REG - Caledonia Investmnts - Final Results
20/05/2025 07:00
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RNS Number : 2988J Caledonia Investments PLC 20 May 2025
Caledonia Investments plc
Final results for the year ended 31 March 2025
Financial highlights
Year Year
31 March 2025 31 March 2024
Net asset value per share total return(1) 3.3% 7.4%
Net asset value per share 5475p 5369p
Net assets £2,932m £2,965m
Annual dividend per share 73.6p 70.4p
1. NAV total return, investment return and pool returns are Alternative
Performance Measures - see note 8.
A presentation for analysts will take place at 09:30 on 20 May 2025, with a
live webcast available via this link: Caledonia Investments plc : Full-Year
Results Presentation | SparkLive | LSEG
(https://sparklive.lseg.com/CaledoniaInvestments/events/d3da5837-756a-4124-a7f6-cb2d36061a8c/caledonia-investments-plc-full-year-results-presentation)
Mat Masters, Chief Executive Officer, commented:
"Caledonia has delivered another year of positive performance, with our
long-term, disciplined investment approach continuing to prove its strength
within a macroeconomic and geopolitical backdrop that remains highly volatile.
All three of our investment pools contributed to growth, demonstrating the
resilience and quality of our diversified portfolio.
The performance has further extended our track record of delivering consistent
real returns for shareholders, alongside 58 years of consecutive dividend
growth. The uncertain operating environment currently shows little sign of
easing, but our focus remains on allocating capital prudently, investing in
high-quality companies and fund managers with track records of success, and
continuing to position Caledonia to compound value for our shareholders over
the long term."
NAV total return of 3.3%
● NAV of £2,932m (5,475p per share) +3.3% NAV total return ('NAVTR')
● All three investment pools contributed to growth, with the investment
portfolio delivering a return of 3.5% in the year, inclusive of foreign
exchange headwinds of c.£42m
- +4.7% return from Public Companies reflecting strong performance during
the year impacted public equity market volatility in March
- +3.7% return from Private Capital with good performance from AIR-serv
Europe and Stonehage Fleming partially offset by the previously reported
reduction in the valuation of Cooke Optics
- +2.2% return from Funds with continued positive performance from our North
American funds (+8.4% in local currency) offset by a small negative
contribution from our Asia funds (-1.6% in local currency)
58 consecutive years of progressive dividend growth
● Proposed final dividend of 53.91p per share, taking total dividend for the
year to 73.6p per share, a 4.5% increase compared to 2024 and extending our
record of growing annual dividends to 58 consecutive years
● Change in the dividend payment profile from 2025/2026 to increase the interim
dividend to 50% of the prior year's total annual dividend
Robust balance sheet with significant liquidity, well positioned to take
advantage of investment opportunities
● Net cash of £151m
● New undrawn revolving credit facility of £325m, increased from £250m,
providing total liquidity of £476m
Increased flexibility for share buybacks
● Independent shareholder approval of an uncapped Rule 9 Waiver in December 2024
gives Caledonia increased flexibility to repurchase shares
● £63m allocated to share buybacks, with 1,729,061 shares repurchased at an
average discount of 34%, resulting in a 59.2p accretion to NAV per share
Seeking shareholder approval for a 10:1 share split
● Seeking shareholder approval at the annual general meeting on 16 July 2025 for
a 10:1 share split, making Caledonia shares more accessible to a wider range
of investors
Performance to 31 March 2025
1 year 3 years 5 years 10 years
% % % %
NAV total return 3.3 17.0 88.3 135.7
Annualised
NAV total return 3.3 5.4 13.5 9.0
CPIH(1) 3.4 5.3 4.6 3.2
FTSE All Share total return 10.5 7.2 12.0 6.2
1. Consumer Prices Index including owner occupiers' housing costs ('CPIH').
20 May 2025
Enquiries
Caledonia Investments plc Teneo
Mat Masters (CEO), Rob Memmott (CFO) Tom Murray, Robert Yates
+44 20 7802 8080 +44 20 7260 2700
Chair's statement
Results
I am pleased to report another year of positive performance at Caledonia, with
NAVTR of 3.3%. This has further extended our track record of generating
long-term real returns, outperforming inflation by 5.8% p.a. over the last
decade, at the top end of our medium to long term goal. Our portfolio
delivered a 3.5% return against an increasingly uncertain macroeconomic and
geopolitical backdrop. All three of our investment pools contributed to growth
in the year.
Income and dividend
Investment and other income(1) decreased from £62.7m to £53.6m(2) and total
net revenue was £30.9m(3). As reported in previous years, we expect a gradual
reduction in investment income as we maintain our focus on total returns and,
over time, we anticipate that net distributions from our fund investments will
play a more material role in dividend cover. The Funds pool generated a net
cash inflow of £43.8m which, together with net revenue, was sufficient to
cover our proposed annual dividend.
The board is recommending a final dividend of 53.91p per share for the year
ended 31 March 2025 which, if approved by shareholders, will be payable on 7
August 2025 to ordinary shareholders on the register on 27 June 2025. This
represents a full-year dividend of 73.6p per share, an increase of 4.5% when
compared to the previous year, and 58 consecutive years of increased annual
dividends.
We remain committed to our progressive dividend policy which aims to increase
annual dividends by at least the rate of inflation over the long term. The
board intends to increase future interim dividends to 50% of the prior year's
total annual dividend, commencing later this year. This will ensure a more
balanced dividend profile than has been paid historically and provide a more
predictable income stream to our shareholders.
Share split
The board is recommending a 10:1 share split which, if approved by
shareholders at the forthcoming annual general meeting, is planned for
implementation on 17 July 2025. This will reduce the nominal value of
ordinary shares from 5p to 0.5p and is expected to improve accessibility for a
wider range of shareholders.
Share buybacks and general meeting
The Cayzer family concert party (the 'Concert Party') is a long-term
shareholder and the source of Caledonia's strong culture and long-term
outlook. Share buybacks increase the percentage of voting rights held by the
Concert Party. Previously, in circumstances where the Concert Party owned more
than 30% but less than 50% of the shares, any increase in the percentage of
shares it owned could have triggered an obligation on the Concert Party to
make a mandatory offer for the company under Rule 9 of The City Code on
Takeovers and Mergers (the 'Code'). Independent shareholders were therefore
asked each year to renew a waiver of these mandatory offer provisions such
that they would not be triggered provided that the Concert Party's percentage
holding in the company did not exceed 49.9%.
This cap on the Concert Party's holding was constraining the company's ability
to buy back any further shares. During the year the board carefully considered
the possibility of taking steps to remove the 49.9% cap and to seek approval
for further buybacks which could result in the Concert Party's interest in the
company's voting rights increasing beyond 50%. I was pleased to take part in
meetings with independent shareholders to discuss this.
Two resolutions were proposed at a general meeting held on 18 December 2024.
The first resolution refreshed the authority to make market purchases of
ordinary shares. The second resolution sought approval of an uncapped waiver
of any requirement on the Concert Party to make an offer for the company under
the Code's mandatory offer provisions due to share buybacks. The board is
pleased that both resolutions were duly passed, giving the company flexibility
to buy back its shares in the future. In considering whether to do this, the
board will continue to take into account the liquidity of the company's
shares, its ongoing investment strategy and the level of any discount at which
the shares are trading in the market relative to NAV per share.
Since the general meeting, the Concert Party's percentage holding in the
company has increased to over 50%. As at 19 May 2025, the Concert Party
holding was 50.4%.
Chairing the board
The board has asked that I extend my tenure for one final year, until no
longer than the annual general meeting in 2026. This is subject to my
re-election being approved by shareholders in July.
Annual general meeting
Each year I, together with my board colleagues, very much welcome the
opportunity to meet with shareholders in person at our annual general meeting
which once again takes place in London on 16 July 2025.
Outlook
As Mat outlines in his report, the unstable macroeconomic and geopolitical
backdrop is likely to continue, causing a degree of uncertainty across the
portfolio. However, Caledonia's investment strategy takes a long-term view. We
have a diversified portfolio of high quality, well managed and profitable
companies alongside investments in funds with track records of success. We
continue to focus on the quality and resilience of each investment. While
Caledonia is a long-term investor, an active approach to portfolio management
enables us to take advantage of opportunities as they arise.
David Stewart
Chair
1. Revenue account.
2. Including the benefit of £9m of revenue from non-consolidated
subsidiaries.
3. Alternative Performance Measure - see note 8.
Chief Executive Officer's report
Caledonia's long term investment approach of 'Time Well Invested', making
thoughtful compounding investments, has underpinned another year of positive
performance, with NAVTR of 3.3%. This performance continues to build on our
track record of delivering long term real returns, outperforming both
inflation and the FTSE All-Share total return over the past decade. Alongside
this, we have increased dividends paid to shareholders for 58 consecutive
years.
We have delivered this performance against an increasingly uncertain
macroeconomic and geopolitical backdrop, demonstrating the strength and
resilience of our diversified, global portfolio of quality companies and
funds, with all investment pools contributing to growth in the year.
In particular, in the latter part of our financial year, changes in US trade
policy introduced significant uncertainty into the global economic outlook.
Market volatility rose significantly in March as investors assessed the
potential implications of higher tariffs and escalating US-China trade
tensions on global growth, productivity and inflation. This volatility, along
with recent elevated levels of inflation, has reduced short-term real returns.
We believe our focus on investing in high quality, well managed companies, as
well as fund managers with track records of success, positions us well to
navigate the current uncertainty.
Years to 31 March 1 year 3 years 5 years 10 years
% % % %
Annualised performance
NAVTR 3.3 5.4 13.5 9.0
Total shareholder return(1) 10.2 3.7 11.0 7.5
CPIH 3.4 5.3 4.6 3.2
FTSE All Share total return 10.5 7.2 12.0 6.2
1. Alternative Performance Measure - see note 8.
Performance highlights
We invest across private and public markets. Overall the portfolio generated a
return of 3.5% in the year. This included adverse foreign exchange movements
which negatively impacted returns by 1.4%.
Annualised investment pool returns
Years to 31 March 1 year 3 years 5 years 10 years
% % % %
Public Companies 4.7 5.5 11.8 8.4
Private Capital 3.7 8.1 19.2 12.4
Funds 2.2 5.8 17.1 13.3
Our Public Companies pool is invested in high-quality, well-managed businesses
with strong market positions and pricing power. The global portfolio is split
between capital and income investments, with the latter providing an important
contribution to cover our cost base and dividend. Performance was affected by
the market volatility nearing the end of the year. Despite this, the pool
delivered a 4.7% return in the year.
Within Private Capital, we acquired Direct Tyre Management ('DTM'), adding
another excellent business to our portfolio of directly held private assets.
DTM is the UK's leading provider of outsourced tyre management services - a
fantastic technology led solution enabling its customers to maximise fleet
efficiency. Both Stonehage Fleming and AIR-serv Europe continued to report a
strong performance, resulting in an increase in their valuations. This has
been partially offset by a decline in the valuation of Cooke Optics. As
previously reported, following the Hollywood strikes in 2023, demand for
Cooke's products has taken longer than we anticipated to recover. As a result
we have reflected a more conservative outcome in our valuation of the
business. Overall, Private Capital reported a return of 3.7%.
Our Funds pool delivered a net positive cashflow of £44m following a subdued
prior financial year. Our North America portfolio delivered an 8.4% return in
local currency, with gains being driven by strong underlying operating
performance and realisation activity. Our Asia portfolio return was -1.6% in
local currency, which reflects the more challenging market conditions in the
region. Taken together and including the negative impact of foreign exchange
movements, our Funds pool produced a return of 2.2% in the year.
Liquidity and balance sheet
A strong financial position is core to Caledonia's strategy. We ended the year
with net cash of £151m which, alongside our £325m revolving credit facility,
provides significant liquidity to invest in attractive opportunities as they
arise.
Shareholder returns
Broader market volatility and sentiment towards investment companies continue
to weigh on ratings across the sector, and in particular those investment
companies that invest in private assets, many of which continue to trade at
significant discounts to net asset value.
Caledonia's share price increased by 10.2% on a total return basis over the
year, with the discount narrowing from 39% to 35%. Despite this reduction in
discount, we believe the share price continues to fundamentally undervalue the
quality of our portfolio and our long-term track record.
Alongside continuing to deliver long-term compounding returns, addressing the
discount remains a priority for the board and management team; it is important
for shareholders to capture more fully the long-term increase in net asset
value per share. There is no single solution to narrowing the discount. During
the year we have focused much of our efforts on improving our investor
relations and communications activities including launching a series of events
profiling each of our investment pools and our differentiated approach. The
first of these, the Private Capital Spotlight, was held in January and we will
host a similar spotlight for our Public Companies pool in June 2025.
As covered in the Chair's statement, alongside improving communication, we
also increased our ability to repurchase shares, which is highly accretive to
NAV per share. We are announcing today two further initiatives: a 10:1 share
split which we hope will make our shares more accessible to a wider range of
investors and a change to our dividend payment profile. A reliable source of
income is important to our shareholders and our progressive dividend policy
aims to increase annual dividends by at least the rate of inflation over the
long term.
People
Our employees remain our greatest asset and we are committed to fostering an
environment that enables us to attract, retain and nurture exceptional people.
This year, we have continued to strengthen the team across a number of
functions, promoting internal talent and bringing in new expertise. I would
like to thank my colleagues for their unwavering enthusiasm and dedication,
which drives the success of our business.
Caledonia's long-term ethos and culture focused on 'Time Well Invested' is
central to our working environment. During the year, we completed our second
anonymised employee engagement survey and are delighted to have received a 92%
response rate with 96% of responders recommending Caledonia as a 'great place
to work'. We benchmark our analysis against businesses within the UK's
financial services sector and are pleased that Caledonia is represented in the
top quartile for both participation rates and engagement scores.
Our approach to responsible investment
As we highlight in the Sustainability section of our 2025 annual report, we
have further developed our approach to responsible investment. During the
year, through our working group, we have strengthened our investment processes
and continue to consider the issues associated with climate change and its
potential impact on our business and portfolio. This year, for the first
time, we are disclosing emissions for our Private Capital pool. Our third
Taskforce on Climate-related Financial Disclosures report will be published
alongside the annual report.
Looking forward
We believe our diversified, global portfolio is well positioned to weather the
uncertainties of the current market. We invest in businesses with strong
market positions and fundamentals. We have a diversified portfolio of high
quality, well managed and profitable companies. This strategy has delivered
compounding real returns. Central to our success is a long term perspective
underpinned by our robust evergreen balance sheet. These strengths enable us
to look through shorter term volatility and take advantage of the long term
opportunities arising from market disruptions.
Mat Masters
Chief Executive Officer
Investment review
Caledonia is a long term investor in both listed and private markets via three
pools: Public Companies, Private Capital and Funds. Each investment pool is
managed by a specialist team investing in well-managed businesses that combine
long-term growth characteristics with, in many cases, an ability to deliver
increasing levels of income.
To ensure that we maintain a balanced portfolio, each of our investment pools
has a strategic allocation range. At 31 March 2025, all of our investment
pools were within their strategic allocation ranges.
Strategic allocation Allocation NAV at 31 March 2025
Public Companies 30%-40% 33%
Private Capital 25%-35% 30%
Funds 25%-35% 31%
Overall performance
At 31 March 2025, the investment portfolio was valued at £2,732.7m,
generating a return of 3.5% during the year. All investment pools contributed
to growth, with performance delivered against a continuing backdrop of
uncertainty and economic headwinds, underscoring the value of our diversified
global portfolio of high-quality well-managed businesses with strong market
fundamentals, alongside funds with strong track records of success.
Investment activity
During the year, we invested a total of £320.3m into the portfolio, against
which £336.4m of proceeds were received, resulting in net inflow of £16.1m.
Investment movements in the year
31 Investments Realisations(3) Accrued income Gains / (losses) 31 Income Return(4)
March 2024 March
2025
£m £m £m £m £m £m £m %
Public Companies 949.8 106.8 (114.2) - 22.3 964.7 21.8 4.7
Private Capital 820.3 83.7 (48.6) 2.2 13.1 870.7 17.5 3.7
Funds 926.3 129.8 (173.6) - 14.8 897.3 4.4 2.2
Total pools 2,696.4 320.3 (336.4) 2.2 50.2 2,732.7 43.7 3.5
Other investments(1) 18.0 - (0.8) - (6.3) 10.9 9.0
Total investments(2) 2,714.4 320.3 (337.2) 2.2 43.9 2,743.6 52.7
Net cash 227.4 151.3
Other net (liabilities) / assets 23.5 36.7
Net assets 2,965.3 2,931.6
1. Other investments comprise legacy investments, cash, receivables and
deferred tax liability in subsidiary investment entities.
2. Total investment portfolio at 31 March 2024 included £19.0m relating to
one investment that was classified as assets held for sale in the Group's
Statement of financial position and was realised during the year to 31 March
2025.
3.Private Capital realisation of £48.6m relates to the repayment of a bridge
loan relating to the acquisition of DTM and the realisation of Bloom.
4. Returns for investments are calculated using the Modified Dietz
methodology.
Investments summary
Holdings over 1% of net assets at 31 March 2025 were as follows:
Net
Value assets
Name Pool Geography Business £m %
Stonehage Fleming Private Capital Chan Is. Family office services 221.4 7.6
AIR-serv Europe Private Capital UK Forecourt vending 197.7 6.7
Cobepa Private Capital Europe Investment company 192.7 6.6
Butcombe Group Private Capital Chan Is. Pubs, bars & inns 136.5 4.7
HighVista Strategies Funds US Funds of funds 99.9 3.4
Philip Morris Public Companies US Tobacco & smoke-free products 90.1 3.1
Watsco Public Companies US Ventilation products 76.6 2.6
Microsoft Public Companies US Software 73.6 2.5
Axiom Asia funds Funds Asia Funds of funds 73.4 2.5
Oracle Public Companies US Software 72.3 2.5
Texas Instruments Public Companies US Semiconductors 64.2 2.2
De Cheng funds Funds Asia Private equity funds 58.5 2.0
Direct Tyre Management Private Capital UK Tyre management services 55.0 1.9
Cooke Optics Private Capital UK Cinematography lenses 44.1 1.5
Fastenal Public Companies US Industrial supplies 43.1 1.5
Charter Communications Public Companies US Cable communications 40.4 1.4
Unicorn funds Funds Asia Funds of funds 39.9 1.4
Thermo Fisher Scientific Public Companies US Pharma and life sciences services 38.7 1.3
Moody's Corporation Public Companies US Financial services 38.3 1.3
Asia Alternatives funds Funds Asia Funds of funds 38.2 1.3
Hill & Smith Public Companies UK Infrastructure 35.6 1.2
Croda International Public Companies UK Speciality chemicals 34.6 1.2
Boyne funds Funds US Private equity funds 33.4 1.1
Pool Corp Public Companies US Pool services 31.9 1.1
Spirax Sarco Public Companies UK Steam engineering 31.0 1.1
AE Industrial funds Funds US Private equity funds 29.0 1.0
Stonepeak funds Funds US Private equity funds 28.6 1.0
CenterOak funds Funds US Private equity funds 28.5 1.0
Alibaba Group Public Companies Asia E-commerce 28.5 1.0
Other assets 757.0 25.5
Investment portfolio 2,732.7 93.2
Cash and other net assets 198.9 6.8
Net assets 2,931.6 100.0
Public Companies
Strategy
The Public Companies pool provides Caledonia with exposure to a concentrated
portfolio of high-quality well-managed businesses. The qualities we focus on
include a strong market position, good and sustainable returns on capital, and
experienced management teams, which are closely aligned with long-term
investors. We expect that a combination of these factors will reward patient
long-term ownership. The portfolio is well positioned to withstand short-term
market volatility, which we believe does not materially impact the long-term
value in the businesses we own.
Caledonia's evergreen balance sheet ensures our strategy is not constrained by
the need to manage subscriptions or redemptions. This allows us to introduce
and realise capital to and from the pool when markets provide good
opportunities.
The global portfolio comprises two strategies, the Capital and the Income
portfolios, each generally holding between 15 and 20 companies. The Income
portfolio aims to deliver an initial yield on invested cost of 3.5% with the
dividend per share from these holdings growing ahead of inflation over the
longer term. The Capital portfolio has no dividend target, is unconstrained
and, consequently, should produce higher returns over time. The portfolios are
managed by a single team, with no benchmark, and with the same research
methodology and investment discipline.
Performance
During the year, the Public Companies pool generated a total return of 4.7%
(6.6% in local currencies). Over the last 10 years the Public Companies pool
has delivered returns of 8.4% p.a..
Public Companies - Capital portfolio
Performance
At the year end, the Capital portfolio was valued at £697.9m and delivered a
return of 3.6% in the year. Volatility and uncertainty in equity markets
during March 2025 had a particularly sharp impact, with a decline of 7.3% in
the month. The portfolio remains concentrated, comprising 18 holdings.
Including the impact of foreign exchange, over the last 10 years the Capital
portfolio has delivered annualised returns of 10.2% p.a..
The strongest performers in terms of share price returns were Alibaba Group
(82.4%), Philip Morris (77.1%) and Charter Communications (24.1%), primarily
driven by a combination of underlying company operating results and improved
expectations for future growth prospects. Alibaba Group's performance followed
growth in its domestic and international e-commerce businesses and an
expansion in cloud computing revenues, coupled with economic stimulus measures
in China which boosted investor confidence. Phillip Morris' smoke-free
products continue to grow strongly with net revenues up over 20% from the
prior year. Charter remains well positioned to benefit from robust free
cashflow growth as capex diminishes, particularly in the wireless market.
Gains across the Capital portfolio were partially offset by negative
contributions primarily from Croda International (-39.7%) and Spirax Sarco
(-36.8%) due to operational deleveraging amid demand headwinds in their end
markets. However, we remain confident in the longer-term prospects of both.
Investment activity
During the year, the portfolio initiated a new position in Pool Corp, a
leading US distributor of swimming pools and related outdoor living products
and sold its holding in British American Tobacco. Following a period of
strong share price appreciation, the portfolio crystalised gains on a portion
of its holdings in Fastenal, Oracle and Watsco. Other than this trading
activity remained targeted with refined positions in a number of existing
investments.
Public Companies - Income portfolio
Performance
The Income portfolio was valued at £266.9m and generated a return of 8.0% in
the year. The higher weighting to more defensive companies partially shielded
its performance from the volatility in equity markets during March 2025. Like
the Capital portfolio, it is concentrated, comprising 17 holdings. Including
the impact of foreign exchange, over the last 10 years the Income portfolio
has delivered annualised returns of 4.6% p.a..
The strongest performers were Philip Morris (77.1%), British American Tobacco
('BAT') (43.2%), Unilever (21.0%) and Sage (20.1%). While BAT's smoke-free
business is not as well developed as that of Philip Morris, it continues to
make progress while paying an attractive dividend. Both Unilever and Sage
continued to execute well against their stated strategies.
Gains were partially offset by weaker share price performances from Croda
International (-38.8%) and Diageo (-28.6%). Both companies have suffered from
an extended period of post pandemic normalisation in their end markets
characterised by destocking and softer demand conditions. However, we remain
positive on their longer-term prospects.
Investment activity
During the year, the portfolio initiated three new positions: Sage, a leading
accounting, HR and payroll software provider to SMEs; Howdens, the UK's
leading trade kitchen supplier; and Croda International, the speciality
chemicals company, which is also held in the Capital portfolio. The portfolio
exited positions in DS Smith, following the announcement of the agreed offer
from International Paper, together with Pennon Group and Reckitt Benckiser.
Private Capital
Strategy
The Private Capital pool comprises a small number of direct investment
holdings in private companies, predominantly in the UK mid-market. We
buy-to-own, focusing on cash generative businesses with strong growth
potential and favourable market dynamics. We typically invest £50m to £150m
in each company using low levels of leverage, providing long-term capital
along with operational and strategic support to portfolio company management
teams. Unlike many private equity firms, as a balance sheet investor, we are
not constrained by the finite life of a private equity fund. This allows us to
create fundamental value over the medium to long term allowing us to exit only
when the time is right to maximise value for shareholders. From investments
made since 2012, the strategy has returned £1.1bn of realised proceeds at an
IRR of 17% and a multiple of 1.8x cost.
Performance
At 31 March 2025, the Private Capital portfolio consisted of eight companies,
with five investments representing over 90% of value.
The portfolio was valued at £870.7m and generated a return of 3.7%, driven by
good operational performance from Stonehage Fleming and AIR-serv Europe. This
was partially offset by a reduction in the value of our investment in Cooke
Optics. Including the impact of foreign exchange, over the last 10 years the
Private Capital pool has delivered an annualised return of 12.4% p.a..
The majority of the portfolio is valued on an earnings multiple basis, with
these multiples in the range of 10 to 14.5 times last 12 months' earnings
before interest, tax, depreciation and amortisation ('LTM EBITDA'). Gearing
levels are low, with net debt typically in the range of 2 to 2.5 times LTM
EBITDA.
Investment activity
We invested a total of £68.7m during the period, primarily our £55.0m
acquisition of DTM in August 2024. We received proceeds of £33.6m from the
sale of Bloom Engineering in December 2024, at an uplift of 42.5% to the 31
March 2024 carrying value.
Portfolio summary
Stonehage Fleming, the international multi-family office, continues to deliver
strong organic growth across each of the Family Office, Investment Management
and Financial Services businesses, with revenue increasing by over 10% during
the last 12 months. The valuation at 31 March 2025 was £221.4m, a return of
32.1% for the year.
AIR-serv Europe, is a leading designer and manufacturer of air, vacuum and jet
wash machines, which it provides to fuel station forecourt operators across
the UK and Western Europe. The business has c.60% market share, with c.23,000
machines installed at over 15,000 customer locations. It has performed well
since acquisition, reporting good year-on-year growth. AIR-serv Europe
continues to trade ahead of expectations and we received our first dividend of
£6.2m in the year. The valuation at 31 March 2025 was £197.7m, a return of
20.0% for the year.
Cobepa, the Belgian based investment company, owns a diverse portfolio of 18
private global investments. The majority of the businesses within the Cobepa
portfolio continue to make progress. The valuation at 31 March 2025 was
£192.7m, a return of 7.8% (10.0% in local currency) for the year.
Butcombe Group (formerly Liberation Group), is an inns and drinks business
with an estate of 69 managed and 50 tenanted pubs, stretching from Southwest
London to Bristol and the Channel Islands. Trading performance has improved
across all three business units, with year-on-year profits increasing. The
optimisation of the Cirrus Inns business, acquired in December 2022, is also
delivering good results. Despite this improved trading, the UK operations will
be impacted by the Chancellor's increase to both National Insurance and
National Minimum Wage, accordingly the valuation at 31 March 2025 was broadly
in line with 31 March 2024 at £136.5m, a return of 0.9% for the year.
DTM, the UK's leading independent provider of outsourced tyre management
services to fleet operators, was acquired in August 2024. Headquartered in
Blackpool, DTM has over 100 employees and serves c.250 fleet customers with
c.285,000 vehicles and c.1.3 million tyres under management. Enabled by a
proprietary technology platform, which allows customers to maximise their
fleet efficiency, compliance and output, DTM connects the vehicles it manages
to a national network of over 3,500 service provider locations. Over the last
15 years, DTM has consistently delivered year-on-year growth with a revenue
CAGR of c.15%. Since acquisition we have appointed a new Chair to support the
management team and have recruited a Chief Revenue Officer, who brings
extensive industry experience and will further strengthen the sales
function. The valuation has been maintained at the equity purchase cost of
£55.0m.
Cooke Optics, a leading manufacturer of cinematography lenses, continues to be
heavily impacted by the repercussions from the Hollywood strikes in 2023.
These disputes were resolved later that year, however recovery in the
cinematography market has been slow and it is clear that it will take longer
than previously anticipated for the industry to recover to pre-strike levels.
As previously reported, we have reflected a more conservative outcome of the
timing and level of this recovery in the valuation at 31 March 2025 of
£44.1m, a reduction of 63.2% for the period. Cooke has no third-party debt.
During the year, following a comprehensive executive search, a new CEO joined
the business in January 2025. We have been working closely with the management
team as they navigate through this challenging period.
We have assessed the portfolio against the backdrop of possible global tariff
increases and, while the situation remains volatile, we do not believe any of
the companies will be materially impacted, whether directly or indirectly.
None are exposed in a way which would threaten their viability or liquidity
position. The most significant risk is that tariff increases result in a
general economic and capital markets downturn.
Funds
Strategy
We invest in funds operating in North America and Asia with a bias to buyouts.
The pool provides attractive diversification, investing in 80 funds managed by
45 managers, with an underlying portfolio of over 600 companies in our
directly held funds, across a wide range of sectors and company sizes.
The North America based funds, which represent 63% of the Funds pool (19% of
Caledonia's NAV), invest into the lower mid-market, with a focus on small to
medium sized, often owner-managed, established businesses. These funds
regularly provide the first institutional investment into these businesses,
and support their professionalisation and growth, both organically and through
M&A activity. Realisations are typically through trade sales or to other,
larger private equity funds. The North America holdings are a combination of
directly owned funds (52% of Funds pool), fund of funds investments (9% of
Funds pool) and quoted funds (2% of Funds pool).
Our Asia funds represent 37% of the Funds pool (11% of Caledonia's NAV)
investing across a wide range of sectors, which are set to benefit from wider
demographic trends, such as healthcare and technology. The funds typically
invest in businesses which have successfully developed their business model
and are in the early years of significant growth. Whilst focused on local
markets, a small number, particularly those with a healthcare focus, also
invest into the US. The pool is a combination of directly owned funds (20% of
Funds pool) with the balance (17% of Funds pool) invested with Asia
Alternatives, Axiom and Unicorn, all fund of funds providers.
Performance
At 31 March 2025, the pool was valued at £897.3m, comprising £565.7m of
North America funds, £328.7m of Asia funds and £2.9m of legacy fund
investments. The pool generated a total return of 2.2% (4.6% in local
currencies) driven by continued positive performance from our North America
holdings (8.4% in local currency) partially offset by the decline in the value
of our Asia holdings (-1.6% in local currency) reflecting the more challenging
market conditions in the region. Including the impact of foreign exchange,
over the last 10 years, the Funds pool has delivered annualised returns of
13.3% p.a..
Looking at the performance drivers in our North America primary fund
programme, alongside improved realisation activity, robust operating
performance continued to be a key driver of returns. That said, no portfolio
is immune to geopolitical and macroeconomic headwinds, but we believe our
diversified portfolio is well-positioned to navigate the ongoing uncertainty
around US trade policy and its global implications. Our North America
portfolio, focused on the lower mid-market, is composed of resilient
businesses with limited exposure to international trade flows. Whilst the
underlying companies are fundamentally sound, our managers anticipate a more
moderated distribution profile in the near-term as companies assess the
duration and economic impact of the announced US trade policy. Likewise, our
managers anticipate that new investment activity may also be impacted, and
fund drawdowns may be moderated during the period of uncertainty.
Within our Asia portfolio, we believe underlying portfolios are well
positioned, benefitting from selective exposure to high-growth sectors.
However, valuations have continued to be impacted by the weakness in local
public markets, the operating environment and reduced attractiveness of
foreign public markets for IPOs. In Asia we have seen an increase in the level
of distributions from 2024, albeit the pace of distributions has yet to
recover to the peak of 2021. Given the continued uncertainty in the macro
environment, alongside the earlier stage focus of our Asia fund holdings, we
expect the pace of distributions to take longer to return to normal levels.
Similar to our North America portfolio, our Asia holdings are predominantly
focused on domestic markets and supply chains.
Investment activity
Overall, the Funds pool generated net cash of £43.8m in the year. Drawdowns
totalled £129.8m, with 80% deployed into North America funds and the balance
into Asia funds. Distributions totalled £173.6m with 65% distributed from the
North America portfolio. Included within distributions of £173.6m, is £19.0m
from a secondary sale of an Asia fund.
Portfolio maturity
Our primary funds portfolio has a weighted average age of approximately 4.3
years (31 March 2024: 4.3 years). The weighted average age of our North
America holdings is 4.0 years (31 March 2024: 4.0 years), within the window of
a four to six year holding period typically targeted by our managers. Given
the earlier stage focus of our Asia portfolio the weighted average age of
these holdings is 4.9 years (31 March 2024: 5.1 years).
Uncalled commitments
At 31 March 2025, uncalled commitments were £415.9m (2024: £377.0m), 73% to
North America and 27% to Asia.
During the year, US$200m was committed: US$180m to North America lower
mid-market buyout funds and US$20m to an existing fund manager in the Asia
portfolio.
Financial review
Caledonia ended the year with net assets of £2,932m (5,475p per share) (2024:
£2,965m; 5,369p per share), delivering a return of 3.3% for the year. The NAV
performance reflects generally good operating performance offset by recent
equity market volatility and foreign exchange movements. Our portfolio of
high-quality companies coupled with our long-term philosophy, positions us
well to navigate uncertainty and deliver long-term real returns.
Our annualised NAVTR over 10 years is 9.0%, with 5.8% and 2.8% respective
outperformance of inflation and the FTSE-All Share index over the same period.
Change in net assets
£m
31 March 2024 2,965.3
Net investment gains 92.4
Portfolio investment income 43.7
Foreign exchange impact (42.2)
Management expenses (32.0)
Other 5.5
Net assets before dividends and share buybacks 3,032.7
Share buybacks (62.7)
Dividends paid (38.4)
31 March 2025 2,931.6
Total comprehensive income
The company seeks to generate total profits from both investment income and
capital growth. For the year ended 31 March 2025, the total comprehensive
income was £66.9m (2024: £203.4m), of which £30.9m (2024: £40.5m) derived
from revenue and £36.0m (2024: £162.9m) from capital.
31 Mar 2025 31 Mar 2024
£m £m
Revenue Capital Total Revenue Capital Total
Investment income - portfolio(1) 43.7 - 43.7 47.1 - 47.1
Net gains on fair value investments - portfolio(2) - 50.2 50.2 - 185.3 185.3
Total return 43.7 50.2 93.9 47.1 185.3 232.4
Investment income - other investments(1) 9.0 - 9.0 14.7 - 14.7
Net losses on fair value investments - other investments(2) - (6.3) (6.3) - (10.9) (10.9)
Net losses on fair value property - (1.3) (1.3) - (3.9) (3.9)
Other income 0.9 0.4 1.3 0.9 0.6 1.5
Total revenue 53.6 43.0 96.6 62.7 171.1 233.8
- ongoing management (25.9) - (25.9) (22.9) - (22.9)
- performance awards(3) - (5.8) (5.8) - (8.3) (8.3)
- transaction costs - (0.3) (0.3) - (0.1) (0.1)
- exchange movements and other (1.3) - (1.3) (0.7) - (0.7)
- other expenses (non-recurring) (2.9) - (2.9) - - -
- other transactions with intra-group (non-consolidated) entities(4) - - - (0.2) - (0.2)
Net finance costs 6.4 - 6.4 (0.2) - (0.2)
Taxation and other 1.0 (0.9) 0.1 1.8 0.2 2.0
Total comprehensive income 30.9 36.0 66.9 40.5 162.9 203.4
1. Total investment income from the portfolio and other investments £52.7m
(2024: £61.8m).
2. Total net gains / (losses) on fair value investments from the portfolio and
other investments £43.9m (2024: £174.4m).
3. Performance awards of £5.8m includes £0.5m of costs recharged to an
intra-group (non-consolidated) entity.
4. Other transactions with intra-group (non-consolidated) entities in the year
to 31 March 2024 includes a £7.2m foreign exchange gain on an intra-group
loan facility and a £7.2m interest expense on the intra-group loan facility
which is reflected in finance costs in the Group statement of comprehensive
income. The loan to the non-consolidated subsidiary was fully repaid at 31
March 2024.
Caledonia allocates expenses between revenue and capital in accordance with
guidance from the Association of Investment Companies and broader market
practice. In addition to transaction costs, share-based payment expenses are
allocated to capital. Caledonia's share-based compensation is directly linked
to investment performance and is therefore viewed as an expense against gains
on investments
Revenue performance
Total comprehensive income was £30.9m (2024: £40.5m), a decrease of £9.6m,
driven by a £5.7m reduction in investment income from non-consolidated
intra-group entities, £2.9m of non-recurring other expenses which includes
professional fees in relation to the Rule 9 Waiver announced in November 2024,
offset by higher net finance income.
Investment income in the year totalled £43.7m, £3.4m lower than the prior
year. Income from the Public Companies pool remained stable at £21.8m (2024:
£21.8m). Investment income from the Private Capital pool was £17.5m, £4.2m
lower than the prior year which included a pre-completion dividend of £5.6m
from the sale of 7IM. Investment income from the Funds pool was £4.4m (2024:
£3.6m).
Investment income from other investments totalled £9.0m representing a
distribution paid by an intra-group non-consolidated entity from trading
reserves.
The company's revenue management expenses were £3.0m higher than last year at
£25.9m (2024: £22.9m), reflecting higher personnel expenses of £2.5m,
largely due to an increase in the average number of employees. There was also
an increase in other costs, driven by legal, professional and communication
expenditure, as well as an increase in non-recoverable indirect taxes.
Ongoing charges
Our ongoing charges ratio for the year was 0.87% (2024: 0.81%). The ongoing
charges ratio is calculated on an industry standard basis, comprising
published management expenses over the monthly average net assets.
Capital performance
Total comprehensive income was £36.0m (2024: £162.9m). The movement compared
to last year is predominantly due to the lower levels of capital gains
achieved from our investments.
Net fair value gains from the portfolio were £50.2m (2024: £185.3m), and
together with portfolio investment income, as described above, of £43.7m
(2024: £47.1m) generated a total return of £93.9m (2024: £232.4m), or 3.5%.
Foreign exchange detracted from performance, with 53% of our NAV denominated
in US dollars, predominantly the 2.2% strengthening of Sterling against the US
dollar resulted in a £42.2m loss across our investment pools.
There was a reduction of £1.3m on property (2024: £3.9m reduction)
reflecting higher yields on commercial properties.
The company's capital management expenses relating to performance awards were
£5.8m (2024: £8.3m). Transaction costs of £0.3m (2024: £0.1m) were
incurred, mainly linked to due diligence work on new private equity and fund
investments.
Valuation
The company maintains a considered valuation approach to all investments,
applying caution in exercising judgement and making the necessary estimates.
All listed investments are valued based on the closing bid price on the
relevant exchange as at 31 March 2025. Private Capital investments are valued
biannually, principally on a normalised EBITDA/market multiple basis, in line
with the latest IPEV guidelines. Our holding in Cobepa is derived from the
valuation it prepares. The Funds pool valuations are based on the most recent
valuations provided by the fund managers, subject to cash movements from the
valuation date. Within our Funds pool, we also reviewed the underlying
valuation methodologies adopted by our fund managers and were satisfied that
the techniques utilised were appropriate. The NAV of the Funds pool comprised
1.3% based on valuations dated 31 March 2025, 1.6% dated 28 February 2025,
67.0% dated 31 December 2024, 30.0%, mostly funds of funds holdings, dated 30
September 2024 and 0.1% at 30 June 2024. In addition, we reviewed the
valuations to ensure any trends or company specific issues were appropriately
reflected. This included a thorough review of the potential impact of trade
tariffs.
The following table summarises the source of valuations across the portfolio,
illustrating that 75% of the portfolio value is subject to either market
prices or independent external valuation.
Pool assets by valuation method %
Quoted price 35
Fund NAV(1) 40
Earnings 25
(1) Includes Private Capital investment in Cobepa
Dividend
We recognise that a reliable source of growing dividends is an important part
of shareholder return over both the short and longer term and have extended
our record of growing annual dividends to 58 consecutive years. We paid an
interim dividend of 19.69p per share on 9 January 2025 and have proposed a
final dividend of 53.91p per share. The total annual dividend for the year of
73.6p per share is an increase of 4.5% on last year.
Including the proposed final dividend, the dividends to be paid out of revenue
earnings for the year ended 31 March 2025 total £39.0m, which is covered by
net revenue for the year of £30.9m and the net cash inflow of £43.8m from
our Funds pool.
As discussed in the Chair's and CEO's statements, we will be increasing the
interim dividend to 50% of the prior year's total annual dividend, which will
provide shareholders with a more balanced dividend payment profile and more
predictable income stream.
Capital allocation
Prudent and disciplined management of our balance sheet is key to its
continued strength and to ensure an efficient allocation of capital. To ensure
that we maintain a balanced portfolio, each of our investment pools has a
strategic allocation range. At 31 March 2025, all of our investment pools were
within their strategic allocation range.
Alongside allocation to our investment strategies, we are committed to our
dividend policy and, when appropriate, share buybacks. Following shareholder
approval for an uncapped Rule 9 Waiver in December 2024, we increased our
capacity for buybacks. Over the course of the year, we allocated £62.7m to
share buybacks, purchasing and cancelling 1,729,061 shares at an average
discount of 33.7%, resulting in a 59.2p accretion to NAV per share.
Cash flows, liquidity and facilities
During the year, we performed enhanced modelling and stress testing, which not
only informed our capital allocation but also supported our credit facility
renewal. In September 2024, the company entered into a new revolving credit
facility of £325m with three banks on improved terms. The facility comprises
£150m over a five-year term expiring in August 2029 and £175m over a three
year term expiring in August 2027. The facility increases the available
resources by £75m and provides the company with enhanced liquidity and
flexibility to support long term investment.
At 31 March 2025, total liquidity of cash and undrawn facilities was £476.3m,
comprising of £151.3m of cash and £325m of undrawn facility. Our net
investment cashflows were an inflow of £18.5m. Investment into our portfolio
totalled £318.9m. Realisations from our portfolio totalled £337.4m.
After investment income, management expenses, dividend payments to our
shareholders and share buybacks, net cash outflow was £76.1m. At 31 March
2025 our net cash was £151.3m (31 March 2024: £227.4m).
Uncalled commitments
Our total uncalled commitments were £415.9m or US$537.3m (2024: £377.0m, US$
475.8m), split 73% in North America and 27% Asia. During the year we committed
US$200m (2024: US$59m).
Foreign exchange
62% of our net asset value is non-Sterling denominated. We do not hedge our
foreign currency exposure. However, this risk is fully recognised by the
business and considered carefully within our risk management framework.
Rob Memmott
Chief Financial Officer
Risk management
Risk management is an integral part of the company's business model and
embedded within its business operations. Caledonia's risk management framework
seeks to ensure that the different parts of the group operate within strategic
risk appetite parameters and that this is integrated with its governance and
decision-making processes. The board has overall responsibility for setting
and monitoring the company's risk appetite.
Principal risks Mitigation and management Key developments
Strategic
Risks in relation to the appropriateness of the business model to deliver The company's business model and strategy are reviewed periodically, against All pools operated within their strategic banding. The capital allocation
long-term growth in capital and income. market conditions and target returns. model was further developed to support liquidity management, strengthening our
resilience to financial market volatility. An uncapped Rule 9 waiver was
Strategic risks include the allocation of capital between public and private The performance of the company and its key risks are monitored regularly by successfully completed allowing the company to buy back shares.
equity, and in relation to geography, sector, currency, yield and liquidity. management and the board.
Investor relations activity has been developed introducing spotlight sessions
for each of the investment pools. The Private Capital session in January was
well received with Public Companies and Funds to follow.
Investment
Risks in respect of specific investment and realisation decisions. Investment Investment opportunities are subject to rigorous appraisal and a multi-stage The Investment Committee met throughout the year to consider investment
risks include appropriate research and due diligence for new investments and approval process. Investment managers have well-developed networks through decisions.
the timely execution of both investments and realisations for optimising which they attract proprietary deal flow.
value.
The investment teams continue to review capacity and capability to ensure
Opportunities to enter or exit investments are reviewed regularly, being appropriate skills and resources are in place. As well as new positions, the
informed by market conditions, pricing and strategic aims. teams promote talent from within, with a number of promotions approved during
the year.
Market
Risk of losses in the value of investments arising from sudden and significant Market risks and sensitivities are reviewed regularly with actions taken, Market volatility and geopolitical risks remain and have heightened over the
movements in public market prices, particularly in highly volatile markets. where appropriate, to balance risk and return. past six months with impacts from the ongoing conflicts in Ukraine and the
Private asset valuations have an element of judgement and could also be
Middle East. However, recent market volatility is largely driven by US trade
impacted by market fluctuations. A regular review of market and portfolio volatility is conducted by the board. tariffs and ongoing uncertainty over their coverage and application.
Reviews also consider investment concentration, currency exposure and
Caledonia's principal market risks are therefore equity price volatility, portfolio liquidity. Portfolio construction, including use of private assets, The Public Companies team maintain a long-term horizon, which benefits us in
foreign exchange rate movements and interest rate volatility. provides some mitigation. volatile periods, remaining vigilant for market opportunities that may present
themselves in the short term.
Inflation, reduced from last year, is expected to remain above the Bank of
England's target in the short term. Projections indicate a return to the 2%
target in the medium term.
Exchange rate movements (particularly £ v US$) impact valuations. This is
closely monitored although there are no plans to change our unhedged position
given the long term nature of our investments.
Liquidity
Risk that liabilities, including private equity fund drawdowns, cannot be met Detailed cash forecasting for the year ahead is updated and reviewed At the end of March 2025 there was £151m cash, in addition to a £325m
or new investments cannot be made due to a lack of liquidity. Such risk can quarterly, including the expected drawdown of capital commitments. A weekly undrawn on the revolving credit facility.
arise from being unable to sell an investment due to lack of a market, or from cash update is produced, focused on the short-term cash forecast.
not holding cash or being able to raise debt.
This was renewed and increased (£250m to £325m) in the year which, in
Loan facilities are maintained to provide appropriate liquidity headroom. addition to cash, provides a substantial amount of available capital for
investment in high quality opportunities.
The liquidity of the portfolio is reviewed regularly.
Detailed cash forecasting continues to be reviewed quarterly.
ESG & climate change
Risks in relation to the successful incorporation of ESG matters and climate Caledonia's ESG knowledge, processes and policies continue to develop as ESG An assessment of the Private Capital portfolio companies' climate change risks
change impacts into our investment approach. matters are integrated into our investment approach. The pools report on ESG and opportunities was conducted for the second year, updating the approach to
and climate change information and developments, to the board annually. ensure alignment with the corporate risk framework. This supports the
Identifying opportunities to drive our approach to ESG matters, deliver strong
climate change risk and opportunities disclosures within the TCFD report.
returns and manage the risks to meet evolving stakeholder expectations.
Disclosure of carbon emissions for the Private Capital portfolio was
introduced for the first time.
Operational
Risks arising from inadequate or failed processes, people and systems, or from Systems and control procedures are developed and reviewed regularly ensuring Cyber security remains a material risk exposure, with focused activity during
external factors. that defences against cyber threats remain robust and aligned to industry the year to augment and strengthen our technical controls. As part of ongoing
standards. They are tested to ensure effective operation. controls assurance, a third party expert was engaged to review our system
Operational risks arise from failures around the recruitment, development and
controls against NIST standards (National Institute of Standards &
retention of staff, system failures and integrity issues, poor procedures, Appropriate remuneration and other policies are in place to facilitate the Technology) with actions being progressed. A system security focused
business disruption and failure to adhere to legal or regulatory requirements. retention of key staff. simulation was facilitated by a third party which stressed the control
Process failures can impact finance, IT and investment teams.
environment, indicating areas of control improvement which are being
Business continuity plans are maintained and updated as the business evolves progressed. Annual cyber security training was conducted, alongside targeted
and in response to emerging threats. This includes a specific focus on cyber phishing simulation campaigns.
security. Caledonia has internal resources to consider regulatory and tax
matters as they arise. Professional advisers are engaged, where necessary, to A new expenses system was introduced increasing efficiency and systemising
assist in specialised areas or when new laws and regulations are introduced. controls.
Group statement of comprehensive income
for the year ended 31 March 2025
2025 2024
Revenue Capital Total Revenue Capital Total
£m £m £m £m £m £m
Revenue
Investment income 52.7 - 52.7 61.8 - 61.8
Other income 0.9 0.4 1.3 0.9 0.6 1.5
Net gains on fair value investments - 43.9 43.9 - 174.4 174.4
Net losses on fair value property - (1.3) (1.3) - (3.9) (3.9)
Total net investment income 53.6 43.0 96.6 62.7 171.1 233.8
Management expenses (25.9) (6.1) (32.0) (22.9) (8.4) (31.3)
Other non-recurring expenses (2.9) - (2.9) - - -
Profit before finance costs 24.8 36.9 61.7 39.8 162.7 202.5
Treasury interest receivable 9.9 - 9.9 3.2 - 3.2
Finance costs (3.5) - (3.5) (10.6) - (10.6)
Exchange movements (1.3) - (1.3) 6.3 - 6.3
Profit before tax 29.9 36.9 66.8 38.7 162.7 201.4
Taxation 1.0 (1.7) (0.7) 1.8 0.6 2.4
Profit for the year 30.9 35.2 66.1 40.5 163.3 203.8
Other comprehensive income items never to be reclassified to profit or loss
Re-measurements of defined benefit pension schemes - 0.3 0.3 - (0.8) (0.8)
Tax on other comprehensive income - 0.5 0.5 - 0.4 0.4
Total comprehensive income 30.9 36.0 66.9 40.5 162.9 203.4
Basic earnings per share 57.5p 65.5p 123.0p 74.5p 300.2p 374.7p
Diluted earnings per share 56.7p 64.6p 121.3p 73.3p 295.7p 369.0p
The total column of the above statement represents the group's statement of
comprehensive income, prepared in accordance with IFRSs as adopted in the
United Kingdom.
The revenue and capital columns are supplementary to the group's statement of
comprehensive income and are prepared under guidance published by the
Association of Investment Companies.
The profit for the year and total comprehensive income for the year is
attributable to equity holders of the parent.
Statement of financial position
at 31 March 2025
Group Company
2025 2024 2025 2024
£m £m £m £m
Non-current assets
Investments held at fair value through profit or loss 2,743.6 2,695.4 2,748.9 2,700.7
Investments in subsidiaries held at cost - - 0.9 0.9
Investment property 12.6 13.3 - -
Property, plant and equipment 25.3 25.2 - -
Deferred tax assets 5.3 5.3 - -
Other receivables - - 30.5 35.5
Employee benefits 5.4 4.3 - -
Non-current assets 2,792.2 2,743.5 2,780.3 2,737.1
Current assets
Asset held for sale - 19.0 - 19.0
Trade and other receivables 10.3 7.3 6.4 5.0
Current tax assets 4.2 1.7 4.5 2.0
Cash and cash equivalents 151.3 227.4 148.5 227.3
Current assets 165.8 255.4 159.4 253.3
Total assets 2,958.0 2,998.9 2,939.7 2,990.4
Current liabilities
Trade and other payables (16.4) (24.4) (22.1) (38.2)
Employee benefits (3.7) (3.1) - -
Current liabilities (20.1) (27.5) (22.1) (38.2)
Non-current liabilities
Employee benefits (4.8) (5.0) - -
Deferred tax liabilities (1.5) (1.1) - -
Non-current liabilities (6.3) (6.1) - -
Total liabilities (26.4) (33.6) (22.1) (38.2)
Net assets 2,931.6 2,965.3 2,917.6 2,952.2
Equity
Share capital 3.0 3.1 3.0 3.1
Share premium 1.3 1.3 1.3 1.3
Capital redemption reserve 1.5 1.4 1.5 1.4
Capital reserve 2,689.9 2,716.6 2,691.6 2,717.1
Retained earnings 240.4 250.2 224.7 236.6
Own shares (4.5) (7.3) (4.5) (7.3)
Total equity 2,931.6 2,965.3 2,917.6 2,952.2
Undiluted net asset value 5558p 5452p
Diluted net asset value 5475p 5369p
The Company profit for the year ended 31 March 2025 was £66.0m (2024:
£202.4m).
The financial statements were approved by the board and authorised for issue
on 19 May 2025 and were signed on its behalf by:
Mat Masters Rob Memmott
Chief Executive Officer Chief Financial Officer
Statement of changes in equity
for the year ended 31 March 2025
Capital
Share Share redemption Capital Retained Own Total
capital premium reserve reserve earnings shares equity
£m £m £m £m £m £m £m
Group
Balance at 31 March 2023 3.1 1.3 1.4 2,555.4 247.4 (10.6) 2,798.0
Total comprehensive income
Profit for the year - - - 163.3 40.5 - 203.8
Other comprehensive income - - - (0.4) - - (0.4)
Total comprehensive income - - - 162.9 40.5 - 203.4
Transactions with owners of the company
Contributions by and distributions to owners
Share-based payments - - - - 6.2 - 6.2
Transfer of shares to employees - - - - (6.9) 6.9 -
Own shares purchased and cancelled - - - (1.7) - - (1.7)
Own shares purchased - - - - - (3.6) (3.6)
Dividends paid - - - - (37.0) - (37.0)
Total transactions with owners - - - (1.7) (37.7) 3.3 (36.1)
Balance at 31 March 2024 3.1 1.3 1.4 2,716.6 250.2 (7.3) 2,965.3
Total comprehensive income
Profit for the year - - - 35.2 30.9 - 66.1
Other comprehensive income - - - 0.8 - - 0.8
Total comprehensive income - - - 36.0 30.9 - 66.9
Transactions with owners of the company
Contributions by and distributions to owners
Share-based payments - - - - 4.5 - 4.5
Transfer of shares to employees - - - - (6.8) 6.8 -
Own shares purchased and cancelled (0.1) - 0.1 (62.7) - - (62.7)
Own shares purchased - - - - - (4.0) (4.0)
Dividends paid - - - - (38.4) - (38.4)
Total transactions with owners (0.1) - 0.1 (62.7) (40.7) 2.8 (100.6)
Balance at 31 March 2025 3.0 1.3 1.5 2,689.9 240.4 (4.5) 2,931.6
Company
Balance at 31 March 2023 3.1 1.3 1.4 2,554.3 236.4 (10.6) 2,785.9
Profit and total comprehensive income - - - 164.5 37.9 - 202.4
Transactions with owners of the company
Contributions by and distributions to owners
Share-based payments - - - - 6.2 - 6.2
Transfer of shares to employees - - - - (6.9) 6.9 -
Own shares purchased and cancelled - - - (1.7) - - (1.7)
Own shares purchased - - - - - (3.6) (3.6)
Dividends paid - - - - (37.0) - (37.0)
Total transactions with owners - - - (1.7) (37.7) 3.3 (36.1)
Balance at 31 March 2024 3.1 1.3 1.4 2,717.1 236.6 (7.3) 2,952.2
Profit and total comprehensive income - - - 37.2 28.8 - 66.0
Transactions with owners of the company
Contributions by and distributions to owners
Share-based payments - - - - 4.5 - 4.5
Transfer of shares to employees - - - - (6.8) 6.8 -
Own shares purchased and cancelled (0.1) - 0.1 (62.7) - - (62.7)
Own shares purchased - - - - - (4.0) (4.0)
Dividends paid - - - - (38.4) - (38.4)
Total transactions with owners (0.1) - 0.1 (62.7) (40.7) 2.8 (100.6)
Balance at 31 March 2025 3.0 1.3 1.5 2,691.6 224.7 (4.5) 2,917.6
Statement of cash flows
for the year ended 31 March 2025
Group Company
2025 2024 2025 2024
£m £m £m £m
Operating activities
Dividends and fund income distributions received 38.5 57.9 38.5 57.9
Interest received 9.9 3.8 9.9 3.8
Cash received from customers 1.3 1.5 0.5 0.6
Cash paid to suppliers and employees (29.7) (23.5) (38.8) (23.7)
Taxes received 0.2 0.1 0.2 0.1
Group tax relief received 0.5 20.9 0.9 21.1
Group tax relief paid (2.8) (0.8) (2.8) -
Net cash flow from operating activities 17.9 59.9 8.4 59.8
Investing activities
Purchases of investments (318.9) (340.8) (318.9) (340.8)
Proceeds from realisation of investments 337.4 599.7 337.4 599.7
Proceeds from repayment of loans to group companies - - 5.0 -
Purchases of property, plant and equipment (1.8) (0.5) - -
Net cash flow from investing activities 16.7 258.4 23.5 258.9
Financing activities
Interest paid (3.7) (10.4) (3.7) (10.4)
Dividends paid to owners of the company (38.4) (37.0) (38.4) (37.0)
Proceeds from bank borrowings - 70.0 - 70.0
Repayment of bank borrowings - (70.0) - (70.0)
Repayment of borrowings from non-consolidated subsidiaries - (258.8) - (258.8)
Purchases of own shares (67.7) (5.3) (67.7) (5.3)
Net cash flow used in financing activities (109.8) (311.5) (109.8) (311.5)
Net (decrease)/increase in cash and cash equivalents (75.2) 6.8 (77.9) 7.2
Cash and cash equivalents at year start 227.4 221.6 227.3 221.1
Effect of foreign exchange rate changes on cash (0.9) (1.0) (0.9) (1.0)
Cash and cash equivalents at year end 151.3 227.4 148.5 227.3
Reconciliation of net cash flow to movement in net debt
for the year ended 31 March 2025
Group Company
2025 2024 2025 2024
£m £m £m £m
Net (decrease)/increase in cash and cash equivalents in the year (75.2) 6.8 (77.9) 7.2
Cash inflow from increase in borrowings - (70.0) - (70.0)
Cash outflow from decrease in borrowings - 328.8 - 328.8
Change in net debt resulting from cash flows (75.2) 265.6 (77.9) 266.0
Change in net debt resulting from foreign exchange movements (0.9) 6.2 (0.9) 6.2
Net cash/(debt) at the start of the year 227.4 (44.4) 227.3 (44.9)
Net cash at the end of the year 151.3 227.4 148.5 227.3
Notes to the final results announcement
1. General information
Caledonia Investments plc is an investment trust company domiciled in the
United Kingdom and incorporated in England in 1928, under number 235481. The
address of its registered office is Cayzer House, 30 Buckingham Gate, London
SW1E 6NN. The ordinary shares of the company are listed on the London Stock
Exchange under Equity shares (commercial companies).
Going concern
As at 31 March 2025, the board has undertaken an assessment of the
appropriateness of preparing its financial statements on a going concern
basis, taking into consideration future cash flows, current cash holdings of
£151m, undrawn banking facilities of £325m and readily realisable assets of
£965m as part of a wider process in connection with its viability assessment.
It has concluded that the group has sufficient cash, other liquid resources
and committed bank facilities to meet existing and new investment commitments.
The directors have concluded that the group has adequate resources to continue
in operational existence for a period of at least 12 months from the date of
approval of the financial statements. Accordingly, they continue to consider
it appropriate to adopt the going concern basis in preparing the financial
statements.
The group has conducted a going concern assessment which considered future
cash flows, the availability of liquid assets and debt facilities, banking
covenant requirements and consideration of the economic environment over at
least 12 months from the date of approval of these financial statements.
In making this assessment, the directors took comfort from the results of two
stress tests, which considered the impact of significant market downturn
conditions.
The first stress test addressed two discrete scenarios: a 5% reduction in the
value of Sterling versus the US dollar compared to the rate on 31 March 2025
and a 12-month delay to Private Capital realisations.
The second stress test modelled a market downturn event over a two-year period
reflecting a fall in Public Companies
investment income of 20%, reduction of Private Capital investment income by
100%, an inability to realise the Private Capital portfolio and a 50%
reduction in distributions from the group's funds portfolio. To simulate an
extreme downside scenario the impact of a market downturn event and all fund
commitments falling due was also assessed. The directors do not believe the
extreme downside scenario is likely but factors this into the going concern
assessment.
Under these scenarios the group would have a range of mitigating actions
available to it, including sales of liquid assets, and usage of banking
facilities, which would provide sufficient funds to meet all of its
liabilities as they fall due and still hold significant liquid assets over the
assessment period. As a result of this assessment the directors are confident
that the company will have sufficient funds to continue to meet its
liabilities as they fall due for at least 12 months from the date of approval
of the financial statements and therefore have prepared the financial
statements on a going concern basis.
2. Dividends
Amounts recognised as distributions to owners of the company in the year were
as follows:
2025 2024
p/share £m p/share £m
Final dividend for the year ended 31 March 2024 (2023) 51.47 27.9 49.20 26.7
Interim dividend for the year ended 31 March 2025 (2024) 19.69 10.5 18.93 10.3
71.16 38.4 68.13 37.0
Amounts proposed after the year end and not recognised in the financial
statements were as follows:
Proposed final dividend for the year ended 31 March 2025 53.91 28.5
The proposed final dividend for the year ended 31 March 2025 was not included
as a liability in these financial statements. The dividend, if approved by
shareholders at the annual general meeting to be held on 16 July 2025, will
be payable on 7 August 2025 to holders of shares on the register on 27 June
2025. The ex-dividend date will be 26 June 2025. The deadline for elections
under the dividend reinvestment plan offered by MUFG Corporate Markets will be
the close of business on 17 July 2025.
For the purposes of section 1158 of the Corporation Tax Act 2010 and
associated regulations, the dividends payable for the year ended 31 March
2025 are the interim and final dividends for that year, amounting to £39.0m
(2024: £38.3m).
3. Earnings per share
Basic and diluted earnings per share
The calculation of basic earnings per share of the group was based on the
profit attributable to shareholders and the weighted average number of shares
outstanding during the year. The calculation of diluted earnings per share
included an adjustment for the effects of dilutive potential shares.
The profit attributable to shareholders (basic and diluted) was as follows:
2025 2024
£m £m
Revenue 30.9 40.5
Capital 35.2 163.3
Total 66.1 203.8
The weighted average number of shares was as follows:
2025 2024
000's 000's
Issued shares at the year start 54,612 54,664
Effect of shares cancelled (740) (1)
Effect of shares held by the employee share trust (151) (270)
Basic weighted average number of shares in the year 53,721 54,393
Effect of performance shares, share options and deferred bonus awards 793 844
Diluted weighted average number of shares in the year 54,514 55,237
4. Operating segments
The following is an analysis of the profit/(loss) before tax for the year and
assets analysed by primary operating segments:
Profit/(loss) before tax Total assets
2025 2024 2025 2024
£m £m £m £m
Public Companies 44.1 101.8 964.7 949.8
Private Capital 30.5 111.2 870.7 820.3
Funds 19.5 19.4 897.3 926.3
Investment portfolio 94.1 232.4 2,732.7 2,696.4
Other investments(1) 2.5 1.4 10.9 18.0
Total revenue/investments 96.6 233.8 2,743.6 2,714.4
Cash and cash equivalents 9.9 3.2 151.3 227.4
Other items (39.7) (35.6) 63.1 57.1
Reportable total 66.8 201.4 2,958.0 2,998.9
1. Other investments included £10.9m of non-pool investments (2024: 18.0m of
non-pool investments).
5. Share-based payments
In the year to 31 March 2025, participating employees in the performance share
scheme were awarded options over 233,802 shares at nil-cost (2024: 212,049
shares). Also in the year to 31 March 2025, participating employees received
deferred awards over 29,224 shares (2024: 1,976 shares). The IFRS 2 expense
included in profit or loss for the year was £5.1m (2024: £7.1m).
6. Net asset value
The group's undiluted net asset value is based on the net assets of the group
at the year end and on the number of ordinary shares in issue at the year-end
less ordinary shares held by The Caledonia Investments plc Employee Share
Trust. The group's diluted net asset value assumes the exercise of performance
share and deferred bonus awards.
2025 2024
Net Number Net Number
assets of shares(1) NAV assets of shares(1) NAV
£m 000's p/share £m 000's p/share
Undiluted 2,936.1 52,750 5558 2,965.3 54,388 5452
Share awards - 793 (83) - 844 (83)
Diluted 2,936.1 53,543 5475 2,965.3 55,232 5369
1. Number of shares in issue at the year-end is stated after the deduction of
133,025 (2024: 223,666) ordinary shares held by the Caledonia Investments plc
Employee Share Trust.
Net asset value total return is calculated in accordance with guidance from
the Association of Investment Companies ('AIC'), as the change in NAV from the
start of the period, assuming that dividends paid to shareholders are
reinvested at NAV at the time the shares are quoted ex-dividend.
2025 2024
p p
Diluted NAV at year start 5369 5068
Diluted NAV at year end 5475 5369
Dividends payable in the year 71 68
Reinvestment adjustment(2) - 6
5546 5443
NAVTR over the year 3.3% 7.4%
2. The reinvestment adjustment is the gain or loss resulting from reinvesting the
dividends in NAV at the ex-dividend date.
7. Capital commitments
At the reporting date, the group and company had entered into unconditional
commitments to funds, limited partnerships and committed loan facility
agreements, as follows:
Group Company
2025 2024 2025 2024
£m £m £m £m
Investments
Contracted but not called 415.9 377.0 415.9 377.0
Loan facilities
Committed but undrawn - - 9.5 4.5
415.9 377.0 425.4 381.5
Amounts are callable within the next 12 months. The group has conducted a
going concern assessment which considered future cash flows, the availability
of liquid assets and debt facilities, over the 12-month period required. In
making this assessment a number of stress scenarios were developed. The most
extreme downside scenario included the impact of a market downturn event and
all outstanding private equity fund commitments being drawn. Under this
scenario the group would have a range of mitigating actions available to it,
including sales of liquid assets and usage of banking facilities, which would
provide sufficient funds to meet all of its liabilities as they fall due and
still hold significant liquid assets over the assessment period.
8. Performance measures
Caledonia uses a number of performance measures to aid the understanding of
its results. The performance measures are standard within the investment trust
industry and Caledonia's use of such measures enhances comparability.
Principal performance measures are as follows:
Net assets
Net assets provides a measure of the value of the company to shareholders and
is taken from the IFRS group net assets.
Net asset value ('NAV')
NAV is a measure of the value of the company, being its assets - principally
investments made in other companies and cash held - minus any liabilities. NAV
per share is calculated by dividing net assets by the number of shares in
issue, adjusted for shares held by the Employee Share Trust and for dilution
by the exercise of outstanding share awards. NAV takes account of dividends
payable on the ex-dividend date.
Net revenue
Net revenue comprises income from investments less management expenses,
financing costs and tax. Net revenue
comprises the revenue column presented in the Group statement of comprehensive
income and differs from total comprehensive income in excluding gains and
losses on investments and other items of a capital nature. The separation of
revenue and capital profits and losses is required by the AIC SORP as being of
fundamental importance to shareholders and other users of the financial
statements of investment trust companies.
NAV total return ('NAVTR')
NAVTR is a measure of how the net asset value per share has performed over a
period, considering both capital returns and dividends paid to shareholders.
NAVTR is calculated as the increase in NAV between the beginning and end of
the period, plus the accretion from assumed dividend reinvestment during the
period. We use this measure as it enables comparisons to be drawn against an
investment index in order to compare performance. The calculation follows the
method prescribed by the AIC.
Total shareholder return ('TSR')
TSR measures the return to shareholders, taking into account the change in
share price over a period of time as well as all the dividends paid during
that period. It is assumed that the dividends are reinvested at the time the
shares are quoted ex dividend.
9. Financial instruments - private asset valuation
Caledonia makes private equity investments in two forms: direct private
investments (the Private Capital pool) and investments into externally managed
unlisted private equity funds and fund of funds (the Funds pool). The
directors have made two estimates which they deem to have a significant risk
of resulting in a material adjustment to the amounts recognised in the
financial statements within the next financial year, which relate to the
valuation of assets within these two pools.
For direct private investments, totalling £870.7m (2024: £820.3m) valuation
techniques using a range of internally and externally developed unobservable
inputs are used to estimate fair value. Valuation techniques make maximum use
of market inputs, including reference to the current fair values of
instruments that are substantially the same (subject to appropriate
adjustments).
For private equity fund investments (excluding funds invested exclusively in
quoted markets), totalling £882.9m (2024: £898.8m) held through externally
managed fund vehicles, the estimated fair value is based on the most recent
valuation provided by the external manager, usually received within 3 to 6
months of the relevant valuation date.
The following table provides information on significant unobservable inputs
used at 31 March 2025 in measuring financial instruments categorised as Level
3 in the fair value hierarchy.
For private company assets we have chosen to sensitise and disclose EBITDA
multiple or tangible asset multiple inputs because their derivation involves
the most significant judgements when estimating valuation, including which
data sets to consider and prioritise. Valuations also include other
unobservable inputs, including earnings which are based on historic and
forecast data and are less judgmental. For each asset category, inputs were
sensitised by a percentage deemed to reflect the relative degree of estimation
uncertainty, and valuation calculations re-performed to identify the impact.
Private equity fund assets are each held in and managed by the same type of
fund vehicle, valued using the same method of adjusted manager valuations, and
subject to broadly the same economic risks. They are therefore subject to a
similar degree of estimation uncertainty. They have been sensitised at an
aggregated level by 5% to reflect a degree of uncertainty over managers'
valuations which form the basis of their fair value.
At 31 March 2025
Description/ valuation method Fair value Unobservable input Weighted average input Input sensitivity Change in valuation
£m +/- +/- £m
Internally developed
Private companies
Large, earnings 555.5 EBITDA multiple 12.5x 10.0% +56.2/-59.8
Small and Medium, blend of methods 67.5 Various +6.8/-7.5
Transaction 55.0 5% +/-2.8
Net assets / manager valuation 192.7 Multiple 1 0.1x +/-19.3
870.7 +85.1/-89.4
Non-pool companies 10.9
Total internal 881.6
Externally developed
Private equity fund
Net asset value 882.9 Manager NAV 1 5% +/-44.1
1,764.5 +129.2/-133.5
10. Financial information
The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 March 2025 or 2024 but is derived
from those accounts. Statutory accounts for 31 March 2024 have been delivered
to the Registrar of Companies, and those for 31 March 2025 will be delivered
in due course. The auditor has reported on those accounts; their reports were:
(i) unqualified; (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report; and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The statutory accounts for the year ended 31 March 2025 will be published on
13 June 2025 and made available for download from the company's website on
that date. Also, a copy will be delivered to the Registrar of Companies in
accordance with section 441 of the Companies Act 2006, following approval by
shareholders.
The statutory accounts for the year ended 31 March 2025 include a 'Directors'
statement of responsibility' as follows:
Each of the directors confirm that, to the best of their knowledge:
● the group and parent company financial statements, which have been prepared in
accordance with applicable accounting standards, give a true and fair view of
the assets, liabilities, financial position and profit or loss of the company
and the undertakings included in the consolidation taken as a whole
● the strategic report includes a fair review of the development and performance
of the business and the position of the company and the undertakings included
in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that it faces.
Signed on behalf of the board by:
Mat Masters Rob Memmott
Chief Executive Officer Chief Financial Officer
19 May 2025 19 May 2025
Forward looking statements: This announcement may contain statements about the
future including certain statements about the future outlook for Caledonia
Investments plc and its subsidiaries ('Caledonia'). These are not guarantees
of future performance and will not be updated. Although we believe our
expectations are based on reasonable assumptions, any statements about the
future outlook may be influenced by factors that could cause actual outcomes
and results to be materially different.
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FTSE's express written consent.
END
Copies of this statement are available at the company's registered office,
Cayzer House, 30 Buckingham Gate, London SW1E 6NN, United Kingdom, or from its
website at www.caledonia.com.
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