Interim Results for the six months ended 30 September 2000

23 Nov 2000

Sir George Russell, chairman of 3i Group plc, commenting on the results, said:

"3i achieved good results for the six months to 30 September 2000, generating a total return of £1,040 million, a return of 20% on opening shareholders' funds. The Directors have announced an interim dividend of 4.9p, an increase of 6.5% over last year."

RESULTS HIGHLIGHTS

  • Total return of £1,040 million
  • Return on opening shareholders' funds of 20%, outperforming all major stock market indices
  • Diluted net asset value per share increased from 847p to 1011p
  • Interim dividend of 4.9p per share, up 6.5%
  • Investment of £902 million

Brian Larcombe, chief executive of 3i Group plc, said:

"I am pleased with 3i's performance in the six months to 30 September and particularly with the progress that we have made in building the business. 3i's international network is enabling us to invest in exciting businesses across the world and to achieve good returns from these investments."

In the UK, investment rose to £511 million compared with £327 million in the same period last year. Investment in continental Europe increased by 79% to £352 million, with particularly strong growth in Germany and Spain.

Quoted markets were receptive to good quality technology IPOs for most of the period. There were 27 IPOs of 3i backed companies in Europe compared with 17 in the whole of the previous financial year. Of these IPOs, 12 were in the UK and 10 were in Germany. There were 67 trade sales compared with 59 in the same period last year.

3i's European network has expanded with the acquisition of Helsinki-based SFK Finance and the opening of an office in Zurich. Since September, 3i has also acquired Bank Austria TFV, an Austrian technology venture capital investor.

3i's US offices in Boston and Palo Alto add value to 3i's overall technology portfolio, as well as providing good investment opportunities. 3i made eight investments during the six months, investing £29 million. Since opening in the US last year, 17 investments have been made, with 3i leading nine of these investments. The Group is very pleased with the continued development of this business.

In Singapore 3i's business has continued to develop, focussing on technology companies and other fast growth businesses with the capacity to establish international operations. 3i has built a good team in Japan but the buy-out market there continues to develop slowly.

3i currently manages around £2.3 billion of unquoted third party funds which are invested alongside 3i's own capital. 3i is the investment manager to four quoted investment companies, with the launch of 3i European Technology Trust in early April. By managing these assets 3i builds on its expertise to manage quoted investments in certain specialist areas which helps 3i to manage its quoted portfolio.

FINANCIAL REVIEW

Total return for the six months was £1,040 million, a return on opening shareholders' funds of 20.1%. This return compares very favourably with total returns of the FTSE 100 and the TechMARK 100 which were down 2.7% and 15% respectively. In line with recent trends, an increasing proportion of total return comprised realised and unrealised capital profits, with revenue profits marginally lower than last year.

Technology investments accounted for all of the Group's total return. Performance of 3i's non-technology, buy-out and growth capital businesses was satisfactory given difficult trading conditions in certain sectors. 3i's European businesses performed well with the UK making a total return of £909 million and continental Europe a return of £174 million.

REVIEW OF STRATEGIC OBJECTIVES

3i has achieved the strategic objectives which were set out three years ago. As a result, 3i has taken the opportunity to set further objectives that reinforce the Group's international ambition.

  • Increase investment in continental Europe to at least 30% of the total portfolio by 2006
  • Increase the US portfolio to at least 10% of 3i's portfolio by 2006
  • Increase the portfolio in Asia Pacific to at least 5% of the Group's portfolio by 2006
  • Continued innovation in the UK to maintain 3's market leading position

3i has exceeded the objectives set for investment in technology companies. The investment policy is to invest in growth companies and it is becoming increasingly difficult to define those which are technology businesses and those whose growth will be driven by the application of new technology. For this reason, a specific technology objective has not been reset.

Brian Larcombe commented: 

"3i has achieved good results and the Group continues to develop its international network, making significant progress in key markets. Investment activity and realisations since 30 September have continued at a high level."

For further information, please contact:

 3i Group plc  
 Brian Larcombe, Chief Executive  Tel:  020 7975 3386
 Michael Queen, Finance Director  Tel:  020 7975 3400
 Liz Hewitt, Director Corporate Affairs  Tel:  020 7975 3283
 Issued by The Maitland Consultancy  
 Philip Gawith  Tel:  020 7379 5151

 

Notes to Editors
3i brings capital, knowledge and connections to the creation and development of businesses around the world. It invests in a wide range of opportunities from start-ups to buyouts and buyins, focusing on businesses with high growth potential and strong management.

3i invests in businesses across three continents through local investment teams in Europe, Asia Pacific and the USA. To date, 3i has invested almost £13 billion (including co-investment funds). In the six months to September 2000, an average of £7.2 million (including co-investment funds) was invested each working day. 3i's current investment portfolio is valued at almost £7 billion.

The Interim Results press release, the presentation and speeches given by Brian Larcombe, chief executive and Michael Queen, finance director, announcing the Interim Results will be published from 10:00: 23 November 2000 on 3i's website:www.3i.com/investor.