with business meetings and events held virtually.
We have equally been aware of the impact on the employees of our investee companies. The Caledonia Fund was established in spring 2020 to support employees of these business suffering financial hardship due to the pandemic. This fund has supported staff particularly at Buzz Bingo and Liberation Group, the two businesses most adversely affected by lockdown regulations over the past year.
Responsible Investment
As a long-term investor our aim is to identify companies that can generate sustainable growth. We believe that responsible investment and business success go hand in hand. We also understand that environmental, social and governance ('ESG') factors are important to our shareholders and broader stakeholders. Historically our stewardship activities have focused primarily on governance matters. Our intent is to build on this approach by fully incorporating ESG matters into our investment decision making and monitoring processes; we aim to progress this area over the coming year.
Outlook
The outlook for our financial year ending 31 March 2022 is dependent on the continued management of the Covid-19 pandemic and its economic impact around the world. The response by central banks has been fulsome and timely, ensuring that there has been sufficient liquidity in the financial system to allow its continued operation. A consequence might be increased volatility on any signs that this largesse might be tempered. We also remain appropriately cautious that the valuations of assets remain elevated. There are also nascent risks associated with higher inflation as pent up demand potentially exceeds supply and the effects of broken global supply chains and increasing domestic protectionism become more prevalent.
The majority of our assets are in a good position to withstand this challenging period of continuing uncertainty. We will maintain our considered approach to new investment opportunities and protecting our strong balance sheet. We believe that the portfolio is well placed to achieve our aims of growing net assets and dividends paid to shareholders over the long-term.
Will Wyatt
Chief Executive
Investments summary
Holdings over 1% of net assets at 31 March 2021 were as follows:
Net Value assets Name Pool Geography Business GBPm % ------------------------- ---------------- ---------- ----------------------- -------- ------ Deep Sea Electronics Private Capital UK Control systems 193.0 8.7 Liberation Group Private Capital Jersey Pubs & restaurants 127.7 5.7 Seven Investment Management Private Capital Jersey Investment management 126.4 5.7 Stonehage Fleming Private Capital Guernsey Family office services 115.5 5.2 Cobehold Private Capital Belgium Investment company 112.3 5.0 Aberdeen US PE funds Funds US Funds of funds 98.2 4.4 Cooke Optics Private Capital UK Cine lens manufacturer 95.6 4.3 Axiom Asia funds Funds Asia Funds of funds 72.5 3.3 Texas Instruments Quoted Equity US Semiconductors 54.0 2.4 Watsco Quoted Equity US Ventilation products 50.8 2.3 Microsoft Quoted Equity US Software 50.6 2.3 Oracle Quoted Equity US Software 48.4 2.2 Charter Communications Quoted Equity US Cable communications 40.7 1.8 Stonepeak funds Funds US Private equity funds 39.8 1.8 Asia Alternatives funds Funds Asia Funds of funds 39.1 1.8 British American Tobacco Quoted Equity UK Tobacco & Vaping 36.2 1.6 Spirax-Sarco Quoted Equity UK Steam engineering 34.0 1.5 Polar Capital Quoted Equity UK Fund manager 33.6 1.5 Pharma & life science Thermo Fisher Scientific Quoted Equity US services 33.2 1.5 Fastenal Quoted Equity US Industrial supplies 32.8 1.5 Hill & Smith Quoted Equity UK Infrastructure 31.6 1.4 JF Lehman funds Funds US Private equity funds 30.8 1.4 Decheng funds Funds Asia/US Private equity funds 30.3 1.4 LYFE fund Funds Asia Private equity funds 28.4 1.3 Unilever Quoted Equity UK Consumer goods 28.2 1.3 BioAgilytix Private Capital US Bioanalytical testing 26.2 1.2 Becton Dickinson Quoted Equity US Medical technology 25.7 1.2 PAG Asia fund Funds Asia Private equity funds 25.6 1.2 AG Barr Quoted Equity UK Drinks manufacturing 22.1 1.0 Croda International Quoted Equity UK Chemicals 21.4 1.0 Other investments 475.3 21.1 Investment portfolio 2,180.0 98.0 Non-pool investments 14.0 0.6 Cash and other 31.3 1.4 -------------------------------------------------------------------------------- -------- ------ Net assets 2,225.3 100.0 -------------------------------------------------------------------------------- -------- ------
Geography is based on the country of listing, country of domicile for unlisted investments and underlying regional analysis for funds.
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 The company's business Approach to ESG and to the appropriateness model and strategy climate change under of the business model are reviewed periodically, development, with to deliver long-term against market conditions commitment to fully growth in capital and target returns. integrate into corporate and income. strategy in the current The performance of financial year. Strategic risks include the company and its the allocation of key risks are monitored Quoted Equity strategy capital between public regularly by management for Income portfolio and private equity, and the board. implemented with emphasis and in relation to on yield quality; geography, sector, partially complete currency, yield, liquidity, and continuing in ESG factors and climate the current financial change. year. Private Capital focus now on driving value creation from existing portfolio of businesses.
Annual net cash requirement for Funds pool diminishes as the portfolio matures. ----------------------------- ------------------------------- ----------------------------- Investment Risks in respect of Investment opportunities Quoted Equity pool specific investment are subject to rigorous has developed a "quality and realisation decisions. appraisal and a multi-stage matrix" to guide robust approval process. investment decision Investment risks include Investment managers making and ongoing the appropriate research have well-developed monitoring. and due diligence networks through which of new investments they attract proprietary ESG and climate change and the timely execution deal flow. considerations will of both investments be factored explicitly and realisations for Target entry and exit into investment decision optimising value. events and prices making and monitoring are monitored and in the current financial updated regularly, year. in relation to market conditions and strategic Funds portfolio commitment aims. level supports detailed due diligence of existing and potential managers, supporting robust manager selection ----------------------------- ------------------------------- ----------------------------- Market Risk of losses in Market risks and sensitivities Quoted Equity pool value of investments are reviewed weekly operates a structured arising from sudden with actions taken, approach to market and significant movements where appropriate, price movements; purchases in market prices, to balance risk and only made when target particularly in highly return. stocks are in the volatile markets. correct price range A regular review of and systematic reductions Caledonia's principal market and portfolio made to holdings when market risks are therefore volatility is conducted prices rise above equity price volatility, by the board. Reviews target levels. foreign exchange rate also consider investment movements and interest concentration, currency Foreign exchange exposure rate volatility. exposure and portfolio reduced using hedging liquidity. contracts in the second half of the year, which were then closed in March 2020. Balance sheet currently fully exposed to foreign exchange movement with use of hedging under periodic review in line with market movements. ----------------------------- ------------------------------- ----------------------------- Liquidity Risk that liabilities Detailed cash forecasting Significantly improved cannot be met or new for six months ahead three year financial investments made due is updated and reviewed planning in place to a lack of liquidity. weekly, including providing a more robust Such risk can arise the expected drawdown liquidity outlook. from not being able of capital commitments. to sell an investment Committed banking due to lack of a market Loan facilities are facilities of GBP250m or from not holding maintained to provide in place. Overdraft cash or being able appropriate liquidity facilities renewed to raise debt. headroom. The liquidity with RBSI and HSBC of the portfolio is renewal underway. reviewed regularly. Short term capital requirements for Private Capital pool largely removed following decision to focus on existing portfolio businesses. Strong performance of Quoted Equity portfolios provides increased level of highly liquid assets. ----------------------------- ------------------------------- ----------------------------- Operational Risks arising from Systems and control Full review of approach inadequate or failed procedures are developed to cyber security processes, people and reviewed regularly. and technology undertaken and systems or from They are tested to using third party external factors. ensure effective operation. expertise. Limited areas for further Operational risks Appropriate remuneration improvements identified arise from the recruitment, and other policies and implemented to development and retention are in place to facilitate mitigate risk of malicious of staff, systems the retention of key threats. and procedures and staff. Business continuity business disruption plans are maintained Business cyber security and updated as the group established business evolves, to raise awareness and in response to and champion new processes emerging threats. to limit vulnerabilities. Enhanced cyber security training and testing regime deployed to all staff. Programme of work underway to upgrade / replace key back office business systems to provide enhanced functionality and management information. Successful recruitment of senior staff into the finance team. ----------------------------- ------------------------------- ----------------------------- Global pandemic (Covid-19) Operational risk arising Operational risk mitigated Remote, secure working from staff sickness by robust IT contingency swiftly introduced, and other restrictions planning, secure remote supported with effective adversely impacting working and careful technology. critical business adherence to the latest operations. government guidance. Staff welfare and ongoing communication Investment risk due Increased frequency prioritised.
to limitations on of investment reviews, earnings growth and particularly Private Additional operational NAV performance from Capital businesses, and financial support key investments, coupled to identify, assess provided, as needed, with erosion of market and address pandemic for Private Capital confidence. related risks. businesses. Liquidity further enhanced to provide increased flexibility to respond to market conditions. ----------------------------- ------------------------------- ----------------------------- Regulatory and legal Risk arising from Caledonia has internal Approach to ESG and exposure to litigation resources to consider climate change, subject or fraud or failure regulatory and tax to ongoing development, to adhere to the tax matters as they arise: to be integrated into and regulatory environment. with professional corporate strategy Caledonia operates advisers engaged where in the current financial across a number of necessary to supplement year. jurisdictions and internal knowledge in an industry that in specialised areas. Health and safety has been subject to protocols developed increasing regulatory Caledonia is a member and implemented for oversight. of the Association Covid-19 working in of Investment Companies line with evolving and operates in line government guidance. with industry standards. Regular staff training ----------------------------- ------------------------------- ----------------------------- EU/UK trade Risk arising from Continued monitoring Private Capital businesses a failure to reach of performance of have adapted supply a trade agreement directly held unquoted chain activity successfully with the EU adds cost investments and business to address new trading to UK trade and negatively model exposure to arrangements, without impacts economic growth. potential EU/UK trade any significant adverse arrangements. impact. Potential volatility to public equity and Continued monitoring No change required foreign exchange markets of public equity and to head office operations. due to uncertainty foreign exchange market surrounding a trade in response to EU/UK Continued monitoring agreement and its trade negotiations. of the potential impact potential impact. of further EU/UK trade negotiations on our public equities and our Private Capital businesses.
Group statement of comprehensive income
for the year ended 31 March 2021
2021 2020 Revenue Capital Total Revenue Capital Total GBPm GBPm GBPm GBPm GBPm GBPm -------------------------------- ------- ------- ------ ------- ------- ------- Revenue Investment income 44.6 - 44.6 53.4 - 53.4 Other income 0.1 0.8 0.9 - - - Net gains and losses on fair value investments - 437.0 437.0 - (206.3) (206.3) Net gains and losses on fair value property - 3.2 3.2 - - - Total revenue 44.7 441.0 485.7 53.4 (206.3) (152.9) Management expenses (18.9) (7.6) (26.5) (17.2) 0.6 (16.6) Profit/(loss) before finance costs 25.8 433.4 459.2 36.2 (205.7) (169.5) Treasury interest receivable 0.1 - 0.1 0.6 - 0.6 Finance costs (2.7) - (2.7) (2.1) - (2.1) Exchange movements (0.8) - (0.8) (0.9) - (0.9) --------------------------------- ------- ------- ------ ------- ------- ------- Profit/(loss) before tax 22.4 433.4 455.8 33.8 (205.7) (171.9) Taxation 7.4 2.8 10.2 0.8 (1.8) (1.0) --------------------------------- ------- ------- ------ ------- ------- ------- Profit/(loss) for the year 29.8 436.2 466.0 34.6 (207.5) (172.9) Other comprehensive income items never to be reclassified to profit or loss Re-measurements of defined benefit pension schemes - 2.3 2.3 - 1.1 1.1 Tax on other comprehensive income - (0.7) (0.7) - (0.7) (0.7) Total comprehensive income 29.8 437.8 467.6 34.6 (207.1) (172.5) Basic earnings per share 54.3p 795.0p 849.3p 63.1p -378.1p -315.0p Diluted earnings per share 53.6p 784.2p 837.8p 62.6p -378.1p -315.0p --------------------------------- ------- ------- ------ ------- ------- -------
The total column of the above statement represents the group's statement of comprehensive income, prepared in accordance with IFRSs adopted pursuant to Regulation (EC) No 1606/2002 as it applies in 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 2021
Group Company 2021 2020 2021 2020 GBPm GBPm GBPm GBPm --------------------------------------- ------- ------- ------- ------- Non-current assets Investments held at fair value through profit or loss 2,194.0 1,656.7 2,198.9 1,658.1 Investments in subsidiaries held at cost - - 0.9 0.9 Investment property 13.3 8.7 - - Property, plant and equipment 29.0 28.0 - - Deferred tax assets 8.4 1.0 6.1 - Employee benefits 4.0 5.1 - - Non-current assets 2,248.7 1,699.5 2,205.9 1,659.0 ---------------------------------------- ------- ------- ------- ------- Current assets Trade and other receivables 3.4 6.6 37.7 36.4 Current tax assets 7.3 2.6 7.3 2.6 Cash and cash equivalents 14.2 114.7 14.5 112.6 ---------------------------------------- ------- ------- ------- ------- Current assets 24.9 123.9 59.5 151.6 ---------------------------------------- ------- ------- ------- ------- Total assets 2,273.6 1,823.4 2,265.4 1,810.6 ---------------------------------------- ------- ------- ------- ------- Current liabilities Trade and other payables (26.4) (30.0) (34.9) (30.0) Employee benefits (2.6) (0.9) - - Current liabilities (29.0) (30.9) (34.9) (30.0) ---------------------------------------- ------- ------- ------- ------- Non-current liabilities Interest bearing loans and borrowings (15.0) - (15.0) - Employee benefits (2.9) (5.2) - - Deferred tax liabilities (1.4) - - - Non-current liabilities (19.3) (5.2) (15.0) - ---------------------------------------- ------- ------- ------- ------- Total liabilities (48.3) (36.1) (49.9) (30.0) ---------------------------------------- ------- ------- ------- ------- Net assets 2,225.3 1,787.3 2,215.5 1,780.6 ---------------------------------------- ------- ------- ------- ------- 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 1,979.1 1,541.3 1,979.8 1,543.2 Retained earnings 254.3 255.5 243.8 246.9
Own shares (13.9) (15.3) (13.9) (15.3) ---------------------------------------- ------- ------- ------- ------- Total equity 2,225.3 1,787.3 2,215.5 1,780.6 ---------------------------------------- ------- ------- ------- ------- Undiluted net asset value 4055p 3259p Diluted net asset value 4000p 3236p ---------------------------------------- ------- ------- ------- -------
The Company profit for the year ended 31 March 2021 was GBP464.5m (2020: GBP175.3m loss)
The financial statements were approved by the board and authorised for issue on 26 May 2021 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 2021
Capital Share Share redemption Capital Retained Own Total capital premium reserve reserve earnings shares equity GBPm GBPm GBPm GBPm GBPm GBPm GBPm ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Group Balance at 31 March 2019 3.2 1.3 1.3 1,748.4 292.4 (44.6) 2,002.0 ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Total comprehensive income Loss for the year - - - (207.5) 34.6 - (172.9) Other comprehensive income - - - 0.4 - - 0.4 ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Total comprehensive income - - - (207.1) 34.6 - (172.5) ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Transactions with owners of the company Contributions by and distributions to owners Share-based payments - - - - (1.5) - (1.5) Transfer of shares to employees - - - - (37.2) 37.2 - Own shares purchased - - - - - (7.9) (7.9) Dividends paid - - - - (32.8) - (32.8) ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Total transactions with owners - - - - (71.5) 29.3 (42.2) ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Balance at 31 March 2020 3.2 1.3 1.3 1,541.3 255.5 (15.3) 1,787.3 ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Total comprehensive income Profit for the year - - - 436.2 29.8 - 466.0 Other comprehensive income - - - 1.6 - - 1.6 ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Total comprehensive income - - - 437.8 29.8 - 467.6 ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Transactions with owners of the company Contributions by and distributions to owners Share-based payments - - - - 5.5 - 5.5 Transfer of shares to employees - - - - (2.8) 2.8 - Own shares purchased - - - - - (1.4) (1.4) Dividends paid - - - - (33.7) - (33.7) ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Total transactions with owners - - - - (31.0) 1.4 (29.6) ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Balance at 31 March 2021 3.2 1.3 1.3 1,979.1 254.3 (13.9) 2,225.3 ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Company Balance at 31 March 2019 3.2 1.3 1.3 1,754.2 282.7 (44.6) 1,998.1 Loss and total comprehensive income - - - (211.0) 35.7 - (175.3) ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Transactions with owners of the company Contributions by and distributions to owners Share-based payments - - - - (1.5) - (1.5) Transfer of shares to employees - - - - (37.2) 37.2 - Own shares purchased - - - - - (7.9) (7.9) Dividends paid - - - - (32.8) - (32.8) ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Total transactions with owners - - - - (71.5) 29.3 (42.2) ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Balance at 31 March 2020 3.2 1.3 1.3 1,543.2 246.9 (15.3) 1,780.6 Profit and total comprehensive income - - - 436.6 27.9 - 464.5 ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Transactions with owners of the company Contributions by and distributions to owners Share-based payments - - - - 5.5 - 5.5 Transfer of shares to employees - - - - (2.8) 2.8 - Own shares purchased - - - - - (1.4) (1.4) Dividends paid - - - - (33.7) - (33.7) ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Total transactions with owners - - - - (31.0) 1.4 (29.6) ----------------------------------- ------- ------- ---------- ------- -------- ------ ------- Balance at 31 March 2021 3.2 1.3 1.3 1,979.8 243.8 (13.9) 2,215.5 ----------------------------------- ------- ------- ---------- ------- -------- ------ -------
Statement of cash flows
for the year ended 31 March 2021
Group Company 2021 2020 2021 2020 GBPm GBPm GBPm GBPm ------------------------------------------- ------- ------- ------- ------- Operating activities Dividends received 42.3 48.8 42.3 48.8 Interest received 2.3 1.7 2.3 1.7 Cash received from customers 0.1 - - - Cash paid to suppliers and employees (17.8) (23.3) (14.4) (28.7) Taxes received 0.1 0.2 0.1 0.2 Taxes paid (0.1) (0.1) (0.1) (0.1) Group tax relief received 0.9 3.7 0.7 3.7 Group tax relief paid - (0.1) (0.2) - Net cash flow from operating activities 27.8 30.9 30.7 25.6 -------------------------------------------- ------- ------- ------- ------- Investing activities Purchases of investments (240.2) (383.1) (240.2) (383.1) Proceeds from disposal of investments 142.7 397.2 142.2 399.6 Purchases of property, plant and equipment (3.5) (2.7) - - Net cash flow from/(used in) investing activities (101.0) 11.4 (98.0) 16.5 -------------------------------------------- ------- ------- ------- ------- Financing activities Interest paid (3.1) (1.7) (2.9) (1.6) Dividends paid to owners of the company (33.7) (32.8) (33.7) (32.8) Proceeds from bank borrowings 65.0 10.0 65.0 10.0 Repayment of bank borrowings (50.0) (10.0) (50.0) (10.0) Loan receipts from subsidiaries - 2.5 - 2.5 Loan payments to subsidiaries (4.1) - (7.8) (1.0) Purchases of own shares (1.4) (7.9) (1.4) (7.9) -------------------------------------------- ------- ------- ------- ------- Net cash flow used in financing activities (27.3) (39.9) (30.8) (40.8) -------------------------------------------- ------- ------- ------- ------- Net increase/(decrease) in cash and cash equivalents (100.5) 2.4 (98.1) 1.3 Cash and cash equivalents at year start 114.7 112.3 112.6 111.3 Cash and cash equivalents at year end 14.2 114.7 14.5 112.6 -------------------------------------------- ------- ------- ------- -------
Notes to the final results announcement
1. General information and basis of preparation
Caledonia Investments plc is an investment trust company domiciled in the United Kingdom and incorporated in England in 1928, under number 235481. 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.
Under the UK Corporate Governance Code and applicable regulations, the directors are required to satisfy themselves that it is reasonable to presume that the company is a going concern. The group balance sheet shows net current liabilities of GBP4.1m, as a result of trade payables due within 12 months. As at 31 March 2021 the group holds GBP730m of liquid assets and has access to GBP235m of undrawn committed banking facilities, GBP97.5m of which expires in July 2022 and GBP137.5m of which expires in May 2025. The directors therefore believe the group will be able to meet these current liabilities as they fall due for at least 12 months from the date of approval of the financial statements.
The group has conducted a going concern assessment which considered future cash flows, the availability of liquid assets and debt facilities, banking covenant requirements and consideration of the risks arising from the Covid-19 pandemic over at least 12 months from the date of approval of these financial statements. In making this assessment a number of stress scenarios were developed. A severe but plausible scenario assumed: (a) reduction in income from quoted equities and privately held investments; (b) a significant fall in distributions from private equity funds; and (c) continued investment into private businesses. A stress scenario used the above assumptions and additionally assumed that (d) all outstanding private equity fund commitments are drawn.
Under these scenarios the group would have a range of mitigating actions available to it, including usage of banking facilities, disposal of some liquid assets and reduction in discretionary spend which would enable it to meet all of its liabilities as they fall due and still hold significant liquid assets over the assessment period. As a result of this assessment the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
2. Dividends
Amounts recognised as distributions to owners of the company in the year were as follows:
2021 2020 p/share GBPm p/share GBPm --------------------------------------------------------- ------- ---- ------- ---- Final dividend for the year ended 31 March 2020 (2019) 44.5 24.4 43.2 23.7 Interim dividend for the year ended 31 March 2021 (2020) 17.0 9.3 16.6 9.1 61.5 33.7 59.8 32.8 --------------------------------------------------------- ------- ---- ------- ----
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 2021 45.9 25.2 --------------------------------------------------------- ---- ----
The proposed final dividend for the year ended 31 March 2021 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 21 July 2021, will be payable on 5 August 2021 to holders of shares on the register on 2 July 2021. The ex-dividend date will be 1 July 2021. The deadline for elections under the dividend reinvestment plan offered by Link Group will be the close of business on 15 July 2021.
For the purposes of section 1158 of the Corporation Tax Act 2010 and associated regulations, the dividends payable for the year ended 31 March 2021 are the interim and final dividends for that year, amounting to GBP34.5m (2020 - GBP33.5m).
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/(loss) 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/(loss) attributable to shareholders (basic and diluted) was as follows:
2021 2020 GBPm GBPm -------- ----- ------- Revenue 29.8 34.6 Capital 436.2 (207.5) -------- ----- ------- Total 466.0 (172.9) -------- ----- -------
The weighted average number of shares was as follows:
2021 2020 000's 000's ---------------------------------------------------------------------- ------ ------ Issued shares at the year start 55,374 55,374 Effect of shares held by the employee share trust (507) (490) ---------------------------------------------------------------------- ------ ------ Basic weighted average number of shares in the year 54,867 54,884 Effect of performance shares, share options and deferred bonus awards 754 388 ---------------------------------------------------------------------- ------ ------ Diluted weighted average number of shares in the year 55,621 55,272 ---------------------------------------------------------------------- ------ ------
4. Operating segments
The following is an analysis of the profit/(loss) before tax for the year and assets analysed by primary operating segments:
Profit/(loss) before tax Total assets 2021 2020 2021 2020 GBPm GBPm GBPm GBPm -------------------------- ------------ ------------ ------- ------- Quoted Equity 174.0 (1.7) 716.1 574.0 Private Capital 150.0 (128.5) 826.8 611.3 Funds 165.9 (13.6) 637.1 450.1 Investment portfolio 489.9 (143.8) 2,180.0 1,635.4 Other investments (4.2) (9.1) 14.0 21.3 -------------------------- ------------ ------------ ------- ------- Total revenue/investments 485.7 (152.9) 2,194.0 1,656.7 Cash and cash equivalents 0.1 0.6 14.2 114.7 Other items (30.0) (19.6) 65.4 52.0 -------------------------- ------------ ------------ ------- ------- Reportable total 455.8 (171.9) 2,273.6 1,823.4 -------------------------- ------------ ------------ ------- -------
5. Share-based payments
In the year to 31 March 2021, participating employees in the performance share scheme were awarded options over 273,597 shares at nil-cost (2020 - 239,138 shares).
Also in the year to 31 March 2021, participating employees received deferred awards over 5,229 shares (2020 - 41,386 shares).
The IFRS 2 expense included in profit or loss for the year was GBP6.3m (2020 - GBP2.4m credit).
6. 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.
2021 2020 Net Number Net Number assets of shares(1) NAV assets of shares(1) NAV GBPm 000's p/share GBPm 000's p/share ------------- ------- ------------ ------- ------- ------------ ------- Undiluted 2,225.3 54,882 4055 1,787.3 54,839 3259 Share awards - 754 (55) - 388 (23) ------------- ------- ------------ ------- ------- ------------ ------- Diluted 2,225.3 55,636 4000 1,787.3 55,227 3236 ------------- ------- ------------ ------- ------- ------------ -------
(1) . Number of shares in issue at the year-end is stated after the deduction of 491,716 (2020: 535,092) ordinary shares held by the Caledonia Investments plc Employee Share Trust.
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.
2021 2020 p p ------------------------------ ----- ----- Diluted NAV at year start 3236 3582 ------------------------------ ----- ----- Diluted NAV at year end 4000 3236 Dividends payable in the year 62 60 Reinvestment adjustment(2) 11 (6) 4073 3290 ------------------------------ ----- ----- NAVTR over the year 25.9% -8.1% ------------------------------ ----- -----
(2) (.) The reinvestment adjustment is the gain or loss resulting from reinvesting the dividends in NAV at the ex-dividend date.
7. 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 2021 2020 2021 2020 GBPm GBPm GBPm GBPm -------------------------- ----- ----- ----- ----- Investments Contracted but not called 285.9 305.2 290.4 313.5 Conditionally contracted 75.6 75.6 75.6 75.6 361.5 380.8 366.0 389.1 -------------------------- ----- ----- ----- -----
Amounts are callable within the next twelve months. The group has conducted a going concern assessment which considered future cash flows, the availability of liquid assets and debt facilities, and consideration of the risks arising from the Covid-19 pandemic over the 12 month period required. In making this assessment a number of stress scenarios were developed. The most severe scenario included all outstanding private equity fund commitments being drawn. Under this severe scenario the group would have a range of mitigating actions available to it, including usage of banking facilities, disposal of some liquid assets and reduction in discretionary spend which would enable it to meet all of its liabilities and still hold significant liquid assets.
8. 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. NAV per share 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. We use this measure as it enables comparisons to be drawn against an investment index in order to benchmark performance. The calculation follows the method prescribed by the Association of Investment Companies ('AIC').
Total shareholder return ('TSR')
TSR measures the return to shareholders through the movement in the share price and dividends paid during the measurement period.
9. Financial instruments - private asset valuation
Caledonia makes private equity investments in two forms: direct private equity investments (the Private Capital pool) and investments into externally managed unlisted private equity funds and fund of funds (the Funds pool). The directors have made two estimates which they deem to have a significant risk of resulting in a material adjustment to the amounts recognised in the financial statements within the next financial year, which relate to the valuation of assets within these two pools.
For directly owned private investments (Private Capital pool), totalling GBP826.8m (2020 - GBP611.3m) valuation techniques using a range of internally and externally developed unobservable inputs are used to estimate fair value. Valuation techniques make maximum use of market inputs, including reference to the current fair values of comparator businesses that are substantially the same (subject to appropriate adjustments). For each asset, a range of valuation methods are considered, and methods judged most appropriate are used, taking into consideration the quantity and quality of data points available. Methods include, inter alia, consideration of indicative offers from third parties, applying an earnings multiple to the maintainable earnings of a business, and net assets, sometimes employing third-party net asset valuations.
For private equity fund investments (unlisted Funds Pool), totalling GBP627.5m (2020 - GBP437.4 m) held through externally managed fund vehicles, the estimated fair value is based on the most recent valuation provided by the external manager, usually received within 3-6 months of the relevant valuation date. Where required, valuations are adjusted for investments and distributions between the valuation date and the reporting date. These valuations depend upon the reasonableness of the fair value estimation made by third-party managers, which are assumed to be reliable in the absence of contrary information.
The following table provides information on significant unobservable inputs used at 31 March 2021 in measuring financial instruments categorised as Level 3 in the fair value hierarchy. Private company (Private Capital) assets have been disaggregated into categories as follows:
-- Assets in the large, earnings based category have an Enterprise Value of >GBP150m, and benefit from a reasonable number of comparative data points, as well as having sufficient size to make their earnings reliable and predictable. -- The asset in the medium, earnings based category has an Enterprise Value of GBP50-GBP100m and has a more limited universe of comparable businesses available. -- Assets in the smaller, earnings based category have an Enterprise value of <GBP50m. Their smaller size results in fewer data points due to a lack of available listed comparators, and makes them generally more vulnerable than larger assets to changes in economic conditions. -- The asset in the large, leisure category is Liberation Group, which operates in a sector subject to significant uncertainty as at 31 March 2021. -- Manager valuations are used for assets where the net asset method is employed.
For private company assets we have chosen to sensitise and disclose EBITDA multiple or tangible asset multiple inputs because their derivation involves the most significant judgements when estimating valuation, including which data sets to consider and prioritise. Valuations also include other unobservable inputs, including earnings and tangible assets, which are based on historic and forecast data and are less judgmental. For each asset category, inputs were sensitised by a percentage deemed to reflect the relative degree of estimation uncertainty, and valuation calculations re-performed to identify the impact.
Private equity fund assets (unlisted Funds Pool investments) are each held in and managed by the same type of fund vehicle, valued using the same method of adjusted manager valuations, and subject to broadly the same economic risks. They are therefore subject to a similar degree of estimation uncertainty. They have been sensitised at an aggregated level by 5% to reflect a degree of uncertainty over managers' valuations which form the basis of their fair value.
Description/ Weighted average valuation method Fair value Unobservable input input Input sensitivity Change in valuation GBPm +/- +/- GBPm -------------------- ---------- -------------------- -------------------- ----------------- ------------------- Internally developed Private companies Large, earnings 434.9 EBITDA multiple 13.3x 10.0% 42.9 / (45.8) Medium, earnings 95.6 EBITDA multiple 13.0x 12.5% 10.2 / (11.4) Small, earnings 21.9 EBITDA multiple 3.9x 15.0% 2.4 / (2.4) Large, Leisure, Tangible assets tangible assets 127.7 multiple 1 17.5% 25.8 / (27.6) Net assets / manager valuation 146.7 Multiple 1 0.1x 14.7 / (14.7) -------------------- ---------- -------------------- -------------------- ----------------- ------------------- 826.8 96.0 / (101.9) Non-pool companies 14.0 -------------------- ---------- -------------------- -------------------- ----------------- ------------------- Total internal 840.8 Externally developed Private equity fund Net asset value 627.5 Manager NAV 1 5% 31.4 / (31.4) -------------------- ---------- -------------------- -------------------- ----------------- ------------------- 1,468.3 127.4 / (133.3)
10. Financial information
The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2021 or 2020 but is derived from those accounts. Statutory accounts for 31 March 2020 have been delivered to the Registrar of Companies, and those for 31 March 2021 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 2021 will be delivered to shareholders on 18 June 2021 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 Companies Act 2006, following approval by shareholders.
The statutory accounts for the year ended 31 March 2021 include a 'Directors' statement of responsibility' as follows:
We confirm that, to the best of our knowledge:
- the group and parent company financial statements, which have been prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole - the strategic report includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, 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 26 May 2021 26 May 2021
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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 .
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