Shares in private equity investment group 3i (iii) fell over 5 per cent on the back of these half-year figures, despite a solid performance and confirmation that the proposed full-year dividend payout, including a special dividend, will rise to 20p a share.
That slippage reflected news that Ed Bramson, an activist investor at Sherborne, which built a 5 per cent stake in 3i's shares earlier this year, has unwound this position - thereby removing a material source of support. Moreover, and even though 3i's investment portfolio delivered cash proceeds of £528m - or a 32 per cent uplift on opening value - fee income was flat at £36m. But a higher £16m contribution from the debt management side offset a fall in private equity fee income to £9m. Indeed, there were no new investments in the private equity portfolio during the first half compared with £138m-worth a year earlier. However, a number of investments have been announced since then, including £64m in international transmission testing business GIF, and £44m in US-based global management consultancy JMJ.
Chief executive Simon Burrows has also made progress in aligning the cost base more closely with income, and operating expenses fell from £105m to £68m. The group's £60m operating costs savings target is expected to exceed by March next year, too.
Analysts at Barclays expects full-year EPS of 54.4p (19.4p in 2013) and net asset value (NAV) of 368p.
| 3i GROUP (III) | ||||
|---|---|---|---|---|
| ORD PRICE: | 352p | MARKET VALUE: | £3.42bn | |
| TOUCH: | 351-352p | 12-MONTH HIGH: | 391p | LOW: 205p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 7 | |
| PREMIUM TO NAV: | 9% | NET CASH: | £28m | |
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 274 | -165 | -17.9 | 2.70 |
| 2013 | 324 | 143 | 15.0 | 6.70 |
| % change | +18 | - | - | +148 |
Ex-div: 11 Dec Payment: 8 Jan | ||||
