TIDMIII
RNS Number : 1424V
3i Group PLC
26 January 2017
26 January 2017
3i Group plc
FY2017 Q3 performance update
A robust performance from our portfolio companies and
continued investment momentum
* NAV per share of 558 pence and total return of 24.1%
at 31 December 2016
* Cash realisations of GBP917 million in the nine
months to 31 December 2016 from our Private Equity
business
* Continued momentum in investment activity taking year
to date Private Equity cash investment to GBP356
million
* Infrastructure announced the launch of a new GBP700
million fund, managed by 3i, to acquire a portfolio
of European infrastructure assets
==============================================================
Simon Borrows, Chief Executive, commented:
"Q3 was an active quarter for our investment teams. We announced
two significant Private Equity investments as well as the launch of
a new fund managing a portfolio of infrastructure assets.
Realisation activity continues apace and we received proceeds from
Action's recent refinancing and our shareholdings in Loxam and Go
Outdoors.
Overall our portfolio remains well positioned, with our key
assets continuing to deliver consistently robust performance. 3i is
set for a strong close to the current financial year."
Private Equity
Portfolio performance
The Private Equity portfolio continued to perform well in the
quarter. In particular, Action delivered another excellent
performance. Its rapid store expansion programme, strong earnings,
like-for-like sales growth and cash generation allowed it to secure
a EUR1.675 billion refinancing. As a result, 3i received GBP187
million of proceeds.
There was a mixed performance from other retailers in our
portfolio with Hobbs trading well through Christmas but Agent
Provocateur and our German investment, Christ, experienced more
subdued December trading.
We continue to see good earnings growth across the portfolio
more generally, with assets such as ATESTEO, Aspen Pumps and
Euro-Diesel performing well and strong cash flow generation from
Scandlines.
Private Equity investments
In December 2016, we made a GBP62 million further investment in
Q Holding to support its transformative acquisition of Degania
Silicone Ltd ("Degania") to create one of the largest medical
silicone and systems manufacturers globally. Our GBP122 million
investment in Ponroy Santé, a manufacturer of natural healthcare
and cosmetics products, completed on 24 January 2017.
Private Equity realisations
We generated total cash proceeds in the quarter to 31 December
2016 of GBP263 million, taking total cash proceeds received in the
nine months to 31 December 2016 to GBP917 million. In addition, we
announced the disposal of Lekolar in January 2017 for proceeds of
c.GBP33 million.
Realisation proceeds
GBPm
============================================= ======================
Full realisations
Go Outdoors 21
Loxam 40
Other 4
Partial realisations
Refresco 11
Refinancings
Action 187
============================================ ======================
Total Q3 2017 cash proceeds 263
============================================= ======================
H1 2017 cash proceeds 654
Total cash proceeds as at 31 December 2016 917
============================================= ======================
In October 2016, we announced an implementation agreement to
sell ACR to two Shenzhen-government sponsored investment companies.
The transaction is subject to a number of regulatory approvals
including the National Development and Reform Commission ("NDRC")
authorisation to remit renminbi outside of China. The recent
tightening of NDRC policy means that inevitably the approval
process will take longer than previously anticipated. As a result,
we have not valued the investment on an imminent sales basis at 31
December 2016.
Top 10 investments by value at 31 December 2016
Valuation Valuation
Valuation Valuation Sep-16 Dec-16
basis currency GBPm GBPm Activity in the quarter
======================= =========== =========== ========== ========== ===========================================
Action Earnings EUR 1,549 1,369 Refinancing returned GBP187m of proceeds
to 3i
======================= =========== =========== ========== ========== ===========================================
3i Infrastructure plc Quoted GBP 673 648
======================= =========== =========== ========== ========== ===========================================
Scandlines DCF EUR 434 443
======================= =========== =========== ========== ========== ===========================================
Q Holding Earnings USD 134 209 Further investment of GBP62m to support
Q Holding's acquisition of Degania in
December 2016
======================= =========== =========== ========== ========== ===========================================
Weener Plastic Earnings EUR 187 189
======================= =========== =========== ========== ========== ===========================================
Basic-Fit Quoted EUR 195 182
======================= =========== =========== ========== ========== ===========================================
Audley Travel Earnings GBP 162 168
======================= =========== =========== ========== ========== ===========================================
Schlemmer Earnings EUR 157 156
======================= =========== =========== ========== ========== ===========================================
BoConcept Earnings DKK 133 138
======================= =========== =========== ========== ========== ===========================================
ATESTEO Earnings EUR 115 136
======================= =========== =========== ========== ========== ===========================================
The top 10 investments in this table comprise 74% (30 September
2016: 74%) of the total Proprietary Capital portfolio by value.
This table does not include ACR, which has been excluded for
commercial reasons.
Total return and NAV position
The foreign exchange impact was flat in the quarter despite
intra-period volatility. Based on the balance sheet at 31 December
2016, a 1% movement in the euro and US dollar would result in a
total return movement of GBP28 million and GBP8 million
respectively.
Altogether the diluted NAV per share increased to 558 pence (30
September 2016: 551 pence) and 550 pence ex-dividend.
Balance sheet and dividend
The Group's balance sheet remains well funded. Net cash
increased to GBP348 million, following good levels of realised
proceeds in the quarter. Liquidity remained strong at GBP1,517
million. The 8 pence FY2017 interim dividend (GBP77 million) was
paid on 4 January 2017 and our EUR310 million bond, due in March
2017, will be repaid out of cash resources.
-S -
Notes
1. Balance sheet values are stated net of foreign exchange translation. Where applicable, the
GBP equivalents at 31 December 2016 in this update have been calculated at a currency exchange
rate of EUR1.1690:GBP1 and $1.2338:GBP1 respectively. At 31 December 2016, 56% of the Group's
net assets were in euro and 15% were in US dollar.
2. At 31 December 2016, 3i had 966.5 million diluted shares.
3. Valuations based on earnings use the 12 months to 30 September 2016 financials, unless forecast
data provides a more reliable picture of maintainable earnings.
4. Action was valued using a post discount run-rate EBITDA multiple of 15.8x based on its 30
September 2016 run rate earnings.
For further information, please contact:
Silvia Santoro
Investor Relations Director
Tel: 020 7975 3258
Kathryn van der Kroft
Communications Director
Tel: 020 7975 3021
About 3i Group
3i is a leading international investment manager focused on
mid-market Private Equity and Infrastructure. Our core investment
markets are northern Europe and North America. For further
information, please visit: www.3i.com.
All statements in this performance update relate to the three
month period ended 31 December 2016 unless otherwise stated. The
financial information is unaudited and is presented on 3i's
non-GAAP Investment basis in order to provide users with the most
appropriate description of the drivers of 3i's performance. Net
asset value ("NAV") and total return are the same on the Investment
basis and on an IFRS basis. Details of the differences between 3i's
consolidated financial statements prepared on an IFRS basis and
under the Investment basis are provided in the 2016 Annual report
and accounts. There have been no material changes to the financial
position of 3i from the end of this quarter to the date of this
announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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