Pre-close period briefing

23 Sep 2011

 

3i Group plc ("3i"), an international investor focused on private equity, infrastructure and debt management, will be holding discussions with analysts and investors ahead of its close period for the six months ending 30 September 2011. This statement sets out the information that will be covered in those discussions. 3i expects to announce its results for the six months ending 30 September 2011 on 10 November 2011.

Commenting on the statement, 3i's Chief Executive, Michael Queen, said:

"We have continued to invest selectively and taken the opportunity to realise assets at attractive prices.

The economic outlook looks increasingly challenging and falling stock markets mean that the value of our portfolio will inevitably be lower at the half year despite an overall solid trading performance.

We face this environment with confidence having reshaped the business over the last few years to ensure that we have both a strong balance sheet and liquidity to continue to implement our strategy."

The main topics that will be discussed with analysts and investors are set out below.

1. Investments and realisations

 

Investment £m

 

Realisations £m

 

5 months

5 months

 

5 months

5 months

 

ended

ended

 

ended

ended

 

31 August

31 August

 

31 August

31 August

 

2011

2010

 

2011

2010

Private Equity

 

 

 

 

 

 

Buyouts

148

218

 

360

3

 

Growth Capital

117

21

 

161

61

Infrastructure

33

-

 

1

-

Debt Management

5

18

 

-

15

Non-core activities

-

-

 

6

50

Total

303

257

 

528

129

Since 31 August, £134 million was invested in Action, a leading discount retailer in the Netherlands.

2. Shareholder distribution

Having set out its return objective at the final results in May, the Board is now reviewing what proportion of this return should be paid to shareholders in the form of an annual dividend. It expects to make a full announcement at the time of its half-yearly results in November.

However, given the Board's confidence in the delivery of the strategy in the medium term the revised dividend policy will result in a progressive dividend based on the performance of the Group and starting from a substantially higher level than the current dividend.

In addition, the Board has the authority to repurchase shares in the market to supplement its new distribution policy, but any such purchases would be weighed against other investment opportunities, and will not depart from the conservative balance sheet strategy it has followed since its rights issue in 2009.

3. Returns

As usual, an important element in the determination of 3i's results for the half year to 30 September 2011 will be the detailed valuation exercise carried out on its investment portfolio as at that date.

The multiples which will be used to value the portfolio will reflect the fall in stock markets, and as a result Net Asset Value at 30 September 2011 is expected to be lower than as at 31 March 2011.

4. Cashflow and balance sheet

The Group had cash, cash deposits and undrawn committed facilities of £1,937 million at 31 August 2011 (31 March 2011: £1,846 million) and gross debt had reduced to £1,733 million from £2,043 million at 31 March 2011.

Net debt decreased from its year end level of £522 million to £343 million at 31 August, reflecting the cashflows relating principally to investments and realisations, together with other operating expenses.

During the period to 31 August 2011, as part of the Company's ongoing balance sheet management, €85 million of the 2012 euro denominated floating rate notes were bought back for cancellation, reducing the total amount payable on maturity to €346.5 million. 

For information please contact:

Patrick Dunne
Group Communications Director
020 7975 3566

Kathryn van der Kroft
PR Director
020 7975 3021

This statement aims to give an indication of material events and transactions that have taken place during the period from 1 April 2011 to 31 August 2011 and their impact on the financial position of 3i Group plc. These indications reflect the Board's current view. They are subject to a number of risks and uncertainties and could change. 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 3is portfolio.