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Caledonia Investments reports strong portfolio but net value dips

7th Jul 2023 12:14

(Alliance News) - Caledonia Investments PLC on Friday said its net asset value decreased in recent months but rose compared to last year, and reported strong performances from its portfolios despite some negative returns.

The London-based investment trust said that its NAV total return for its first quarter ended June 30 was positive 0.1%, down from positive 1.3% for the same period in 2022. NAV at June 30 was 5026 pence per share, down from 5043p per share at March 31.

Caledonia Investments' stock was up 1.7% at 3,239.99p on Friday in London.

The firm's Funds portfolio produced a negative 1.0% return during the quarter, due to "modest valuation growth from many of the holdings across our maturing investments." However the growth was "more than offset" by the adverse impact of the pound strengthening against the US dollar, on which the portfolio is primarily based.

Caledonia Investments said it invested GBP25 million through drawdowns during the period, invested GBP13 million in the secondary purchase of two Decheng funds.

Caledonia Investments also said its Private Capital portfolio, which consists of "significant positions" in five UK-centric businesses and one European private investment firm, produced a negative 0.3% total return during the quarter. It said this mainly reflects the impact of foreign exchange changes on primarily non-pound sterling holdings.

Caledonian Investments said its most important transaction during the quarter was acquiring the European division of AIR-serv, a Lancashire-based forecourt vending equipment supplier, in which it purchased a 99.8% stake with a GBP142.5 million investment.

The company's Quoted Equity pool, however, produced a positive 3.3% total return during the first quarter. It said this reflected the US market having performed well in the period while UK public equities experienced small declines.

Within the Quoted Equity pool, the Capital portfolio generated a positive 4.8% total return, with its stakes in Oracle Corp, Watsco Inc and Microsoft Corp produced gains of around USD50 million in total. However the portfolio's gains were offset by weaker performances from Alibaba Group Holding Ltd, Thermo Fisher Scientific Inc and Spirax-Sarco Engineering PLC.

The Income portfolio, by contrast, produced a negative 0.8% total return, reflecting its greater UK market focus and valuation declines from most of its holdings including Pennon Group PLC and DS Smith PLC. Caledonia Investments also added a holding in Relx PLC to this portfolio.

By Emma Curzon, Alliance News reporter

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