Caledonia Investments PLC
01 April 2003
CALEDONIA INVESTMENTS PLC
Conversion to Investment Trust Status from 1 April 2003
Caledonia Investments plc ('Caledonia') confirms that, as previously announced,
it intends as from today to manage its affairs, so far as it is able, to comply
with the requirements for approval as an authorised investment trust. Approval
as an investment trust is granted retrospectively by the Inland Revenue for each
financial year of a company for which such status is sought.
In future Caledonia will publish its NAV per share as at each month end.
Accordingly, the company plans to publish its NAV per share as at 30 April, 2003
in early May 2003, together with the NAV as at 31 March, 2003, subject in each
case to final statutory audit clearance. The preliminary announcement of its
audited full year results is scheduled for release on 29 May 2003.
Commenting on the announcement, Tim Ingram, Chief Executive of Caledonia, said:
'Conversion to investment trust status means that Caledonia will not be subject
to corporation tax on gains arising from investment disposals. We believe that
conversion to investment trust status, combined with the continuation of our
investment strategy as set out in our interim announcement, provides Caledonia
with a strong platform from which to continue building shareholder value. In
addition, Caledonia has previously stated that it expects to have at least £400m
of distributable reserves post conversion. We now expect the level of
distributable reserves to be around £450 million and this level of reserves
represents a multiple of about 25 times the dividend cost of £18.2m in respect
of Caledonia's year ended 31 March 2002. This serves to underpin the company's
progressive dividend policy which has delivered a 35 year unbroken record of
annual dividend increases.'
1 April 2003
Caledonia Investments plc Tel: 020 7802 8080
College Hill Tel: 020 7457 2020
Notes to editors
Caledonia is a long established investment company with international scope
listed on the London Stock Exchange. Caledonia's strategy has delivered
outperformance against its benchmark FTSE All-Share Total Return index of 26%
over the five year period to 31 December 2002 and 37% over the ten year period
to 31 December 2002. Caledonia has a policy of delivering a progressive annual
dividend growth with a 35-year record of unbroken annual dividend increases.
Through holding a diversified portfolio, Caledonia aims to maintain a medium
overall risk position.
At 31 December 2002, Caledonia had a Net Asset Value of 939 pence per ordinary
share (after deducting £20 million for contingent tax and other costs associated
with conversion to investment trust status, being the amount which such costs
are not expected to exceed). Based on a share price as at 31 December 2002 the
discount to its Net Asset Value per share (after deducting costs associated with
conversion referred to above) was 30.1 per cent.
Following Tim Ingram's appointment as chief executive in June 2002, a strategy
review was undertaken. The results of the strategy review were announced on 21
November 2002 together with the interim report for the half year to 30 September
Caledonia plans to focus on a portfolio of around 30 to 40 principal
investments, with a policy that at least 50% of the total portfolio should be in
quoted securities or other liquid assets. New investments will typically be in
the range £10 million to £25 million. Careful control is exercised over costs,
notwithstanding Caledonia's active and participative management style. The Board
believes that Caledonia has a long established and valuable reputation for being
a supportive long term investor, which brings a strong deal flow of
opportunities not always available to others.
Caledonia's investments are focused on a selected range of sectors where it has
good in-house knowledge that can add value to management of investee companies.
Where particular expertise is not held in-house, investments may be made through
third party managed funds where Caledonia will often seek a significant stake in
the management company.
Caledonia's selected sectors are: Financial comprising 33% of the portfolio,
including holdings in Close Brothers Group plc, ICAP plc and Rathbone Brothers
Plc; Leisure and Media comprising 17% of the portfolio, including holdings in
Kerzner International Ltd and The Sloane Club Group Ltd; Property and General
comprising 17% of the portfolio, including holdings in Quintain Estates and
Development PLC; Industrial and Services comprising 15% of the portfolio,
including investments in Offshore Logistics Inc. and Amber Industrial Holdings
PLC. Investment Funds comprising 15% of the portfolio includes holdings in
British Empire Securities and General Trust plc and funds managed by Aberforth
Partners. Technology comprises 3% of the portfolio. The percentages of the
portfolio quoted are as at 31 December 2002.
Conversion to investment trust status will eliminate Caledonia's future
liability for corporation tax on chargeable gains. As a result, Caledonia
believes it will be able to build greater value for shareholders and be more
appealing to retail shareholders which ultimately should contribute towards a
lower discount of Caledonia's share price to Net Asset Value per share. As an
investment trust, Caledonia expects to be included in the AITC Global Growth
sector where its investment performance would have put it in the top quartile by
reference to both five and ten year total shareholder returns for the period to
31 December 2002.
The Cayzer Trust Company Limited and other Cayzer family interests together
control some 49.9% of Caledonia.
This information is provided by RNS
The company news service from the London Stock Exchange TJBPJ