Interim Results
Caledonia Investments PLC
21 November 2006
Caledonia Investments plc
Interim results for the six months ended 30 September 2006
Key points
• 311% total shareholder return over ten years (201% outperformance vs
FTSE All-Share Total Return index)
• 242% total shareholder return over five years (189% outperformance vs
FTSE All-Share Total Return index)
• 1.1% increase in NAV per share (undiluted)
• 4.4% increase in interim dividend to 9.5p
• £172m invested and £176m of assets realised
• Payment of elective special dividend of £103m and capital reduction
Tim Ingram, Chief Executive, commented:
'With the discount at which our shares trade to NAV having narrowed, our future
success will be measured by how our portfolio performs relative to the market.
We believe our model helps give us the opportunity both to see a healthy flow of
attractive investment opportunities and to add value to our investments. We
remain determined to retain our prudent approach.'
21 November 2006
Enquiries:
Caledonia Investments plc 020 7802 8080
Tim Ingram, Chief Executive
Jonathan Cartwright, Finance Director
College Hill 020 7457 2020
Tony Friend
Roddy Watt 07766 998915
Chairman's statement
Results
The first half of our fourth year as an investment trust has been a quieter
period for investment markets, with our benchmark FTSE All-Share index showing a
flat performance and with the movement in Caledonia's net asset value per share
during this short period showing just a small increase of 1.1%. This slowdown in
markets has come as no surprise to us, as mentioned in our last annual report.
Tim Ingram, in his Chief Executive's review, comments on our continuing strong
performance against our five and ten year benchmark and this reflects our
investment strategy, which is aimed at the longer term.
Dividend
The directors have declared an interim dividend of 9.5p per share, representing
an increase of 4.4%, thus maintaining our aim to make progressive annual
dividend payments.
Elective special dividend
In June, we offered shareholders the option of participating in a return of
funds of up to £128m by way of an elective special dividend, with the shares
elected being cancelled through a reduction of capital. Shareholders elected to
receive this dividend of 1902.17p per share on 84.4% of the total shares
offered, resulting in a pay out of £102.9m. Of this, we estimate that 89% was
accounted for principally by institutions, including The Cayzer Trust Company,
which chose to maintain its shareholding at 33.3%, leaving only some 11% taken
up by retail shareholders. We regard the overall outcome as very satisfactory.
Share price
Our share price total return over the half year of 3.6% was ahead of the 1.8%
increase in the FTSE All-Share Total Return index and has benefited from a
further reduction in the discount of our share price to net asset value per
share. The discount has narrowed over the period from 3.9% to 2.6%, which is far
removed from the 29.8% prevailing at the time of our conversion to investment
trust status on 1 April 2003. However, I must again remind shareholders that we
do not control our share price and that, for the future, we are more likely to
be judged on the performance of our underlying assets.
Portfolio
Tim Ingram comments on the detailed movements within our portfolio for the six
months under review in his Chief Executive's review. It has continued to be an
active period, but marked by our decision to realise our substantial, long
standing holding in Kerzner International (formerly Sun International) through a
management buy-out proposed by the Kerzner family. We had previously halved the
size of this shareholding and the final realisation yielded proceeds, after
taking account of currency hedges, of £131m, bringing the overall total realised
to £216m, on an investment costing £43m. I would like to thank all concerned
with the management of this highly entrepreneurial and rewarding investment. I
would also like to extend our very deepest sympathies to Sol Kerzner and his
family on the recent loss of his son Butch in a helicopter accident so soon
after their decision to embark on a new phase in the development of the
business, of which Butch was so much the architect.
Outlook
We have been fortunate in delivering long periods of good growth for our
shareholders, but this poses demanding standards for the future. Whilst we can
never be sure of repeating this, we believe strongly in our long term approach
of backing sound managements in businesses that we can understand. We have an
interesting and diverse portfolio, a healthy flow of opportunities and the
resources to invest further. However, there are many uncertainties in this fast
changing world and we can only commit to do our best.
Peter Buckley
Chairman
Chief Executive's review
Markets
The first six months of our financial year has ended rather flat in terms of
equity prices. A distinct wobble was felt in May, with the FTSE All-Share index
falling by over 5%. The effects of higher energy prices, high levels of consumer
debt (at least in the Anglo-Saxon countries), an upwards tendency on interest
rates and tensions in the Middle East and North East Asia are all starting to be
felt. Consequently, notwithstanding our long term approach, we consider it
prudent to retain liquidity on our balance sheet, despite having paid out
approximately £102.9m of cash through an elective special dividend in July.
Performance
Our total shareholder return ('TSR') over five years to 30 September 2006 was
242%, compared with the FTSE All-Share Total Return of 53%. Over the ten year
period, our TSR of 311% compares well with the 110% total return of the FTSE
All-Share. We continue to have a TSR performance that meets our aspiration to be
in the top quartile of global growth investment trusts for both these periods.
As our TSR performance is strongly driven by our share price, performance over
five and ten years has been enhanced by a significant narrowing of the discount
between our share price and net asset value ('NAV') per share. The measure,
therefore, of how our actual portfolio of investments has performed relative to
the market can be gauged by comparing our NAV per share performance with the
FTSE All-Share index.
We converted to investment trust status on 1 April 2003 and, since then, have
consistently applied recognised valuation guidelines in measuring our NAV. In
the three and a half years since our conversion, our NAV per share has increased
by 128%, whereas the FTSE All-Share index has increased by 76%, representing an
outperformance of 52% over this period.
Activity
In the first six months of our financial year we have been very active, making
around £172m of new and follow-on investments. Nearly half of this amount was
for new investments, which included:
o £22.1m for a 60% stake in Ermitage, an unlisted Jersey-based fund of hedge
funds business, with a further £5.0m invested in its Strategic Partners
Fund.
o £15.9m for a 49% stake in Celerant Consulting, an unlisted UK-based
management consultancy business.
o £12.0m for a 19.6% shareholding in Eredene Capital, an AIM-listed company
investing in property in India.
o £12.0m in a Nova Capital Guernsey fund that bought a 100% stake in
Springboard, a private equity investment company, and which will be managed
by Nova Capital, in which we hold a 33% stake.
o £8.4m for a 49% stake in TGE, an unlisted Germany-based liquefied natural
gas process engineering business.
Realisations totalled around £176m, of which by far the most important was the
buy-out of Kerzner International, the resorts owner and operator in which we had
an 8% stake, by a management-led investor group. The $237m received by us at the
beginning of September had been hedged at an average of $1.81 to the pound,
resulting in an overall realisation of £131m, including a £6m benefit from the
hedge.
In July, we paid out approximately £102.9m in cash to shareholders who had
elected to receive a special dividend with a subsequent cancellation of those
shares on which this special dividend was paid. This elective offer permitted
over-subscription, and all shareholders who so subscribed had their
over-subscriptions met in full. Our shares in issue subsequently reduced by
approximately 5.4m to around 58.7m.
As a result of all of the above activity, our liquidity reduced from £180m at 31
March 2006 to £84m at 30 September 2006.
Table 1: Investments
six months to 30 September 2006
Equity
holding Country of Cost
% Instrument domicile Business £m
New
Ermitage 60.0 Equity/loans Jersey Hedge fund manager 22.1
Celerant Group 49.0 Equity/loans UK Management consultancy 15.9
Eredene Capital 19.6 Equity UK Property investment 12.0
Nova Springboard fund Capital/loan Guernsey Investment fund 12.0
TGE Holdings 49.9 Equity/loans Germany Gas engineering 8.4
Serica Energy 3.6 Equity UK Oil and gas exploration 5.6
Strategic Partners fund Shares US Hedge fund 5.0
Other investments 1.7
82.7
Follow-on
Polar Capital funds Shares Ireland/ Hedge funds 26.8
Cayman
Bristow Group 6.9 Equity/prefs US/UK Helicopter services 13.9
Melrose Resources 8.9 Equity UK Oil and gas exploration 10.7
Edinmore 100 Loans UK Property trading 8.4
Novae Group 6.1 Equity UK Insurance 6.1
Other investments 22.9
88.8
171.5
Table 2: Realisations
six months to 30 September 2006
Realised
Proceeds gain
Nature of realisation £m £m
Kerzner International Full sale of holding 125.1 103.4
Sterling Industries Capital distribution 23.0 2.3
Polar Capital funds Redemption of funds 7.2 2.4
Other realisations 20.8 6.6
Total 176.1 114.7
The Kerzner International sale proceeds exclude £5.9m of currency hedge gains.
Looking forward
Although we continue to see a healthy flow of investment opportunities, we
remain conservative in our approach, particularly regarding price. We do,
therefore, expect to have a significant level of liquidity at the end of our
financial year.
Tim Ingram
Chief Executive
Our portfolio
Equity Country Proportion
holding of Business Total of net
Name % domicile sector Nature of business £m assets %
Close Brothers(1,2) 12.3 UK Financial Merchant banking 183.6 15.2
British Empire 18.5 UK Funds Investment trust 134.2 11.1
Securities(1,2)
Quintain Estates(1) 7.3 UK Property Property invest/develop 65.9 5.5
Rathbone Brothers(1,2) 10.8 UK Financial Fund management 52.9 4.4
Polar Capital funds(2) Ireland/ Funds Hedge and long-only 48.1 4.0
Cayman funds
Bristow Group(1,2) 6.9 US/UK Oil & gas Helicopter services 38.7 3.2
Melrose Resources(1) 8.9 UK Oil & gas Oil and gas exploration 34.6 2.9
Cobepa(2) 9.4 Belgium Funds Investment company 29.9 2.5
Edinmore(2) 100.0 UK Property Property trading 29.3 2.4
Oval Financial(2) 29.0 UK Financial Insurance broking 25.7 2.1
Satellite Information 24.4 UK Consumer Betting information 25.6 2.1
Services(2) distribution
Ermitage(2) 60.0 Jersey Financial Fund management 22.1 1.8
Eddington Triple Alpha Cayman Funds Fund of hedge funds 21.4 1.8
Fund(2)
Incisive Media(1,2) 10.6 UK Consumer Business publishing 21.1 1.7
A G Barr(1) 9.4 UK Consumer Soft drinks 20.7 1.7
Savills(1,2) 2.9 UK Property Property agency 20.5 1.7
Alok Industries(1,2) 13.7 India Consumer Textiles manufacturer 18.2 1.5
Sterling Industries(2) 100.0 UK Industrial Engineering 17.7 1.5
Novae Group(1,2) 6.1 UK Financial Insurance services 16.7 1.4
Celerant Group(2) 49.0 UK Industrial Management consultancy 15.9 1.3
India Capital Growth 22.0 UK Funds Investment company 15.8 1.3
Fund(1,2)
Eredene Capital(1,2) 19.6 UK Property Property investment 14.4 1.2
Nova Capital funds UK Funds Investment funds 13.7 1.1
Polar Capital Partners 20.5 UK Financial Fund management 13.6 1.1
(1,2)
Buckingham Gate(2) 100.0 UK Property Property investment 13.2 1.1
The Sloane Club(2) 100.0 UK Consumer Residential club owner/ 12.7 1.1
operator
Avanti Screenmedia(1,2) 17.6 UK Consumer Screenmedia services 12.5 1.0
Marketform(2) 26.8 UK Financial Insurance services 12.3 1.0
Other investments 194.7 16.1
Total investments 1,145.7 94.8
Net liquid assets 62.3 5.2
Net assets 1,208.0 100.0
1. Equity securities listed on UK or overseas stock exchanges.
2. Board representation.
The table above shows holdings representing 1% or more of total assets.
Net assets by business sector
£m %
Financial 347.3 28.7
Funds 343.1 28.4
Property 173.1 14.3
Oil and gas 87.6 7.3
Industrial 70.6 5.8
Consumer 124.0 10.3
Total portfolio 1,145.7 94.8
Other net assets 62.3 5.2
1,208.0 100.0
Net assets by category
£m %
Equities quoted 682.4 56.5
Equities unquoted 183.1 15.1
Loans and fixed income 115.7 9.6
Hedge and other funds 164.5 13.6
Total portfolio 1,145.7 94.8
Other net assets 62.3 5.2
1,208.0 100.0
Net assets by currency
£m %
Pounds sterling 1,036.3 85.8
US dollar 74.3 6.1
Euro 60.4 5.0
Indian rupee 31.2 2.6
Other currencies 5.8 0.5
1,208.0 100.0
Income statement
for the six months ended 30 September 2006 (unaudited)
Company Group
6 mths 6 mths Year 6 mths 6 mths Year
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2006 2005 2006 2006 2005 2006
£m £m £m £m £m £m
Investment and other income 14.0 9.3 26.2 12.3 9.1 26.0
Gains and losses on investments held at fair value 2.3 154.2 352.7 (15.2) 133.6 321.6
Gains on money market funds held at fair value 1.0 - 0.8 1.0 - 0.8
Gains and losses on derivatives 5.9 (6.7) (9.0) 6.1 (6.7) (9.0)
Provisions - - (10.0) (3.1) - (6.9)
23.2 156.8 360.7 1.1 136.0 332.5
Management expenses (5.3) (5.6) (10.8) (5.3) (5.6) (10.8)
Other expenses (0.8) (0.5) (1.1) (0.8) (0.5) (1.1)
Net portfolio return 17.1 150.7 348.8 (5.0) 129.9 320.6
Revenue from sales of goods and services - - - 64.4 60.4 109.1
Operating expenses - - - (55.2) (55.1) (106.9)
Gain on disposal of available for sale investment - - - - - 0.3
Gain on disposal of operations - - - - - 31.4
Gain on investment property - - - - - 1.7
Share of results of joint ventures - - - 1.7 0.4 1.0
Profit before finance costs 17.1 150.7 348.8 5.9 135.6 357.2
Finance costs (1.1) (0.7) (0.8) (2.6) (1.5) (3.2)
Profit before tax 16.0 150.0 348.0 3.3 134.1 354.0
Taxation 1.2 0.3 1.4 (0.7) (0.4) (0.4)
Profit for the period 17.2 150.3 349.4 2.6 133.7 353.6
Attributable to
Equity holders of the parent 17.2 150.3 349.4 1.6 133.7 353.5
Minority interests - - - 1.0 - 0.1
17.2 150.3 349.4 2.6 133.7 353.6
Basic earnings per ordinary share 28.2p 237.1p 551.4p 2.6p 211.1p 558.3p
Diluted earnings per ordinary share 28.0p 236.1p 549.2p 2.6p 210.2p 556.1p
Statement of recognised income and expense
for the six months ended 30 September 2006 (unaudited)
Company Group
6 mths 6 mths Year 6 mths 6 mths Year
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2006 2005 2006 2006 2005 2006
£m £m £m £m £m £m
Gains on revaluation of available for sale investments - - - - 0.7 -
Gain on disposal of available for sale investments - - - - - (0.3)
Exchange differences on translation of foreign operations - - - (0.7) 1.7 0.7
Actuarial gains on defined benefit pension schemes - 1.2 (1.2) 2.5 1.0 (1.8)
Tax on items recognised directly in equity - - 0.3 - (0.3) 0.3
Net income recognised directly in equity - 1.2 (0.9) 1.8 3.1 (1.1)
Profit for the period 17.2 150.3 349.4 2.6 133.7 353.6
Total recognised income and expense 17.2 151.5 348.5 4.4 136.8 352.5
Attributable to
Equity holders of the parent 17.2 151.5 348.5 3.4 136.8 352.4
Minority interests - - - 1.0 - 0.1
17.2 151.5 348.5 4.4 136.8 352.5
Balance sheet
as at 30 September 2006 (unaudited)
Company Group
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2006 2005 2006 2006 2005 2006
£m £m £m £m £m £m
Non-current assets
Investments held at fair value through profit or loss 1,142.9 1,045.2 1,145.2 1,031.7 959.6 1,049.0
Investments in subsidiaries 2.8 2.8 2.8 - - -
Property, plant and equipment - - - 75.1 76.3 69.1
Investment property - - - 5.8 4.1 5.8
Intangible assets - - - 40.6 4.1 4.0
Available for sale investments - - - 0.5 4.4 0.5
Interests in joint ventures - - - 11.0 8.8 9.6
Deferred tax assets 2.3 - 1.2 4.2 1.0 2.4
Non-current assets 1,148.0 1,048.0 1,149.2 1,168.9 1,058.3 1,140.4
Current assets
Inventories - - - 29.5 24.2 30.2
Operating and other receivables 4.3 5.8 4.2 28.4 31.7 27.8
Current tax assets - 4.1 - 0.6 3.8 0.5
Investments held at fair value through profit or loss - - 75.8 0.3 - 75.8
Cash and cash equivalents 84.1 82.3 103.8 115.0 102.2 164.7
Current assets 88.4 92.2 183.8 173.8 161.9 299.0
Total assets 1,236.4 1,140.2 1,333.0 1,342.7 1,220.2 1,439.4
Current liabilities
Bank overdrafts - - - (1.7) (5.1) (8.2)
Interest-bearing loans and borrowings - - - (1.0) - (0.7)
Operating and other payables (5.6) (12.1) (4.0) (23.7) (33.3) (25.4)
Employee benefits - - - (1.4) (2.3) (9.9)
Current tax liabilities (7.6) (9.0) (6.5) (9.8) (9.4) (8.8)
Provisions (13.5) - (13.5) (14.7) - (11.0)
Current liabilities (26.7) (21.1) (24.0) (52.3) (50.1) (64.0)
Non-current liabilities
Interest-bearing loans and borrowings - - - (63.4) (39.5) (41.3)
Employee benefits (1.7) (1.4) (1.4) (4.9) (14.6) (8.0)
Deferred tax liabilities - (1.9) (0.6) (1.1) (2.5) (0.7)
Provisions - - - (4.0) - -
Non-current liabilities (1.7) (3.3) (2.0) (73.4) (56.6) (50.0)
Total liabilities (28.4) (24.4) (26.0) (125.7) (106.7) (114.0)
Net assets 1,208.0 1,115.8 1,307.0 1,217.0 1,113.5 1,325.4
Equity
Share capital 3.3 3.6 3.6 3.3 3.6 3.6
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 935.6 752.8 947.5 - - -
Retained earnings 266.6 356.9 353.4 1,207.4 1,106.0 1,317.9
Foreign exchange translation reserve - - - (0.2) 0.1 0.5
Fair value reserve for available for sale investments - - - - 0.7 -
Equity attributable to owners of the parent 1,208.0 1,115.8 1,307.0 1,213.0 1,112.9 1,324.5
Minority interest - - - 4.0 0.6 0.9
Total equity 1,208.0 1,115.8 1,307.0 1,217.0 1,113.5 1,325.4
Net asset value per ordinary share (undiluted) 2083p 1762p 2061p
Net asset value per ordinary share (diluted) 2061p 1748p 2044p
Cash flow statement
for the six months ended 30 September 2006 (unaudited)
Company Group
6 mths 6 mths Year 6 mths 6 mths Year
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2006 2005 2006 2006 2005 2006
£m £m £m £m £m £m
Cash flow from operating activities
Dividends received 9.8 8.5 18.6 8.7 8.4 17.4
Interest received 2.9 3.4 7.8 3.2 3.3 9.1
Cash received from customers - - - 69.0 62.0 115.8
Cash paid to suppliers (6.4) (7.4) (13.3) (74.5) (61.8) (132.7)
Taxes paid - - - (3.3) (1.7) (3.2)
Group relief received 0.6 1.1 1.4 - - -
Net cash flow from operating activities 6.9 5.6 14.5 3.1 10.2 6.4
Cash flow from investing activities
Purchases of property, plant and equipment - - - (12.1) (1.4) (4.1)
Proceeds from disposal of property, plant and equipment - - - - 1.6 1.9
Purchases of non-current investments held at fair value (168.4) (58.9) (160.2) (138.7) (58.7) (149.2)
Purchases of current investments held at fair value - - (85.0) (0.3) - (85.0)
Disposals of non-current investments held at fair value 176.3 119.6 323.0 145.5 110.8 274.4
Disposals of current investments held at fair value 76.8 - 10.0 76.8 - 10.0
Net receipts from derivatives 5.3 - (7.5) 6.0 - (7.5)
Purchase of interest in joint venture - - - - (1.1) (1.1)
Purchase of subsidiary net of cash acquired - - - (17.1) (0.1) -
Proceeds on disposal of subsidiaries net of cash disposed - - - 0.9 - 80.3
Taxes received - - - 0.9 - 1.3
Net cash flow from investing activities 90.0 60.7 80.3 61.9 51.1 121.0
Cash flow from financing activities
Interest paid (0.8) (0.4) (0.3) (2.0) (1.5) (2.3)
Distributions paid to holders of equity shares (115.9) (12.4) (18.2) (115.4) (12.4) (18.2)
Proceeds from new borrowings 38.0 - - 51.2 1.7 7.0
Repayment of borrowings from a subsidiary - (10.3) (10.2) - - -
Repayment of borrowings (38.0) - - (41.8) (0.1) (4.0)
Net purchase of own shares 0.1 (0.5) (1.9) 0.1 (0.5) (1.9)
Net cash flow from financing activities (116.6) (23.6) (30.6) (107.9) (12.8) (19.4)
Net increase in cash and cash equivalents (19.7) 42.7 64.2 (42.9) 48.5 108.0
Cash and cash equivalents at period start 103.8 39.6 39.6 156.5 48.4 48.4
Exchange gains/(losses) on cash and cash equivalents - - - (0.3) 0.2 0.1
Cash and cash equivalents at period end 84.1 82.3 103.8 113.3 97.1 156.5
Notes to the financial information
1. Reporting entity
Caledonia Investments plc (the 'Company') is an investment trust company
incorporated in England. 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 and New Zealand Stock Exchanges.
The unaudited interim financial information contained in this report has been
approved for issue by the board of directors on 21 November 2006. The
comparative figures for the financial year ended 31 March 2006 are not the
Company's statutory accounts for that financial year. Those accounts, which were
prepared under International Financial Reporting Standards ('IFRS') as adopted
by the EU, have been reported on by the Company's auditors and delivered to the
Registrar of Companies. The report of the auditors was unqualified and did not
contain statements under section 237(2) or (3) of the Companies Act 1985.
This interim financial information has not been prepared in accordance with IAS
34 'Interim Financial Reporting'.
The interim financial information contained in this report does not include all
the information and disclosures required in the annual report and financial
statements, and should be read in conjunction with the Group's annual report and
financial statements as at 31 March 2006, which are available on request from
the Company's registered office or at www.caledonia.com.
2. Significant accounting policies
The interim financial information contained in this report, as at and for the
six months ended 30 September 2006, comprise the Company and all its
subsidiaries (together referred to as the 'Group') and the Group's interests in
associates and jointly controlled entities.
The accounting policies applied by the Group in this interim financial
information are the same as those applied by the Group in its consolidated
financial statements as at and for the year ended 31 March 2006.
Caledonia is an investment trust company. However, because it has the power to
control certain investments, it is required to prepare group accounts that
consolidate the results of such investments. In order to present information
that is comparable with other investment trust companies, Caledonia also
publishes financial information of the Company, which includes investments in
subsidiaries regarded as part of the Company's investing business at fair value.
3. Taxation
Company Group
6 mths 6 mths Year 6 mths 6 mths Year
30 Sep 30 Sep 31 Mar 30 Sep 30 Sep 31 Mar
2006 2005 2006 2006 2005 2006
£m £m £m £m £m £m
Income statement
UK taxation (1.2) (0.3) (1.4) (0.3) (0.4) (1.4)
Overseas taxation - - - 1.0 0.8 1.8
(1.2) (0.3) (1.4) 0.7 0.4 0.4
Changes in equity
UK taxation - - (0.3) - 0.3 (0.3)
Included in the Group's share of results of joint ventures for the six months
ended 30 September 2006 is a tax charge of £0.5m (six months ended 30 September
2005 - £0.1m and year ended 31 March 2006 - £0.1m).
4. Earnings and net asset value 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 2006 was based on the profit attributable to ordinary shareholders
and a weighted average number of ordinary shares outstanding during the six
months ended 30 September 2006.
The calculation of diluted earnings per share takes account of share options and
deferred bonus plan awards with dilutive potential. The weighted average number
of ordinary shares takes account the number of dilutive potential ordinary
shares to be issued as a result of share options exercised 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
2006 2005 2006 2006 2005 2006
£m £m £m £m £m £m
Earnings (basic) 17.2 150.3 349.4 1.6 133.7 353.5
Effect of share options - - 0.2 - - 0.2
Earnings (diluted) 17.2 150.3 349.6 1.6 133.7 353.7
'000 '000 '000 '000 '000 '000
Weighted average shares (basic) 61,081 63,394 63,366 61,051 63,344 63,315
Effect of share options 389 275 294 389 275 294
Weighted average shares (diluted) 61,470 63,669 63,660 61,440 63,619 63,609
Undiluted and diluted net asset value 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.
The company's diluted net asset value per ordinary share assumes the exercise of
all outstanding share options and the vesting of shares under the deferred bonus
plan.
30 Sep 30 Sep 31 Mar
2006 2005 2006
Net assets (£m) Undiluted 1,208.0 1,115.8 1,307.0
Diluted 1,221.2 1,127.2 1,317.1
Number of shares ('000) Undiluted 57,988 63,313 63,411
Diluted 59,243 64,495 64,425
Net asset value per share (p) Undiluted 2083 1762 2061
Diluted 2061 1748 2044
5. Dividends
6 mths to 6 mths to Year to
30 Sep 2006 30 Sep 2005 31 Mar 2006
p £m p £m p £m
Recognised
Interim for 2005 - - - - 9.1 5.8
Final for 2006 (2005) 20.5 13.0 19.5 12.4 19.5 12.4
Elective special - 102.9 - - - -
20.5 115.9 19.5 12.4 28.6 18.2
Proposed
Interim for 2006 9.5 5.5 9.1 5.8 - -
Final for 2006 - - - - 20.5 13.0
9.5 5.5 9.1 5.8 20.5 13.0
The proposed interim dividend for 2006 is based on 9.5p per share and 57,988,000
ordinary shares being eligible as at 30 September 2006. The dividend was
approved on 21 November 2006 and will be payable on 9 January 2007 to
shareholders on the register on 8 December 2006. The ex-dividend date will be 6
December 2006.
Independent review report
to Caledonia Investments plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 September 2006 which comprises the income statement, the
statement of recognised income and expense, the balance sheet, the cash flow
statement and related notes 1 to 5 on a Company and Group basis. We have read
the other information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
This report is made solely to the company in accordance with Bulletin 1999/4
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 interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2006.
Deloitte & Touche LLP
Chartered Accountants
London
21 November 2006
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.
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