Caledonia Investments (CLDN) H1 2025 earnings summary

Executive summary

• NAV total return of 0.5% for the six months to September 2024, with net assets at £2.9bn and NAV per share at 5,346p, impacted by £104m FX headwinds reducing NAVTR by 3.6%.

• Portfolio diversified across public companies, private capital, and funds, each representing roughly a third of NAV, targeting long-term compounding real returns of CPIH +3% to +6%.

• Interim dividend increased by 4% to 19.69p per share, marking 57 consecutive years of dividend growth.

• Share buybacks of £26.3m (746,963 shares) at a 34.8% discount, accreting 25.6p to NAV per share; seeking approval for an uncapped Rule 9 Waiver to continue buybacks.

• Strong balance sheet with £460m liquidity, no structural leverage, and a new £325m revolving credit facility.

Financial highlights

• NAV per share at 5,346p; share price at 3,440p, representing a 35.7% discount to NAV.

• Public companies returned 7% in GBP (11.6% in local currencies); private capital -2.8% (dragged by Cooke Optics); funds -2.4% (+3.6% in local currencies).

• Total investment portfolio value at £2.74bn: Public Companies £1.02bn, Private Capital £848m, Funds £875m.

• Investment income for the period was £29.4m; total comprehensive income £21.9m; profit for the period £7.8m.

• Net cash at period end £134.6m; total liquidity £460m, supported by the new RCF.

Outlook and guidance

• Portfolio remains well positioned to deliver target returns and dividend growth over the long term, with robust balance sheet and increased liquidity.

• Management committed to judicious buybacks, ongoing dividend growth, and maintaining free float.

• Board and management prioritize delivering shareholder value and addressing the share price discount to NAV.

• Share buyback authority to be refreshed, with a proposal to remove the cap on the Cayzer family concert party's shareholding.

• Portfolio well positioned to generate good returns despite macro and geopolitical challenges.