TIDMCLDN
RNS Number : 9978P
Caledonia Investments PLC
24 November 2016
Caledonia Investments plc
Half-year results for the six months ended 30 September 2016
Financial highlights
6 months Year
30 Sep 31 Mar
2016 2016 Change
Net asset value per share
total return +6.7% +2.6%
Net asset value per share 3083p 2890p +6.7%
Net asset value GBP1,726m GBP1,644m +5.0%
Interim dividend per share 14.9p 14.3p +4.2%
Highlights
- NAV per share total return of +6.7% for the six
months to 30 September 2016; +13.8% for the twelve
months to 30 September 2016
- Interim dividend up 4.2% to 14.9p
- GBP148m invested, including GBP71m in The Liberation
Group
- GBP171m realised, including sale of Bowers &
Wilkins for GBP24m
- Net cash of GBP29.4m at 30 September 2016
Will Wyatt, Chief Executive, commented:
"Our investment portfolio has delivered a 6.7% NAV total return
in the six months, with positive contributions from all investment
pools. This is a good performance during a period of significant
economic and political uncertainty. Our strategy of maintaining a
globally diversified investment portfolio has provided an effective
hedge to market uncertainties. We have maintained a robust flow of
income, which totalled GBP20.3m for the six months and has
supported a 4.2% increase in our interim dividend.
"While we expect to see continued volatility in financial
markets, we remain active in our search to find potential new
investments, but remain wary of current price expectations. We
believe our diversified and long term portfolio remains well
positioned to attain the target returns that we aim to deliver for
our shareholders despite the less than ideal backdrop."
24 November 2016
Enquiries
Caledonia Investments plc Tulchan Communications
Will Wyatt, Chief Executive Peter Hewer
Stephen King, Finance Director Jessica Reid
+44 20 7802 8080 +44 20 7353 4200
Management report
Results
Caledonia's net asset value per share total return ('NAVTR') was
6.7% over the six months to 30 September 2016, a period which
included the momentous vote by the British public to leave the
European Union and the subsequent abrupt change of Prime Minister.
The strategy of maintaining a balanced investment portfolio of UK
and overseas businesses and funds has proved to be a useful hedge
through this period of uncertainty, as we have benefited from
holding dollar and euro denominated investments following the
devaluation of sterling. The majority of our portfolio continued to
perform satisfactorily and we have maintained a steady flow of
income, which totalled GBP20.3m for the half year. This is slightly
lower than the comparable period in 2015, which included a one-off
special dividend received on the sale of our holding in TGE Marine.
As at 30 September 2016, cash, net of debt, on the balance sheet
stood at GBP29.4m.
Our share price rose in line with our net asset value per share
over the six months and consequently the discount remained the same
at the start and end of this period, at around 21%, although in the
interim it traded in a range of 14-23%. The average for the period
was 19%.
The board has declared an interim dividend of 14.9p, a rise of
4.2%. This will be paid to shareholders on 5 January 2017.
Investment performance
The board's preferred measure of longer term performance is a
comparison of Caledonia's NAVTR to the FTSE All-Share Total Return
over rolling ten year periods and we are pleased to report that we
continue to perform ahead of this benchmark. Over shorter periods,
the board looks at our NAVTR performance against inflation (RPI) on
the basis that a return in the range of RPI+3% to RPI+6% should,
over longer periods, be consistent with an outperformance of the
FTSE All-Share. With inflation subdued for the time being,
outperformance of this measure has been particularly strong. This
is, however, unlikely to continue as asset prices and other market
indicators point towards reduced levels of investment returns in
the future and, following sterling's recent depreciation, the UK is
due a bout of inflation in 2017.
6 mths 1 year 3 years 5 years 10 years
% % % % %
---------------------------- ------ ------ ------- ------- --------
NAV total return 6.7 13.8 41.0 81.5 79.7
Annualised
NAV total return 13.8 12.1 12.7 6.0
Retail Prices Index 2.0 1.7 2.2 2.8
Performance vs RPI 11.8 10.4 10.5 3.2
FTSE All-Share Total Return 5.8
Performance vs FTSE 0.2
---------------------------- ------ ------ ------- ------- --------
Total management expenses were GBP13.2m, compared with GBP11.4m
in the equivalent period last year. The increase was due
principally to increased staff costs and share-based payment
expenses. Both the current and previous periods included costs
associated with temporary accommodation whilst our headquarters
building is being refurbished.
Pool performance
31 Mar Invest- Change 30 Sep
Pool 2016 ments Disposals in value 2016 Income Return
GBPm GBPm GBPm GBPm GBPm GBPm %
---------------- ------- ------- --------- -------- ------- ------ ------
Quoted 449.3 6.5 (62.7) 32.0 425.1 5.7 9.3
Income & Growth 194.1 3.5 (5.5) 10.3 202.4 6.0 8.6
Unquoted 646.3 81.8 (67.0) 19.4 680.5 7.4 4.4
Funds 308.4 56.0 (36.1) 43.3 371.6 1.2 13.9
---------------- ------- ------- --------- -------- ------- ------ ------
Portfolio 1,598.1 147.8 (171.3) 105.0 1,679.6 20.3 8.2
Cash and other 46.2 46.3
---------------- ------- ------- --------- -------- ------- ------ ------
Net assets 1,644.3 1,725.9 6.7
---------------- ------- ------- --------- -------- ------- ------ ------
1. Unallocated investments with a value of GBP36.5m (31 March
2016 - GBP11.1m) were included in 'Other items'. Gains of GBP0.3m
were attributed to unallocated investments.
Quoted pool (GBP425m, 25% of net assets)
We invest in companies with established business models, strong
balance sheets and good returns on capital and strong annual cash
flows.
The total return for the Quoted pool was 9.3% over the period
driven by several of the large dollar denominated international
holdings, but also notably good performances by companies such as
Hill & Smith and Spirax Sarco, both UK based engineering
businesses. Weakness in the oil and gas markets continued to impact
negatively on Bristow Group, the US helicopter services group, and
we took the opportunity to sell our holding in Union Pacific, the
US railroad operator, in light of difficult trading conditions. We
also sold our holding in Real Estate Investors, the Birmingham
based property company, and reduced our holding in Close Brothers,
following another good set of results. The pool continues to be at
the bottom of its asset allocation range reflecting the current
paucity of attractive valuations and our decision to take profits
as markets have risen. We will await opportunities to deploy
capital at better rates of return than are currently available.
Income & Growth pool (GBP202m, 12% of net assets)
We invest in a portfolio of liquid global equities that produces
a reliable and increasing income stream.
The total return for the Income & Growth pool for the period
was 8.6% and since inception five years ago 8.5% annualised. The
pool produced GBP6.0m of income during the period and is currently
running at a yield of 4.3%. This reflects the manager's careful
portfolio construction, aimed at striking the right balance between
income and capital growth from this global portfolio. The lack of
interest available from bank deposits and low bond yields has seen
investors target high yielding equities to the extent that
valuations of income stocks have been pushed to new highs. We
remain cautious and aware of maintaining our investing discipline
in a market that now offers much less attractive pricing than
hitherto available.
Unquoted pool (GBP681m, 39% of net assets)
We invest in unlisted businesses that require capital and an
investor with a balance sheet able to provide a long term
perspective. We mainly invest in majority positions.
The total return for the Unquoted pool was 4.4% over the six
months. This was underpinned by continued strong performances from
Park Holidays and Cobehold, the latter being a euro denominated
investment. During the period, we invested GBP71m in The Liberation
Group, a brewery, restaurant and pub company based in the Channel
Islands and South West England. The strategy is to expand the group
by reinvesting profits into acquisitions of further sites on the UK
mainland whilst continuing to support a strong dividend flow to
Caledonia. The valuation of Sterling Industries was cut by half to
GBP5m, as the oil and gas and steel industries, in which the
majority of its businesses operate, continued to struggle. Seven
Investment Management has seen assets under management grow to over
GBP11bn (from GBP9.4bn on acquisition in 2015) and its profits have
grown strongly during the first year of our ownership.
During the half-year, we sold our holding in Bowers &
Wilkins ('B&W') for GBP24.0m, Park Holidays paid a special
dividend of GBP26.7m following a refinancing earlier in the year
and we received a distribution of GBP10.6m from Latshaw Group in
the US, following the sale of one of its divisions. B&W was
sold to a US technology provider as it continued to grapple with
the challenge of allying its speaker technology to the rapidly
changing consumer markets and music delivery methods. The
investment made a small but positive IRR over the four year period
that we were minority owners. More positively, the Latshaw Group,
in which we invested GBP27.2m in 2012, has already returned
GBP34.5m in cash with the remaining business valued at GBP15.6m, an
IRR of 22.1% to date.
Funds pool (GBP372m, 21% of net assets)
We invest in both private equity and quoted market funds, with
an emphasis on providing exposure to areas of the world where we
are less willing to invest directly.
The Funds pool delivered a 13.9% return for the six month
period, particularly benefiting from currency tailwinds, as it is
predominantly invested in the US and Asia. However, this should not
disguise a strong underlying performance from our investments in
quoted market funds in Asia which, taken together, returned 24.3%.
The private equity fund investment strategy continues to be
implemented, with GBP235m of undrawn commitments at the end of the
period. Liquidity has been largely generated within the pool,
especially from returns of capital by the China Capital Today
Growth fund, which has made such a huge success of its investment
in JD.com. This individual fund is showing a net return of 11.3x
invested capital and an IRR of 46% to date.
Investment portfolio - asset allocation
Strategic
30 September 2016 31 March 2016 allocation
Pool GBPm % GBPm % %
---------------- ------------ ----- ---------- --- ----------
Quoted 425.1 25 449.3 27 25-40
Income & Growth 202.4 12 194.1 12 15-20
Unquoted 680.5 39 646.3 39 35-45
Funds 371.6 21 308.4 19 15-20
Cash and other 46.3 3 46.2 3 +/-10
---------------- ------------ ----- ---------- --- ----------
Net assets 1,725.9 100 1,644.3 100
---------------- ------------ ----- ---------- --- ----------
Dividend
The directors have declared an interim dividend of 14.9p per
share. This represents an increase of 4.2% over the equivalent
dividend last year and will be paid on 5 January 2017.
Outlook
The decision to leave the European Union has unsurprisingly
caused a great deal of uncertainty, which will remain until there
is a clear view of how an exit is to be achieved and its effects on
the UK economy. Even after new trading relationships are
established there will be much refinement required, such that it is
difficult to foresee stable conditions for some considerable time.
The Bank of England has lowered the base rate to 0.25% and provided
yet more liquidity to the system with another round of quantitative
easing. The devaluation of sterling will import inflation over the
next year but should aid the balance of payments deficit. The
Government has much to do and it should be remembered that the UK
is still running a substantial budget deficit and is continuing to
increase the vast UK national debt, which remains the long-lasting
legacy of the disastrous Labour administration of the Blair/Brown
era. Likewise, it is uncertain as to what effect on the world
economy the new Republican Administration in the US will bring to
bear when Mr Trump takes office as President in early 2017.
This is far from the ideal background for investment and it is
somewhat counter-intuitive that many stock markets are trading at
near all-time highs with asset prices also continuing to be strong,
propped up by loose monetary policy. Caledonia's portfolio of
asset-backed, cash producing unlisted businesses, high margin,
market leading quoted companies and private equity funds stand us
in good stead to be able to weather future economic difficulties as
they may arise. We remain active in our search to find potential
new investments for our portfolio, but remain wary of current price
expectations. Meanwhile, we maintain a reliable stream of income
which underpins our dividend strategy. We believe the portfolio is
well positioned to attain the target returns that we aim to deliver
for our shareholders despite the less than ideal backdrop.
Portfolio summary
Holdings of 1% or more of net assets at 30 September 2016 were
as follows:
Net
Value assets
Name Pool Geography Business GBPm %
---------------------- ----------- ------------ ----------------------- ------- ------
Caravan parks
Park Holidays Unquoted UK operator 134.2 7.8
Cobehold Unquoted Belgium Investment company 122.9 7.1
Gala Bingo Unquoted UK Bingo operator 92.3 5.4
Seven Investment
Management Unquoted UK Investment management 76.7 4.4
The Liberation Restaurants
Group Unquoted Jersey and bars 71.0 4.1
Residential
The Sloane Club Unquoted UK club 58.5 3.4
Choice Care Group Unquoted UK Care homes provider 54.6 3.2
British American
Tobacco Quoted/I&G UK Tobacco 44.1 2.6
AG Barr Quoted UK Soft drinks 41.8 2.4
Quoted market
NTAsian funds Funds Asia funds 39.7 2.3
Macquarie Asia Quoted market
New Stars fund Funds Asia fund 38.8 2.2
Flowserve Quoted US Industrial engineering 36.1 2.1
Capital Today Private equity
China Growth fund Funds China fund 35.9 2.1
Arlington AVM Quoted market
Ranger fund Funds US fund 34.7 2.0
Bristow Group Quoted US Helicopter services 31.9 1.9
Aberdeen US PE
funds Funds US Funds of funds 31.6 1.8
Infrastructure
Microsoft Quoted US technology 29.8 1.7
Jardine Matheson Quoted Singapore Industrial engineering 29.5 1.7
Spirax Sarco Quoted UK Steam engineering 28.3 1.6
PVAM Perlus Microcap Quoted market
fund Funds US fund 26.6 1.5
Infrastructure
Oracle Quoted US technology 26.1 1.5
Polar Capital Quoted UK Fund manager 23.7 1.4
Infrastructure
Hill & Smith Quoted UK products 22.5 1.3
Private equity
J F Lehman funds Funds US funds 22.4 1.3
Nestlé Quoted Switzerland Packaged foods 20.5 1.2
Satellite Information Broadcasting
Services Unquoted UK services 20.0 1.2
New Silk Road Quoted market
Asia fund Funds Asia fund 19.9 1.2
Thermo Fisher Biotechnology
Scientific Quoted US development 19.8 1.1
LondonMetric Property Quoted UK Property investment 19.1 1.1
Becton Dickinson Quoted US Medical technology 18.8 1.1
Asia Alternatives
PE funds Funds Asia Funds of funds 18.0 1.0
Other investments 389.8 22.6
-------------------------------------------------------------------------- ------- ------
Investment portfolio 1,679.6 97.3
Cash and other
items 46.3 2.7
-------------------------------------------------------------------------- ------- ------
Net assets 1,725.9 100.0
-------------------------------------------------------------------------- ------- ------
1. Geography is based on the country of listing,
country of domicile for unlisted investments
and underlying regional analysis for funds.
2. Unallocated investments totalling GBP36.5m were
included in 'Cash and other items'.
Pool distribution Geographic distribution Asset class distribution
Quoted 25% United Kingdom 52% Listed equities 36%
Continental
Income & Growth 12% Europe 11% Private companies 40%
Private equity
Unquoted 39% North America 23% funds 11%
Quoted market
Funds 21% Asia 13% funds 10%
Cash and other Cash and other
items 3% Other countries 1% items 3%
Risks and uncertainties
Caledonia has a risk management framework that provides a
structured process for identifying, assessing and managing risks
associated with the company's business objectives and strategy.
The principal risks and uncertainties faced by the company are
set out in the strategic report section of Caledonia's annual
report 2016. External risks arise from political, legal, regulatory
and economic changes. Strategic risks arise from the conception,
design and implementation of the company's business model.
Investment risks occur in relation to specific investment
decisions, subsequent performance or concentration of exposure.
Treasury and funding risks arise from counterparties, uncertainty
in market prices and rates and liquidity availability. Operational
risks arise from potentially inadequate or failed controls,
processes, people or systems.
The principal risks and uncertainties identified in the annual
report 2016 remain unchanged and each of them has the potential to
affect the company's results during the remainder of the year
ending 31 March 2017.
Caledonia actively monitors key risk factors, including
portfolio concentration, liquidity and volatility, and aims to
manage risk by:
- diversifying the portfolio by sector and geography
- ensuring access to relevant information from investee companies, particularly in the case
of unquoted investments through board representation
- managing cash and borrowings to ensure that liquidity is available to meet investment and
operating needs
- reducing counterparty risk by limiting maximum aggregate exposures.
Going concern
The factors likely to affect the company's ability to continue
as a going concern were set out in the annual report 2016. As at 30
September 2016, there have been no significant changes to these
factors. Having reviewed the company's forecasts and other relevant
evidence, the directors have a reasonable expectation that the
company and the group have adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the
half-year condensed financial statements.
Directors' responsibility statement
We confirm that to the best of our knowledge:
- the condensed set of financial statements has
been prepared in accordance with IAS 34 Interim
Financial Reporting as adopted by the EU;
- the interim management report includes a fair
review of the information required by:
- DTR 4.2.7R of the Disclosure Guidance and Transparency
Rules, being an indication of important events
that have occurred during the first six months
of the financial year and their impact on the
condensed set of financial statements and a
description of the principal risks and uncertainties
for the remaining six months of the financial
year;
- DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being related parties transactions that
have taken place in the first six months of
the current financial year and that have materially
affected the financial position or performance
of the entity during that period and any changes
in the related party transactions described
in the last annual report that could do so.
Signed on behalf of the board
Will Wyatt, Chief Executive
24 November 2016
Independent review report
to Caledonia Investments plc
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2016 which comprises the group
statement of comprehensive income, the condensed group and company
statements of financial position, the condensed group and company
statements of changes in equity, the condensed group and company
statements of cash flows and the related explanatory notes. We have
read the other information contained in the half-yearly financial
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the Disclosure Guidance and Transparency Rules
('the DTR') of the UK's Financial Conduct Authority ('the UK FCA').
Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this report
and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company for our review work, for this report, or for the
conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the
group and company are prepared in accordance with IFRSs as adopted
by the EU. The condensed set of financial statements included in
this half-yearly financial report has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2016 is not prepared, in all material respects, in
accordance with IAS 34 as adopted by the EU and the DTR of the UK
FCA.
Tom Brown
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square, London E14 5GL
24 November 2016
Condensed group statement of comprehensive income
for the six months ended 30 September 2016
Six months Six months Year 31 Mar
30 Sep 2016 30 Sep 2015 2016
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- ------- ------- ------ ------- ------- ------- ------- ------- ------
Revenue
Investment
income 20.3 - 20.3 23.3 - 23.3 50.7 - 50.7
Other income 0.1 - 0.1 0.1 - 0.1 0.7 - 0.7
Gains and losses
on fair value
investments - 105.3 105.3 - (69.7) (69.7) - 12.5 12.5
Gains on fair
value property - 0.1 0.1 - 0.1 0.1 - 0.2 0.2
---------------------- ------- ------- ------ ------- ------- ------- ------- ------- ------
Total revenue 20.4 105.4 125.8 23.4 (69.6) (46.2) 51.4 12.7 64.1
Management
expenses (9.2) (4.0) (13.2) (8.1) (3.3) (11.4) (16.2) (7.4) (23.6)
Other non-recurring
expenses (0.4) - (0.4) - - - (3.0) - (3.0)
Performance
fees - - - - - - - (0.1) (0.1)
Guarantee obligation
provided - (0.1) (0.1) - - - - - -
---------------------- ------- ------- ------ ------- ------- ------- ------- ------- ------
Profit/(loss)
before finance
costs 10.8 101.3 112.1 15.3 (72.9) (57.6) 32.2 5.2 37.4
Treasury interest
receivable 0.1 - 0.1 0.1 - 0.1 0.2 - 0.2
Finance costs (0.9) - (0.9) (0.9) - (0.9) (1.8) - (1.8)
Exchange movements (0.4) - (0.4) 0.3 - 0.3 0.4 - 0.4
---------------------- ------- ------- ------ ------- ------- ------- ------- ------- ------
Profit/(loss)
before tax 9.6 101.3 110.9 14.8 (72.9) (58.1) 31.0 5.2 36.2
Taxation 2.1 0.7 2.8 1.7 0.9 2.6 3.2 1.7 4.9
---------------------- ------- ------- ------ ------- ------- ------- ------- ------- ------
Profit/(loss)
for the period 11.7 102.0 113.7 16.5 (72.0) (55.5) 34.2 6.9 41.1
Other comprehensive
income items
never to be
reclassified
to profit or
loss
Actuarial gain/(loss)
on defined
benefit pension
schemes - (4.5) (4.5) - - - - 2.3 2.3
Tax on other
comprehensive
income - 0.8 0.8 - (0.2) (0.2) - (0.6) (0.6)
---------------------- ------- ------- ------ ------- ------- ------- ------- ------- ------
Total comprehensive
income 11.7 98.3 110.0 16.5 (72.2) (55.7) 34.2 8.6 42.8
---------------------- ------- ------- ------ ------- ------- ------- ------- ------- ------
Basic earnings
per share 21.3p 185.6p 206.9p 29.9p -130.6p -100.7p 62.0p 12.5p 74.5p
Diluted earnings
per share 20.9p 182.0p 202.9p 29.4p -130.6p -100.7p 60.8p 12.3p 73.1p
---------------------- ------- ------- ------ ------- ------- ------- ------- ------- ------
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 period and total comprehensive income for the
period is attributable to equity holders of the parent.
Condensed statements of financial position
at 30 September 2016
Group Company
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2016 2015 2016 2016 2015 2016
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Non-current assets
Investments held at fair value through profit or loss 1,716.1 1,508.2 1,609.2 1,707.3 1,506.4 1,604.7
Investments in subsidiaries held at cost - - - 0.8 0.8 0.8
Property, plant and equipment 29.4 24.0 25.7 - - -
Deferred tax assets 3.2 2.4 2.8 - - -
Employee benefits 2.1 1.9 3.2 - - -
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Non-current assets 1,750.8 1,536.5 1,640.9 1,708.1 1,507.2 1,605.5
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Current assets
Trade and other receivables 5.1 94.1 8.3 29.4 103.1 22.4
Current tax assets 2.7 1.3 2.0 2.6 2.1 2.3
Cash and cash equivalents 29.4 11.7 23.8 28.9 8.3 23.8
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Current assets 37.2 107.1 34.1 60.9 113.5 48.5
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Total assets 1,788.0 1,643.6 1,675.0 1,769.0 1,620.7 1,654.0
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Current liabilities
Bank overdrafts - - (0.9) - - -
Interest-bearing loans and borrowings - - - - (40.0) -
Trade and other payables (43.9) (16.0) (14.1) (36.5) (14.8) (7.9)
Employee benefits (1.0) (0.9) (1.9) - - -
Provisions (9.1) (9.7) (9.0) (9.1) (9.0) (9.0)
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Current liabilities (54.0) (26.6) (25.9) (45.6) (63.8) (16.9)
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Non-current liabilities
Interest-bearing loans and borrowings - (60.0) - - (10.0) -
Employee benefits (7.9) (5.0) (4.5) - - -
Deferred tax liabilities (0.2) (0.2) (0.3) - - -
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Non-current liabilities (8.1) (65.2) (4.8) - (10.0) -
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Total liabilities (62.1) (91.8) (30.7) (45.6) (73.8) (16.9)
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Net assets 1,725.9 1,551.8 1,644.3 1,723.4 1,546.9 1,637.1
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Equity
Share capital 3.2 3.2 3.2 3.2 3.2 3.2
Share premium 1.3 1.3 1.3 1.3 1.3 1.3
Capital redemption reserve 1.3 1.3 1.3 1.3 1.3 1.3
Capital reserve 1,432.0 1,252.9 1,333.7 1,436.9 1,256.1 1,335.0
Retained earnings 318.9 312.0 325.0 311.5 303.9 316.5
Own shares (30.8) (18.9) (20.2) (30.8) (18.9) (20.2)
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Total equity 1,725.9 1,551.8 1,644.3 1,723.4 1,546.9 1,637.1
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Undiluted net asset value per share 3144p 2812p 2944p
Diluted net asset value per share 3083p 2759p 2890p
------------------------------------------------------ ------- ------- ------- ------- ------- -------
Condensed group statement of changes in equity
for the six months ended 30 September 2016
Capital
redemp-
Share Share tion Capital Retained Own Total
capital premium reserve reserve earnings shares equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ------- ------- ------- ------- -------- ------ -------
Six months ended 30
September 2016
Balance at 1 April
2016 3.2 1.3 1.3 1,333.7 325.0 (20.2) 1,644.3
------------------------- ------- ------- ------- ------- -------- ------ -------
Total comprehensive
income for the period
Profit for the period - - - 102.0 11.7 - 113.7
Other comprehensive
income - - - (3.7) - - (3.7)
------------------------- ------- ------- ------- ------- -------- ------ -------
Total comprehensive
income - - - 98.3 11.7 - 110.0
------------------------- ------- ------- ------- ------- -------- ------ -------
Transactions with owners
of the company
Contributions by and
distributions to owners
Exercise of options - - - - - 0.2 0.2
Share-based payments - - - - 3.3 - 3.3
Own shares purchased - - - - - (10.8) (10.8)
Dividends paid - - - - (21.1) - (21.1)
------------------------- ------- ------- ------- ------- -------- ------ -------
Total transactions
with owners - - - - (17.8) (10.6) (28.4)
------------------------- ------- ------- ------- ------- -------- ------ -------
Balance at 30 September
2016 3.2 1.3 1.3 1,432.0 318.9 (30.8) 1,725.9
------------------------- ------- ------- ------- ------- -------- ------ -------
Six months ended 30
September 2015
Balance at 1 April
2015 3.2 1.3 1.3 1,325.1 313.2 (17.2) 1,626.9
------------------------- ------- ------- ------- ------- -------- ------ -------
Total comprehensive
income for the period
Loss for the period - - - (72.0) 16.5 - (55.5)
Other comprehensive
income - - - (0.2) - - (0.2)
------------------------- ------- ------- ------- ------- -------- ------ -------
Total comprehensive
income - - - (72.2) 16.5 - (55.7)
------------------------- ------- ------- ------- ------- -------- ------ -------
Transactions with owners
of the company
Contributions by and
distributions to owners
Exercise of options - - - - - 0.2 0.2
Share-based payments - - - - 2.6 - 2.6
Own shares purchased - - - - - (1.9) (1.9)
Dividends paid - - - - (20.3) - (20.3)
------------------------- ------- ------- ------- ------- -------- ------ -------
Total transactions
with owners - - - - (17.7) (1.7) (19.4)
------------------------- ------- ------- ------- ------- -------- ------ -------
Balance at 30 September
2015 3.2 1.3 1.3 1,252.9 312.0 (18.9) 1,551.8
------------------------- ------- ------- ------- ------- -------- ------ -------
Year ended 31 March
2016
Balance at 1 April
2015 3.2 1.3 1.3 1,325.1 313.2 (17.2) 1,626.9
------------------------- ------- ------- ------- ------- -------- ------ -------
Total comprehensive
income for the year
Profit for the year - - - 6.9 34.2 - 41.1
Other comprehensive
income - - - 1.7 - - 1.7
------------------------- ------- ------- ------- ------- -------- ------ -------
Total comprehensive
income - - - 8.6 34.2 - 42.8
------------------------- ------- ------- ------- ------- -------- ------ -------
Transactions with owners
of the company
Contributions by and
distributions to owners
Exercise of options - - - - - 0.7 0.7
Share-based payments - - - - 5.8 - 5.8
Own shares purchased - - - - - (3.7) (3.7)
Dividends paid - - - - (28.2) - (28.2)
------------------------- ------- ------- ------- ------- -------- ------ -------
Total transactions
with owners - - - - (22.4) (3.0) (25.4)
------------------------- ------- ------- ------- ------- -------- ------ -------
Balance at 31 March
2016 3.2 1.3 1.3 1,333.7 325.0 (20.2) 1,644.3
------------------------- ------- ------- ------- ------- -------- ------ -------
Condensed company statement of changes in equity
for the six months ended 30 September 2016
Capital
redemp-
Share Share tion Capital Retained Own Total
capital premium reserve reserve earnings shares equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------- ------- ------- ------- ------- -------- ------ -------
Six months ended 30
September 2016
Balance at 1 April
2016 3.2 1.3 1.3 1,335.0 316.5 (20.2) 1,637.1
Profit and total comprehensive
income for the period - - - 101.9 12.8 - 114.7
------------------------------- ------- ------- ------- ------- -------- ------ -------
Transactions with owners
of the company
Contributions by and
distributions to owners
Exercise of options - - - - - 0.2 0.2
Share-based payments - - - - 3.3 - 3.3
Own shares purchased - - - - - (10.8) (10.8)
Dividends paid - - - - (21.1) - (21.1)
------------------------------- ------- ------- ------- ------- -------- ------ -------
Total transactions
with owners - - - - (17.8) (10.6) (28.4)
------------------------------- ------- ------- ------- ------- -------- ------ -------
Balance at 30 September
2016 3.2 1.3 1.3 1,436.9 311.5 (30.8) 1,723.4
------------------------------- ------- ------- ------- ------- -------- ------ -------
Six months ended 30
September 2015
Balance at 1 April
2015 3.2 1.3 1.3 1,328.6 304.5 (17.2) 1,621.7
Loss and total comprehensive
income for the period - - - (72.5) 17.1 - (55.4)
------------------------------- ------- ------- ------- ------- -------- ------ -------
Transactions with owners
of the company
Contributions by and
distributions to owners
Exercise of options - - - - - 0.2 0.2
Share-based payments - - - - 2.6 - 2.6
Own shares purchased - - - - - (1.9) (1.9)
Dividends paid - - - - (20.3) - (20.3)
------------------------------- ------- ------- ------- ------- -------- ------ -------
Total transactions
with owners - - - - (17.7) (1.7) (19.4)
------------------------------- ------- ------- ------- ------- -------- ------ -------
Balance at 30 September
2015 3.2 1.3 1.3 1,256.1 303.9 (18.9) 1,546.9
------------------------------- ------- ------- ------- ------- -------- ------ -------
Year ended 31 March
2016
Balance at 1 April
2015 3.2 1.3 1.3 1,328.6 304.5 (17.2) 1,621.7
Profit and total comprehensive
income for the year - - - 6.4 34.4 - 40.8
------------------------------- ------- ------- ------- ------- -------- ------ -------
Transactions with owners
of the company
Contributions by and
distributions to owners
Exercise of options - - - - - 0.7 0.7
Share-based payments - - - - 5.8 - 5.8
Own shares purchased - - - - - (3.7) (3.7)
Dividends paid - - - - (28.2) - (28.2)
------------------------------- ------- ------- ------- ------- -------- ------ -------
Total transactions
with owners - - - - (22.4) (3.0) (25.4)
------------------------------- ------- ------- ------- ------- -------- ------ -------
Balance at 31 March
2016 3.2 1.3 1.3 1,335.0 316.5 (20.2) 1,637.1
------------------------------- ------- ------- ------- ------- -------- ------ -------
Condensed statements of cash flows
for the six months ended 30 September 2016
Group Company
6 mths 6 mths Year 6 mths 6 mths Year
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2016 2015 2016 2016 2015 2016
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------- ------- ------- ------- ------- -------
Operating activities
Dividends received 22.1 24.3 48.3 22.1 24.2 48.3
Interest received 0.4 0.5 1.3 0.1 0.1 0.7
Cash received from customers 0.1 0.1 0.2 - - -
Cash paid to suppliers
and employees (9.7) (8.4) (20.7) (13.4) (17.6) (28.9)
Taxes received - 0.2 0.5 - 0.2 0.5
Taxes paid (0.1) (0.2) (0.4) (0.1) (0.2) (0.4)
Group tax relief received 2.4 1.4 2.5 2.4 1.4 3.3
-------------------------------- ------- ------- ------- ------- ------- -------
Net cash flow from operating
activities 15.2 17.9 31.7 11.1 8.1 23.5
-------------------------------- ------- ------- ------- ------- ------- -------
Investing activities
Purchases of investments (148.1) (321.8) (548.0) (138.0) (321.8) (545.2)
Proceeds from disposal
of investments 146.4 154.4 450.5 144.0 155.8 455.1
Purchases of property,
plant and equipment (3.7) (4.8) (6.6) - - -
-------------------------------- ------- ------- ------- ------- ------- -------
Net cash flow from/(used
in) investing activities (5.4) (172.2) (104.1) 6.0 (166.0) (90.1)
-------------------------------- ------- ------- ------- ------- ------- -------
Financing activities
Interest paid (0.6) (0.8) (1.5) (0.6) (0.5) (1.1)
Dividends paid to owners
of the company (21.1) (20.3) (28.2) (21.1) (20.3) (28.2)
Proceeds from bank borrowings - 71.0 170.0 - 30.0 30.0
Repayment of bank borrowings - (20.0) (179.0) - (20.0) (30.0)
Loan receipts from subsidiaries 33.0 1.0 7.1 36.7 40.0 97.6
Loan payments to subsidiaries (4.0) (3.2) (10.1) (16.4) - (113.6)
Exercise of share options 0.2 0.2 0.7 0.2 0.2 0.7
Purchases of own shares (10.8) (1.9) (3.7) (10.8) (1.9) (3.7)
-------------------------------- ------- ------- ------- ------- ------- -------
Net cash flow from/(used
in) financing activities (3.3) 26.0 (44.7) (12.0) 27.5 (48.3)
-------------------------------- ------- ------- ------- ------- ------- -------
Net increase/(decrease)
in cash and cash equivalents 6.5 (128.3) (117.1) 5.1 (130.4) (114.9)
Cash and cash equivalents
at period start 22.9 140.0 140.0 23.8 138.7 138.7
-------------------------------- ------- ------- ------- ------- ------- -------
Cash and cash equivalents
at period end 29.4 11.7 22.9 28.9 8.3 23.8
-------------------------------- ------- ------- ------- ------- ------- -------
Notes to the condensed financial statements
1. General information
Caledonia Investments plc is an investment trust company
domiciled in the United Kingdom. The address of its registered
office is 2nd Floor Stratton House, 5 Stratton Street, London W1J
8LA. The ordinary shares of the company are premium listed on the
London Stock Exchange.
This condensed set of financial statements was approved for
issue on 24 November 2016 and is unaudited.
The information for the period ended 30 September 2016 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for the year
ended 31 March 2016 has been delivered to the Registrar of
Companies. The auditor's report on those accounts was not
qualified, did not draw attention to any matters by way of emphasis
of matter and did not contain a statement under section 498(2) and
(3) of the Companies Act 2006.
2. Accounting policies
Basis of accounting
This condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting and should be
read in conjunction with the annual financial statements for the
year ended 31 March 2016, which were prepared in accordance with
IFRSs as adopted by the European Union.
This condensed set of financial statements has been prepared in
accordance with the recommendations of the SORP issued by the
Association of Investment Companies.
Basis of consolidation
In accordance with the IFRS 10/IAS 28 Investment entity
amendments, the consolidated financial statements include the
financial statements of the company and service entities controlled
by the company made up to the reporting date. All other investments
in controlled entities are accounted as held at fair value through
profit or loss.
Going concern
The directors have assessed the risks facing the group and
consider that it has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to
adopt the going concern basis in preparing this half-year condensed
set of financial statements.
Changes in accounting policies
As required by the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority, this condensed set of financial
statements has been prepared applying the accounting policies and
presentation that were applied in the preparation of the company's
published consolidated financial statements for the year ended 31
March 2016.
Judgements and estimates
In preparing these interim financial statements, management has
made judgements, estimates and assumptions that affected the
application of accounting policies and the reported amounts of
assets and liabilities, income and expense.
The significant judgements made by management in applying the
group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the consolidated
financial statements for the year ended 31 March 2016.
3. Dividends
Amounts recognised as distributions to owners of the company in
the period were as follows:
6 mths 6 mths Year
30 Sep 30 Sep 31 Mar
2016 2015 2016
GBPm GBPm GBPm
--------------------------------------------------------------------- ------ ------ ------
Final dividend for the year ended 31 March 2015 of 36.8p per share - 20.3 20.3
Second interim dividend for the year ended 31 March 2016
of 38.3p per share paid on 1 April 2016 21.1 - -
Interim dividend for the year ended 31 March 2016 of 14.3p per share - - 7.9
--------------------------------------------------------------------- ------ ------ ------
21.1 20.3 28.2
--------------------------------------------------------------------- ------ ------ ------
The directors have declared an interim dividend for the year
ending 31 March 2017 of 14.9p per share, totalling GBP8.2m, which
has not been included as a liability in this condensed set of
financial statements. This dividend will be payable on 5 January
2017 to holders of shares on the register on 2 December 2016. The
ex-dividend date will be 1 December 2016.
4. Provisions
During the period, the group and company provided an additional
GBP0.1m of solvency guarantee provision.
During the six months ended 30 September 2015, the group
utilised GBP0.7m of a provision for expected legal costs (31 March
2016 - GBP1.4m).
5. Share capital
During the period, the company's Employee Share Trust sold
205,851 shares for GBP0.2m and purchased 147,971 shares for GBP3.5m
in connection with the exercise of share options and calling of
performance share and deferred bonus awards. The Employee Share
Trust also purchased 300,000 shares from The Cayzer Trust Company
Ltd for GBP7.3m.
In the six months ended 30 September 2015, the company's
Employee Share Trust sold 146,235 shares for GBP0.2m and purchased
76,270 shares for GBP1.9m in connection with the exercise of share
options and calling of performance share awards.
In the year ended 31 March 2016, the company's Employee Share
Trust sold 183,825 shares for GBP0.7m and purchased 100,282 shares
for GBP2.4m in connection with the exercise of share options and
calling of performance share awards. The Employee Share Trust also
purchased 55,000 shares in the market for GBP1.3m.
6. Net asset value per share
The group's undiluted net asset value per share is based on the
net assets of the group at the period end and on the number of
shares in issue at the period end less shares held by the Caledonia
Investments plc Employee Share Trust. The group's diluted net asset
value per share assumes the exercise of all outstanding
in-the-money share options and the calling of performance share and
deferred bonus awards at the closing mid-market price on the
reporting date.
7. Operating segments
The chief operating decision maker has been identified as the
Executive Committee, which reviews the company's internal reporting
in order to assess performance and allocate resources. Management
has determined the operating segments based on these reports.
The performance of operating segments is assessed against group
total revenue, which principally comprises gains and losses on
investments and investment income. Reportable profit or loss is
after 'Treasury income' and 'Other items', which comprise
management and other expenses and provisions. Reportable assets
equate to the group's total assets. Cash and cash equivalents, net
of bank overdrafts, and other items are not identifiable operating
segments.
'Other investments' comprise subsidiaries not managed as part of
the investment portfolio.
Profit/(loss) before Total assets
tax
6 mths 6 mths Year
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2016 2015 2016 2016 2015 2016
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------- ------- ------- ------ ------- ------- -------
Pool
Quoted 37.7 (54.5) (33.9) 425.1 475.5 449.3
Income & Growth 16.3 (14.3) (0.8) 202.4 191.8 194.1
Unquoted 26.8 30.6 79.2 680.5 518.0 646.3
Funds 44.5 (8.1) 18.6 371.6 309.5 308.4
--------------------------- ------- ------- ------ ------- ------- -------
Portfolio 125.3 (46.3) 63.1 1,679.6 1,494.8 1,598.1
Other investments 0.5 0.1 1.0 36.5 13.4 11.1
--------------------------- ------- ------- ------ ------- ------- -------
Total revenue/ investments 125.8 (46.2) 64.1 1,716.1 1,508.2 1,609.2
Cash and equivalents 0.1 0.1 0.2 29.4 11.7 22.9
Other items (15.0) (12.0) (28.1) 42.5 123.7 42.9
--------------------------- ------- ------- ------ ------- ------- -------
Reportable total 110.9 (58.1) 36.2 1,788.0 1,643.6 1,675.0
--------------------------- ------- ------- ------ ------- ------- -------
8. Related parties
Other than noted below, the nature of related party transactions
has not changed significantly from those described in the company's
annual report for the year ended 31 March 2016. There were no
transactions with related parties during the six months ended 30
September 2016 which had a material effect on the results or the
financial position of the company or of the group.
During the period, the company's Employee Share Trust purchased
300,000 shares from The Cayzer Trust Company Ltd, which held 35.5%
of the company's total voting rights, at the prevailing market
price, for GBP7.3m.
Caledonia Group Services Ltd, a wholly-owned subsidiary of the
company, provides management services to the company. During the
period, GBP11.1m was charged to the company (30 September 2015 -
GBP9.6m and 31 March 2016 - GBP20.6m).
9. Capital commitments
At 30 September 2016, the company had undrawn fund and other
commitments totalling GBP268.3m (30 September 2015 - GBP190.7m and
31 March 2016 - GBP282.6m).
10. Fair value hierarchy
The table below analyses financial instruments held at fair
value according to the subjectivity of the valuation method, using
the following hierarchy:
Level Quoted prices (unadjusted) in active markets
1 for identical assets.
Level Inputs other than quoted prices included within
2 Level 1 that are directly or indirectly observable.
Level Inputs for the asset that are not based on
3 observable market data.
Group Company
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2016 2015 2016 2016 2015 2016
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------- ------- ------- ------- ------- ------- -------
Investments held at fair value
Level 1 626.1 666.0 642.0 626.1 666.0 642.0
Level 2 193.1 122.3 136.9 197.8 119.7 145.9
Level 3 896.9 719.9 830.3 883.4 720.7 816.8
------------------------------- ------- ------- ------- ------- ------- -------
1,716.1 1,508.2 1,609.2 1,707.3 1,506.4 1,604.7
------------------------------- ------- ------- ------- ------- ------- -------
Movement in Level 3 financial instruments was as follows:
6 mths 6 mths Year
30 Sep 30 Sep 31 Mar
2016 2015 2016
GBPm GBPm GBPm
------------------------------------------------------- ------ ------- -------
Group
Balance at the period start 830.3 751.0 751.0
Reclassifications - (45.3) (45.3)
Purchases 104.1 93.8 204.4
Disposal proceeds (66.2) (107.8) (158.2)
Gains and losses on investments sold in the period 23.9 67.5 110.7
Gains and losses on investments held at the period end 4.8 (39.3) (32.3)
------------------------------------------------------- ------ ------- -------
Balance at the period end 896.9 719.9 830.3
------------------------------------------------------- ------ ------- -------
Company
Balance at the period start 816.8 736.3 736.3
Reclassifications - (30.7) (45.3)
Purchases 104.1 93.8 204.4
Disposal proceeds (66.2) (106.5) (157.0)
Gains and losses on investments sold in the period 23.9 67.5 110.7
Gains and losses on investments held at the period end 4.8 (39.7) (32.3)
------------------------------------------------------- ------ ------- -------
Balance at the period end 883.4 720.7 816.8
------------------------------------------------------- ------ ------- -------
During the prior period ended 30 September 2015 and year ended
31 March 2016, the group and company transferred GBP45.3m from
Level 3 to Level 2 in respect of quoted market funds. In addition,
during the six months ended 30 September 2015, the company
transferred GBP14.6m from Level 2 to Level 3 in respect of a
property company investment.
The methods used to determine fair value investments are
unchanged from those described in the annual report 2016. Listed
investments are valued at bid price or the most recent transaction
price. Unlisted companies are valued according to the International
Private Equity and Venture Capital Valuation Guidelines (December
2015), using one of the following methods: price of recent
investment, multiples or net assets. The valuation of fund
interests is based on the latest fund managers' NAVs and other
investments are valued using appropriate techniques.
11. Share-based payments
The company operates a current performance share scheme and a
legacy executive share option scheme, as well as a current deferred
bonus plan. Details of these schemes were disclosed in the annual
report 2016 and the basis of measuring fair value was consistent
with those disclosures.
During the six months ended 30 September 2016, 220,825 awards
were issued under the performance share scheme (30 September 2015
and 31 March 2016 - 214,152 awards). Compulsory and voluntary
deferred bonus awards over 8,568 and 2,087 shares respectively were
granted (30 September 2015 and 31 March 2016 - 49,223 and 2,105
shares respectively). Matching awards were also granted over 10,655
shares (30 September 2015 and 31 March 2016 - 51,328 shares).
Expenses in respect of share-based payments in the period were
GBP3.3m (30 September 2015 - GBP2.6m and 31 March 2016 -
GBP5.8m).
FTSE International Limited ('FTSE') (c) FTSE 2016. '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, 2nd Floor Stratton House, 5 Stratton Street,
London W1J 8LA, United Kingdom, or from its website at
www.caledonia.com. Neither the contents of the company's website,
nor the contents of any website accessible from hyperlinks on the
company's website (or any other website) is incorporated into, or
forms part of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FEWFWDFMSEIF
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