Caledonia Investments Plc · LSE:CLDN
Caledonia Investments — FY2020 Earnings Presentation
29 slides from Caledonia Investments's earnings presentation, May 27, 2020
Slide 1: Presentation of Final Results
Presentation of Final Results Year ended 31 March 2020 www.caledonia.com
Slide 2: Introduction and Highlights of the Year
Introduction and Highlights of the Year Will Wyatt CEO Full year results 2020 1
Slide 3: NAV total return growth since 1987
NAV total return growth since 1987 Long term growth in returns and dividends • +8.6% NAV per share annualised total return for period since 1987 (vs +6.9% for FTSE All-Share) 1,600 • 10 year NAV per share Caledonia NAVTR annualised total return +6.9% FTSE All-Share TR (10 year FTSE All-Share TR annu
Slide 4: Highlights
Highlights Year ended 31 March 2020 NAV total return • -8.1% NAV per share total return for year -8.1% • -16.7% share price total return (2019: +10.9%) NAV per share • Income for year flat at £34.6m 3236 pence -9.7% • Covid-19 has been a challenge to certain key assets in the (2019: 3582p) portfolio
Slide 5: 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 – but medium term weaker • Aim to outperform FTSE All-Share Total Ret
Slide 6: NAV Summary Performance by Pool
NAV Summary Performance by Pool Annual returns for the three pools Value Investment Total Total Total Return 31 Mar 2020 Income Return Return excl. FX Investment Pool £m £m £m % % Quoted Equity 574.0 22.4 (1.7) -0.3% -2.7% Private Capital 611.3 28.5 (128.6) -18.0% -18.5% Funds 450.1 2.4 (13.6) -2.8%
Slide 7: Analysis by Geography
Analysis by Geography Good geographical diversification Geography by Domicile 8% UK Geography by 12% 30% Channel Islands Revenue Source Europe 8% UK N America 5% 21% Asia Europe 30% 13% Cash and other N America 7% 22% Asia 17% Other countries Currency Distribution 4% 1% Pound sterling Cash and other
Slide 8: Covid-19 Overview
Covid-19 Overview As at 31 March 2020 • Robust trading across portfolio for 11 months of year • March saw dramatic increase in volatility in market and valuations • Quoted Equity ‒ Strategy avoids sectors most affected by Covid-19 ‒ Exceptional relative performance vs. markets • Private Capital ‒ Di
Slide 9: Strategy & Allocation
Strategy & Allocation Investment Portfolio construction Income Pool is now managed by the Quoted Equity team Strategic Investment Pool Description Return Targets Allocation Capital portfolio 10% total return (no yield target) Quoted Equity 35%-50% Income portfolio 7% total return (3.5% initial yield
Slide 10: Quoted Equity
Quoted Equity Sector leading businesses: good margins, well-managed & often global • 32% of net assets, with £22m of income • -0.3% total return for year, split: Capital +1.3%: Income -3.8% • Returns driven by: - Strong contribution from US quoted equities - Judicious investment and divestment over
Slide 11: Quoted Equity – Capital portfolio
Quoted Equity – Capital portfolio Top holdings as at 31 March 2020 Value Holdings (£m) 31 Mar 2020 Sector Microsoft 39.8 Distribution 6% 5% Financial Industrial Oracle 37.1 24% 24% Consumer goods Charter Communications 32.0 Healthcare Becton Dickinson 27.0 Telecommunications 8% Technology Spirax Sar
Slide 12: Quoted Equity – Income portfolio
Quoted Equity – Income portfolio Top holdings as at 31 March 2020 Value Yield All Holdings over £10m (£m) 31 Mar 2020 % Sector Sabre Insurance 15.3 4.5 Distribution 18% Financial Pennon Group 14.6 2.5 29% Industrial Unilever 13.1 3.5 6% Consumer goods National Grid 12.4 5.4 Technology British Americ
Slide 13: Private Capital
Private Capital Majority and minority growth capital in established UK businesses • -18.0% return in year against a 14% target return (9% capital, 5% income) • 11 holdings - £611m portfolio • 35% of net assets • Valuation impacted by Covid-19, with significant impact on consumer leisure companies •
Slide 14: Private Capital – New Investments (all H1)
Private Capital – New Investments (all H1) Year ended 31 March 2020 • One of the world’s leading independently owned family offices • Acquired a 36.7% shareholding • 2 board seats Investment by Caledonia • Over 540 employees in 11 offices in 8 geographies around the £89m world Date of Investment • U
Slide 15: Private Capital – Trading Updates
Private Capital – Trading Updates Year ended 31 March 2020 • DSE has traded strongly over year delivering double digit returns Valuation £123m 11% • Covid-19 only marginal impact on DSE's operations with all sites trading normally Year of Investment 2018 • Paid a dividend of £7.6m during the year
Slide 16: Private Capital – Trading Updates
Private Capital – Trading Updates Year ended 31 March 2020 • 7IM remains fully operational. Revenue directly linked to AUM - Valuation negatively impacted by declines in public equity markets 21% £85m • 7IM's defensively orientated funds have performed well relatively and Year of Investment has ne
Slide 17: Private Capital – Trading Updates
Private Capital – Trading Updates Year ended 31 March 2020 • Belgian based investment company, which owns a diverse portfolio of Valuation global investments 7% £97m • Portfolio in good position to withstand Covid-19 impact Year of Investment 2004 • December Y/E, valuation adjustment of 13% • US b
Slide 18: Private Capital
Private Capital Portfolio as at 31 March 2020 First Value Sector Portfolio (£m) Invested 31 Mar 2020 Distribution 5% 1% 1% Financial Deep Sea Electronics 2018 122.6 18% 32% Industrial Cobehold 2004 97.4 Consumer goods Stonehage Fleming 2019 89.5 3% Consumer services Healthcare Seven Investment Manag
Slide 19: Funds
Funds A portfolio of PE funds operating in North America and Asia • -2.3% total return for year • £450m portfolio / 25% of net assets – invested in US and Asian PE funds • Good underlying returns from PE funds, offset by adjustment of £(86)m for Covid-19 • £43m of redemptions from Quoted Market fund
Slide 20: Funds
Funds Top holdings as at 31 March 2020 Value Top Holdings (£m) 31 Mar 2020 Sector Financial Distribution 15% 1% 11% Aberdeen US PE funds 70.0 Oil & Gas 9% Industrial Axiom Asia funds 49.0 Consumer goods 15% JF Lehman funds 31.6 Consumer services Technology Asia Alternatives funds 30.1 23% Healthcare
Slide 21: Financial Review
Financial Review Tim Livett CFO Full year results 2020 20
Slide 22: Summary of Comprehensive Income
Summary of Comprehensive Income 31 Mar 2020 31 Mar 2019 Change £m £m £m Investment and other income 53.4 53.1 0.3 Gains/(losses) on investments and property (206.3) 171.4 (377.7) Total income (152.9) 224.5 (377.4) Expenses - ongoing management (17.2) (17.9) 0.7 - performance awards (allocated to cap
Slide 23: Change in Net Asset Value
Change in Net Asset Value Year ended 31 March 2020 NAV Movement (millions) 2050 £37 £2,002 2000 1950 1900 £53 1850 £1,820 £17 1800 £12 £1,787 £243 £33 1750 1700 Opening NAV FX gain Investment Investment Management Other Closing NAV Dividends Closing NAV loss income expenses before dividends Full yea
Slide 24: Income
Income Year ended 31 March 2020 • Income principally derived from: • Private Capital £28.6m (2019: £27.6m) • Quoted Equity £22.4m (2019: £23.0m) Year end 2020 Income £54.0m Cash and Quoted non-pool Capital £0.6m 2.2% 51.6 52.7 54.0 2.7% £10.1m 42.8 48.0 47.7 46.8 Portfolio yield £54.0m Quoted Privat
Slide 25: Net Cash and Facilities
Net Cash and Facilities High levels of liquidity Revolving 5-year facility with RBSi Caledonia Net Cash 31 March 2020 £25m £115m Caledonia Net Cash £250m 31 March 2019 Committed facilities £112m comprising Revolving 5-year facilities with RBSi & ING £225m Banking Facilities RBSi Facilities are for a
Slide 26: Caledonia Discount
Caledonia Discount Year ended 31 March 2020 • Discount at month end NAV/ Caledonia NAV/Share and Discount to Share Price range from 14% to 25% share pence (31 March 2015 to 31 March 2020) Discount in year 3700 Caledonia NAV/share 35% • Cayzer concert party 3500 Discount holding constrains buy- backs
Slide 27: Outlook
Outlook 1 The majority of our investments are in a good position to deal with this challenging period – although outlook for those in the leisure sector is uncertain 2 We have a strong balance sheet, with cash and banking facilities to ensure that we have liquidity to take advantage of opportunities
Slide 28: Questions
Questions If you have any questions following the presentation, you can contact us in the following ways: • Send an email to: enquiries@caledonia.com • Call us on tel: 020 7802 8080 • Request a further video meeting with us – please email: enquiries@caledonia.com Full year results 2020 27
Slide 29: Caledonia Investments plc
Caledonia Investments plc Cayzer House 30 Buckingham Gate London SW1E 6NN Tel: +44 20 7802 8080 Web: www.caledonia.com