Pre-close period briefing
3i Group plc ("3i"), a world leader in private equity and venture capital, will be briefing analysts and investors ahead of its close period for the full year to 31 March 2006.
3i expects to announce its full year results for the year ending 31 March 2006 on 11 May 2006.
The main topics that will be discussed with analysts and investors are set out below.
Investment and realisations
3i invested a total of £1,184 million in the eleven months ended 28 February 2006, compared with £843 million in the equivalent period last year. This includes £186 million (2005: £157 million) invested on behalf of co-investment funds managed by 3i.
Realisation proceeds received by 3i (excluding co-investment funds) totalled £1,815 million in the eleven months ended 28 February, which compares with realisation proceeds of £1,146 million in the equivalent period last year.
Realised profits (net of write-offs) on the disposal of investments for the eleven month period to 28 February are expected to be significantly higher than last year, reflecting the significant level of realisations.
An important element in the determination of 3i's results for the year to 31 March 2006 is the detailed valuation exercise carried out on its investment portfolio as at that date. However, provisions against the carrying value of investments in businesses which may fail are expected to be broadly in-line with those made in the equivalent period last year.
Convertible bond and foreign exchange
The significant rise in the Company's share price has given rise to an increase in the fair value of the derivative embedded in the €550 million Convertible Bonds due 2008. The share price of 946p at the close of the market on 28 March 2006 would result in a fair value adjustment of approximately £(79) million (£(14) million at 30 September 2005). In addition, a foreign exchange movement of approximately £50 million (£35 million at 30 September 2005) accrued for the eleven month period to 28 February, resulted mainly from the strengthening of the dollar relative to sterling.
Return of capital to shareholders
Since receiving approval at its AGM in July 2005 to return surplus cash to shareholders, 3i has paid a special dividend of approximately £245 million and has since then made aggregate on-market purchases of £220 million (exclusive of stamp duty and brokers' commissions).
Given the strong level of realisation proceeds, the Board is intending to make a further return of cash to shareholders of not less than £500 million and expects to make an announcement at the time of the full year results on 11 May 2006.
Philip Yea, 3i's Chief Executive, said:
"We have seen a continued strong performance from our business in buoyant financing markets. We have also continued to make good progress on our strategic agenda, growing our investment levels in existing markets whilst building capabilities in newer markets."
For information please contact:
3i Group plc
Simon Ball, Finance Director - 020 7975 3356
Patrick Dunne, Group Communications Director - 020 7975 3283
Philip Gawith - 020 7379 5151
This statement gives some indication of 3i's expected return (and of key components of that return) for the twelve months to 31 March 2006. These indications reflect the Board's current view. They are subject to a number of risks and uncertainties and could change. The final numbers for the twelve months to 31 March 2006, due to be reported on 11 May 2006, may differ accordingly. Factors which could cause or contribute to such differences include, but are not limited to, general economic and market conditions and specific factors affecting the financial prospects or performance of individual investments within 3i's portfolio.