Caledonia Inv PLC - Report for the quarter ended 31 December 2018

Caledonia presents a report of its activities for the quarter ended 31 December 2018 and up to the date of publication.

Material events

o

NAV per share total return for the quarter was -3.0%. Unquoted investments are revalued in March and September. Consequently, the NAV at 31 December 2018 did not include any unrealised valuation adjustments to unquoted investments in the past three months. NAV per share total return for the nine months to 31 December 2018 (year to date) was 6.5% and the return for calendar year 2018 was 4.3%.

 

 

o

Investments during the period totalled £240.1m, including £117.2m for a 98.9% equity stake and £50.0m of short term bridging finance (subsequently repaid) in Deep Sea Electronics, the UK manufacturer of electronic control modules for industrial applications, £33.4m in fund subscriptions and commitment drawdowns and £38.5m in quoted investments in the Quoted and Income pools.

 

 

o

Realisations during the period totalled £211.4m, including £99.4m from sale of the Choice Care Group investment (including a pre-sale dividend of £7.1m), returning a 1.9x money multiple and an 14.3% IRR over the five years of ownership, £50.0m from repayment of the Deep Sea Electronics short term bridging loan, £27.3m from fund distributions and £38.4m from the sale of quoted investments in the Quoted and Income pools.

 

 

o

An interim dividend of 16.1p per share was declared on 21 November 2018, an increase in interim dividend of 3.9% over the previous year. The dividend, totalling £8.8m, will be paid on 10 January 2019 to holders of ordinary shares on the register on 30 November 2018. The ex-dividend date was 29 November 2018.

 

 

o

On 21 December 2018, Caledonia announced that it had agreed terms to acquire a 36.7% stake in Stonehage Fleming Family and Partners, one of the world's leading independently owned family offices, for approximately £92m, with potential deferred consideration of up to a further £20.6m, if certain financial targets are met. The transaction is conditional on obtaining regulatory approvals in a number of jurisdictions, which are expected within three months.

 

 

o

The Association of Investment Companies reclassified Caledonia from its Global to Flexible Investment sector. Launched in January 2016, the Flexible Investment sector incorporates "companies whose policy allows them to invest in a range of asset types" and is better suited to Caledonia's investment strategy.

Financial position and performance summary

 

At 31 Dec 2018 

At 30 Sep 2018 

Net assets

£1,930m 

£2,000m 

NAV per share

3441p 

3563p 

Discount

17.9% 

22.1% 

1.

NAVs per share are calculated on a diluted, cum-income basis.

2.

31 December 2018 was the latest date on which an NAV per share was prepared.

3.

Caledonia reviews the valuation of its unquoted investments in March and September.

       

At 31 December 2018, the company had net cash of £54.5m, compared with £67.0m of cash at 30 September 2018.

Investment portfolio

Ten largest holdings as at 31 December 2018

 

 

 

31 Dec 2018 

Name

Business

 

£m 

Seven Investment Management

Investment management

 

121.7 

Deep Sea Electronics

Control systems

 

117.2 

Cobehold

Investment company

 

106.2 

Cooke Optics

Lens manufacturer

 

92.6 

Buzz Bingo

Bingo operator

 

89.1 

Liberation Group

Pubs and restaurants

 

82.0 

Aberdeen US PE funds

Funds of PE funds

 

79.8 

Arlington AVM Ranger fund

Quoted market fund

 

44.0 

Asia Alternatives funds

Funds of PE funds

 

42.9 

NTAsset funds

Quoted market funds

 

40.6 

 

 

 

816.1 

Other pool investments

 

 

1,020.1 

Cash and other items

 

 

93.3 

Net assets

 

 

1,929.5 

Pool distribution

 

31 Dec 2018 

30 Sep 2018 

Quoted pool

21% 

24% 

Income pool

12% 

13% 

Unquoted pool

35% 

31% 

Funds pool

27% 

26% 

Cash and other

5% 

6% 

Caledonia publishes monthly fact sheets, which give further details of the investment and other activities during each month. These fact sheets and other information are available on the Company's website at www.caledonia.com.

Caledonia publishes a quarterly report as a supplement to its monthly fact sheets. The quarterly report presents the financial position of the company at the quarter end, together with highlights of material transactions or other events that occurred during the quarter. Caledonia believes that publication of a quarterly report is a valuable communication to investors.