Caledonia Investments PLC · LSE:CLDN
Caledonia Investments — FY2005 Earnings Presentation
28 slides from Caledonia Investments's earnings presentation, May 19, 2005
Slide 1: Presentation of Preliminary results to 31 March 2005
19 May 2005 Presentation of Preliminary results to 31 March 2005 www.caledonia.com
Slide 2: Introduction – Peter Buckley, Chairman
Introduction Peter Buckley Chairman 1
Slide 3: About Caledonia
About Caledonia Investment trust since 1 April 2003 Global Growth sector of investment trusts Quoted since 1960 (FTSE 250) Distinctive style: − Long term supportive shareholder − Significant minority stakes − Normally with board position 33.5% owned by Cayzer Trust Company and 45.7% by wid
Slide 4: Objectives
Objectives Outperform FTSE All-Share Total Return over 5 and 10 years Pay a progressive dividend … and also aim to provide positive returns over 5 and 10 years 3
Slide 5: Highlights to 31 March 2005
Highlights to 31 March 2005 NAV increase in year to 31 March 2005 of 21% i.e. 9% outperformance TSR increase − 125% over 5 years – 133% outperformance − 229% over 10 years – 111% outperformance Global Growth ranking (source: Lipper) − 4th out of 37 trusts (1 year) − 1st out of 35 trusts (3 yea
Slide 6: Highlights to 31 March 2005 (continued)
Highlights to 31 March 2005 (continued) £124m invested and £218m realised during the year Proposed final dividend of 19.5 pence per share (28.2 pence for full year: +4.4%) 38th consecutive year of annual dividend increase Elective special dividend/share cancellation successfully completed
Slide 7: Business review – Tim Ingram, Chief Executive
Business review Tim Ingram Chief Executive 6
Slide 8: Summary of the twelve months to 31 March 2005
Summary of the twelve months to 31 March 2005 31.3.05 31.3.04 Change Net asset value per ordinary share* 1554p 1282p +21.2% Share price 1367p 1017p +34.4% FTSE All-Share Index 2457.7 2197.0 +11.9% Discount 12.0% 20.7% narrowed *Before accrual for final dividend 7
Slide 9: Total return: 5 years to 31 March 2005
Total return: 5 years to 31 March 2005 250 Total shareholder return rebased to 100 225 FTSE All-Share Total Return rebased to 100 200 175 150 125 100 75 50 00 01 02 03 04 05 Caledonia TR CAGR +17.6% FTSE All-Share TR CAGR - 1.7% 8
Slide 10: Annual dividend growth
Annual dividend growth* 175 Annual dividend Retail Price Index 150 125 100 95 96 97 98 99 00 01 02 03 04 05 Excluding special dividends of 30p and 70p per share in relation to 1997 and 2000 respectively Caledonia dividend CAGR 5.2% RPI 2.6% Caledonia has a 38 year record of annual dividend growth *
Slide 11: Performance attribution for the 12 months to 31.03.05 and 24 months
Performance attribution for the 12 months to 31.03.05 and 24 months since conversion 12 month 24 month change (%) change (%) Caledonia net asset performance +21.2% +69.8% FTSE All-Share Index +11.9% +41.6% Outperformance +9.3% +28.2% Outperformance due to sector selection +0.5% +7.5% Outperformance
Slide 12: Major outperformers year to 31 March 2005
Major outperformers year to 31 March 2005 Investment Value Additions/ Value Mov’t in under- % chg in value (1) 31.03.04 (£m) (Disposals) (£m) 31.03.05 (£m) lying value (£m) (adj for add/disp) Kerzner International 140.1 -62.0 117.4 39.3 +35% British Empire Securities 76.6 0 104.9 28.3 +37% Paladin R
Slide 13: Major underperformers year to 31 March 2005
Major underperformers year to 31 March 2005 Investment Value Additions/ Value Mov’t in under- % chg in value (1) 31.03.04 (£m) (Disposals) (£m) 31.03.05 (£m) lying value (£m) (adj for add/disp) Close Brothers 203.2 -57.1 139.5 -6.6 -4% SVB Holdings 15.5 0 9.5 -6.0 -39% Tribal Group 2.2 9.2 7.8 -3.6
Slide 14: Principal investments in the year to 31 March 2005
Principal investments in the year to 31 March 2005 Investments of £124m and disinvestments of £218m i) New investments Percentage held £m £m Cobepa 9.4% 22.8 Incisive Media 8.8% 10.6 Omniport 39.2% 6.0 India portfolio n.a. 7.4 Berkshire Capital 30.0% 5.1 Terrace Hill 7.5% 4.1 Seven Publishing 21.7
Slide 15: Principal investments in the year: follow on investments
Principal Investments in the year to 31 March 2005 ii) Follow on investments Aggregate held £m £m General Practice Group 30.0% 16.9 Oval 27.4% 12.5 Polar Capital funds n.a. 9.3 Tribal Group 7.4% 9.2 Melrose 6.7% 0.9 Other (including private equity draw downs) n.a. 15.5 64.3 New investments (b/fwd) 5
Slide 16: Principal Disinvestments in the year to 31 March 2005
Principal Disinvestments in the year to 31 March 2005 £m Kerzner International (rebalancing 20.2% to 10.1%) 62.0 Close Brothers (rebalancing 17.6% to 12.5%) 57.1 Aberforth (distribution) 23.8 Radio Investments 13.7 Polar Capital and funds 12.4 Distributions from private equity funds 8.1 Redleaf II 7
Slide 17: Activity since year end
Activity since year end £39.6m cash at 31 March 2005 Principal investments/disinvestments in 6 weeks since 31 March 2005 Investments £m SIS (22%) 18.0 Disinvestments F&C Asset Management 20.0 16
Slide 18: Finance Review – Jonathan Cartwright, Finance Director
Finance Review Jonathan Cartwright Finance Director 17
Slide 19: Portfolio Information: sector distribution
Portfolio Information Sector distribution as at 31 March 2005 40 FTSE Board All- Policy 35 Share Caledonia Limit* 30 Sector % % % Financial 24 27 40 25 Leisure & Media 12 17 30 % 20 Managed Funds 2 24 30 15 Ind’l & Services 23 18 30 10 Property 4 13 20 5 Other sectors 35 1 10 0 Financial Leisure & M
Slide 20: Portfolio Information (continued)
Portfolio Information (continued) Split of total assets as at 31 March 2005 % Quoted investments 66 Unquoted investments 31 Cash 3 100 At least 50% of total assets to be held in quoted investments or liquid assets 19
Slide 21: Share Price discount to NAV
Share Price discount to NAV 35% 33.5% 1 April 2003: Conversion to investment trust status 30% Share price discount to NAV 25% 2 July 2004: Elective 21 November 2002: special dividend paid Announcement of proposal to convert 20% to investment trust status 15% 12.0% 10% 5% Oct 02 Jan 03 Feb 03 Nov 02
Slide 22: Company cash flow year to 31 March 2005
Company cash flow year to 31 March 2005 £m Cash at 1 April 2004* 38.8 Acquisitions (127.4) Disposals 218.5 Ordinary Dividends (18.9) Elective Special Dividend (88.0) Investment Income 27.7 Others** (11.1) Cash at 31 March 2005* 39.6 *cash in hand plus short term deposits **of which: management expen
Slide 23: Company total return year to 31 March 2005
Company total return year to 31 March 2005 £m £m Gains on investments 165.8 Income from investments 18.9 184.7 Expenses – management (10.0) Other costs (0.4) Interest payable (1.0) (11.4) 173.3 Taxation (0.1) 173.2 Total return per share (basic) 263.6p 22
Slide 24: International Financial Reporting Standards (IFRS)
International Financial Reporting Standards (IFRS) Report as from interim: 30 September 2005 Key differences − Mark listed investments to bid prices vs mid-market (IAS 39) − Incorporate difference between B/S value of pension fund assets and discounted liabilities (IAS 19) Adjustments not expe
Slide 25: Closing Remarks – Tim Ingram, Chief Executive
Closing Remarks Tim Ingram Chief Executive 24
Slide 26: Investment trust….performance driven
Investment trust….performance driven Key differentiators Valued reputation D strong deal flow (very discerning: 7 out of 153) Added value of constructive active management Largely self-managed 25
Slide 27: Outlook
Outlook Cautious approach Care not to overpay Unlikely to be geared in the near term Seeking to renew buy-back powers Hands on understanding of portfolio Investing in India and looking at opportunities in the Far East as well as traditional areas 26
Slide 28: Performance driven
4 =< CALEDONIA INVESTMENTS G Performance driven