Caledonia Investments Plc · LSE:CLDN
Caledonia Investments — FY2022 Earnings Presentation
27 slides from Caledonia Investments's earnings presentation, May 26, 2022
Slide 1: Presentation of Final Results
Presentation of Final Results Year ended 31 March 2022 Will Wyatt CEO Mat Masters CEO Designate Tim Livett CFO www.caledonia.com
Slide 2: Highlights
Highlights Year ended 31 March 2022 NAV total return +27.9% • +27.9% NAV per share total return for year (2021: +25.9%) NAV per share 5041 pence +26.0% • All 3 pools delivered strong positive returns (2021: 4000p) Net assets • High level of liquidity from cash generated by £2,783m +25.1% exits (2021
Slide 3: Performance Track Record
Performance Track Record Consistent long term outperformance • Aim to grow capital value and income over the long term (10 years) measured in real terms ✓Achieved • Target return of RPI +3% to +6% over medium / long term ✓Achieved • Aim to outperform FTSE All-Share Total Return over 10 years ✓Achiev
Slide 4: Strategy & Allocation
Strategy & Allocation Investment portfolio construction Strategic Investment Pool Description Total Return Targets Allocation Capital portfolio 10% Quoted Equity 35%-50% Income portfolio 7% (3.5% yield on cost) Private Capital UK mid-market companies 14% 35%-45% Funds US & Asia PE Funds 12.5% 20%-30
Slide 5: Summary Performance by Pool
Summary Performance by Pool Annual returns for the three pools Value NAV Investment Total Total 31 Mar 2022 Breakdown Income Return Return Investment Pool £m % £m £m % Quoted Equity 830.1 30% 23.3 100.7 14.1% Private Capital 781.7 28% 26.9 322.0 54.7% Funds 794.4 29% 5.6 230.4 38.3% Total Pools 2,40
Slide 6: Analysis by Geography
Analysis by Geography Good geographical diversification Geography by Domicile 14% 16% UK Geography by Channel Islands Revenue Source 12% Europe 16% 14% UK N America 17% Asia 2% Europe 7% Cash and other N America 35% 20% 17% Asia Other countries Currency Distribution Cash and other 6% 2% Pound sterli
Slide 7: Analysis by Sector
Analysis by Sector See-through basis 4% 1% 18% Energy & materials Real estate Industrials 2% 28% Healthcare 2% Consumer Technology 12% Telecom Utilities Financials 14% 19% Full year results 2022 6
Slide 8: Quoted Equity
Quoted Equity Sector leading businesses: good margins, well-managed & often global Target annual return • 2 portfolios representing 30% of net assets Capital Portfolio 10% • 14.1% total return for year, split: Capital +14.6%; Income +13.7% Income Portfolio 7% • Strong medium and long-term performanc
Slide 9: Quoted Equity – Capital Portfolio
Quoted Equity – Capital Portfolio Top ten holdings as at 31 March 2022 1 year 3 years 5 years Value Holdings (£m) 31 Mar 2022 Annualised Returns 14.6% 16.4% 14.6% Microsoft 62.4 Sector Oracle 58.6 Distribution 4% 7% Financial Watsco* 45.2 23% Industrial Thermo Fisher Scientific 45.0 Consumer staples
Slide 10: Quoted Equity – Income Portfolio
Quoted Equity – Income Portfolio Top ten holdings as at 31 March 2022 1 year 3 years 5 years Value Yield Annualised Returns 13.7% 8.7% 3.6% Top Ten Holdings (£m) 31 Mar 2022 % Annualised Yield 3.9% 4.6% 5.0% Watsco* 17.0 3.1 Fortis 16.2 3.3 Sector Reckitt Benckiser 15.7 2.7 Distribution 5% 19% Finan
Slide 11: Private Capital
Private Capital Majority and minority growth capital in established UK businesses Target annual return • 54.7% return for year Private Capital 14% • 2 significant realisations in the year: Deep Sea Electronics and BioAgilytix • Very strong performance underpinned by realised gains • Longer term perf
Slide 12: Private Capital
Private Capital Portfolio as at 31 March 2022 1 year 3 years 5 years Value First 31 Mar Annualised Returns 54.7% 16.1% 12.8% Portfolio (£m) Invested 2022 Sector Seven Investment Management 2015 173.7 Distribution 6% 1% Cobehold 2004 159.2 Financial Stonehage Fleming 2019 140.1 24% 43% Industrial Lib
Slide 13: Private Capital: Businesses Sold In Year
Private Capital: Businesses Sold In Year Year ended 31 March 2022 • Leading provider of backup power control systems Proceeds • Grew strongly since its acquisition by Caledonia in 2018 £242m Year of Investment • Sold to Generac Holdings in Jun 2021 - net proceeds of £242m* 2018 • Uplift in the year
Slide 14: Private Capital: Financial Services Businesses
Private Capital: Financial Services Businesses Year ended 31 March 2022 • Intermediary and private client investment management Valuation £174m • Strong performance, AUM growth FY return 41% Year of Investment • Net fund inflows of £1.6bn in the year 2015 • Well executed integration of Partners Weal
Slide 15: Private Capital: Leisure & Industrial Businesses
Private Capital: Leisure & Industrial Businesses Year ended 31 March 2022 • Pub, restaurant and drinks business Valuation £136m • Financially robust despite two years of Covid interrupted trading FY return 6% • Estate is dominated by quality destination pubs Year of Investment 2016 • Wadworth pubs p
Slide 16: Funds
Funds A portfolio of PE funds operating in North America and Asia Target annual return • 38.3% total return for year Funds 12.5% • £794m portfolio / 29% of net assets – invested in US and Asian PE funds • Portfolio invested in 64 funds managed by 40 managers • US fund investment focuses on buyout fu
Slide 17: Funds
Funds Top holdings as at 31 March 2022 1 year 3 years 5 years Value Annualised Returns 38.3% 21.9% 17.6% Top Holdings (£m) 31 Mar 2022 Sector Aberdeen US PE fund of funds 117.3 2% 4% Financial Distribution Axiom Asia fund of funds 87.6 12% Energy 24% Industrial Asia Alternatives fund of funds 49.8 C
Slide 18: Succession
Succession • Mat Masters to succeed as CEO post AGM in July • Joined Caledonia in 2005 from Grant Thornton • Head of Quoted Capital portfolio since 2010, promoted to Head of Quoted Equity in 2019 • Experienced in both quoted and unquoted investing Full year results 2022 17
Slide 19: Financial Review
Financial Review Full year results 2022 18
Slide 20: Summary of Comprehensive Income
Summary of Comprehensive Income 31 Mar 2022 31 Mar 2021 Change £m £m £m Investment and other income 56.4 45.5 10.9 Gains on investments and property 570.7 440.2 130.5 Total income 627.1 485.7 141.4 Expenses - ongoing management (21.0) (18.9) (2.1) - performance awards (allocated to capital expenses)
Slide 21: Income
Income Year ended 31 March 2022 • Income principally derived from: • Private Capital £26.9m (2021: £22.8m) • Quoted Equity £23.3m (2021: £17.1m) Year end 2022 Income £56.4m Cash and 56.4 non-pool Quoted 52.7 53.4 51.6 £0.6m Capital 48.0 47.7 46.8 £11.1m 45.5 42.8 2.3% Portfolio yield Private Capital
Slide 22: Change in Net Asset Value
Change in Net Asset Value Year ended 31 March 2022 NAV Movement (millions) 2900 £56 £17 £2,836 £571 £2,783 2800 £33 £35 £18 2700 2600 2500 2400 2300 £2,225 2200 2100 Opening NAV Net investment Investment Management Other Closing NAV Dividends Share Closing NAV gains income expenses before purchases
Slide 23: Net Cash and Facilities
Net Cash and Facilities • Started the year with £15m drawn – paid back in the first quarter • Discussions well advanced with ING to renew £112.5m facility for further 3 years to July 2025 • Proposed special dividend will cost £95m and takes yield to shareholders, over last 5 years, above 3% Caledoni
Slide 24: Caledonia NAV/Share & Share Price Discount
Caledonia NAV/Share & Share Price Discount Performance to 31 March 2022 • Discount widened at end March following NAV uplift • Discount averaged 24% over twelve months of FY21/22 Last Twelve Months: NAV/Share & Share Price Discount 35% 5000 4800 4600 30% NAV/share (p) 4400 4200 25% 4000 Discount 380
Slide 25: Outlook
Outlook 1 Diverse portfolio of listed, fund and privately owned assets managed to deliver target returns over the long term 2 High-quality holdings capable of responding to the challenges posed by inflation, supply constraints and potentially lower future growth in GDP 3 Strong balance sheet, with b
Slide 26: Questions
Questions If you have any questions, or to request a meeting/call with us, you can contact us in the following ways: • Send an email to: enquiries@caledonia.com • Call us on tel: 020 7802 8080 Full year results 2022 25
Slide 27: Caledonia Investments plc
Caledonia Investments plc Cayzer House 30 Buckingham Gate London SW1E 6NN Tel: +44 20 7802 8080 Web: www.caledonia.com