Caledonia Investments plc

Very warm welcome to everybody. My name is Will Wyatt. I'm the CEO at Caledonia. And albeit it says Tim Lillard underneath on the captain, Tim is the CFO who will be doing the second half of the results. So if everybody's ready, I will kick off. We've got a number of people online. What I think is probably easier is we'll do, if you're happy, I'll run through the presentation. We'll take questions in the room and then questions from people online afterwards. I think that's probably the most sensible way of trying to do it. So NAV total return for the year was just a light under 28%. It's a really good year and indeed building on an excellent year last year. We run the portfolio through three different pools of capital and all three of those pools delivered really strong results, which is unusual, but I'm delighted when it all happens and you get the engine running on all cylinders. We had a couple of quite big exits from our private capital portfolio, which has generated a lot of cash. So we currently, the NAV sits, we sit on well over 350 million of cash, which is about 13% of the portfolio, as well as having unused bank facilities. So we've got particularly high levels of liquidity. And that really has driven the thinking behind, A, we've increased the full year dividend overall by 3%, but the board is also proposing a special dividend of 175p a share, which is £95 million from that liquidity that I talked about, and that'll be put to shareholders at the AGM in July. Just going to the track record, Caledonia is really about growing the balance sheet, but both in capital and in income terms, which is why we talk about NAV total return. But over the long term, we're an across the cycle investor. Really, to measure that, we tend to tilt towards inflation and have a look at RPI plus three to plus six as an acceptable return. And that on this chart is the yellow bar. Obviously, that's looking backwards when RPI has been averaging about 3% over the last decade or so. Overall, we are aiming to outperform the FTSE All Share over the long run. And we've achieved that in all time periods. individual managers here have have absolute benchmarks to or absolute returns to beat for performance so no one gets paid for beating the market but i think it's a good measure to check that uh caledonia's worth its its place in the world to be able to beat the market so you're obviously going to get inflation starting to come into these figures as we go forward and that yellow bar will will rise But overall, you know, over the last 10 years, we've compounded at 12%, which is, you know, about 215% on an absolute basis. And the near term, midterm figures remain strong. So long may that continue. In terms of strategy and allocation, we have, as I said, specific return targets for each of those pools. And we have a banding for allocation with private equity style investing when you're putting lumpy sums of money to work and you sell things, these figures move in and out of range a bit. The quoted is 30%, which is slightly below its strategic allocation. And I think that's really reflecting the fact that actually we found it quite difficult to buy into the listed markets over the last few years. We've been net sellers rather than buyers because pricing has been so strong. um a private capital um having made two sales currently sits at 28 of our of our assets so we're slightly below the bottom end of that target allocation and funds sits uh toward the top end at 29 and obviously 13 cash you know we we we have a sort of plus 10 minus 10 uh or you know 10 in in debt type banding for cash so we're at the top end of that at the moment So that's how that works. Just turning to the performance by pool, you can see for the year, each of those pools did extremely well. Quoted equity, 14% overall. It's about flat year from the interims, with a little bit of a run-up and coming back down. But I think our portfolio is... whilst it's exposed to the US market. So we'll import some of that volatility. We're in longer-term holdings, and I'll talk through that in a minute. The private capital, a monster return, 55%, driven really by the two big exits. And again, I'll go through that in detail in a minute. And the funds, a really strong return, 38%. Our funds pool invests in both Asia and America. But a really, really strong return there. So overall, that's driven the 28%. Just a note on investment income, Tim will talk about it a little bit in a minute, but 56% is a good increase on the previous year. Sorry, 56 million of investment income, a really good increase on the previous year. On a geographic and currency basis, we've done a look-through analysis, as we normally do, of the portfolio to have a look at geography, the revenue by source, and this looks through to the funds as well. We've actually got quite a balanced portfolio. Our largest exposure, 30%, is to North America, but good exposure to both Europe, UK and Asia. On the currency side of life, 45% exposure to the dollar, 47% pound sterling with a bit of euro in there. We don't have an active currency management style. We like to get exposure through the portfolio and we let the portfolio sort that out. But I think my personal view over time, and if you go back to when sterling left the gold standard, you're better having quite a lot out of sterling rather than being totally exposed to sterling. So we like to have a bit of exposure to other currencies there. On a sectoral basis, again, quite balanced. Our style of investing, which is, you know, we're looking for steady long-term growth, is particularly well suited to areas such as industrials. The financial sector as well has always been a historic strength of Caledonia's, and we've got... an 18% exposure to that, but also quite a lot to consumer, healthcare and tech as well. So we have quite a good covering across sectors, but inevitably slanted to our style. So looking at those pools one by one, the quoted equity pool, as I mentioned, 14%. This is run in two portfolios. We have a capital portfolio, which has about 600 million of assets and an income portfolio, which has another 200. They both performed well for the year. The overall target is just a smidge under 10% when you combine them. But overall, the capital portfolio is aiming for 10% and the income for 7%. We like to have a foot in both camps so you don't get totally exposed and you can look frightfully clever being exposed to the growth side of life until the gray side of life goes into reverse so it's quite good having a it's been quite difficult being an income investor for the last three or four years um but i think we're we remain happy to have a foot in that camp to make sure we've got a bit of balance in the portfolio. And I think the returns there speak for themselves. They've been really good. The income portfolio had a change of manager about three years ago, and the capital team took it over and reshaped it, and in fact have done really well in the near term. So that will continue building its return basis. Capital portfolio, 70% exposed to America. We think the better companies in the world are to be found in America, actually. And most of these businesses we've held for quite some time. We like their long-term compounding nature where they can... the profits they make, they can reinvest in their business and continue to grow shareholder value better than we can by selecting other ones. So these are really high quality businesses that we've generally held for quite some time. And again, you can see the sector distribution, quite a good spread, but quite a lot in the industrial sector. The income portfolio you get the reverse you get 60% in the UK and 30% in the States and the odd one in America sorry in Europe. And those those businesses are producing a running year for the last year about just under 4% the target is about three three and a half, depending on where markets are. So. That's the income portfolio and equated capital portfolio. Moving to the private capital side of life, cracking good return, as I mentioned, driven by the two exits of deep sea electronics and bioagiletics. longer-term performance remains strong. And I'd sort of draw you to this because this is where risk management comes in. We had a difficult time through the lockdown with a couple of our investments, which was in pubs and also Buzz Bingo. In fact, Buzz we had to sell ultimately last year and took quite a big hit on it. Even with that, we have kept up with our returns, which I'm really pleased about, and it just, I think, underlines the risk parameters within which we operate. So those returns remain strong. The portfolio as it is today is there. Note the sort of entrance date, the date at which we invested in some of these businesses, that it's a reasonably young portfolio, with the exception of Kobe Hold and SIS. And having sold two of the other businesses, there obviously is room for more in the portfolio. Markets are high, prices are high. We tend to wait until the right business for us comes along rather than worrying about making sure we've got exactly the right allocation. And I think that's, again, reflects Caledonia style. We're happy to wait until the right business comes along for us and we will continue to do that. So buying discipline remains key. The geographic weighting and private capital really tends to invest in the UK. This is majority and minority holdings of companies in the UK, some of which are based in the Channel Islands. The foreign piece comes from Kobe Hold, which is an investment fund in Brussels, which has had actually itself a very good year, and I'll talk about that in a minute. So turning to the businesses that we sold in the year, we sold in the early part of the year, Deepsea Electronics. We were approached actually by Generac, which is a US business, really, and ended up selling it because we liked the price and the return it gave us. But it wasn't actually within the plan. It was quite early on in our investment in the business. We more than doubled our money in this. And, you know, we're happy, more than happy to take away net proceeds of, you know, just over 240 million pounds. So that was the beginning of the year. Toward the end of the year, in December last year, we had a co-investment in this business called BioAgilitics alongside Kibipa. It's a testing solutions provider in the States, effectively a CRO, I think is the technical terms, and they've had an extremely strong period of growth, but also had made a number of acquisitions, and the P&L had grown very, very strongly, and the decision was taken, I think, also in line with very strong multiples available to sell it And the business was sold to Synven. We made over six times our money in the business. But we also think it's a cracking good business and reinvested some of our proceeds alongside Synven, who we know quite well. They're good investors, good people. And this business has got a lot of runway in our view. So very happy to take some cash off the table, but also happy to remain with an investment alongside CoBeeper and the consortium in the business. So turning to the current portfolio, the largest of which is Seven Investment Management, which is an investment management business. It mostly takes its money through the IFA channels and is investing pensions for people who are putting £500 a month away or whatever they can afford. into Seven's funds. And they have a number of funds that they run on different risk matrices. Very strong AUM growth in the year. But also, they made an acquisition of a business called Partners Wealth Management, which is absolutely targeted at, as the name suggests, partners in law firms and accountancy firms who get introduced to them. So look, you're going to be a partner. You're coming into money. Speak to these guys, they're very good at looking after your own personal wealth. And that is a really good business growing nicely and is a really good adjunct and sits nicely with Seven. So that had quite a bounce in the year. Again, the pricing of these assets is quite strong in the public markets, which is where we benchmark the pricing as well as the private markets. And the business value grew by 40% in the year. The other financial asset we have, Stonehake Fleming, is an international multifamily office. So they look after high net worth families, wealth, whether it be their tax, whether it be their various properties around the world. So they have an ongoing annual stream of income from looking after those families, as well as an investment management arm. The business has grown strongly, again, both organically and through acquisition. And it bought the Cavendish business last year, which has now been fully integrated, which came with, you know, over a billion of assets under management. And also the Maitland Group. Maitland Group had two sides and Stonehakes bought the private clients business and tucked that in. That business continues to grow well. We're a minority shareholder in it alongside the original founding partners of StoneAid. Beeper, I mentioned earlier, which is an investment fund, has 14 or 15 businesses. It originally set up as an LBO fund. It's owned by European families and extremely well run by a gentleman called Jean-Marie Laurent-José, who's been running it really for the last 20 years. He's an excellent investor. They've got some really interesting portfolio companies, and they play quite strongly on the family connections, such that they've got some minority stakes in family businesses who require capital but don't particularly want to go into the open capital markets to access it. They've had a really strong year, you know, and this is quite a large business. It's, you know, it's a $4 billion business. euro fund now or company actually because it's a balance sheet but they had two cracking exits obviously bioagilitics which was an absolute humdinger for them they also had a distribution business called a hila brand that they sold to dhl during the year and that has driven uh the returns in that business so We've been in that for a long time and it remains a very good performer. I think its long-term IRR is in the high teens since 2004. So that's a pretty good result. Turning to our leisure and industrial businesses, Liberation is the pub group. It owns 117 pubs in the southwest of England and also the Channel Islands. They're a mixture of both freehold and tenanted. The brand of beer that sits behind Liberation in the UK is called Buckham. It's quite a well-known ale in the southwest. And Liberation is a brand that they have on the Channel Islands. It's obviously had a tough two years with being open close, open close, open close, open close. We're yet to have a full year trading since they reopened, but the balance sheet remains strong. The trading has returned well, you know, in line or better than the market. And we've also made some tuck in acquisitions. So last year we bought 21 pubs off the Woodworth family, which sat very well in our portfolio. geographic concentration they've they're performing really well post a capex program that we've put into those over the last year or so so you know I think that that business is is set to go well but of course it faces all the headwinds that everybody else does of inflation such like but you know you've got a nice asset backing in in the freehold state estate Last but not least is Cook Optics, which is a manufacturing business based in Leicester. They manufacture quite complex film camera lenses. and have been doing so since the late 1800s. There are three main players in the market. There's Cooke, there's Zeiss, and there's Leica. Cooke are particularly known for their soft focus lenses. So when you get into romantic stories or areas where they want soft focus, they use Cooke lenses and they are used in a lot of film across the world and are very well known. um they've got that they're also known for very high quality lenses that last which is good but bad if you're a manufacturer trying to sell new ones the great thing is we've got a following win from the market you've got a huge amount of new content being created for all of the people like you know amazon netflix and everybody is wanting new content the business model here is we we make them and we sell them to rental houses and the rental houses rent them to the director, the film producers and directors who, you know, need a, you know, 35mm and need a, you know, short lens, long lens, zoom lens. They've also just recently launched, post the lockdown, a new set of lenses, which have gone down well, and obviously you have to gear up the manufacturing to produce those So the business is going well. And a full year return of 34% reflects both a bounce back in its P&L. It had problems manufacturing-wise with COVID and had to sort of shut down, move around its operations. But I think that's a return to form and also good, strong trading growth in the business. So that's the private capital side. Last but very not least at all is the funds portfolio, which has continued to grow and perform extremely well over the long run. This is a strategy that has really been was first put in place about 11 years ago. And we've been building a portfolio of PE funds in North America and Asia. We started accessing this through funder funds. And as we've grown to get to know the market, we started doing much more single fund investing ourselves. So the growth for the year has been very strong. we end to commit about 100 to 150 million dollars a year so kind of 80 to 130 pounds this year 111 million was drawn down but we received back 165 million in cash so this is not just valuation growth this is proper real hard cash and it's a it's a it's a business strategy that takes quite a long time to get going because you have to put the money in the ground to get it coming back. So now it's maturing, we are cash positive, and it's doing exactly what we want. It's invested in the States in the small to mid-cap area, which has a lot of benefits of there are absolutely huge range of companies that you can invest in and actually pricing tends to be quite low. So you're in the well below, you're in the sort of 300 to a billion dollar market in the States and very good for buy and build strategies for small local private equity firms. and that engine continues very strongly. In Asia, we're in slightly earlier stage venture It's an immature market in Asia, particularly in China. You haven't got that depth of manufacturing where people can go and pick off little firms. So there's a lot of IT in this, a lot of venture and early growth, new economy style investing. And again, the returns from that have been strong, including cash returns. So that's been the key always. So pleased with that. And that gives you a view of the bigger holdings. Now, when it says Aberdeen USP funded funds, that is a number of funds because we've backed on, you know, fund four, fund five and fund six. So it looks like a particularly large holding. But actually across this portfolio, you've got more than a thousand companies through the 60 odd funds that we're invested in. So it's pretty well diversified. And you can see that the split between America and Asia, we have outstanding commitments at the year end of $331 million. Sorry, thank you. So that covers the underlying portfolio, the pools. Just quickly moving on to succession. Matt Masters is going to succeed me as CEO post the AGM in July. Matt's been at Caledonia since 2005. He's an accountant. He's worked in M&A. He then came here and changed his hat to the buy side and has been involved both in unquoted and quoted investing. So he's got experience of both sides. But in particular, since 2010 here, he's run the... quoted capital portfolio and run it very successfully. He's very thoughtful. Sadly, he couldn't be with us here today, but I'll make sure that he will bring him around to introduce him to you guys in due course. And he's always available to take a meeting. So he will succeed in July. So I think Tim, that's it.

Good morning, everybody.

I'm just going to run through a few slides that just talk about our financial performance in a bit more detail over the last 12 months. So this first slide is a summary or extract from our financial statements. So this is our comprehensive income position. So just whizzing down the key points, investment and other income, as Will noted, has grown strongly by about 24% year on year. And I'm going to go through that in a bit more detail on the next slide. The big driver of the performance was clearly the gains on investments in property in the year, £571 million of gains, and obviously a mix in there of realised and unrealised. But if you think about it across the pools in which we invest, 77 million of that came from our quoted portfolios. £295 million came from the private capital pool and of that about half was the realisations on DSC and biogeopolitics and the rest was underlying value growth in the remaining portfolio. And then funds generated about £225 million of gains, again some of those being realised and generating cash. In terms of costs, management expenses are up a couple of million pounds and performance awards are also up. In both cases, clearly performance is driving a large chunk of that in terms of remuneration rewards. But in terms of the performance awards that go to capital, there's quite a big impact of the increase in national insurance flowing through on previously accrued costs there. The tax line shows quite a significant credit, so you see £18 million. So we have been able to effectively utilise both the current year tax losses, but also some historic tax losses, which will group relieve taxable gains elsewhere within the group. So that's been a good use of those losses. So overall total comprehensive income of £611 million for the year. That's a very strong outcome. It's ahead of where we were last year and that was clearly a good year as well. And then just noted down the bottom there, management expense ratio has effectively come down to 0.84% for the year based on keeping the cost growth low whilst obviously the asset value has increased significantly. So this slide just deals with income, which as I said was up strongly year over year. And you can see up in the top left hand corner growth in both private capital and quoted equity investment income. And the chart underneath just splits that down across the different pools. In terms of the quoted equity, an element of that is just overall underlying growth in terms of dividend income. I think the bulk of our companies have now reset post-COVID to a level where they are comfortable to distribute. But we also received about £5 million from Pennon, which was effectively as a result of their disposal in their Virador business. They made a large distribution, which we have accounted for as a capital dividend. And then in the private capital area, that 27 million pounds of income dominated in part by DSE. So there's a large pre-sale dividend issued, which was about 12.5, 12.6 million. We also saw good growth from Stonehake Fleming with the bulk of the other businesses effectively yielding a similar level of dividend as we've seen historically. And obviously you can see from the chart on the right hand side, the very strong growth in the year. The funds area generated an unusually high amount of income this year. So this is simply how money is distributed back to us effectively. And some underlying holdings within our Asian portfolio did some corporate restructuring, which led to income coming back to us as a dividend rather than just as a capital gain. So this next slide just walks through the movement in the NAV over the year. So we started at 2225. We grew by that 611 that you saw on the comprehensive income slide up to 2836. You can see very clearly the capital gains in that first column being the real driver aided by the investment income. And the other in this case mainly is those tax credits that we took. And then from 2836 we paid out about 35 million pounds of dividends and the net share purchases was around 18 and that included the quite significant share buyback period program we had earlier in the year. So we finished the year at 2783 and that's equivalent to 5041 pence per share and the actual NAV was up just over 25% for the year. In terms of cash, our cash position at the end of the year was 341 million. So significantly up compared with where we were last year and we had no borrowings at all. Clearly the money that's come back to us, particularly from the disposals in the private capital pool has been the big driver of that growth in cash, but clearly there's been a significant amount of reinvestment going on as well. We've talked about the special dividend, so that's proposed at the level of 175 pence per share. The last time we did a special dividend was about five years ago in 2017. And in terms of what that reflects for our shareholders, our standard dividend that we award equates to just under 2% yield per share. obviously moves around a little bit as the share price moves, but that sort of level, taking the special dividend into account moves us up to being just over 3% yield to our shareholders and when looked at over sort of a five-year period. And the total cost of that dividend is about £95 million, which when compared to our current degree of liquidity, we think is perfectly manageable and leaves plenty to still be reinvested. We have £250 million of banking facilities, as noted there. Part of that was with ING, and those current arrangements come to a close at the end of July of this year, and we are well advanced in terms of negotiating a renewal of that facility, which will be completed, I suspect, in the near future. So this slide talks to what's happened in terms of NAV per share growth over the year and also what's happened to the discount compared to the share price. So we started the year with an NAV of almost exactly £40 per share, as shown in the blue line on the left-hand side of the screen. And that effectively created a discount with a share price at £2,645 of about 34%, as shown by the green line. And you can see over the year that NAV share position has improved quite markedly. So finishing the year at 5041. So good strong growth through the year. But you can see the discounts performed somewhat strangely. So we had a period all the way through to December. And if you just ignore the spiking around October and November, which is due with the Agilitex transaction, we saw the share price rise quite nicely through the year and the discount came down to about 15%. And then through the last quarter, through to March, you can see effectively we saw some retrenchment as the share price was impacted by the market movements, I think reflecting mainly the concerns around inflation, the conflict in Ukraine, which has meant that the share price fell back a little bit and the discount moved back to about 30%. However, over the year, the share price grew strongly and was up about 34%, so still delivering a good return for our shareholders. The discount has remained roughly in the same place through the early part of this new financial year. And given that we have about 42% of our NAV in either cash or public equities, which are highly liquid, I think we still feel that level of discount is somewhat excessive. But that's what we're being marked up by the markets currently. So just in summary, I guess the first thing to say is a really strong financial year in terms of both the returns generated and the realisations achieved and the cash that's flowed back to the company. We've seen the share price grow strongly and obviously we've got the proposals for the special dividend as well. But I think we have to be realistic that although we're well positioned, it is a much more challenging environment as we look forward. So just thinking about where we start from, we still believe we've got a very strong portfolio in terms of a diverse group of high quality assets. And we believe they are well positioned to respond to the challenges that are likely to face them over the coming year, but recognize that there is a degree of uncertainty there as well. And equally, we've got a strong balance sheet. So we have a degree of liquidity and we have banking facilities. And so therefore, if there are good opportunities that do arise, we're well positioned to take advantage of them. And I think we continue to underline our overall aim, which is to have a portfolio which can grow over the long term and generate both capital growth and dividends for our shareholders. And we believe we're still well placed to do that. That's my close, so I think we're happy to take questions, and for people who are on the webinar, we can take questions either if you raise your hands or if you post the questions, hopefully we'll pick those up and respond to them. I'm relying on my assistants to help with that process, I'll be very honest with you. So any questions from within the room, first of all?

Absolutely. In terms of private companies making even more private entity investments, is there a pipeline? Have you got any deals under active consideration at the moment? And are there kind of supplementary questions? Just in terms of the valuation, again, on the funds, really. I think you said a 70% to 80% of value at the end of December, or perhaps even earlier. I just wondered if there's been any provisions made against those specific valuations.

So part one, We've had, I think, a pretty similar deal flow coming in to the private capital portfolios we've had since, you know, over the last five years. So we've had plenty of deal flow. But, you know, for whatever reason, we have either not liked the deals or we... found we've been beaten occasionally you get to you know the last three or four and you get outpriced or or whatever it may be management prefer someone else um we we have uh We do have deals that we are further down the line than just, oh, here's a new company to look at. So we've done a certain amount of work on, but I can begin to tell you whether those will actually come to pass or not. That, you know, we'll just have to see. So the deal flow remains strong. There are plenty of deals out there. It, as ever, is the discipline of choosing the right ones for our shareholders.

But are you seeing price in a moderate way last year? Exactly.

It slightly depends on the asset, to be honest. You've got quite sort of bifurcated pricing depending on, you know, growth, steady cash generator versus, you know, we wouldn't go into the sort of farmer market or, you know, that's just not our thing. But I don't think we've noticed a huge amount of change in pricing, you know, to date, to be honest. Part two, pricing of funds. I can't remember, so our latest fact sheet, which was April, would have brought forward the pricing. So as at 31st of March, we were, was it 70% December, 30% March, something like that?

So what we've done is within the accounts as well, we did update our PE fund valuations. So as Will said, I think about 20% of values as I and there's about 10% that are still on the September valuation with the cash flow forward. We went through an exercise to get comfortable that there were not sufficiently strong external drivers that would lead us to believe those valuations were not still the most appropriate way to value those funds.

So there is no provision on the balance sheet for a delta in... in those, whether it be our board dance. Yeah.

Yeah. Yeah. So obviously Matthew's approaching July, very different market environment now. Yes. How do you see the approach, if it's all kind of changing going forwards and then sort of more of the allocation that you said, sort of bait lessons, pro-sequencing, struggles to find some opportunities, clearly that prices have come down now. Do you see more opportunities there?

I mean, I think Caledonia as a house is an evolving, it's a place that evolves relatively steadily. It doesn't do U-turns as a house generally. And I think Matt, having worked here for a long time, is fairly au fait with what's been going on in my tenure. And of course, like any new CEO, he will have a look at things differently. develop his own strategy with the team. And, you know, as things change, we'll communicate that to the market and the shareholders. So, you know, I don't suppose there'll be a screeching U-turn. and will suddenly launch off into Australian beachwear or something. So evolve is the way we tend to do it. Second half of the question, I mean, it's very difficult. And you never quite know in the private markets. When, you know, we always sort of say, you know, when the bus comes along, suddenly you get three in a row. And that's happened to us before where we, you know, we've been doing two deals at the same time, having not done anything for 18 months. uh but i just wouldn't read much into if we don't do anything for 10 years well that's going to be pretty obvious but the fact that we don't do anything as a house for 18 months two years is more of a factor of us i i hope and we'll continue to do this exercising discipline in the way that we invest rather than oh my god we've got to get up to the strategic allocation so i think that's why there are bands there sometimes you know it wasn't that long ago we were up to the up to the top end of that band, boom, boom, two exits in a row, and you're suddenly locked. So there's cash on the balance sheet. I absolutely don't have a crystal ball, but you might think that pricing might come back a bit over the next year or two. Will the right asset come up at the right price? Who knows? But we'll continue, I'm sure, to trump around and look for the right things.

So I think there's a question on the screen about share buybacks and both what was done and also why we haven't done any more.

So we have, Caledonia has a shareholder, which is the Kayser Concert Party, the Kayser family in total, whether they hold shares via the Kayser Trust Company or in their own names, whereby that 40... quite high percentage of the shares is owned by them, which allows us very little headroom to do buybacks. And we had a small amount of headroom. And when we saw that the discount was at what we thought was particularly good value for shareholders, we used up a bit of that headroom. during the year so we did about 18 million pounds worth as tim mentioned but i think that is taking us up to a level where you know we want to leave a bit of headroom before the 50 and the 50 marker is in fact a city code if the concert party goes through 50 they would have to make a mandatory bid for the company and i don't think i'd be very popular as ceo if um if i push them through that so we do have a limitation on share buybacks uh and the amount that we can do and you know we we haven't we've got sort of precious little room to to do any further share buybacks um do you want to have a look for me let me just see if there's any other questions

Do you have any questions, China?

Yeah, through the private equity funds out there, we've got this Asia and China. We've got a number of funds there. Some of it is, about half of it is in funder funds and the other half of direct investments in private equity funds out there. We have a lady who's actually Singaporean who lives in London and has spent a lot of her last 10 years on an aeroplane going to and from China, who's got an extremely good network of people and contacts out there. And, you know, we have a very broad brush, two-third commitment to America, one-third to Asia-China. It's currently, as the assets are growing, As the holdings are currently, it's about 60% America, 40% Asia, but that will go more towards America over time. We started in Asia a bit earlier than America, actually, was the truth, and had a big win out there, and that's funded that up.

As your view towards China kind of changed, it's all very crisp and brings some notes.

Well, I think we have a we have a view that it's a very interesting place there's a lot going on there's a lot of growth there but there's a lot of innovation. And yeah geopolitically, it is probably perception wise more difficult potentially than it was five years ago, but I don't I don't see. you know, currently, and I don't think we as a house see something for Matt and the team to look forward to, you know, China suddenly going into total isolation and shutting the financial borders. And I think they would find that quite a difficult thing to do because they are properly, you know, tied into the globe in terms of trading. So we try and take a risk-adjusted approach whereby we have an exposure there that's not too big. But, you know, it's attractive. It's made us really good returns. It's been by far and away the most successful part of our portfolio to date. Actually, America is catching up in terms of returns. It's been good hunting.

Can I just ask about the special dividend and specifically the level at which that scheme sets? I mean, I think you kind of referred to that if I can give you some scope on the balance sheet going forward, but what was the kind of science behind setting that?

I think it's, so the question for those who can't hear was what's the science behind setting the level of the special dividend? And the answer is really it's a mixture of both looking at the cash availability and also our overall yield to the market over time. And whilst we trumpet and have done every year for the last 55 years, this is the 55th year of increasing dividend, that dividend is actually quite skinny when you look at it against the market. And Caledonia has had a history of topping up occasionally with special dividends. And we think once you're over three, you're much more market in line with the market. So that was a factor as well, silently. So we're a capital house with some income. And from time to time, if you have a win, we try and share with them. That's been the approach.

Do you have any more questions online?

Doesn't look like it. No, doesn't look like it to me. So I think you're done.

Good.

Okay. Good. All right. Well, thank you all very much indeed.

Thanks for coming down. Yeah, thanks for having us. Anyway, we're all around. We'll make sure that Matt is available. He just happens to be off site today. So he's around for you to meet. But don't expect him to say the new strategy is because he's got a long way from that.