Interim Results
Caledonia Investments PLC
27 November 2007
Caledonia Investments plc
Half-year results for the six months ended 30 September 2007
Key points
• 357% total shareholder return over ten years (276% outperformance vs
FTSE All-Share Total Return index)
• 289% total shareholder return over five years (172% outperformance vs
FTSE All-Share Total Return index)
• 137% increase in NAV per share (undiluted) over five years (53%
outperformance against FTSE All-Share index)
• 4.2% increase in interim dividend to 9.9p
• £113m invested and £40m realised
• 2.0% decrease in NAV per share (undiluted) over the period
Tim Ingram, Chief Executive, commented:
'Our strategy has continued to deliver over the medium term, and we have
continued our progressive dividend policy with a 4.2% increase in the interim
dividend. We have a sound portfolio and, with no gearing at this stage, are well
placed to take advantage of the opportunities that are likely to arise in the
more constrained circumstances that now prevail in the markets.'
27 November 2007
Enquiries:
Caledonia Investments plc 020 7802 8080
Tim Ingram, Chief Executive
Jonathan Cartwright, Finance Director
College Hill 020 7457 2020
Tony Friend
Roddy Watt
Chairman's statement
The first half of our financial year has seen considerable turbulence and
volatility in markets, triggered by the US sub-prime crisis, and our net asset
value per share fell by 2.0%, compared with a 1.0% increase in the FTSE
All-Share index.
Nonetheless, we take a long term view and our well established strategy of
acquiring significant, usually minority, stakes in promising listed and unlisted
companies and working with proven managements to add value over the longer term
has enabled us to continue to record outperformance against our benchmark FTSE
All-Share Total Return index over five and ten years of 172% and 276%
respectively.
Dividend
The directors have declared an interim dividend of 9.9 pence per share,
representing an increase of 4.2% over last year's interim dividend and
maintaining our aim to make progressive annual dividend payments. This dividend
will be paid on 8 January 2008.
Share price and discount
Despite a small reduction in our net asset value per share over the period, our
share price rose by 3.3% to 2135 pence from 2066 pence, outperforming the 1.0%
increase in the FTSE All-Share index, with a consequent narrowing of the
discount of the market value of our shares to their underlying net asset value
from 9.5% to 4.6%, although this discount can vary, particularly in volatile
markets such as we are experiencing at present. It is important to bear in mind
that the handsome outperformance in total shareholder return referred to above
for the five and ten year periods stems substantially from the relatively large
discounts, of over 30%, which attached to our share price at the outset of these
periods. Whilst we have worked strenuously over the years to build an awareness
of our investment approach and the performance which has derived from it, we
hope that such wide discounts will not prevail going forward, albeit we do not,
as I have mentioned before, control our share price. However, we remain mindful
that the share price discount affects shareholder value and we will continue to
use our authority to buy back our own shares, when we believe it is in the
interest of our shareholders.
Portfolio
The level of investment activity during the period reflected our ability to
access opportunities that are not always available to others and our continued
investment in Asia. Further details are given in the Chief Executive's review.
Outlook
Markets have now been visited by the shockwaves of the sub-prime lending follies
in the USA egged on by the greed of big investment banks. This has combined with
the failure of the UK watchdogs to avert the Northern Rock crisis despite
volumes of burdensome regulatory impositions on the financial sectors. It is a
bit surprising that reality has been so slow to reflect in the markets and we
have, even now, probably not felt the full impact. Whilst our long term approach
does not always facilitate maximum liquidity for the perfect moment of timing,
we believe that we have a sound portfolio and, with no borrowings on our balance
sheet, are well placed to take advantage of the opportunities which these more
constrained circumstances should present.
Peter Buckley
Chairman
Chief Executive's review
Performance summary
Our aim continues to be to provide consistently over five and ten year periods
total shareholder returns ('TSR') which outperform the FTSE All-Share Total
Return index and to provide positive total returns over rolling five year
periods.
The Chairman has referred in his statement to these returns, which have been
significantly enhanced by the narrowing of the discount between our share price
and net asset value ('NAV') per share. It is our wish for this discount to
remain in future within modest limits or, at the higher end of our expectations,
to reach a premium. As we cannot control our own share price, our performance
focus is on growing our NAV per share.
We can now measure, on a consistent basis, our NAV per share for the five year
period to 30 September 2007. We can therefore report that, over this five year
period, NAV per share increased by 137%, which reflects an outperformance of 53%
over the FTSE All-Share index.
The first six months of our financial year has seen significant turbulence in
the markets initiated by the sub-prime mortgage crisis in the USA. The ensuing
drying up in the credit markets has led to emergency funding from central banks
in the USA, Europe and the UK and a 0.5% cut in dollar interest rates by the
Federal Reserve Bank in September (and a further 0.25% cut in October). Slightly
surprisingly, but perhaps as a result of the huge quantities of funding put into
the markets by government bodies, the FTSE All-Share index ended 1.0% up over
the period, with the FTSE 100 up 2.5%.
Our company NAV per share, on an undiluted basis, was 2237p at 30 September
2007, compared with 2283p at 31 March 2007. The principal components of this 2%
decline were a total return loss of 24p and dividends paid of 22p. Total return
was mainly impacted by the decreasing valuations of some of our larger quoted
holdings, notably Close Brothers, Quintain Estates and Melrose Resources,
partially offset by a strong performance in aggregate from our Indian
investments and gains in the share price of Bristow Group. Investment income and
expenses were at a similar level to the same period last year.
We have continued to maintain our prudent approach and have remained ungeared
throughout the period with £36m of cash at the end of September.
Investment activity
In the first six months of our financial year we made around £113m of new and
follow-on investments. Most (approximately £86m) of this was for follow-on
investments and in many cases we have taken advantage of some low share prices
during the period to add to our existing stakes in businesses that we know well.
Major new and follow-on investments included:
Resulting
equity
holding Country of Cost
Name % Category domicile Business £m
New investments
Retif 15.4 Equity/loans France Shop fittings supplier 12.9
Hedging subsidiary(1) 100 Loans UK FTSE 250 put options 8.0
Vietnamese portfolio Equity Vietnam 3.1
Celona(2) Loans UK Telecoms 3.0
27.0
Follow-on investments
Quintain Estates 9.6 Equity UK Property invest/develop 24.7
Incisive Media Capital UK Business publisher 15.5
Eddington Capital Shares Cayman Hedge fund 10.0
fund
Avanti Communications 19.9 Loans UK Satellite comms services 7.0
Polar Capital funds Shares Cayman Hedge fund 5.0
Pragma Shares France Private equity fund 3.5
Other investments 20.4
86.1
Total 113.1
1. Subsidiary company used to purchase FTSE 250 put options.
2. The company also holds warrants to subscribe for shares representing up to 49.9% of the equity.
During the six months, we realised a total of £40m. Significant realisations
included:
Realised
Proceeds gain
Name Nature of realisation £m £m
Polar Capital funds Redemption 11.1 0.2
CF AVI Global fund Redemption 9.3 2.3
Pragma fund Distributions 5.7 4.1
Savills Sale of remaining holding 2.9 2.5
Other realisations 11.0 4.5
40.0 13.6
In view of the general uncertainties in economic outlook, we felt it prudent to
protect in part the considerable value gains we have achieved in the portfolio
by hedging against possible significant falls in equity values. Accordingly,
during the period we invested a total of £8m in purchasing one-year put options
on the FTSE 250 index through a subsidiary (included in new investments above),
which provides some downside protection on approximately £85m of our portfolio.
Net liquidity at 30 September of £36m has reduced from £109m at the last year
end. Whilst we have increased our level of investment over the period, we have
continued to maintain our prudent approach and have remained ungeared.
Outlook
The market turbulence resulting from the USA sub-prime mortgage crisis is likely
to continue into the second half of the year and equity markets will face
uncertainty as credit spreads widen, confidence is tested and volumes are low.
Nevertheless, we are continuing to see a healthy flow of opportunities and are
willing to make further investments, but we remain cautious in these uncertain
times. We expect to remain ungeared for the rest of the year, but, at some time
in the future, conditions could bring opportunities which may justify a moderate
amount of borrowing.
Over the longer term, we believe that our strategy will continue to deliver
enhanced performance.
Tim Ingram
Chief Executive
Our portfolio
Significant holdings
Equity Net
holding Country Business Total assets
of
Name % domicile sector Nature of business £m %
Close Brothers(1,2) 12.2 UK Financial Merchant banking 146.3 11.4
British Empire Securities 18.3 UK Funds Investment trust 140.9 10.9
(1,2)
Quintain Estates(1) 9.6 UK Property Property investor/ 92.1 7.1
developer
Rathbone Brothers(1,2) 10.7 UK Financial Funds management 55.9 4.3
Bristow Group(1,2) 6.9 USA/UK Oil and gas Helicopter services 44.5 3.5
Polar Capital funds(2) Ireland/ Funds Hedge funds 42.4 3.3
Cayman
Cobepa(2) 9.9 Belgium Funds Investment company 41.7 3.2
Oval(2) 27.4 UK Financial Insurance broking 34.4 2.7
Incisive Media(2) UK Consumer Business publisher 32.1 2.5
Melrose Resources(1,2) 9.4 UK Oil and gas Oil and gas exploration 31.1 2.4
Satellite Information 22.5 UK Consumer Betting information 25.9 2.0
Services(2) distribution
Eddington Triple Alpha Cayman Funds Fund of hedge funds 25.4 2.0
Fund(2)
India Capital Growth Fund 26.3 Guernsey Funds Investment company 24.5 1.9
(1,2)
Sterling Industries(2) 100.0 UK Industrial Engineering 22.3 1.7
Alok Industries(1,2) 14.8 India Consumer Textiles manufacturer 22.2 1.7
A G Barr(1) 9.4 UK Consumer Soft drinks 21.9 1.7
Polar Capital(1,2) 15.9 UK Financial Funds management 21.7 1.7
Ermitage(2) 60.0 Jersey Financial Hedge funds management 20.7 1.6
Novae Group(1,2) 6.1 UK Financial Insurance services 20.3 1.6
TGE Gas Engineering(2) 49.9 Germany Industrial Gas engineering 19.5 1.5
Avanti Communications 19.9 UK Consumer Satellite comms services 17.2 1.3
(1,2)
Nova Springboard fund Guernsey Funds Investment fund 16.0 1.2
Terrace Hill(1,2) 8.3 UK Property Property development 15.1 1.2
Serica Energy(1) 10.2 UK Oil and gas Oil and gas exploration 15.1 1.2
Marketform(2) 26.8 UK Financial Insurance services 14.4 1.1
Begbies Traynor(1,2) 10.9 UK Industrial Corporate recovery 13.8 1.1
services
Edinmore(2) 100.0 UK Property Property trading 13.7 1.1
The Sloane Club(2) 100.0 UK Consumer Residential club owner/ 13.5 1.0
operator
Varun Shipping(1,2) 11.7 India Industrial Shipping services 13.3 1.0
Retif(2) 15.4 France Industrial Shop fittings supplier 12.9 1.0
Buckingham Gate(2) 100.0 UK Property Property investment 12.9 1.0
Other investments 228.5 17.7
Total investments 1,272.2 98.6
Cash and other net assets 18.0 1.4
Net assets 1,290.2 100.0
1. Equity securities listed on UK or overseas stock exchanges.
2. Board or equivalent representation.
Net assets by business Net assets by geography Net assets by currency
sector
Financial 27% United Kingdom 64% Pounds sterling 82%
Funds 28% Continental Europe 13% Euro 7%
Property 13% North America 9% US dollar 6%
Oil and gas 7% Asia 12% Indian rupee 4%
Industrial 11% Other countries 1% Other currencies 1%
Consumer 13% Cash and other 1%
Cash and other 1%
Responsibility statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
o the condensed set of financial statements has been prepared in accordance with IAS 34 '
Interim Financial Reporting'; and
o the interim management report includes a fair review of the information required by:
1. DTR 4.2.7 of the 'Disclosure Rules and Transparency Rules', being an indication of
important events that have occurred during the first six months of the financial year
and their impact on the condensed set of financial statements and a description of the
principal risks and uncertainties for the remaining six months of the year; and
2. DTR 4.2.8 of the 'Disclosure Rules and Transparency Rules', being related parties
transactions that have taken place in the first six months of the current financial
year and that have materially affected the financial position or the performance of the
enterprise during that period and any changes in the related parties transactions
described in the last annual report that could have a material effect on the financial
position or performance of the enterprise in the first six months of the current
financial year.
Signed on behalf of the Board
Tim Ingram Jonathan Cartwright
Chief Executive Finance Director
Independent review report to Caledonia Investments plc
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2007 which comprises the income statement, the statement of recognised
income and expense, the balance sheet, the cash flow statement and related notes
1 to 9 on a company and group basis. We have read the other information
contained in the half-yearly financial report and considered whether it contains
any apparent misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company in accordance with International
Standard on Review Engagements 2410 issued by the Auditing Practices Board. Our
work has been undertaken so that we might state to the company those matters we
are required to state to them in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the company are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard 34
'Interim Financial Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 September 2007 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditor
London, UK
27 November 2007
Condensed income statement
for the six months ended 30 September 2007
Company Group
6 mths 6 mths Year 6 mths 6 mths Year
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2007 2006 2007 2007 2006 2007
£m £m £m £m £m £m
Gains and losses on investments (35.2) 2.3 96.5 (39.2) (15.2) 66.0
held at fair value through profit or loss
Gains and losses on derivatives used to 0.3 5.9 5.6 1.4 6.1 5.9
hedge the fair value of investments
Provisions - - - - (3.1) (3.1)
Investment income 16.8 13.1 40.1 15.1 10.7 25.5
Gross portfolio return (18.1) 21.3 142.2 (22.7) (1.5) 94.3
Management expenses (5.2) (5.3) (11.0) (5.2) (5.3) (11.0)
Other expenses (0.2) (0.8) (1.1) (0.2) (0.8) (1.1)
Net portfolio return (23.5) 15.2 130.1 (28.1) (7.6) 82.2
Revenue from sales of goods and services - - - 57.1 64.4 135.0
Operating expenses - - - (53.4) (55.2) (120.0)
Gain on disposal of operations - - - - - 4.4
Gain on investment property - - - 2.9 - -
Share of results of joint ventures - - - 1.8 1.7 6.1
Profit/(loss) before finance costs (23.5) 15.2 130.1 (19.7) 3.3 107.7
Gains on money market funds - 1.0 1.0 - 1.0 1.0
held at fair value through profit or loss
Treasury interest receivable 3.0 0.9 3.5 3.6 1.6 4.3
Exchange movements (0.2) (0.5) (0.7) (0.2) (0.5) (0.7)
Finance costs - (0.6) (0.3) (2.1) (2.1) (4.1)
Profit/(loss) before tax (20.7) 16.0 133.6 (18.4) 3.3 108.2
Taxation 6.5 1.2 2.5 5.0 (0.7) (0.3)
Profit/(loss) for the period (14.2) 17.2 136.1 (13.4) 2.6 107.9
Attributable to
Equity holders of the parent (14.2) 17.2 136.1 (13.4) 1.6 106.1
Minority interest - - - - 1.0 1.8
(14.2) 17.2 136.1 (13.4) 2.6 107.9
Basic earnings per ordinary share -24.5p 28.2p 228.6p -23.1p 2.6p 178.3p
Diluted earnings per ordinary share -24.5p 28.0p 226.9p -23.1p 2.6p 176.9p
Condensed statement of recognised income and expense
for the six months ended 30 September 2007
Company Group
6 mths 6 mths Year 6 mths 6 mths Year
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2007 2006 2007 2007 2006 2007
£m £m £m £m £m £m
Exchange differences on translation - - - 0.1 (0.7) (1.2)
of foreign operations
Actuarial gains and losses on defined - - (0.3) - 2.5 0.2
benefit pension schemes
Tax on items recognised directly in equity (0.2) - 1.9 (0.2) - 1.7
Net income/(expense) recognised (0.2) - 1.6 (0.1) 1.8 0.7
directly in equity
Profit/(loss) for the period (14.2) 17.2 136.1 (13.4) 2.6 107.9
Total recognised income and expense (14.4) 17.2 137.7 (13.5) 4.4 108.6
Attributable to
Equity holders of the parent (14.4) 17.2 137.7 (13.5) 3.4 106.8
Minority interest - - - - 1.0 1.8
(14.4) 17.2 137.7 (13.5) 4.4 108.6
Condensed balance sheet
as at 30 September 2007
Company Group
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2007 2006 2007 2007 2006 2007
£m £m £m £m £m £m
Non-current assets
Investments held at fair value through profit 1,271.4 1,142.9 1,228.1 1,157.2 1,031.7 1,125.9
or loss
Investments in subsidiaries held at cost 0.8 2.8 0.8 - - -
Available for sale investments - - - 0.5 0.5 0.5
Intangible assets - - - 40.6 40.6 40.7
Property, plant and equipment - - - 76.9 75.1 78.6
Investment property - - - 4.3 5.8 5.8
Interests in joint ventures - - - 9.7 11.0 11.6
Deferred tax assets 6.9 2.3 5.8 8.9 4.2 8.0
Non-current assets 1,279.1 1,148.0 1,234.7 1,298.1 1,168.9 1,271.1
Current assets
Inventories - - - 16.8 29.5 19.5
Trade and other receivables 2.6 4.3 6.5 34.6 28.4 29.0
Current tax assets - - - - 0.6 0.2
Money market funds held at fair value through - - - 0.3 0.3 0.3
profit or loss
Cash and cash equivalents 36.1 84.1 108.6 52.7 115.0 123.2
Current assets 38.7 88.4 115.1 104.4 173.8 172.2
Total assets 1,317.8 1,236.4 1,349.8 1,402.5 1,342.7 1,443.3
Current liabilities
Bank overdrafts - - - (0.4) (1.7) (1.5)
Interest-bearing loans and borrowings - - - (1.3) (1.0) (1.3)
Trade and other payables (8.9) (5.6) (4.8) (31.2) (23.7) (27.1)
Employee benefits - - - (1.3) (1.4) (3.1)
Current tax liabilities (1.0) (7.6) (5.2) (2.8) (9.8) (6.6)
Provisions (13.5) (13.5) (13.5) (14.0) (14.7) (14.1)
Current liabilities (23.4) (26.7) (23.5) (51.0) (52.3) (53.7)
Non-current liabilities
Interest-bearing loans and borrowings - - - (58.0) (63.4) (64.7)
Employee benefits (1.0) (1.7) (0.9) (5.4) (4.9) (5.4)
Deferred tax liabilities (3.2) - (2.2) (4.4) (1.1) (3.6)
Provisions - - - - (4.0) -
Non-current liabilities (4.2) (1.7) (3.1) (67.8) (73.4) (73.7)
Total liabilities (27.6) (28.4) (26.6) (118.8) (125.7) (127.4)
Net assets 1,290.2 1,208.0 1,323.2 1,283.7 1,217.0 1,315.9
Equity
Share capital 3.3 3.3 3.3 3.3 3.3 3.3
Share premium 1.3 1.3 1.3 1.3 1.3 1.3
Capital redemption reserve 1.2 1.2 1.2 1.2 1.2 1.2
Capital reserve 1,011.7 935.6 1,048.6 - - -
Retained earnings 272.7 266.6 268.8 1,273.7 1,207.4 1,305.9
Foreign exchange translation reserve - - - (0.6) (0.2) (0.7)
Equity attributable to owners of the parent 1,290.2 1,208.0 1,323.2 1,278.9 1,213.0 1,311.0
Minority interest - - - 4.8 4.0 4.9
Total equity 1,290.2 1,208.0 1,323.2 1,283.7 1,217.0 1,315.9
Net asset value per ordinary share (undiluted) 2237p 2083p 2283p
Net asset value per ordinary share (diluted) 2212p 2061p 2258p
Condensed cash flow statement
for the six months ended 30 September 2007
Company Group
6 mths 6 mths Year 6 mths 6 mths Year
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2007 2006 2007 2007 2006 2007
£m £m £m £m £m £m
Operating activities
Dividends received 12.3 9.8 29.7 12.8 8.7 12.8
Interest received 4.7 2.9 7.9 4.6 3.2 7.2
Cash received from customers - - - 61.2 69.0 144.8
Cash paid to suppliers (6.5) (6.9) (10.1) (58.5) (75.0) (130.5)
Taxes received/(paid) 2.1 - 0.9 (3.3) (4.5)
-
Group relief received 0.1 0.6 0.4 - - -
Net cash from operating activities 12.7 6.4 27.9 21.0 2.6 29.8
Investing activities
Purchases of property, plant and equipment - - - (2.1) (12.1) (18.9)
Proceeds from disposal of property, - - - - - 0.7
plant and equipment
Purchases of investments held at fair value (112.6) (168.4) (290.4) (105.0) (138.7) (253.3)
through profit or loss
Purchases of money market funds - - - - (0.3) -
held at fair value through profit or loss
Proceeds on disposal of investments 40.9 176.3 309.5 43.5 145.5 255.0
held at fair value through profit or loss
Proceeds on disposal of money market funds - 76.8 76.8 - 76.8 76.8
held at fair value through profit or loss
Proceeds on disposal of investment property - - - 4.5 - -
Net receipts/(payments) from derivatives 0.3 5.3 4.4 (7.4) 6.0 5.1
Purchase of subsidiary net of cash acquired - - - (0.7) (17.1) (17.1)
Proceeds on disposal of subsidiaries - - - - 0.9 3.0
net of cash disposed
Taxes received - - - - 0.9 -
Net cash from/(used in) investing activities (71.4) 90.0 100.3 (67.2) 61.9 51.3
Financing activities
Interest paid - (0.3) (0.3) (2.0) (1.5) (2.7)
Distributions paid to holders of equity (12.5) (13.0) (18.5) (12.5) (13.0) (18.5)
shares
Dividends paid to minority interests - - - (0.1) (0.4) (0.4)
Elective special dividend paid - (102.9) (102.9) - (102.0) (102.0)
Proceeds from new borrowings - 38.0 43.0 1.3 51.2 83.8
Repayment of borrowings - (38.0) (43.0) (8.6) (41.8) (73.9)
Net purchase of own shares (1.3) 0.1 (1.7) (1.3) 0.1 (1.7)
Net cash used in financing activities (13.8) (116.1) (123.4) (23.2) (107.4) (115.4)
Net increase/(decrease) in cash (72.5) (19.7) 4.8 (69.4) (42.9) (34.3)
and cash equivalents
Cash and cash equivalents at period start 108.6 103.8 103.8 121.7 156.5 156.5
Exchange gains/(losses) on cash and cash - - - - (0.3) (0.5)
equivalents
Cash and cash equivalents at period end 36.1 84.1 108.6 52.3 113.3 121.7
Notes to the condensed set of financial statements
1. General information
Caledonia Investments plc is an investment trust company domiciled in the United
Kingdom and incorporated in England, under the Companies Acts 1908 to 1917. 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 and the New Zealand Exchange.
The information for the period ended 30 September 2007 does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. A copy
of the statutory accounts for the year ended 31 March 2007 has been delivered to
the Registrar of Companies. The auditors' report on those accounts was not
qualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985.
The half-year results are unaudited. They should not be taken as a guide to the
full year and do not constitute the statutory accounts.
2. Accounting policies
This condensed set of financial statements has been prepared using accounting
policies consistent with International Financial Reporting Standards ('IFRS') as
adopted by the European Union and in accordance with International Accounting
Standard 34 'Interim Financial Reporting'. The half-yearly condensed set of
financial statements should be read in conjunction with the annual financial
statements for the year ended 31 March 2007, which were prepared in accordance
with IFRS as adopted by the European Union.
The same accounting policies, presentations and methods of computation are
followed in this condensed set of financial statements as were applied in the
company's latest audited annual financial statements.
3. Dividends
6 mths 6 mths Year
30 Sep 30 Sep 31 Mar
2007 2006 2007
£m £m £m
Amounts recognised as distributions to equity holders in the period
Final dividend for the year ended 31 March 2007 12.5 13.0 13.0
of 21.6p per share (2006 - 20.5p)
Interim dividend for the year ended 31 March 2007 of 9.5p per share - - 5.5
Elective special dividend paid on 13 July 2006 of 1902.17p per share - 102.9 102.9
elected
12.5 115.9 121.4
The directors have proposed an interim dividend for the year ending 31 March
2008 of 9.9p per share, totalling £5.7m, which has not been included as a
liability in this condensed set of financial statements. This dividend will be
payable on 8 January 2008 to holders of shares on the register on 7 December
2007. The ex-dividend date will be 5 December 2007.
4. Earnings and net asset values per share
Basic and diluted earnings per share
The calculation of basic earnings per share of the company and of the group at
30 September 2007 was based on the profit attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding during the six
months ended 30 September 2007.
The calculation of diluted earnings per share takes account of the share options
and deferred bonus plan awards with dilutive potential. The weighted average
number of ordinary shares takes account of the number of dilutive potential
ordinary shares that could be issued as a result of the exercise of share
options and the vesting of shares under the deferred bonus plan.
Company Group
6 mths 6 mths Year 6 mths 6 mths Year
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2007 2006 2007 2007 2006 2007
£m £m £m £m £m £m
Earnings (basic and diluted) (14.2) 17.2 136.1 (13.4) 1.6 106.1
000's 000's 000's 000's 000's 000's
Weighted average shares (basic) 57,924 61,081 59,537 57,921 61,051 59,520
Effect of share options and deferred bonus - 389 455 - 389 455
awards
Weighted average shares (diluted) 57,924 61,470 59,992 57,921 61,440 59,975
Undiluted and diluted net asset values per share
The company's undiluted net asset value per ordinary share is based on the net
assets of the company at the period end and on the number of ordinary shares in
issue at the period end less shares held by the Caledonia Investments plc
Employee Share Trust and shares held in treasury or by a subsidiary.
The company's diluted net asset value per ordinary share assumes the exercise of
all outstanding, in-the-money share options, the calling of shares in the
deferred bonus plan and the reissue of shares held in treasury at the mid-market
price at the balance sheet date.
30 Sep 30 Sep 31 Mar
2007 2006 2007
Undiluted
Net assets (£m) 1,290.2 1,208.0 1,323.2
Number of shares (000's) 57,673 57,988 57,952
Net asset value per share (p) 2237 2083 2283
Diluted
Net assets (£m) 1,311.5 1,221.2 1,336.1
Number of shares (000's) 59,302 59,243 59,169
Net asset value per share (p) 2212 2061 2258
5. Related parties
Caledonia Group Services Ltd, a wholly-owned subsidiary of the company, provides
management services to the company. During the period, £5.0m was charged to the
company (30 September 2006 - £5.0m and 31 March 2007 - £11.3m).
6. Segment reporting
The following is an analysis of the revenue and results for the period analysed
by business segment, the group's primary basis of segmentation:
Financial Industrial/
Investing services consumer Property Total
£m £m £m £m £m
6 mths 30 Sep 2007
Gross portfolio return (20.7) - - - (20.7)
Trading revenue - 7.4 44.3 5.7 57.4
Inter-segment sales (2.0) - - (0.3) (2.3)
(22.7) 7.4 44.3 5.4 34.4
Segment result (28.0) 2.0 2.8 1.7 (21.5)
Unallocated net income 8.1
Loss for the period (13.4)
6 mths 30 Sep 2006
Gross portfolio return 4.5 - - - 4.5
Trading revenue - 6.9 48.1 9.9 64.9
Inter-segment sales (2.9) - - (0.5) (3.4)
1.6 6.9 48.1 9.4 66.0
Segment result (6.5) 2.5 5.0 0.6 1.6
Unallocated net income 1.0
Profit for the period 2.6
Year 31 Mar 2007
Gross portfolio return 113.2 - - - 113.2
Trading revenue - 14.3 99.0 22.4 135.7
Inter-segment sales (15.8) - - (0.7) (16.5)
97.4 14.3 99.0 21.7 232.4
Segment result 86.3 4.6 5.9 4.8 101.6
Unallocated net income 6.3
Profit for the year 107.9
7. Impairment of assets
There was no group impairment loss for the period (30 September 2006 - £nil and
31 March 2007 - £0.6m).
8. Capital commitments
On 30 September 2007, the company had undrawn fund and other commitments
totalling £63.3m (30 September 2006 - £50.1m and 31 March 2007 - £73.9m).
9. Share based payments
The company operates two types of share based payment plans. The executive share
option scheme is a discretionary plan for directors and senior management,
entitling participants to purchase shares in the company at the market price at
the date of grant, subject to service and company performance criteria, between
three and ten years after the date of grant. The company also has a deferred
bonus plan under which senior employees compulsorily defer part of their annual
bonus, being any bonus in excess of 50% of their basic salary for the bonus
year, into shares and may voluntarily defer up to 50% of their remaining cash
bonus into shares. The company will match the number of shares comprised in the
voluntary deferral, subject to service and company performance criteria.
In the period to 30 September 2007, participating employees in the executive
share option scheme were awarded options over 172,930 shares at a price of 2158p
per share (30 September 2006 and 31 March 2007 - 172,690 shares at 1878p per
share). The weighted average fair value of these shares at the date of grant,
using a binomial valuation model, was estimated at 588p per share (30 September
2006 and 31 March 2007 - 496p per share).
Also in the period to 30 September 2007, participating employees in the deferred
bonus plan applied a proportion of their annual bonuses to purchase 40,561
shares at a price of 2158p per share (30 September 2006 and 31 March 2007 -
65,347 shares at 1878p per share). Matching awards of 16,733 shares were granted
(30 September 2006 and 31 March 2007 - 20,859 shares), which depend on company
performance. The fair value of the bonus deferral shares was measured directly
as the bonus foregone. The fair value of the matching shares was also 2158p per
share, on a market neutral valuation basis (30 September 2006 and 31 March 2007
- 1878p per share).
The IFRS 2 expense charged to the income statement for the period was £0.7m (30
September 2006 - £0.3m and 31 March 2007 - £1.6m).
Copies of this statement are available at the company's registered office,
Cayzer House, 30 Buckingham Gate, London SW1E 6NN, England, or from its website
at www.caledonia.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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