Caledonia Investments reports that its NAV total return for the 12 months ended 31 March 2026 was 5.4%. The dividend has been increased to 7.68p from 7.38p (+4.1%). Both figures are ahead of inflation of 3.4%. The dividend increase is for the 59th year in a row and the dividend was fully covered by net revenue (helped by a £24.5m dividend from one of the private companies, Air-Serv). £35m worth of shares (9,465,511 shares) were bought back and this added 3.5p to the NAV (0.6%).

The trust says that all three of its investment pools contributed to growth, with the investment portfolio delivering a return of 6.1% in the year: 1.2% from Public Companies, 13.1% from Private Capital and 4.9% from Funds.

A key development in the private capital pool (and a big contributor to that return) was the sale of the trust’s stake in Stonehage Fleming. The £290m exit crystallised a 3.2x return on cost and was done at a 30% uplift to its previous carrying value in the NAV (underscoring how conservative these valuations are).

The return for the year was behind the average of the past decade (9.2% per year, 5.8 percentage points ahead of inflation) and behind the 21.5% return on the FTSE All-Share. The period was marked by considerable macroeconomic volatility – kicking off with the tariff announcements in April 2025 and concluding with the Iran war.

Within the public companies portfolio, the team sold down the position in Oracle, realising £65m and delivering a 96.3% return during the year, selling ahead of Oracle’s subsequent de-rating as questions arose over its ability to finance its massive AI-related capex programme. The portfolio did have exposure to two companies at the centre of the agentic AI related selloff in software stocks – RELX (-34.7%) and Sage Group (-30.2%).

The discount widened during the turbulent period in markets that marked the US/Israeli attack on Iran, and this left shareholders with a -7.1% return for the year in share price terms and the shares trading on a 43.4% discount. Things have settled down a bit since the year end and the discount has narrowed to 36.0%.

The board is keen to narrow the discount further. To that end, the shares have been split, shares bought back, investor events have sought to explain the workings of the three pools, and the dividend profile tweaked to make the income stream more predictable.

QuotedData’s Matthew Read said: “Caledonia’s results provide an illustration of why its long-term record deserves more credit than the current discount implies. While a 5.4% NAV return is modest in the context of an All-Share return of more than 20%, the period was a volatile one and the headline numbers mask the benefit of the diversification with CLDN’s portfolio (it is a mix of public equities, private capital and funds), its resilience, and the progress that is quietly being made.

The sale of Stonehage Fleming at a 3.2x multiple on cost demonstrates that Caledonia’s patient private capital investments can create significant value over time. It’s not surprising that its public equities pool had a tough period – as market leadership became increasingly concentrated around AI enthusiasm and momentum-driven areas, Caledonia’s more quality-focused, long-duration approach, was likely to lag, although the management of the Oracle position – locking in gains after a sharp AI-driven rerating – illustrates the approach can still be nimble.”