Foreign exchange-related losses and slightly lower valuation growth from its core private equity business dampened gross investment returns for 3i (III) in FY2018. Unrealised profits on the private equity portfolio were down 15 per cent on the prior year, with a small number of companies exposed to the high street or undergoing a strategic shift declining in value. That fed through to a 12 per cent decline in overall gross investment returns at £1.6bn.
However, its largest private equity portfolio company Action – which accounts for more than a third of that business’s value – grew more than a fifth in value. That included 3i’s receipt of £307m from the discount retailer’s fifth refinancing. The group also recognised £302m unrealised value growth against the sale of its stake in ferry operator Scandlines, which was valued at £803m. Management will reinvest following its completion to hold a 35 per cent stake.
Its infrastructure business advised on six new investments for 3i Infrastructure – in which it has a 34 per cent stake – including the additional £186m ploughed into Wireless Infrastructure to gain a majority holding. Gross investment returns of £113m, were up 30 per cent on the prior year.
Analysts at Societe Generale expect adjusted net assets of 808p a share at March 2019.
| 3i (III) | ||||
| ORD PRICE: | 973.4p | MARKET VALUE: | £ 9.47bn | |
| TOUCH: | 973-973.4p | 12-MONTH HIGH: | 986p | LOW: 823p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 6 | |
| PREMIUM TO NAV: | 34% | NET CASH: | £479m | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 348 | 0.52 | 54.8 | 20 |
| 2015 | 396 | 0.70 | 73.9 | 20 |
| 2016 | 463 | 0.79 | 85.6 | 22 |
| 2017 (restated) | 604 | 1.52 | 159 | 26.5 |
| 2018 | 724 | 1.49 | 152 | 30 |
| % change | +20 | -2 | -4 | +13 |
| Ex-div: | 14 Jun | |||
| Payment: | 20 Jul |
