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3i's value keeps rising

The investment group has injected a further £500m into new investments
November 20, 2017

The timing of investment realisations and revaluations has masked first-half progress made by investment group 3i (III). Unrealised profits on its private equity portfolio were down a fifth on the prior year, which included the rerating of its investment in Dutch discount retailer Action.

IC TIP: Hold at 916.5p

Management also generated fewer proceeds from disposing of private equity investments, which declined by almost half to £350m. Disposals included Oticas Carol, its last remaining holding in Brazil, which had increased in value by around half since the initial investment. Overall, private equity realisations will be weighted towards the second half, so should come more into line with last year. The group ploughed £514m into four new companies, including £172m into Benelux optical retailer Hans Anders and £135m into automotive and component supply specialist Formel D.

Infrastructure business 3iN generated a total return of 7 per cent on its opening net asset value, putting it ahead of schedule to meet its medium-term target range of between 8 per cent and 10 per cent. The 3i Managed Infrastructure Acquisitions fund closed in June, after the group invested £30m alongside two pension funds. The infrastructure business also made its first North American investment after the period-end in Smarte Carte, a provider of self-service luggage carts and electronic lockers.

Analysts at Barclays expect adjusted net assets of 700p at the end of March 2018, up from 604p at the same point in 2017.

3I (III)    
ORD PRICE:916.5pMARKET VALUE:£8.92bn
TOUCH:916.5-917p12-MONTH HIGH:975pLOW: 624p
DIVIDEND YIELD:2.9%PE RATIO:7
PREMIUM TO NAV:40%NET DEBT:1%
Half-year to 30 SeptNet asset value (p)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2016607975101.58
201765565668.28
% change+8-33-33 
Ex-div:14 Dec   
Payment:10 Jan