A poor investment climate has hit 3i hard and the private equity investor racked up a £498m loss on its unrealised investments in the 12 months to end March against a profit of £325m in the prior financial year. Furthermore, realised profits collapsed from £124m to £23m with the net result that the 10.6 per cent total return on shareholders' funds enjoyed the previous year was replaced with a negative return of 19.5 per cent.
There was some good news as gross realisations of £771m exceeded investments by £125m, although this was mainly due to the group's ongoing selective approach to new investments, primarily as a result of turmoil in the eurozone and a general decline in merger and acquisition activity. In the first half, favourable conditions supported sales to strategic buyers and a busy initial public offering (IPO) market provided a decent exit window for private equity players, but conditions have deteriorated since the autumn.
Still, group finances remain in pretty good shape, with net debt being slashed from £1.9bn to £464m since March 2009. The board has also increased the dividend sharply, and will pay out as much as 20 per cent of gross cash realisations, subject to gearing remaining below 20 per cent.
| 3i GROUP (III) | ||||
|---|---|---|---|---|
| ORD PRICE: | 181p | MARKET VALUE: | £1.8bn | |
| TOUCH: | 180-181p | 12-MONTH HIGH: | 299p | LOW: 166p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | na | |
| DISCOUNT TO NAV: | 35% | NET DEBT: | 18% | |
| Year to 31 Mar | Net asset value (p)* | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 671 | 834 | 130 | 10.6 |
| 2009 | 279 | -1944 | -319 | 3.80 |
| 2010 | 321 | 159 | 17.2 | 3.00 |
| 2011 | 351 | 189 | 19.6 | 3.60 |
| 2012 | 279 | -777 | -82.8 | 8.10 |
| % change | -21 | - | - | +125 |
Ex-div: 20 Jun Payment: 20 Jul *Diluted net asset value | ||||
