Caledonia back in the black

CALEDONIA Investments swung strongly back into the black over the past year despite underperforming its benchmark, a performance the group said was down to its commitment to conservative, long-term investment plays.

Caledonia posted a £312.4m pre-tax profit for the year to March, in comparison to a loss of £325.5m the previous year during the turmoil of the financial crisis.

The investment trust said its diluted net asset value per share increased by 30.5 per cent compared to a 46.7 per cent rise in the FTSE All-Share index.

But chief executive Tim Ingram said the relative underperformance was caused by the group’s philosophy of taking “significant long-term stakes, usually with a board seat, in sound, well run companies”.

“The value of our holdings in such companies fell significantly less than the equity market as a whole during the downturn, and hence had less ground to make up in the recovery phase,” he added.

Caledonia said it would continue to focus on opportunities in the fast-growing economies of Asia and Far East, avoiding the stagnant prospects of the West, with its unsustainable levels of government debt.