Caledonia weathers commodities storm

Challenging global commodities markets have made for a tough six months for Caledonia Investments, according to its half-year report to 30 September 2015.

The London-based trust saw its net asset value per share drop 5.1% since 31 March, to 2759p. The total net asset value stood at £1.552bn (down from £1.627bn).

Income from the trust’s portfolio was up 6.9%, however, to £23.3m.

“Despite challenging global equity markets, our portfolio has delivered a resilient performance and continues to benefit from strong income generation, which grew 6.9% in the period, supporting a further 3.6% increase in our dividend”, said chief executive Will Wyatt.

Caledonia invested a net total of £250m over the period, and realised a net total of £173m. That included the sale of TGE Marine for £84m, which Caledonia reported was a 30% premium to the maritime engineer’s book value.

“The Unquoted pool in particular had a strong performance, returning 6.0% during a busy period that included the acquisition of Seven Investment Management and the realisation of TGE Marine at a significant premium”, Wyatt said.

“Weak markets have also enabled us to add to our quoted portfolio, as valuations became more attractive for long term investment.”

The trust’s NAV total return was -3.8% for the six month period, which the report blamed on a difficult time for equity markets. Nevertheless, Wyatt remains positive Caledonia has the right mix of investments going forward.

“While we expect to see continued volatility in financial and commodity markets in the months ahead, we are confident our portfolio will provide shareholders with attractive returns over the long term”, he said.

As at 15:05 on Thursday, shares in Caledonia Investments were up 0.46% to 2,406p.