Caledonia Investments PLC · LSE:CLDN

Caledonia Investments — Investor Presentation (July 2003)

26 slides from Caledonia Investments's investor presentation, July 2003

  1. Slide 1: Performance driven

    Performance driven July 2003 www.caledonia.com

  2. Slide 2: What is Caledonia?

    What is Caledonia? „ A diversified investment company „ Invest in an international spread of interests (usually headquartered in the UK) „ Building value through active participation in strategic investments „ Measure ourselves in terms of overall return 1

  3. Slide 3: Brief History of Caledonia

    Brief History of Caledonia „ Started as shipping company in 1880’s (Clan Line and subsequently Union Castle) „ Diversified into a portfolio of investments in 1960’s as British and Commonwealth „ Caledonia sold investment in B&C in 1987 „ Caledonia 37.7% owned by Cayzer Trust Company, 49.9% by wider

  4. Slide 4: Financial aims

    Financial aims „ To outperform FTSE All-Share TR over 5 and 10 years „ To maintain a progressive dividend 3

  5. Slide 5: Total return

    Total return TSR to 30.6.03 250 Caledonia FTSE Outperformance Caledonia - Total Return Index All-Share FTSE All-Share - Total Return Index 5 year +15% -18% +33% 200 10 year +170% +91% +79% 150 100 50 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Source: FTSE/Datastream 5 yr 10 yr Caledoni

  6. Slide 6: Annual dividend growth

    Annual dividend growth 200 Annual dividend Retail Price Index 175 150 125 100 93 94 95 96 97 98 99 00 01 02 03 Excluding special dividends of 30p and 70p per share in relation to 1997 and 2000 respectively Caledonia dividend CAGR 5.7% RPI 4.7% Caledonia has a 36 year record of annual dividend growth

  7. Slide 7: Business aims

    Business aims „ Manage portfolio of significant investments „ Supportive, proactive long term investor „ Sector diversification (achieve medium overall risk) „ Emphasis on selected sectors 6

  8. Slide 8: Business policies

    Business policies „ New investments typically £10 million - £25 million „ Influential minority stakes „ Quoted and unquoted „ Investee management appraisal paramount „ Extensive analysis „ 3rd party fund managers for sectors where in-house resource not available „ Seek stakes in 3rd party fund manag

  9. Slide 9: Business policies

    Business policies „ Board representation „ Working closely with investee management „ Proactively bringing growth opportunities „ Promoting synergies among investee companies „ Regular team reviews „ Investment disposals − Regular management review of all investments − Formal annual board review of

  10. Slide 10: Business policies

    Business policies „ Not less than 50% of portfolio in quoted investments and liquid assets „ Focus on 30 to 40 principal investments „ Moderate gearing, when appropriate, to enhance returns „ Cost control 9

  11. Slide 11: Investment team

    Investment team Investment management Specialist support headed by Peter Buckley* Joined in 1967 Graeme Denison* Legal & secretarial Tim Ingram* Joined in 2002 Paul Whiteley Finance Jonathan Cartwright* Joined in 1989 Tony Carter Taxation David Kinloch* Joined in 1985 Jonathan Hale Treasury Charles

  12. Slide 12: Board changes

    Board changes Strengthening of Board of Directors: „ 3 new independent non-executive directors appointed in last 18 months „ Appointment of Tim Ingram as Chief Executive in June 2002 11

  13. Slide 13: Investment trust rationale

    Investment trust rationale Outstanding performance: „ TSR1 outperformance 79% (10 years to 30 June 2003) „ TSR1 outperformance 33% (5 years to 30 June 2003) „ Top quartile performance (AITC Global Growth Investment Trusts) over 5 and 10 years „ 36 years unbroken annual dividend increase Prior to con

  14. Slide 14: Investment trust rationale

    Investment trust rationale Reasons for significant discount included: „ Liability for tax on chargeable gains „ No real comparator in Speciality and Other Finance sector listing „ Insufficient market understanding of strategy and valuation „ Absence of regular information on NAV „ Limited stock liqu

  15. Slide 15: Investment trust advantages

    Investment trust advantages Post conversion: „ More efficient tax structure „ Clearer understanding of Caledonia „ NAV published monthly (based on BVCA guidelines) „ Potential enhanced appeal to retail investors „ narrowing of share price discount to NAV (reduced from 33.5% at 30 September 2002 to 2

  16. Slide 16: Investment trust advantages

    Investment trust advantages „ No CGT liability: ¾ no actual CGT payable ¾ avoids costly tax planning ¾ purer divestment decisions 15

  17. Slide 17: Sector distribution vs FTSE All-Share at 30 June 2003

    Sector distribution vs FTSE All-Share at 30 June 2003 Caledonia Sector Caledonia FTSE % % Financial 32 25 Leisure and media 20 11 Managed Funds 17 2 FTSE All-Share Industrial and services 16 21 Property 11 4 Technology 2 10 Other sectors 2 27 Caledonia % weighting versus FTSE All-Share % weighting 1

  18. Slide 18: Analysis of NAV by currency

    Analysis of NAV by currency 30 June 2003 74% Sterling US dollar Euro Other 1% 3% 22% 17

  19. Slide 19: Analysis of NAV by geography

    Analysis of NAV by geography 30 June 2003 73% United Kingdom Rest of Europe North America Rest of the World 4% 1% 22% 18

  20. Slide 20: Top ten investments - 30 June 2003

    Top ten investments - 30 June 2003 Business % holding Valuation Country % of of holding portfolio £m Close Brothers Group * Merchant bank 17.6 164 UK 21.1 Kerzner International ** Resort operator 20.7 113 Bahamas 14.6 British Empire Securities Investment trust 19.9 58 UK 7.4 & General Trust * Offsho

  21. Slide 21: Principal investments since year end

    Principal investments since year end „ £44m cash at 30 June 2003 „ £60m of bank facilities available „ Investments since 31 March 2003 - Easybox (£8m) - Paladin (£4m) - SVB (£6m) - further follow-on investments totaling £6m 20

  22. Slide 22: Investment trust....performance driven

    Investment trust….performance driven „ Key Differentiators ¾ Valued reputation strong deal flow ¾ Added value of constructive active management ¾ Largely self-managed ¾ More than £450m of distributable reserves underpins progressive dividend policy 21

  23. Slide 23: Appendix 1 Biographies

    * *e5 CALEDONIA INVESTMENTS Appendix 1 Biographies

  24. Slide 24: Biographies of investment team

    Biographies of investment team Peter Buckley: Chairman A member of the Institute of Chartered Accountants of Scotland, he joined B&C in 1967 and became a director of Caledonia in 1976, chief executive in 1987 and chairman in 1994. He is a non-executive director of Close Brothers Group, Offshore Logi

  25. Slide 25: Biographies of investment team

    Biographies of investment team Charles Cayzer: Executive Director Having gained experience of merchant banking, commercial banking and corporate and project finance with Baring Brothers, Cayzer Irvine & Co and Cayzer Ltd, he was appointed a director of Caledonia in 1985. He is also a director of sev

  26. Slide 26: Biographies of investment team

    Biographies of investment team Guy Crawford: Investment Manager After qualifying as a Chartered Accountant, he returned to Scotland to manage the UK and US assets of Scottish United Investors, one of the larger international investment trusts. In 1985, he was a founder director of Dunedin Fund Manag

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