Caledonia pays pounds 25m special dividend

Caledonia Investments, the financial group backed by the wealthy Cayzer family, yesterday declared a 30p special dividend worth around pounds 25m to shareholders, and brought forward its final dividend of 12.8p normally paid in August.

Observers in the City interpreted it as pre-empting any actions by a possible Labour government to tighten up Inland Revenue rules on special dividends. The Cayzers are high- profile supporters of the Tories, and Caledonia donates pounds 50,000 a year to Conservative Party coffers.

Peter Buckley, chairman and chief executive of Caledonia, said the special dividend was a "once- off" and had received clearance from the Inland Revenue.

"We're making the payment to reflect the growth in the value of our funds. Our balance sheet has grown by about 76 per cent over the last four and a half years, and if you add back in goodwill we've written off on acquisitions that climbs to about 95 per cent."

Mr Buckley said the Revenue had agreed to the payment not least because Caledonia was announcing it just as it was going ex-dividend, so that investors would not have been able to pile into the stock because of it.

Caledonia's shares fell 11p to 753.5p yesterday. Martin Cross, an analyst at UBS, said this was a good performance considering the 30p payment. "The shares are still trading at a 26 per cent discount if you add back all the goodwill and consider the conservative accounting policies."