Caledonia Investments (CLDN) announced its annual results for the year ended 31 March 2024. The company saw a NAV total return of 7.4% slightly behind the benchmark return of 8.4%, although it remains well ahead over three, five, and ten year periods. Despite the solid NAV growth, the share price total return was -1.2%, leading to the discount widening to 34% at the time of publishing. The company, which invests via strategic allocations to three pools: public companies, private capital and funds, noted that all three contributed to the growth, with the investment portfolio delivering a return of 8.7% in the year, despite foreign exchange headwinds of c.£39m. This included a 12.0% return from public companies and 12.3% return from private capital and 2.2% return from funds.
CLDN also announced a 4.5% increase to in the proposed dividend for 2024, marking 57 consecutive years of progressive dividend growth.
Additionally, the company highlighted its robust balance sheet and strong liquidity position which includes;
- Net cash of £227m combined with an undrawn revolving credit facility of £250m, providing total liquidity of £477m
- £346m invested into new and existing investments with proceeds of £371m received from the portfolio in the year
- 290,219 of shares repurchased in March and April 2024 at an average discount of 36%, resulting in a 10.1p accretion to NAV per share
Commenting on the performance, chief executive officer, Mat Masters, noted;
“Our long-standing philosophy of investing in high-quality, well-managed companies, with a truly long-term view, continues to serve us well. All three investment pools have contributed to our growth over the past year, despite a background of continuing macroeconomic and geopolitical uncertainty, and we are delighted to be increasing our dividend for the 57th consecutive year.
“While the external environment remains uncertain, we remain focused on what we can control. Our long-term approach, diversified global portfolio and strong balance sheet position us well to take advantage of investment opportunities and continue delivering attractive long-term returns.”
Regarding the outlook, chair David Stewart added;
“Caledonia’s investment strategy takes a long-term view, with the premise being that exposure to good-quality companies over long time periods is preferable to short-term trading. Focusing on the long term necessitates a balanced approach to building a portfolio and has resulted in Caledonia’s exposure being well-diversified and having a global reach.
“The economic, fiscal, geopolitical and technological environments appear to be in a state of flux and somewhat unpredictable. Our key steps to mitigate these risks continue to be with the quality and resilience of each investment being carefully considered, as well as avoiding debt to drive returns. While Caledonia is a long-term investor, an active approach to portfolio management enables us to take advantage of opportunities as they arise.”
CLDN : Steady year for Caledonia not reflected in share price