Interim Results

Caledonia Investments PLC
27 November 2001

                         INTERIM RESULTS ANNOUNCEMENT



Caledonia Investments plc, the diversified trading and investment company,
today announces its interim results for the six months ended 30 September
2001. The salient features are:
                                                    6 mths    6 mths      Year
                                                    30 Sep
                                                              30 Sep    31 Mar
                                                      2001
                                                                2000      2001
                                                        £m
                                                                  £m        £m
Total operating profit                                15.2      25.7      53.5
Profit before taxation                                 8.9      27.9      55.7
Shareholders' funds                                  732.0     837.6     854.8
Basic earnings per ordinary share                     8.1p     24.0p     53.2p
Adjusted basic earnings per ordinary share            9.9p     24.3p     49.6p
Dividends per ordinary share                          7.8p      7.8p     24.0p
Net asset value per ordinary share                    985p     1055p     1082p
Adjusted net asset value per ordinary share          1014p     1314p     1198p



Commenting on the results, Peter Buckley, Chairman and Chief Executive of
Caledonia Investments plc, said:

'As indicated in our statement on 23 October, interim profits have shown a
marked reduction compared with last year. Although adjusted net asset value
per share also moved down broadly in line with markets, values have since
returned to almost the March level. It remains to be seen how soon the
reduction in interest rates will stimulate a recovery in the world economy and
whether inflation can be kept in check when the upturn comes. However, there
will be interesting investment opportunities for those with good financial
resources and a willingness to invest, both of which we have.'



HIGHLIGHTS

Net Asset Value

Caledonia's overall performance is usually assessed by reference to the value
of its assets. Net asset value per share showed a reduction, as recorded in
the balance sheet, from 1082 pence at 31 March to 985 pence or, when adjusted
to reflect the market value of our associate interests, from 1198 pence to
1014 pence. The fall of 15.4% in the latter values is broadly in line with
comparator indices, although since 30 September adjusted net asset value per
share has returned to almost the March level.

Profit and Loss Account

Unsurprisingly given the associate company results already in the public
domain and the more difficult economic climate, profits for the six months to
30 September 2001 have shown a marked reduction. The reduction in group
operating profit from £8.3m to £2.5m included a fall in trading profit from £
6.7m to £0.6m, due largely to the absence of last year's £4.1m profit from the
sale of a development site and an interim loss of £1.0m from the engineering
activities of Sterling Industries (2000 - £0.5m profit). In addition, interest
receivable of £2.3m moved to £0.3m of interest payable following the
utilisation of group cash in payment of the special dividend last year and in
continued investment. The lower profit from our associates, which has moved
from £17.5m to £12.4m, reflects a reduction of £8.5m in our share of the
profits of Close Brothers reported for the second half of its year to 31 July
2001. This has been partially offset by a first time operating contribution of
£5.9m from Sun International Hotels, which has been treated as an associate
since 1 October 2000. The increase in interest payable also relates to Sun
International Hotels. Overall, profit before tax has declined from £27.9m to £
8.9m.

Earnings per Share

Earnings per share have come down from 24.0 pence to 8.1 pence and, on an
adjusted basis, show a lesser reduction from 24.3 pence to 9.9 pence.

Balance Sheet

In the balance sheet, net debt increased from £9m at 31 March to £55m. This
was largely the result of spending £31m on investment and £36m buying in 4.6m
Caledonia shares, which has added some 13 pence to our net asset value per
share.

Dividend

In view of the uncertainty which faces the world economy at the present time
and the fall in our half time results, the directors have declared a
maintained interim dividend of 7.8 pence per share at a cost of £5.8m (2000 -
£6.1m). The dividend will be payable on 10 January 2002 to shareholders
registered on 7 December 2001.

Directors

Caledonia is pleased to confirm that Charles Allen-Jones and Adrian Evans have
joined the board as independent non-executive directors and looks forward to
the benefit of their very considerable experience. The company is also pleased
to confirm that James Loudon, who is currently a non-executive director, has
become non-executive deputy chairman with immediate effect. Michael Wyatt, who
has been deputy chairman for over 7 years, will relinquish his executive
responsibilities at the end of the company's current financial year, but will
remain on the board as a non-executive director. Nigel Cayzer has ceased to be
a director. Joe Burnett-Stuart, the senior independent non-executive director,
plans to retire at the conclusion of the next annual general meeting in July
2002 and Caledonia intends to appoint another independent non-executive
director in due course.



Enquiries:

Caledonia Investments plc:

Peter Buckley, Chairman and Chief Executive

020 7802 8080



Citigate Dewe Rogerson:

Bill Trelawny / Charles Vivian

020 7638 9571



REVIEW OF OPERATIONS



Financial

Close Brothers (associate: 19%)

Close Brothers reported its first decline in overall profits for 26 years. The
Winterflood market making activity, which yielded £50m of superprofits in the
previous year, was also impacted by the slowdown in stock market activity
during the second half of the year to 31 July. However, the other group
activities, namely asset management, corporate finance and banking, which now
includes asset finance, grew by 28%. The sound management which has
characterised this business will stand it in good stead during the current
downturn and when market conditions improve.

Rathbones (investment: 12%)

Rathbones reported profits for the six months to 30 June 20% below its
comparable period, although funds under management had increased by £0.5bn to
£6.0bn, which bodes well for the longer term.

Friends Ivory & Sime (investment: 6%)

Friends Ivory & Sime recently announced lower earnings per share and an
unchanged interim dividend for its half year to 30 June 2001. Funds under
management fell from £37.4bn to £34.8bn between December 2000 and June 2001
against a background of weaker global markets.

ICAP (investment: 4%)

ICAP, formerly Garban-Intercapital, has bucked the trend in the financial
sector by indicating strong growth in its half year to 30 September,
notwithstanding the loss of its offices in the World Trade Center, from which
thankfully all but one of its 750 staff escaped. The New York operation is now
substantially re-established, which is a huge credit to all concerned, and the
group continues to strengthen its market position as the leading interdealer
broker.

Industrial and Services

Sterling Industries (subsidiary: 100%)

Sterling Industries, in common with many others in the engineering sector,
continues to find trading conditions difficult. The expected improvement in
the Hydraulics division did not materialise as markets continued to soften and
retrenchment costs were incurred. In the Thermal Process division, a welcome
improvement in the UK was more than offset by a lack of orders in the USA and
lower margins in Germany.

Amber (subsidiary: 100%)

Amber reported an overall improvement in profitability at the trading level
resulting from management action focused on customer service, pricing and cost
control.

Offshore Logistics (investment: 6%)

Offshore Logistics continued the strong improvement achieved last year.
Earnings per share for the six months to 30 September 2001 increased by over
70%, with significant contributions from both Bristow in the North Sea and
Airlog in the Gulf of Mexico. Whilst the outlook for the year seems
satisfactory, pressures from staff costs and the consequences of the lower oil
price remain.



Investment Funds

English & Scottish Investors (associate: 32%)

English & Scottish Investors enjoyed another period of outperformance against
its benchmark indices for its first half year to 31 July, albeit there was a
fall its net asset value per share of some 10%.

British Empire Securities and General Trust (associate: 18%)

British Empire Securities and General Trust has recently announced that its
net asset value per share fell 8% during its year to 30 September, which is a
highly creditable achievement when compared with a fall of 31% in its
benchmark index.

Technology

Caledonia's technology investments have declined in value against a background
of very substantial falls in the TMT sector worldwide. In particular, the
investment in Amerindo Internet Fund (investment: 5%) has continued to
disappoint both in terms of net asset value performance and discount. Overall,
technology interests were valued at £28m at 30 September, compared with £30m
at 31 March. Investment in the sector totalled £4m during the period and
investments totalling £4m were transferred from other categories.

Leisure and Media



The Sloane Club (subsidiary: 100%)

The Sloane Club has continued to deliver a good performance in spite of the
softer London hotel market.



Radio Investments (associate: 39%)

Radio Investments continued to focus its portfolio of local radio stations.
Gross revenues rose strongly during its year to 30 September and have
continued to grow, albeit at a slower rate.



Sun International Hotels (associate: 21%)

Sun International Hotels enjoyed a continuing improvement in its second
quarter results. However, Paradise Island was impacted by the terrorist events
of 11 September, as occupancy fell to 35% for the month of September compared
with 68% for the same month in the previous year. This resulted in a group
loss of $7.5m for the quarter before unusual items, compared with a profit of
$9.2m for the equivalent quarter last year. Occupancy has gradually improved
into October and November, although some damage was sustained from Hurricane
Michelle. The expansion of the Mohegan Sun casino was achieved ahead of time
on 25 September and further extensions are scheduled to open in April next
year. Whilst these facilities are owned by the Mohegan Tribe, the contribution
to Sun International Hotels, through its commission on revenue, should be
substantially enhanced looking forward.

Property and General

The six months under review has been a quieter period for both Edinmore and St
Lawrence Properties, the latter of which, as already mentioned, delivered a £
4.1m profit on the disposal of a development land site in Oxford in the
comparable period last year.



SUMMARY OF RESULTS BY CLASS OF BUSINESS
                                  Attributable
                                       profits       Book value       Valuation
                                            £m               £m              £m

                                   -----------     ------------      ----------
Financial                                  9.0            183.9           264.7
Industrial and services                      -            113.1           117.0
Investment funds                           3.0            220.4           185.6
Technology                               (0.3)             28.1            28.5
Leisure and media                          4.8            136.9           107.1
Property and general                       2.3            104.5           105.9

                                    ----------       ----------      ----------
                                          18.8            786.9           808.8
Other items                              (3.6)
Unallocated net liabilities                              (54.9)          (54.9)

                                   -----------      -----------     -----------
                                          15.2            732.0           753.9

                                   -----------      -----------     -----------



The table above presents a summary of the results of the group by class of
business. Attributable profits are the group's share of operating profits of
subsidiaries and associates, and dividends and interest receivable from other
investments. The book value is the group's share of net assets of subsidiaries
and associates, including capitalised goodwill, and a valuation of
investments. The valuation column overlays the book value with a valuation of
associates, whilst subsidiaries are shown at book value throughout.

If the group had realised its investments at 30 September 2001 at the stated
valuation, it is calculated that tax of some £31m would have arisen.



UNAUDITED GROUP PROFIT AND LOSS ACCOUNT

for the six months ended 30 September 2001


                                                6 mths       6 mths        Year
                                                30 Sep       30 Sep      31 Mar
                                                  2001         2000        2001
                                                    £m           £m          £m

                                          ------------  -----------  ----------
Group turnover                                    56.0         68.1       135.2

Trading profit                                     0.6          6.7         9.7
Income from investments                            6.0          6.4        12.6
Interest net                                     (0.3)          2.3         3.1
Amounts written off current assets                   -        (3.8)       (3.9)
Other income                                       0.5          0.3         0.9
Group overheads                                  (4.3)        (3.6)       (7.7)

                                         -------------  ----------- -----------
Group operating profit                             2.5          8.3        14.7
Share of operating profit of associates           12.4         17.5        40.1
Amortisation of goodwill on acquisition            0.3        (0.1)       (1.3)
of associates
                                         -------------  ----------- -----------
Total operating profit                            15.2         25.7        53.5
Loss on sale of operations                       (0.4)          4.0         9.9
Interest payable                                 (5.9)        (1.8)       (7.7)

                                         ------------- ------------ -----------
Profit on ordinary activities before               8.9         27.9        55.7
taxation
Tax on profit on ordinary activities             (2.6)        (8.4)      (12.8)

                                         ------------- ------------ -----------
Profit on ordinary activities after                6.3         19.5        42.9
taxation
Minority interests (equity)                          -        (0.6)       (1.0)

                                         ------------- ------------ -----------
Profit for the financial period                    6.3         18.9        41.9
Dividends                                        (5.8)        (6.1)      (18.8)

                                         ------------- ------------ -----------
Profit retained for the financial period           0.5         12.8        23.1

                                         ------------- ------------ -----------
Per ordinary share                                   p            p           p

                                         ------------- ------------ -----------
Earnings
Basic                                              8.1         24.0        53.2
Diluted                                            8.1         23.9        53.1
Adjusted basic                                     9.9         24.3        49.6
Dividends                                          7.8          7.8        24.0

                                         -------------  ----------- -----------



UNAUDITED GROUP RESERVE MOVEMENTS

for the six months ended 30 September 2001



TOTAL RECOGNISED GAINS AND LOSSES
                                                  6 mths      6 mths       Year
                                                  30 Sep      30 Sep     31 Mar
                                                    2001        2000       2001
                                                      £m          £m         £m

                                           ------------- ----------- ----------
Profit for the financial period                      6.3        18.9       41.9
Realised gains and losses on sale of                 0.8        58.2       58.1
investments
Provision against investments                      (1.1)       (1.5)      (1.5)
Movement in revaluation reserve                   (60.8)       (1.7)     (14.5)
Tax on sale of investments                         (1.1)      (12.3)      (1.5)
Exchange differences                               (5.5)         9.9       16.7
Minority interests                                 (0.1)           -          -
Share of reserve movements of associates
Realised gains and losses on sale of                 1.1        11.4       14.1
investments
Movement in revaluation reserve                   (21.0)       (1.7)        0.2
Exchange differences                               (0.6)       (0.1)        0.4
Other movements                                      0.7           -          -

                                          -------------- ----------- ----------
Total recognised gains and losses                 (81.3)        81.1      113.9

                                          -------------- ----------- ----------



RECONCILIATION OF SHAREHOLDERS' FUNDS
                                                6 mths       6 mths        Year
                                                30 Sep       30 Sep      31 Mar
                                                  2001         2000        2001
                                                    £m           £m          £m

                                           -----------   ----------   ---------
Total recognised gains and losses               (81.3)         81.1       113.9
Dividends                                        (5.8)        (6.1)      (18.8)

                                          ------------   ----------   ---------
                                                (87.1)         75.0        95.1
Purchase of own shares                          (36.0)        (1.6)       (5.1)
Goodwill on disposals written back               (0.5)            -         0.5
Share of goodwill movements of associates          0.8        (0.1)           -

                                          ------------   ----------   ---------
Net movement in shareholders' funds            (122.8)         73.3        90.5
Opening balance of shareholders' funds           854.8        764.3       764.3

                                          ------------   ----------   ---------
Closing balance of shareholders' funds           732.0        837.6       854.8

                                          ------------   ----------   ---------



UNAUDITED GROUP BALANCE SHEET

at 30 September 2001
                                                 30 Sep      30 Sep      31 Mar
                                                   2001        2000        2001
                                                     £m          £m          £m

                                            -----------  ----------   ---------
Fixed assets
Intangible assets                                  11.0        11.5        11.4
Tangible assets                                    68.7        48.0        68.3
Investments
Investment in associates                          389.9       279.9       405.3
Other investments                                 329.4       494.9       389.1

                                           ------------  ----------  ----------
                                                  799.0       834.3       874.1

                                           ------------  ----------  ----------
Current assets
Stocks                                             16.1        17.7        16.5
Debtors                                            31.6        39.7        37.9
Short term deposits                                10.6        23.8         9.0
Cash at bank and in hand                           21.8        18.5        11.4

                                           ------------  ----------  ----------
                                                   80.1        99.7        74.8

                                           ------------  ----------  ----------
Creditors falling due within one year
Short term borrowings                            (81.5)      (13.0)      (23.4)
Other creditors                                  (30.8)      (37.6)      (35.8)

                                           ------------ -----------  ----------
                                                (112.3)      (50.6)      (59.2)

                                           ------------ -----------  ----------
Net current liabilities                          (32.2)        49.1        15.6

                                           ------------ -----------  ----------
Total assets less current liabilities             766.8       883.4       889.7

                                           ------------ -----------  ----------
Creditors falling due after more than one
year
Long term borrowings                              (5.4)       (6.1)       (5.5)
Other creditors                                       -       (1.5)           -

                                           ------------ -----------  ----------
                                                  (5.4)       (7.6)       (5.5)

                                           ------------ -----------  ----------
Provision for liabilities and charges
Deferred taxation                                (28.0)      (36.4)      (28.0)

                                           ------------ -----------  ----------
                                                  733.4       839.4       856.2
Minority interests (equity)                       (1.4)       (1.8)       (1.4)

                                          ------------- ----------- -----------
                                                  732.0       837.6       854.8

                                          ------------- ----------- -----------
Capital and reserves
Called up share capital                             4.1         4.4         4.4
Share premium account                               1.3         1.3         1.3
Capital redemption reserve                          1.1         0.8         0.8
Revaluation reserve                                36.5       189.0       119.1
Profit and loss account                           689.0       642.1       729.2

                                          ------------- ----------- -----------
Shareholders' funds (equity)                      732.0       837.6       854.8

                                          ------------- ----------- -----------
Net asset value per ordinary share                 985p       1055p       1082p

                                          ------------- ----------- -----------



UNAUDITED GROUP CASH FLOW STATEMENT

for the six months ended 30 September 2001
                                                 6 mths      6 mths        Year
                                                 30 Sep      30 Sep      31 Mar
                                                   2001        2000        2001
                                                     £m          £m          £m

                                           ------------  ----------  ----------
Net cash inflow from operating activities           6.8        17.4        32.7

                                           ------------  ----------  ----------
Dividends from associates                           3.8         2.4         7.6

                                           ------------  ----------  ----------
Servicing of finance
Interest paid                                     (0.1)       (0.2)       (0.3)
Dividends paid to minority shareholders               -       (0.7)       (1.8)

                                          ------------- -----------  ----------
                                                  (0.1)       (0.9)       (2.1)

                                          ------------- -----------  ----------
Taxation                                          (1.0)       (2.9)       (9.2)

                                          ------------- -----------  ----------
Capital expenditure and financial
investment
Purchase of tangible fixed assets                 (3.2)       (1.3)      (23.7)
Sale of tangible fixed assets                       0.1         0.1         0.3
Purchase of investments                          (27.8)      (52.8)      (73.9)
Sale of investments                                21.1        31.1        51.7

                                          ------------- -----------  ----------
                                                  (9.8)      (22.9)      (45.6)

                                          ------------- -----------  ----------
Acquisitions and disposals
Purchase of operations                            (0.2)       (0.5)       (0.5)
Investment in associates                          (4.6)       (6.0)      (18.7)
Sale of interests in associates                     0.5         0.3         0.2

                                          ------------- ----------- -----------
                                                  (4.3)       (6.2)      (19.0)

                                          ------------- ----------- -----------
                                                  (4.6)      (13.1)      (35.6)
Equity dividends paid                            (12.7)      (67.5)      (73.6)
Management of liquid resources                    (1.7)        84.9        99.9
Purchase of own shares                           (28.5)       (1.6)       (5.1)
Loans                                              27.9         0.5        21.9

                                          ------------- -----------  ----------
Decrease in cash in the period                   (19.6)         3.2         7.5

                                          ------------- -----------  ----------



RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
                                                  6 mths      6 mths       Year
                                                  30 Sep      30 Sep     31 Mar
                                                    2001        2000       2001
                                                      £m          £m         £m

                                            ------------  ----------  ---------
Group operating profit                               2.5         8.3       14.7
Depreciation and amortisation                        3.0         2.8        5.5
Loss and provision against own shares                0.1         0.1        0.1
Profit on sale of fixed assets                         -           -      (0.1)
Investment income and interest accruals            (0.3)       (1.6)      (1.9)
increase
Stocks decrease                                      0.4         0.8        2.2
Debtors decrease                                     6.8         8.9       14.8
Creditors decrease                                 (5.7)       (1.9)      (2.6)

                                           ------------- ----------- ----------
                                                     6.8        17.4       32.7

                                           ------------- ----------- ----------



SUPPLEMENTARY INFORMATION



Taxation

Taxation charged to the profit and loss account included £2.6m (2000 - £5.3m)
in respect of associated companies.



Earnings per ordinary share

The calculation of basic earnings per ordinary share was based on the
77,542,000 (2000 - 78,901,000) weighted average number of ordinary shares in
issue during the period. Diluted earnings per ordinary share took into account
the 46,000 (2000 - 88,000) dilutive potential ordinary shares from employee
share option schemes.

Adjusted basic earnings per ordinary share, excluding sale of operations,
amortisation of goodwill and other items, net of attributable tax, is
considered to provide a more consistent indication of underlying operating
performance.



Analysis of changes in net debt
                                 Opening     Exchange                Closing
                                 balance     differences Cash flow   balance
                                 £m          £m          £m          £m

                                 ----------  ----------- ----------- ----------
Cash at bank and in hand         11.4        (0.1)       10.5        21.8
Bank overdrafts                  (1.2)       -           (30.1)      (31.3)

                                 ----------  ----------- ----------- ----------
                                 10.2        (0.1)       (19.6)      (9.5)
Short term deposits              9.0         (0.1)       1.7         10.6
Debt due within one year         (22.2)      -           (28.0)      (50.2)
Debt due after more than one     (5.5)       -           0.1         (5.4)
year
                                 ----------- ----------- ----------- ----------
                                 (8.5)       (0.2)       (45.8)      (54.5)

                                 ----------- ----------- ----------- ----------



Basis of preparation and issue of interim report

The interim report has been prepared on the basis of the accounting policies
set out in the 2001 group accounts, except when they are to be changed to be
in the next annual accounts, and is unaudited. The group has implemented FRS
19 (deferred tax), which has had no material impact on reported results.

The interim report was approved by the board on 28 November 2001. The results
for the year ended 31 March 2001 do not constitute the company's statutory
accounts. The statutory accounts for that period, which received an
unqualified audit report, have been filed with the Registrar of Companies.

The interim report will be posted to all shareholders and copies will be made
available to the public at the registered office of the Company, Cayzer House,
30 Buckingham Gate, London SW1E 6NN.