Caledonia Investments PLC · LSE:CLDN
Caledonia Investments — Shareholder Meeting (July 2023)
33 slides from Caledonia Investments's shareholder meeting presentation, Jul 19, 2023
Slide 1: Annual General Meeting
Annual General Meeting 19 July 2023 www.caledonia.com
Slide 2: David Stewart, Chair
David Stewart Chair www.caledonia.com
Slide 3: Presentation of Final Results
Presentation of Final Results Year ended 31 March 2023 Mat Masters CEO Tim Livett CFO Tom Leader Head of Private Capital www.caledonia.com
Slide 4: Highlights
Highlights Year ended 31 March 2023 • +5.5% NAV per share total return for year NAV total return +5.5% • Private Capital and Funds pools generated good returns (2022: +27.9%) NAV per share • Favourable impact of fall in value of Sterling v. US dollar 5068 pence +0.5% (2022: 5041p) • Payment of speci
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 • Target return of RPI +3% to +6% over medium / long term • Aim to outperform FTSE All-Share Total Return over 10 years 20% +19.3% +5.5% Annualised
Slide 6: Strategy & Allocation
Strategy & Allocation Investment portfolio construction Strategic Investment Pool Description Total Return Targets Allocation Capital portfolio 10% Quoted Equity 30%-40% Income portfolio 7% (3.5% yield on cost) Private Capital UK mid-market companies 14% (2.5% yield on cost) 25%-35% Funds US & Asia
Slide 7: Summary Performance by Pool
Summary Performance by Pool Annual returns for the three pools Value NAV Investment Total Total 31 Mar 2023 Breakdown Income Return Return Investment Pool £m % £m £m % Quoted Equity 836.9 30% 20.8 1.4 0.2% Private Capital 824.0 30% 20.6 64.6 8.4% Funds 873.8 31% 1.8 103.6 13.3% Total Pools 2,534.7 9
Slide 8: Analysis by Geography
Analysis by Geography Good geographical diversification Geography by Domicile UK 15% Channel Islands 16% Geography by Europe 8% Revenue Source N America 39% Asia 13% Cash and other 9% UK 17% Europe 17% N America 34% NAV Currency Asia 20% Distribution Other countries 3% Cash and other 9% Pound sterli
Slide 9: Analysis by Sector
Analysis by Sector See-through basis Industrials 20% Information technology 18% Financials 17% Consumer discretionary 14% Healthcare 12% Consumer staples 8% Materials 4% Communication services 2% Utilities 2% Energy 2% Real estate 1% AGM 2023 8
Slide 10: Quoted Equity
Quoted Equity Sector leading businesses: good margins, well-managed & often global • 0.2% total return for year, split: Capital +1.1%; Income -2.4% Target annual return • £837m across 2 portfolios / 30% of net assets Capital portfolio 10% Income portfolio 7% • Strong medium and long-term performance
Slide 11: Quoted Equity – Capital Portfolio
Quoted Equity – Capital Portfolio Top holdings as at 31 March 2023 3 years 5 years 10 years Value Top Holdings (£m) 31 Mar 2023 Annualised Returns 16.4% 14.1% 10.8% Oracle 70.1 Sector Information technology 30% Microsoft 66.6 Distribution Industrials 18% Watsco* 51.5 Materials 14% Thermo Fisher Scie
Slide 12: Quoted Equity – Income Portfolio
Quoted Equity – Income Portfolio Top holdings as at 31 March 2023 3 years 5 years 10 years Value Yield Annualised Returns 9.2% 5.2% 4.2% Top Holdings (£m) 31 Mar 2023 % Annualised Yield 3.9% 4.4% 4.6% Unilever 19.0 4.7 Watsco* 18.9 2.8 Sector Reckitt 18.4 2.9 Distribution Consumer staples 37% Indust
Slide 13: Private Capital
Private Capital Majority and minority growth capital in established UK businesses Target annual return • 8.4% return for year Private Capital 14% • £824m portfolio / 30% of net assets • Good annual performance underpinned by progress at the underlying portfolio companies • Longer term performance re
Slide 14: Private Capital
Private Capital Portfolio as at 31 March 2023 3 years 5 years 10 years Value First 31 Mar Annualised Returns 27.4% 13.5% 14.5% Portfolio (£m) Invested 2023 Sector Seven Investment Management 2015 187.1 Distribution Financials 43% Cobehold 2004 176.1 Consumer discretionary 21% Stonehage Fleming 2019
Slide 15: Private Capital: Financial Services Businesses
Private Capital: Financial Services Businesses Year ended 31 March 2023 • Intermediary and private client investment management Valuation £187m • Adversely affected by global equity markets, AUM off 5% FY return 16% • Net fund inflows from new and existing customers Year of Investment • Earnings adv
Slide 16: Private Capital: Leisure & Industrial Businesses
Private Capital: Leisure & Industrial Businesses Year ended 31 March 2023 • Pubs, bars and inns business • Estate is dominated by quality destination pubs Valuation £132m FY return -12% • Some adverse impact from cost inflation and weaker consumer demand Year of Investment • Merger with Cirrus Inns,
Slide 17: Private Capital: New Acquisition – AIR-serv
Private Capital: New Acquisition – AIR-serv April 2023 • Leading designer and manufacturer of air, vacuum and jet wash machines Investment £142.5m Equity stake 99.8% • Provides machines on revenue share or rental basis to fuel station Year of Investment forecourt operators across UK and Western Euro
Slide 18: Funds
Funds A portfolio of PE funds operating in North America and Asia Target annual return • 13.3% total return for year, aided by favourable FX movements Funds 12.5% • £874m portfolio / 31% of net assets – invested in US and Asian PE funds • Portfolio invested in 64 funds managed by 40 managers • US fu
Slide 19: Funds
Funds Top holdings as at 31 March 2023 3 years 5 years 10 years Value Annualised Returns 28.3% 18.7% 18.4% Top Holdings (£m) 31 Mar 2023 Sector Aberdeen US PE funds 114.9 Healthcare 22% Distribution Industrials 20% Axiom Asia funds 84.3 Consumer discretionary 19% Asia Alternatives funds 48.1 Informa
Slide 20: Financial Review
& gi ae CALEDONIA os INVESTMENTS Financial Review AGM 2023 19
Slide 21: Summary of Comprehensive Income
Summary of Comprehensive Income 31 Mar 2023 31 Mar 2022 Change £m £m £m Investment and other income 45.3 56.4 (11.1) Gains on investments and property 131.6 570.7 (439.1) Total income 176.9 627.1 (450.2) Expenses - ongoing management (21.3) (21.0) (0.3) - performance awards (allocated to capital exp
Slide 22: Statement of Financial Position
Statement of Financial Position 31 Mar 2023 31 Mar 2022 Change £m £m £m Investments 2,795 2,385 410 Property and PPE 43 45 (2) Other assets 35 44 (9) Cash 222 341 (119) Total assets 3,095 2,815 280 Interest bearing loans (inter-company) (266) - (266) All other liabilities (31) (32) 1 Net assets 2,79
Slide 23: Change in Net Asset Value
Change in Net Asset Value Year ended 31 March 2023 NAV Movement (millions) 3000 £43 2950 £2,929 £132 £30 2900 2850 £2,798 2800 £2,783 £131 2750 2700 Opening NAV Net investment Investment Management Other Closing NAV Dividends Closing NAV gains income expenses before dividends AGM 2023 22
Slide 24: Net Cash & Facilities
Net Cash & Facilities • Revised facility arrangement signed with RBSI in November 2022 • Total value maintained at £137.5m and extended to November 2027 • Special dividend paid in August 2022 cost £95m and took shareholder yield, over last 5 years, over 3% Caledonia Net Cash 31 March 2023 Revolving
Slide 25: Share Price Performance
Share Price Performance Year to 31 March 2023 • Share price and discount has fluctuated from the impact of market volatility • NAV per share has remained stable throughout the financial year FTSE All-Share TR Index Caledonia NAV v Share Price (rebased to 100 at 31 March 22) (£ per share) 110 55 108
Slide 26: Share Price Performance
Share Price Performance Year to 31 March 2023 • UK Investment Trusts have seen average discounts widen significantly during FY22/23 Monthly average discount to NAV (UK Investment Trusts) • Average discount in March 2023 was 14.2% - up May-22 Nov-22 Mar-23 Aug-22 Apr-22 Dec-22 Feb-23 Sep-22 Oct-22 Ju
Slide 27: Share Price Performance
Share Price Performance Year to 31 March 2023 • Key tool used by Investment Trusts to manage the level of discount is share buy-backs. Caledonia is Ten Year Record unable to use this approach due to the holding of In p/share NAV Share Price Discount the Cayzer Concert Party (c.48% holding). 31/03/20
Slide 28: Trading Update – Quarter 1 FY2024
Trading Update – Quarter 1 FY2024 Performance summary • NAVTR of 0.1% for the quarter April – June Returns 5% • Strong US equity performance and modest fund valuation improvements 4% 3.3% • Sterling strengthening by c.3% against US 3% dollar has adversely impacted returns across our investments – in
Slide 29: Outlook
Outlook 1 Diverse portfolio of listed, fund and privately owned assets managed to deliver target returns over the long term 2 High-quality holdings capable of responding to the challenges posed by inflation, increased interest rates and potentially lower future growth in GDP 3 Strong balance sheet,
Slide 30: David Stewart, Chair
David Stewart Chair www.caledonia.com
Slide 31: Q&A
28 Q& A ? CALEDONIA INVESTMENTS AGM 2023 30
Slide 32: Formal business
& Formal business Mf CALEDONIA AGM 2023 31
Slide 33: Annual General Meeting
Annual General Meeting 19 July 2023 www.caledonia.com
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