Preliminary statement of annual results for year to 31 March 2001
Total return of £(142) million, a negative return of 2.7% on opening shareholders' funds
Outperformance of the main FTSE indices
Revenue profit after tax of £116 million
Net realised profit of £911 million over cost. Net realised profit of £453 million over opening valuation
Unrealised value decrease of the portfolio of £(676) million
£2.0 billion (including co-investment funds) invested in over 700 companies
Diluted net asset value per share of 815p
Recommended final dividend of 8.1p per share, making a total dividend for the year of 13.0p (2000: 12.2p), up 6.6%
Sir George Russell, chairman of 3i Group plc, commenting on the results, said:
"This is a strong result in relative market terms as 3i has outperformed the main FTSE indices by over 8% and each of the main European technology indices by over 50%. Our long-term financial performance has been outstanding and I have every confidence this will continue."
This is a strong performance in relative market terms as 3i has outperformed the main FTSE indices by over 8% and each of the main technology indices by over 50%.
This result has been achieved by maintained revenue profits and very high realised profits on the sale of investments which together offset most of the fall in the valuation of the portfolio.
The fall in the valuation of the portfolio largely resulted from the decrease in value of quoted technology investments.
Record level of investment of almost £2 billion in over 700 companies.
Record realisations and return flow that exceeded investment.
3i has made outstanding progress with its strategic objectives during the year. 3i's objective is to be the leading international venture capital company with a strong position in all of the major venture capital markets. Within the next five years, we expect to have about half of our total portfolio outside of the UK, with at least 30% in continental Europe, at least 10% in the United States and around 5% in Asia Pacific.
In the UK, we have maintained our leading market position and further developed our leadership position in technology investment and in mid-market buyouts. We have extended our sector team working, particularly in a number of technology based industries, which has helped us to gain real benefits from our international network.
In Europe, our network of offices and teams is now substantially complete. We have built a strong business in the Nordic region through the acquisition of SFK in Finland during the year and since the year-end through the acquisition of Atle AB, the leading quoted venture capital company in Sweden. We acquired Bank Austria TFV in Austria and have established new offices in Copenhagen and Zurich and, since the year-end, in Dublin.
We now have 341 staff in 22 offices across continental Europe and a market leading position with a balanced capability between technology and buy-out investing. Our continental European portfolio increased to 23% of Group assets.
Our US business, which opened in 1999, has rapidly built a strong market position in certain technology sectors. Our international network is proving to be a significant competitive advantage in winning business. We have made good progress against our other strategic objectives, namely to assist our existing technology portfolio, to gain a window on innovation and technology trends and to access high quality deal flow.
In Asia Pacific, our office in Singapore, which opened in 1997, has continued to develop well and we are planning to expand our operations by opening an office in Hong Kong to access the north Asia market. In Japan, where we focus on buy-outs, we completed the then largest buy-out transaction in Japan during the year and are continuing to develop this market.
In the UK, we had an active year with record levels of investment and realisations. We invested £1.0 billion in 328 companies across a wide range of sectors and maintained our leadership position in both the technology and mid-market buy-out sectors.
We have continued to increase investment in all countries and our total investment in continental Europe grew by 82% to £770 million in 354 companies. Strong realised profits, especially in Italy and Germany, were offset by the fall in value of quoted investments, particularly those quoted on the Neuer Markt. We achieved 21 IPOs on six different continental European markets.
During the year we have invested £134 million in 29 companies. We have recruited locally and now have 27 staff in our offices in Palo Alto and Boston.
Asia Pacific continues to be an important market for 3i and, despite continuing economic uncertainty, the environment for our business in the region remains positive. Our Singapore based team had an active year in the region, resulting in 14 investments made in the last year totalling £40 million. The US$400 million Asia Pacific Technology Fund is now 15% invested and one investment has already been listed on the Singapore Stock Exchange.
3i now manages and advises third party unquoted funds totalling £2.1 billion of commitments on behalf of external investors. Following substantial fundraising last year we did not require any major new fundraising activity during the year.
3i Asset Management increased the amount of third party quoted funds under management generating a substantial increase in fee income.
Revenue profit before tax increased by £1 million to £120 million with a particularly strong increase in fee income from £55 million to £72 million. We achieved a high level of realisations in the year. Net realised profits (after deduction of realised losses) increased to £453 million (2000: £350 million). Equity proceeds amounted to £1,308 million, up £486 million from last year. There was a net reduction of £676 million in the valuation of the portfolio.
3i has generated a net cash inflow during the year and as a result gearing is now 22% compared to 23% at 31 March 2000. The Group has a strong balance sheet and the capacity to continue to invest in attractive opportunities.
Commenting on the results, 3i's chief executive, Brian Larcombe, said:
"Looking ahead, our plans anticipate another challenging year and while we are devoting more of our resources to assist our portfolio companies, this is not a time to be shy of making new investments. We have the capabilities, in the strength of the network, our brand and our people, to continue to outperform."
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 buy-outs and buy-ins, 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 over £13.5 billion (including co-investment funds). In the 12 months to 31 March 2001, an average of £7.8 million (including co-investment funds) was invested each working day. 3i's current portfolio is valued at almost £6 billion.