Caledonia Investments PLC · LSE:CLDN

Caledonia Investments — Investor Presentation (April 2003)

32 slides from Caledonia Investments's investor presentation, April 2003

  1. Slide 1: Performance driven

    Performance driven April 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 for £428 million „ Caledonia 37.7% owned by Cayzer Trust Company

  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 31.12.02 Caledonia FTSE All-Share 250 5 year +15% -11% 10 year +129% +92% Caledonia - Total Return Index FTSE All-Share - Total Return Index 200 150 100 50 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Source: FTSE/Datastream 4

  6. Slide 6: Dividends

    Dividends pence 30 25 20 15 10 5 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 Sep-02 Interim dividend Final dividend 35 year record of annual dividend growth 5

  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, including: − Financial services − Leisure & media − Property 6

  8. Slide 8: Business policies

    Business policies „ New investments typically £10 million - £25 million „ Influential minority stakes, typically 10-20%, or more in certain cases „ Quoted and unquoted „ Investee management appraisal paramount „ Extensive analysis „ 3rd party fund managers for sectors where in-house resources or exp

  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: Investment trust rationale

    Investment trust rationale Outstanding performance: „ TSR1 outperformance 37% (10 years to 31 December 2002) „ TSR1 outperformance 26% (5 years to 31 December 2002) „ Top quartile performance (Global Growth Investment Trusts) over 5 and 10 years „ 35 years unbroken annual dividend increase But: „ Di

  13. Slide 13: 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

  14. Slide 14: Investment trust advantages

    Investment trust advantages „ More efficient tax structure „ Clearer understanding of Caledonia „ NAV published monthly (based on BVCA guidelines) „ Potential enhanced appeal to retail investors 13

  15. Slide 15: Key issues of conversion

    Key issues of conversion Cost: „ Estimated not to exceed £20m „ Market conditions advantageous Distributable reserves: „ Plan to retain approx £450m of distributable reserves „ Underpins maintenance of progressive dividend policy Business flexibility: „ No material constraints on stated strategy 14

  16. Slide 16: Reporting timetable

    Reporting timetable „ Investment Trust conversion 1 April 2003 „ Announcement of March and April NAVs early May 2003 „ Preliminary announcement 29 May 2003 15

  17. Slide 17: Analysis of investments at valuation December 2002

    Analysis of investments at valuation 31 December 2002 - £675m Financial £219m (33%) Leisure and media £113m (17%) Property and general £118m (17%) Industrial and services £105m (15%) Investment funds £99m (15%) Technology £21m (3%) Excludes cash and other items and before estimated costs associated

  18. Slide 18: Analysis of NAV by currency

    Analysis of NAV by currency 31 December 2002 Sterling (77%) US dollar (19%) Euro (2%) Other (2%) Before estimated costs associated with conversion to Investment Trust status 17

  19. Slide 19: Caledonia's key competitive advantages

    Caledonia’s key competitive advantages 1. Favoured access to investment opportunities „ Valued reputation as supportive long term investor „ Not a “limited life fund” „ Not subject to sector whims „ Stable management team with substantial experience „ Active management contribution to growth „ Outst

  20. Slide 20: Caledonia's key competitive advantages

    Caledonia’s key competitive advantages 2. Experience in working with investments „ Ability to influence management constructively „ Proactive approach to business growth 3. Stable investment/management team 4. Value creation in fund management 5. Substantial distributable reserves underpin dividend

  21. Slide 21: Appendix 1 Financial Summary

    Appendix 1 Financial Summary

  22. Slide 22: Sector summary

    Sector summary Valuation 31 Dec 30 Sep 31 Mar Page ref. 2002 2002 2002 £m £m £m Financial 219 205 285 22 Leisure and media 113 131 148 23 Property and general 118 118 123 24 Industrial and services 105 111 140 25 Investment funds 99 98 107 26 Technology 21 20 32 27 675 683 835 Other items 27 - 22 70

  23. Slide 23: Financial

    Financial Valuation 31 Dec 30 Sep 31 Mar Page ref. Holding 2002 2002 2002 % £m £m £m Close Brothers 17.7 141 124 189 ICAP 3.01 30 32 31 Rathbones 11.7 26 26 36 ISIS Asset Management 6.2 17 17 20 Other 5 6 9 219 205 285 21 1 Reduced (6.3.03) to 2.8% 22

  24. Slide 24: Leisure and media

    Leisure and media Valuation 31 Dec 30 Sep 31 Mar Page ref. Holding 2002 2002 2002 % £m £m £m Kerzner International 20.7 72 85 111 The Sloane Club 100 29 29 16 Radio Investments 39.4 12 12 16 Other - 5 5 113 131 148 21 23

  25. Slide 25: Property and general

    Property and general Valuation 31 Dec 30 Sep 31 Mar Page ref. Holding 2002 2002 2002 % £m £m £m Quintain Estates 7.1 23 21 20 Buckingham Gate 100 20 20 21 Paladin Resources 7.61 14 11 6 Edinmore 100 12 11 3 Other 49 55 73 118 118 123 21 1 since increased to 8.1% 24

  26. Slide 26: Industrial and services

    Industrial and services Valuation 31 Dec 30 Sep 31 Mar Page ref. Holding 2002 2002 2002 % £m £m £m Offshore Logistics/Bristow 5.9 33 30 33 Amber 100 18 22 34 Sterling Industries 100 16 18 23 Wallem1 74.4 13 13 13 Other 25 28 37 105 111 140 21 1 The holding in Wallem comprised 26% of voting ordinary

  27. Slide 27: Investment funds

    Investment funds Valuation 31 Dec 30 Sep 31 Mar Page ref. Holding 2002 2002 2002 % £m £m £m British Empire Securities 19.9 51 51 62 Aberforth Partners’ fund 25.5 18 17 10 Close Investment funds 5.4 7 7 7 Other 23 23 28 99 98 107 21 26

  28. Slide 28: Technology

    Technology Valuation 31 Dec 30 Sep 31 Mar Page ref. 2002 2002 2002 £m £m £m Total 21 20 32 21 27

  29. Slide 29: Appendix 2 Biographies

    * *e5 CALEDONIA INVESTMENTS Appendix 2 Biographies

  30. Slide 30: 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

  31. Slide 31: 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

  32. Slide 32: Biographies of investment team

    Biographies of investment team Helen Ward: Corporate Development Manager After qualifying as a Chartered Accountant with Price Waterhouse, she worked for Grindlay Brandts Corporate Finance for eight years followed by a further eight years with Abbey National Corporate Development with responsibility

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