Faced with big investment losses last year, private equity investor
Gross portfolio returns reached £180m - a significant improvement on the £331m negative return a year earlier. Realised gains grew from £31m to £65m, too, and last year's unrealised losses of £441m were replaced with a gain of £66m - although portfolio income from dividends, fees and income from loans slipped from £79m to £49m. And while total returns were a negative £5m, this was a considerable improvement on the £523m loss a year earlier. What's more, given the uncertain economic climate, 3i has adopted a more selective approach to new investments, with commitments falling from £448m a year ago to £138m.
Broker Investec Securities expects full-year net asset value per share of 279p, rising to 298p in 2014.
|3i Group (III)|
|ORD PRICE:||210p||MARKET VALUE:||£2.04bn|
|TOUCH:||209-210p||12-MONTH HIGH:||231p||LOW: 166p|
|DIVIDEND YIELD:||3.9%||PE RATIO:||na|
|DISCOUNT TO NAV:||23%||NET DEBT:||19%|
|Half-year to 30 Sep||Net asset value (p)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Ex-div: 12 Dec
Payment: 9 Jan
3i has has delivered on all fronts, cutting costs and debt while maintaining the dividend. Moreover, it's developing its third-party fund management side, with assets there up from £10.5bn to £11.3bn. Sure, investment conditions remain uncertain - but 3i's progress could mean a narrowing of the hefty discount to net assets that the shares currently trade at. Buy.
Last IC view: Hold, 181p, 17 May 2012