There was speculation that private equity groups would suffer in the run-up to June's European Union referendum, but the latest half-year figures from 3i (III) suggest that these worries were overdone. In fact, the subsequent devaluation of sterling resulted in a net foreign exchange gain of £283m. The group, which also incorporates infrastructure and debt management divisions, shrugged off geopolitical uncertainties and some shortlived market volatility to post a gross investment return of 25.3 per cent, while driving total returns over the £1bn mark from £168m in the corresponding period in 2015.
It was a particularly busy period in terms of private equity realisations, reflected in proceeds of £654m with returns over double the level of invested capital. With an eye on future returns, 3i invested £287m in two new private equity investments: Schlemmer and BoConcept.
Elsewhere in the group, investors will take encouragement from the performance of the infrastructure business, which delivered a gross investment return of £90m in addition to fee income. And although the group launched two new collateralised loan obligations through to the end of September, a decision was taken subsequent to the period-end to hive off the debt management business to Investcorp for gross cash proceeds of £222m.
Analysts at JPMorgan Cazenove expect net asset value of 584p a share for the March 2017 year-end, up from 463p in 2016.
3I (III) | ||||
---|---|---|---|---|
ORD PRICE: | 616p | MARKET VALUE: | £5.99bn | |
TOUCH: | 616-617p | 12-MONTH HIGH: | 680p | LOW: 381p |
DIVIDEND YIELD: | 3.9% | PE RATIO: | 4 | |
PREMIUM to NAV: | 11% | NET CASH: | £187m |
Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2015 | 403 | 150 | 15.8 | 6.0 |
2016 | 554 | 946 | 98.5 | 8.0 |
% change | +37 | +531 | +523 | +33 |
Ex-div: 8 Dec Payment: 4 Jan |