Caledonia Investments makes decent progress despite market struggles

Caledonia Investments reported a 2.7% decline in net assets in its first half on Thursday, to £1.85bn, with net asset value per share also down, dipping 2.9% to 3,298p.

The FTSE 250 firm said the decline in net assets for the six months to 30 September, compared to a positive net asset value total return of 1.1% for the period, was primarily due to the payment in August of a special dividend amounting to £55m.

It said its net asset value per share total return was 1.1% for the six month period, and 11.9% for the 12 months to 30 September.

It confirmed a 4% increase to the interim dividend to 15.5p, on top of the special dividend totalling £55m paid during the period.

The company also confirmed the Sloane Club was sold for £80m post-period end.

A total of £84m was invested in the half-year, including £50m in fund drawdowns and subscriptions, while £104m was realised, including £51m for the sale of part of the investment in Cobehold.

Net cash stood at £143m as at 30 September.

“Our investment portfolio has delivered a 1.1% NAV per share total return in the six months, with positive contributions from the unquoted and funds pools,” said chief executive Will Wyatt.

“During the period, the US dollar weakened against sterling, creating a drag on our performance.

“We have maintained a robust flow of income, totalling £19.8m for the six months, supporting a 4.0% increase in our interim dividend.”

Wyatt said stock markets and asset prices remained at levels which, for a value-oriented investor such as Caledonia, offered “few opportunities” to deploy capital.

“We retain a healthy level of cash on our balance sheet, which was increased to over 12% of net assets by the sale of the Sloane Club.

“However, both quoted and unquoted markets remain fully priced and these conditions, aided by accommodative monetary policy, may remain for a considerable time.”