Caledonia Investments Plc · LSE:CLDN
Caledonia Investments — FY2021 Earnings Presentation
27 slides from Caledonia Investments's earnings presentation, May 27, 2021
Slide 1: Presentation of Final Results
Presentation of Final Results Year ended 31 March 2021 Will Wyatt CEO Tim Livett CFO www.caledonia.com
Slide 2: Highlights
Highlights Year ended 31 March 2021 NAV total return +25.9% • +25.9% NAV per share total return for year (2020: -8.1%) NAV per share • Strong recovery in global equity markets provided 4000 pence +23.6% positive backdrop to overall performance (2020: 3236p) Net assets • All three pools delivered ret
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% initial yield) 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 2021 Breakdown Income Return Return Investment Pool £m % £m £m % Quoted Equity 716.1 32% 17.1 174.0 30.3% Private Capital 826.8 37% 22.8 150.0 23.2% Funds 637.1 29% 0.7 165.9 34.8% Total Pools 2,18
Slide 6: Analysis by Geography
Analysis by Geography Good geographical diversification Geography by Domicile 2% 12% UK Geography by 29% Channel Islands Revenue Source Europe 5% 2% UK N America 20% 34% Asia Europe Cash and other 23% 17% N America 6% Asia 17% Other countries Currency Distribution Cash and other 6% 2% Pound sterling
Slide 7: Analysis by Sector
Analysis by Sector See-through basis 4% 1% 17% Energy & materials Real Estate Industrials 2% Healthcare 4% 31% Consumer Technology 9% Telecom Utilities Financials 21% 11% Full year results 2021 6
Slide 8: Quoted Equity
Quoted Equity Sector leading businesses: good margins, well-managed & often global Target annual return • Two portfolios representing 32% of net assets Capital Portfolio 10% • 30.3% total return for year, split: Capital +35.9%; Income +17.5% Income Portfolio 7% • Long term compounding businesses. Re
Slide 9: Quoted Equity – Capital Portfolio
Quoted Equity – Capital Portfolio Top holdings as at 31 March 2021 Value 1 year 3 years 5 years Holdings (£m) 31 Mar 2021 Annualised Returns 35.9% 18.6% 15.8% Microsoft 50.6 Oracle 48.4 Sector Charter Communications 40.7 Distribution 5% 7% Financial Texas Instruments* 39.3 20% Industrial Consumer go
Slide 10: Quoted Equity – Income Portfolio
Quoted Equity – Income Portfolio Top holdings as at 31 March 2021 1 year 3 years 5 years Value Yield Annualised Returns 17.5% 5.2% 4.2% All Holdings over £10m (£m) 31 Mar 2021 % Reckitt Benckiser 15.1 2.7 Sector Texas Instruments* 14.6 2.2 Distribution 17% Financial Watsco* 13.9 2.5 29% Fortis 13.5
Slide 11: Private Capital
Private Capital Majority and minority growth capital in established UK businesses • 23.2% return for year • Significant Covid-19 impact on 2 consumer leisure businesses Target annual return • 3 bolt-on acquisitions during year Private Capital 14% • Portfolio recovering well from low point in March 2
Slide 12: Private Capital
Private Capital Portfolio as at 31 March 2021 1 year 3 years 5 years Value First 31 Mar Annualised Returns 23.2% 4.0% 7.4% Portfolio (£m) Invested 2021 Sector Deep Sea Electronics 2018 193.0 Distribution 3% 1% Liberation Group 2016 127.7 17% Financial Seven Investment Management 2015 126.4 Industria
Slide 13: Private Capital – Leisure Businesses
Private Capital – Leisure Businesses Year ended 31 March 2021 • Pub, restaurant and drinks business Valuation 65% • Trading very significantly affected by lockdowns £128m Year of Investment • Distribution business and Channel Islands pubs provided cost underpin 2016 • £36m acquisition of 21 pubs f
Slide 14: Private Capital – Financial Services Businesses
Private Capital – Financial Services Businesses Year ended 31 March 2021 • Retail investment manager Valuation 29% • Strong recovery in trading £126m Year of Investment • AUM of £19bn at March 2021 2015 • Acquisition of Partners Wealth Management • International family office Valuation 30% • Res
Slide 15: Private Capital – Industrial Businesses
Private Capital – Industrial Businesses Year ended 31 March 2021 Valuation • Strong rebound in profits and orders from first quarter low 65% £193m • Negotiated trading issues caused by Brexit well Year of Investment 2018 • Well poised to take advantage of post-Covid boom Valuation • April shutdown
Slide 16: Funds
Funds A portfolio of PE funds operating in North America and Asia Target annual return • 34.8% total return for year Funds 12.5% • £637m portfolio / 29% of net assets – invested in US and Asian PE funds • Portfolio invested in 49 funds giving exposure to over 1,000 businesses • Long-term investment
Slide 17: Funds
Funds Top holdings as at 31 March 2021 1 year 3 years 5 years Value Annualised Returns 34.8% 14.6% 14.9% Top Holdings (£m) 31 Mar 2021 Sector Aberdeen US PE fund of funds 98.2 Financial Distribution 1% 14% Axiom Asia fund of funds 72.5 19% Energy Industrial Stonepeak 39.8 12% Consumer goods Asia Alt
Slide 18: Financial Review
Financial Review Full year results 2021 17
Slide 19: Summary of Comprehensive Income
Summary of Comprehensive Income 31 Mar 2021 31 Mar 2020 Change £m £m £m Investment and other income 45.5 53.4 (7.9) Gains on investments and property 440.2 (206.3) 646.5 Total income 485.7 (152.9) 638.6 Expenses - ongoing management (18.9) (17.2) (1.7) - performance awards (allocated to capital expe
Slide 20: Income
Income Year ended 31 March 2021 • Income principally derived from: • Private Capital £22.8m (2020: £28.6m) • Quoted Equity £17.1m (2020: £22.4m) Year end 2021 Income £45.6m Cash and non-pool Quoted 51.6 52.7 53.4 £5.0m Capital 48.0 47.7 46.8 £10.0m 45.6 1.8% 42.8 Portfolio yield £45.6m Quoted Income
Slide 21: Change in Net Asset Value
Change in Net Asset Value Year ended 31 March 2021 NAV Movement (millions) 2300 £46 £12 £2,259 £2,225 £440 £26 2200 £34 2100 2000 1900 £1,787 1800 1700 Opening NAV Investment gain Investment Management Other Closing NAV Dividends Closing NAV income expenses before dividends Full year results 2021 20
Slide 22: Caledonia NAV/Share & Share Price Discount
Caledonia NAV/Share & Share Price Discount Performance to 31 March 2021 • Discount widened at end March following NAV uplift • Discount averaged 22% over twelve months of FY20/21 4100 35% Last 12 Months: NAV/Share & Share Price Discount 4000 3900 30% 3800 3700 25% 3600 NAV/share (p) 3500 Discount 20
Slide 23: Outlook
Outlook 1 Our diverse portfolio of listed, fund and privately owned assets is managed to deliver returns over the long term 2 We will maintain our considered approach to new investment opportunities, particularly whilst asset valuations remain elevated 3 We have a strong balance sheet, with banking
Slide 24: Appendices
Appendices Full year results 2021 23
Slide 25: Net Cash and Facilities
Net Cash and Facilities • Drawdown on our facilities during year Caledonia Net Debt Revolving 3-year 31 March 2021 facility with RBS at 150bp over LIBOR £25m £(0.8)m Caledonia Net Cash 31 March 2020 £250m Committed £114.7m facilities comprising Revolving 3 and 5-year facilities with RBS and ING at a
Slide 26: Questions
Questions If you have any questions, or to request a video meeting 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 2021 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