3i Group PLC Q1 Performance update (0791M)
July 26 2017 - 1:00AM
UK Regulatory
TIDMIII
RNS Number : 0791M
3i Group PLC
26 July 2017
26 July 2017
3i Group plc
FY2018 Q1 performance update
A busy start to the year with four new Private Equity
investments and good portfolio performance
* NAV per share of 628 pence and total return of 4.1%
at 30 June 2017
* Good level of new investment in Private Equity with
GBP276 million invested in Hans Anders and Lampenwelt
in the quarter and a further GBP241 million committed
to Formel D and Cirtec
* Successful close of two new Infrastructure funds, the
3i Managed Infrastructure Acquisitions Fund and the
3i European Operational Projects Fund
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Simon Borrows, Chief Executive, commented:
"This was another good quarter for 3i and our portfolio of
international investments is performing well against an improving
economic backdrop. We completed or signed four new investments in
Germany, the Netherlands and the US and some GBP250 million of
divestments, including the announced sale of Mémora at a
significant uplift to its March 2017 value. We also added two new
Infrastructure funds, the 3i Managed Infrastructure Acquisitions
Fund and the 3i European Operational Projects Fund."
Private Equity
Portfolio performance
The Private Equity portfolio performed well in the quarter.
Action continued to see strong earnings growth and cash flow
generation. There was robust earnings growth across the portfolio
more generally with a good contribution from ATESTEO, Q Holding and
Audley Travel, together with strong cash flow generation from
Scandlines.
Private Equity investments
We completed our investments in Hans Anders (GBP172 million) and
Lampenwelt (GBP104 million) in May 2017 and Formel D (GBP136
million) in July 2017. We also announced a c.$136 million
investment in Cirtec Medical, a leading provider of outsourced
engineering and manufacturing to the medical device sector, which
is expected to complete by 30 September 2017.
Private Equity realisations
We generated total cash proceeds of GBP107 million in the
quarter from the full realisations of MKM and Dphone at uplifts of
3% and 30% respectively against 31 March 2017 book value.
Realisation proceeds
GBPm
-------------------------------- ----------------------
Full realisations
MKM 70
Dphone 26
Other 11
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Total Q1 FY2018 cash proceeds 107
-------------------------------- ----------------------
We also announced the sale of Mémora on 17 July 2017. This
disposal, which is expected to complete by the end of September
2017, will generate proceeds of c.GBP117 million to 3i. Mémora was
valued at GBP86 million at 31 March 2017 and has been moved to an
imminent sales basis at 30 June 2017.
Infrastructure
Our team, which advises 3i Infrastructure plc, is working
actively on its more recent acquisitions, including potential
follow on investments, and its pipeline of possible new
investments. 3i also invested GBP21 million in the new 3i Managed
Infrastructure Acquisitions Fund and committed EUR40 million to the
new 3i European Operational Projects Fund, which achieved its first
close in April 2017.
Top 10 investments by value at 30 June 2017
Valuation Valuation
Valuation Valuation Mar-17 Jun-17
basis currency GBPm GBPm Activity in the quarter
----------------------- ----------- ----------- ---------- ---------- ------------------------------
Action Earnings EUR 1,708 1,835
----------------------- ----------- ----------- ---------- ---------- ------------------------------
3i Infrastructure plc Quoted GBP 655 658 Ex-dividend date 15 June 2017
----------------------- ----------- ----------- ---------- ---------- ------------------------------
Scandlines DCF EUR 538 571
----------------------- ----------- ----------- ---------- ---------- ------------------------------
Q Holding Earnings USD 222 238
----------------------- ----------- ----------- ---------- ---------- ------------------------------
Weener Plastic Earnings EUR 200 213
----------------------- ----------- ----------- ---------- ---------- ------------------------------
Audley Travel Earnings GBP 185 194
----------------------- ----------- ----------- ---------- ---------- ------------------------------
Basic-Fit Quoted EUR 184 182
----------------------- ----------- ----------- ---------- ---------- ------------------------------
Hans Anders Earnings EUR - 175 New investment
----------------------- ----------- ----------- ---------- ---------- ------------------------------
ATESTEO Earnings EUR 160 172
----------------------- ----------- ----------- ---------- ---------- ------------------------------
BoConcept Earnings DKK 146 156
----------------------- ----------- ----------- ---------- ---------- ------------------------------
The top 10 investments in this table comprise 71% (31 March
2017: 70%) of the total Proprietary Capital portfolio by value.
Total return and NAV position
The continued weakening of sterling against the euro following
the UK General Election in June 2017 contributed to a total foreign
exchange gain in the quarter of GBP68 million. Based on the balance
sheet at 30 June 2017, a 1% movement in the euro and US dollar
would result in a total return movement of GBP37 million and GBP7
million respectively. Altogether the diluted NAV per share
increased to 628 pence (31 March 2017: 604 pence) and 609.5 pence
following the payment of the FY2017 final dividend.
Balance sheet and dividend
The Group's balance sheet remains well funded. Net cash reduced
to GBP161 million, due to the investment activity in the quarter.
Liquidity remained strong at GBP1,086 million. The GBP136 million
investment in Formel D completed on 17 July 2017 and the 18.5 pence
FY2017 final dividend (GBP178 million) was paid on 21 July
2017.
Notes
1. Balance sheet values are stated net of foreign exchange translation. Where applicable, the
GBP equivalents at 30 June 2017 in this update have been calculated at a currency exchange
rate of EUR1.1388:GBP1 and $1.2989:GBP1 respectively. At 30 June 2017, 61% of the Group's
net assets were in euro and 12% were in US dollar.
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2. At 30 June 2017 3i had 968.4 million diluted shares.
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3. Action was valued using a post discount run-rate EBITDA multiple of 16.0x based on its run-rate
earnings to 19 June 2017, the closest period end to 3i's.
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- ENDS -
For further information, please contact:
Silvia Santoro
Investor Relations Director
Tel: 020 7975 3258
Kathryn van der Kroft
Communications Director
Tel: 020 7975 3021
About 3i Group
3i is a leading international investment manager focused on
mid-market Private Equity and Infrastructure. Our core investment
markets are northern Europe and North America. For further
information, please visit: www.3i.com
All statements in this performance update relate to the three
month period ended 30 June 2017 unless otherwise stated. The
financial information is unaudited and is presented on 3i's
non-GAAP Investment basis in order to provide users with the most
appropriate description of the drivers of 3i's performance. Net
asset value ("NAV") and total return are the same on the Investment
basis and on an IFRS basis. Details of the differences between 3i's
consolidated financial statements prepared on an IFRS basis and
under the Investment basis are provided in the 2017 Annual report
and accounts. There have been no material changes to the financial
position of 3i from the end of this quarter to the date of this
announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
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