Caledonia Investments delivers 5.4% NAV total return in year of progress

Caledonia Investments final results 2026: solid NAV growth, but the share price told a rougher story

Caledonia Investments has put out a respectable set of final results for the year ended 31 March 2026. The headline number is a 5.4% net asset value total return, or NAV total return, which is a measure of how the underlying portfolio performed including dividends reinvested.

That is not a barnstorming year, but it is positive, and importantly it came from all three investment pools – Public Companies, Private Capital and Funds. In a volatile market, that matters. It suggests the group’s diversification did its job.

The catch is that shareholders did not feel much of that benefit in the share price. Total shareholder return was -7.1% because the discount to NAV widened sharply, ending the year at 43.4%.

Caledonia Investments 2026 results key numbers investors should know

Metric	31 March 2026	31 March 2025
NAV total return	5.4%	3.3%
Net assets	£2,980.0 million	£2,931.6 million
Diluted NAV per share	567.6p	547.5p
Annual dividend per share	7.68p	7.36p
Total comprehensive income	£135.1 million	£66.9 million
Net cash	£90.0 million	£151.3 million
Total liquidity	£415.0 million	Not disclosed

One housekeeping point – Caledonia carried out a 10:1 share split in July 2025, so the prior-year per share figures have been restated. That is worth knowing if you are comparing old numbers and wondering why they look different.

Why the Caledonia NAV result is better than the share price suggests

The underlying portfolio returned 6.1% in the year, which is slightly ahead of the group’s 5.4% NAV total return once costs, foreign exchange and other items are taken into account. That portfolio return broke down as 1.2% from Public Companies, 13.1% from Private Capital and 4.9% from Funds.

So the real engine room was Private Capital. Public Companies were positive, but only just, after a rough March. The company said the Iranian conflict and rising inflation late in the year hurt returns, and it is very clear from the numbers that market volatility did some damage right at the end.

Still, there is a decent long-term message here. Annualised NAV total return over 10 years was 9.2%, ahead of CPIH inflation at 3.4% and ahead of the FTSE All-Share total return at 8.7% over the same period. In plain English, Caledonia has been good at compounding value over time, even if this particular year was only middling.

Stonehage Fleming sale is the standout win in Caledonia’s final results

The big bright spot is the agreed sale of Stonehage Fleming. Expected cash proceeds are about £290 million, which Caledonia says equates to a 3.2x multiple on cost and a £67 million, or 30%, uplift to the 31 March 2025 carrying value.

That is exactly the sort of result private market investors want to see. It shows Caledonia can hold an asset patiently, help grow it, and then crystallise value at a strong price. For me, this is the most important strategic proof point in the whole update.

At the year end, Stonehage Fleming was carried at £279.3 million as an asset held for sale, reflecting expected proceeds less a discount of about 3.5% for execution risk and the time value of money. Completion is expected in mid 2026, so investors should keep an eye on that actually landing.

Caledonia’s discount to NAV remains the main frustration for shareholders

This is where the report turns more awkward. Average discount to NAV during the year was 34.0%, and it widened to 43.4% by the year end. That is a very large gap between what the portfolio is worth on paper and where the market prices the shares.

That gap matters because it can swamp decent portfolio performance. You can have a portfolio that goes up, but if investors get more pessimistic about the shares, your own return still goes backwards. That is exactly what happened here.

Management is clearly aware of the issue. It has re-profiled the dividend, completed a share split and continued buybacks. Those are sensible steps, but the blunt truth is they have not solved the discount problem yet.

Share buybacks and dividend growth are helpful, but not a cure-all

Caledonia bought back 9,465,511 shares during the year, spending £34.6 million at an average discount of 34.7%. That added 3.49p, or 0.6%, to NAV per share.

That is good capital allocation. When a company can buy its own assets at a big discount, it is usually a low-risk way to enhance value for remaining shareholders. So I see the buybacks as a genuine positive.

The dividend story is also steady. The total dividend for the year is 7.68p per share, up 4.4%, and that extends Caledonia’s record to 59 consecutive years of dividend growth. Better still, the dividend is covered by net revenue profit of £40.4 million, with dividends for the year amounting to £39.9 million.

That said, this is not an income rocket. It is more about consistency than a high yield, based on what is disclosed here.

Caledonia balance sheet strength gives it options in a volatile market

One of the strongest parts of the update is the balance sheet. Caledonia ended the year with net cash of £90.0 million and an undrawn revolving credit facility of £325.0 million, giving total liquidity of £415.0 million.

That liquidity should improve again once the Stonehage Fleming proceeds arrive. For an investment trust, that matters because it means Caledonia does not need to sell assets at the wrong time just to meet commitments or fund new opportunities.

There is also a decent stress-testing section in the results. Management says the group could withstand severe downside scenarios and still meet obligations. That does not make it risk-free, but it does support the idea that this is a conservatively financed vehicle.

What moved inside the portfolio in 2026

• Public Companies: Return of 1.2%. A weak March hurt performance, although Oracle was a standout and Caledonia realised £65.4 million from it during the year.
• Private Capital: Return of 13.1%. Stonehage Fleming and AIR-serv Europe did the heavy lifting.
• Funds: Return of 4.9%, or 7.1% in local currency. Asia and North America both contributed positively.

There was also a £22.4 million foreign exchange hit, mainly because sterling strengthened against the US dollar. With 62% of NAV non-sterling denominated and no hedging, that is part of the package.

My view on Caledonia Investments after these 2026 final results

I think this is a mildly positive set of results for the business and a frustrating one for the shareholder experience. The underlying portfolio has held up, Private Capital produced a very strong exit, the dividend kept growing, and the balance sheet remains robust.

The negative is obvious: the market still does not give Caledonia full credit for that quality. A 43.4% year-end discount is huge, and until that starts to close more meaningfully, investors may continue to feel short-changed despite steady NAV progress.

So the investment case looks fairly clear. If you believe management can keep compounding NAV and eventually narrow the discount, the shares may look interesting. If you think the discount is structural and likely to persist, then the case is harder, because good portfolio returns can keep getting lost between NAV and share price.

For now, I’d say the results reinforce Caledonia’s strengths rather than transform the story. Solid portfolio, strong liquidity, proven private capital execution – but the discount remains the elephant in the room.