Preliminary statement of annual results for year to 31 March 2000
Total return of £1.6 billion, a return of 44% on opening shareholders' funds, outperforming the FTSE All-share Index (excluding investment companies) by 34%
£1.4 billion (including co-investment funds) invested in 593 companies, an increase of 20%
Shareholders' funds increased from £3.6 billion to £5.2 billion, up 44%
Diluted net asset value per share increased from 601p to 847p, up 41%
Recommended final dividend of 7.6p per share, making a total dividend for the year of 12.2p (1999: 11.3p), up 8%
Sir George Russell, chairman of 3i Group plc, commenting on the results, said: "3i has made excellent progress with its strategic objectives and has achieved very good financial results. 3i faces an exciting and challenging period ahead, with a clear strategy to grow the business. We will continue to build our capabilities to reinforce our position as the leading venture capital company in Europe and increase our presence in other international markets."
3i Group plc announces today that the total return in the year to 31 March 2000 was £1.6 billion, a return of 44% on opening shareholders funds, a record for 3i. The Group's compound average annual return for the five years to 31 March 2000 was 22.1%, against the FTSE All-share compound average annual return of 18.9%.
A record level of investment of £1.4 billion, including co-investment funds, in 593 companies, the third consecutive year that 3i has invested over £1 billion.
Diluted net asset value per share increased from 601p to 847p, an increase of 41% from 31 March 1999
Profits (over carrying value) on sale of equity investments were £350 million, an increase of 94%. These profits represented an uplift over opening valuation of 83%. Profits over cost were £643 million
Unrealised value growth in the portfolio of £1.2 billion
Final dividend of 7.6p recommended by the Directors, making a total dividend for the year of 12.2p
REVIEW OF STRATEGIC OBJECTIVES
3i has made excellent progress against its strategic objectives:
Maintain market leadership in the UK
- Invested £894 million in 354 companies
- Accounted for 42% of all technology investments made by BVCA members
- Total return from the UK was £1,302 million, a return of 43%
- Restructured 3i's UK network onto a stronger regional footing
Increase investment in continental Europe to 20% of the Group's portfolio by 2003
- Increased investment in continental Europe to £422m from £241m in the year to 31 March 1999, an increase of 75%
- The continental portfolio now represents 18% of the total portfolio
- Opened offices in Nantes in France and in Bologna and Padua in Italy
Increase technology assets to over 30% of the Group's portfolio
- Increased technology investment to £656m from £291m in the year to 31 March 1999, representing an increase of 125%
- The technology portfolio now represents 40% of the portfolio
Develop a significant business in the US and Asia Pacific
- Opened offices in Boston and Palo Alto in September 1999 and have completed nine investments, investing US$44 million
- Increased investment in Asia Pacific and raised a US$400 million 3i Asia Pacific Technology fund in Singapore
Grow funds under management to support our core investment activities
- Eurofund III, a Euro 2 billion pan-European buy-out fund was launched
- Launched a US$400 million 3i Asia Pacific Technology Fund
- Launched 3i Bioscience Investment Trust, a quoted investment trust, on the London Stock Exchange
- Increased third party quoted funds under management during the financial year to £0.8 billion
- Following the year end launched 3i European Technology Trust on the London Stock Exchange
The UK business is now benefiting from the restructuring of the UK network into six regions, reporting high levels of investments and realisations. The network provides a strong competitive advantage, combining local knowledge with the benefit of an international network.
Returns from the UK business have been very good, particularly in technology businesses. The UK return was £1,302 million, driven mainly by the value growth of quoted technology and buy-out companies coming from 3i's portfolio in which 3i has retained a stake. 3i made 202 technology investments during the year and now has 485 UK technology businesses in the portfolio. 3i completed 52 buy-outs during the year, investing a total of £424 million.
3i in continental Europe has again had a successful year in building its business and making significant progress towards achieving the strategic objective of 20% of its portfolio assets in continental Europe by 2003. The continental portfolio now totals 18% of the Group's portfolio.
Investment levels grew strongly, rising from £241 million last year to £422 million in the financial year ended 31 March 2000. Total return in continental Europe was £221 million before currency adjustment.
3i strengthened its network, opening offices in Nantes in France and Padua and Bologna in Italy. In addition, with the acquisition of Technologieholding, a German venture capital company, 3i added Berlin and Leipzig to 3i's German network. Since the year end, 3i has opened an office in Zurich, Switzerland and has agreed to acquire SFK Finance Oy, based in Helsinki, giving 3i its first office in the Nordic region.
Since 3i established its offices in September 1999, US $44 million has been invested in nine companies. These have been achieved primarily on the strength of 3i's ability to deliver genuine international reach to US entrepreneurs. 3i's network of 39 offices across three continents and a portfolio of around 750 technology investments is proving to be very attractive to US technology businesses.
During the year, 3i invested in 11 companies and expects further expansion in this region will be greatly assisted by the launch of the 3i Asia Pacific Technology Fund. The US $400 million fund includes a commitment of US $100 million from the Government of Singapore's Technopreneurship Investment Fund (TIF).
In Japan, 3i's joint venture with the Industrial Bank of Japan, 3i Kogin Buyouts, is well advanced in recruiting local expertise. The business will take advantage of the opportunities that are expected to result from the major structural changes taking place in the Japanese market.
3i currently manages around £2.3 billion of third party co-investment funds. During the year, new unquoted funds were launched, most notable Eurofund III, a Euro 2 billion fund, 3i's first pan-European buy-out fund. The addition of 3i Bioscience and after the year end, 3i European Technology Trust, has increased third party quoted funds under management to £0.8 billion.
The Group's total return of £1,579 million for the year comprises capital return of £1,460 million and revenue return of £119 million. Unrealised value growth of £1,167 million made a significant contribution to the Group's total return, as well as the realised capital return of £350 million on the sale of investments. Revenue profit after tax was £115 million.
Commenting on the results, 3i's chief executive, Brian Larcombe, said: Our strategy is to build on 3i's position as Europe's leading venture capital company and to expand internationally to take advantage of growing markets. Many others have recognised the potential of venture capital and are entering the market. To stay ahead, we will continue to build our international capabilities and use our extensive resources to support the companies in which we invest.
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For further information, please contact:
|Brian Larcombe, Chief Executive||Tel: 020 7975 3386|
|3i Group plc|
|Michael Queen, Finance Director||Tel: 020 7975 3400|
|3i Group plc|
|Liz Hewitt, Director Corporate Affairs||Tel: 020 7975 3283|
|3i Group plc|
|Andrew Millington, Director||Tel: 020 7329 0096|