Sale of Sterling Hydraulics

Caledonia Investments PLC
14 October 2005


Caledonia Investments plc


Sale of Sterling Hydraulics


Caledonia Investments plc ('Caledonia') is pleased to announce the sale of
Sterling Hydraulics Ltd and Sterling Hydraulics Inc (together 'Sterling
Hydraulics') to Parker Hannifin Corporation ('Parker') for £33.2m in cash.
Sterling Hydraulics, a manufacturer of specialist hydraulic valves and manifold
blocks, is a division of Sterling Industries PLC, a wholly-owned subsidiary of
Caledonia. Parker Hannifin is the global leader of motion and control
technologies and systems, with annual sales exceeding $8bn.

Sterling Industries PLC was valued at £10.8m as at 31 March 2005 and at £30.3m
as at 30 September 2005 (reflecting the likelihood of the sale described above).
Completion of the sale is expected add a further £2.9m to Caledonia's reported
net assets.


Commenting on the sale, Tim Ingram, Chief Executive of Caledonia, said:

'We are pleased to have concluded this sale to Parker Hannifin. Sterling
Hydraulics has been part of the group for many years, but we believe that it is
the right time to take advantage of consolidation within the industry by selling
the business to a global player.'


14 October 2005


ENQUIRIES:

Caledonia Investments plc                                   Tel: [phone]
Tim Ingram, chief executive

College Hill                                                Tel: [phone]
Tony Friend
Richard Pearson




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