Final Results - Part 2
3i Group PLC
17 May 2001
PART 2
Financial Review - Highlights
Total return (£m) 2001 2000
Revenue profit before tax 120 119
Net realised capital profits 453 350
Unrealised value growth (676) 1,167
Tax and other (57) (39)
Total return for the Group (142) 1,579
Total return by geography (£m) 2001 2000
UK 81 1,302
Continental Europe (145) 221
US (56) 41
Asia Pacific (63) 68
Currency adjustment 41 (53)
Total return for the Group (142) 1,579
Realisations 2001 2000
Total net realised profits (£m) 350 453
Equity proceeds (£m) 1,308 822
Uplift over opening equity valuation (%) 63 83
Percentage of opening equity portfolio sold (%) 19 17
Share and loan portfolio (£m) 2001 2000
Listed equity 818 1,103
Secondary market quoted 266 483
Unquoted equity 2,765 2,499
Loan investments 1,522 1,292
Fixed income shares 434 593
Total 5,805 5,970
Investment Unquoted Unquoted funds
3i funds Total 3i 2000 Total
2001 2001 2001 2001 2000 2000 2000
£m £m £m No £m £m £m No
UK 786 220 1,006 328 705 189 894 354
Continental 560 210 770 354 306 116 422 218
Europe
Asia Pacific 49 13 62 15 31 1 32 11
US 134 - 134 29 28 - 28 10
Total 1,529 443 1,972 726 1,070 306 1,376 593
Michael Queen, Finance Director
16 May 2001
Consolidated statement of total return
for the year to 31 March 2001
Revenue Capital Total Revenue Capital Total
2001 2001 2001 2000 2000 2000
£m £m £m £m £m £m
Capital profits
Net realised profits over opening 453 453 350 350
valuation
Net unrealised value movement in (676) (676) 1,167 1,167
the year
(223) (223) 1,517 1,517
Total operating income before 358 358 325 325
interest payable
Interest payable (117) (4) (121) (104) (1) (105)
241 (227) 14 221 1,516 1,737
Administrative expenses (121) (49) (170) (102) (33) (135)
Amortisation of goodwill - (18) (18) - (2) (2)
Return before tax and currency 120 (294) (174) 119 1,481 1,600
translation adjustment
Tax (4) 19 15 (4) (13) (17)
Return for the year before currency
translation adjustment 116 (275) (159) 115 1,468 1,583
Currency translation adjustment - 17 17 4 (8) (4)
Total return 116 (258) (142) 119 1,460 1,579
Total return per share
Basic (pence) 19.1p (42.5)p (23.4)p 19.9p 244.1p 264.0p
Diluted (pence) 18.9p (42.0)p (23.1)p 19.7p 241.7p 261.4p
Reconciliation of movement in shareholders' funds
The Group The Group
2001 2000
£m £m
Opening balance 5,174 3,604
Revenue return 116 119
Capital return (258) 1,460
Total return (142) 1,579
Dividends (78) (72)
Proceeds of issues of shares 19 63
Movement in the year (201) 1,570
Closing balance 4,973 5,174
Consolidated revenue statement
for the year to 31 March 2001
2001 2000
£m £m
Interest receivable
Interest receivable and similar income
arising from debt securities
and other fixed income securities
held as financial fixed asset
investments
Interest receivable on loan investments 99 87
Fixed rate dividends 21 34
120 121
Other interest receivable and similar income 43 31
163 152
Interest payable (117) (104)
Net interest income 46 48
Dividend income from equity shares 123 117
Share of net losses of joint ventures (2) (1)
Fees receivable 72 55
Other operating income 2 2
Total operating income 241 221
Administrative expenses and depreciation (121) (102)
Profit on ordinary activities before tax 120 119
Tax on profit on ordinary activities (4) (4)
Profit for the year 116 115
Dividends
Interim (4.9p per share paid,
2000: 4.6p per share paid) (29) (27)
Final (8.1p per share proposed,
2000: 7.6p per share paid) (49) (45)
Profit retained for the year 38 43
Earnings per share
Basic (pence) 19.2p 19.3p
Diluted (pence) 18.9p 19.1p
There is no material difference between the reported revenue and the revenue
on an unmodified historical cost basis.
Consolidated balance sheet
as at 31 March 2001
2001 2001 2000 2000
Assets £m £m £m £m
Treasury bills and other eligible bills 1 -
Loans and advances to banks 890 478
Debt securities held for treasury purposes 201 191
Debt securities and other fixed income securities
held as financial fixed asset investments
Loan investments 1,522 1,292
Fixed income shares 434 594
1,956 1,886
Equity shares
Listed 971 1,304
Unlisted 3,030 2,982
4,001 4,286
5,957 6,172
Interests in joint ventures
Share of gross assets 46 122
Share of gross liabilities - -
46 122
Intangible fixed assets
Goodwill 74 76
Tangible fixed assets 60 53
Own shares 56 48
Other assets 79 81
Prepayments and accrued income 75 68
Total assets 7,439 7,289
Liabilities
Deposits by banks 617 190
Debt securities in issue 1,503 1,613
Other liabilities 58 69
Accruals and deferred income 210 187
Provisions for liabilities and charges
Deferred tax 8 23
Subordinated liabilities 70 33
2,466 2,115
Called up share capital 304 302
Share premium account 333 316
Capital redemption reserve 1 1
Capital reserve 4,083 4,341
Revenue reserve 252 214
Equity shareholders' funds 4,973 5,174
Total liabilities 7,439 7,289
Memorandum items
Contingent liabilities
Guarantees and assets pledged as collateral security 19 16
Commitments 452 350
Approved by the Board
Sir George Russell CBE
Brian Larcombe
Directors
16 May 2001
Consolidated cash flow statement
for the year to 31 March 2001
2001 2000
£m £m
Operating activities
Interest received and similar income arising from
debt securities and other fixed income securities
held as financial fixed asset investments 103 114
Other interest received and similar income 43 35
Interest paid on borrowings (115) (103)
Dividends received from equity shares 121 115
Fees and other net cash receipts 75 54
Operating and administrative costs paid (94) (109)
Net cash inflow from operating activities 133 106
Taxation received 12 19
Capital expenditure and financial investment
Investment in equity shares,
fixed income shares and loans (1,541) (1,278)
Sale, repayment or redemption of equity shares,
fixed income shares and loan investments 1,586 1,162
Investment administrative expenses (49) (33)
Investment interest paid (4) (1)
Net divestment of joint ventures 23 7
Disposal of investment properties 2 4
Purchase of tangible fixed assets (11) (11)
Sale of tangible fixed assets 2 1
Net cash inflow/(outflow) from capital
expenditure and financial investment 8 (149)
Acquisitions
Acquisition of subsidiary undertakings (11) (78)
Equity dividends paid (74) (69)
Management of liquid resources (378) (189)
Net cash (outflow) before financing (310) (360)
Financing
Debt due within one year (20) 9
Debt due after more than one year 352 309
Issues of shares 18 64
Net cash inflow from financing 350 382
Increase in cash 40 22
Notes to the financial statements
for the year to 31 March 2001
1 Reconciliation of revenue profit before tax to net cash inflow from operating
activities
2001 2000
£m £m
Revenue profit before tax 120 119
Depreciation of equipment and vehicles 8 6
Increase in other assets associated with
operating activities (2) (13)
Tax on investment income included
within income from overseas companies (2) (2)
Increase in prepayments and accrued income
associated with operating activities (7) (9)
Increase in accruals and deferred income
associated with operating activities 14 4
Reversal of losses of joint ventures
less distributions received 2 1
Net cash inflow from operating activities 133 106
2 Reconciliation to net debt
2001 2000
£m £m
Increase in cash in the year 40 22
Cash outflow from management of liquid resources 378 189
Cash (inflow) from debt financing (296) (309)
Cash (inflow) from subordinated liabilities (36) (9)
Change in net debt from cash flows 86 (107)
Debt acquired with subsidiary undertakings - (23)
Foreign exchange movements (17) (2)
Movement in net debt in the year 69 (132)
Net debt at start of year (1,170) (1,038)
Net debt at end of year (1,101) (1,170)
3 Analysis of net debt
Other
1 Cash Exchange non-cash 31
April flow movement changes March
2000 2001
£m £m £m £m £m
Cash and deposits repayable on demand 42 40 5 - 87
Treasury bills, other loans, advances and 627 378 - - 1,005
treasury debt securities
Deposits and debt securities repayable (393) 20 (15) (275) (663)
within one year
Deposits and debt securities repayable (1,410) (316) (6) 275 (1,457)
after one year
Subordinated liabilities (33) (36) (1) - (70)
Finance leases (3) - - - (3)
(1,170) 86 (17) - (1,101)
Notes to the preliminary announcement:
Note 1
The statutory accounts for the year to 31 March 2001 have not yet been
delivered to the Registrar of Companies. The statutory accounts for the year
to 31 March 2000 were filed with the Registrar of Companies on 9 October 2000.
The auditors' reports on these statutory accounts are unqualified and do not
contain any statements under Section 237(2) or (3) of the Companies Act 1985.
This announcement does not constitute statutory accounts.
Note 2
The final dividend will be payable on 13 July 2001 to holders of shares on the
register on 15 June 2001.
Note 3
Copies of the Report and accounts 2001 will be distributed to shareholders on
or soon after 1 June 2001.
Note 4
Investment statistics referred to in this preliminary announcement relate to
investments made by 3i Group and third party co-investment funds unless
otherwise stated.
Ten largest investments
Investment First Cost(1) Proportion Directors' Income Net Earnings(2)
invested £m of equity valuation(1)received assets(2) £m
in shares £m during £m
held the
year(3)
£m
Morse plc(4) 1995
Leading
technology
integrator
Equity shares 9 21.9% 108 1
9 108 1 75 13
TeleCity plc(4) 1998
Internet and
telecoms
engineering
services
Equity shares 1 30.4% 62 -
1 62 - 99 (14)
Beltpacker plc(5) 2000
Manufacture/
marketing of
healthcare/
beauty
products,
footwear and
accessories
Equity shares 12 35.6% 12 -
Loans 38 38 1
50 50 1 - -
Weston Medical 1993
Group plc(4)
Needle-free
medical device
manufacture
Equity shares 1 20.5% 47 -
1 47 - 38 (10)
Mettis Group 1999
Ltd
Manufacture and
sale of
forgings
Equity shares 1 40.0% 1 -
Loans 41 41 3
42 42 3 (3) (5)
General London 2001
Construction
Holdings Ltd(5)
Regional
housebuilder
Equity shares 1 41.6% 1 -
Loans 41 41 -
42 42 - - -
Actelion AG(4) 1998
Research and
development of
anti-infective
drugs
Equity shares 1 5.1% 42 -
1 42 - 100 (16)
Marlborough 1996
Stirling plc(6)
Design and
implementation
of software
Equity shares 15 17.5% 39 1
15 39 1 10 5
Taylor & 1982
Francis Group
plc4 Scientific
and technical
publishing
Equity shares 2 7.6% 39 -
2 39 - 63 9
ERM Holdings 2001
Ltd(5)
Environmental
consultancy
Equity shares 1 42.4% 1 -
Loans 36 36 -
37 37 - - -
Notes to the ten largest investments:
1. The investment information is in respect of 3i's holding and excludes any
co-investment by 3i managed funds.
2. Net assets and earnings figures are taken from the most recent audited
accounts of the investee business . The figures shown are the total
earnings and net assets of each business. Because of the varying rights
attaching to the classes of shares held by 3i, it could be misleading to
attribute a certain proportion of earnings and net assets to the
proportion of equity capital held. Negative earnings and net assets are
shown in brackets.
3. Income in the year represents dividends received (exclusive of dividend tax
credits at 10%, but inclusive of any overseas withholding tax) and gross
interest receivable in the year to 31 March 2001.
4. Quoted company (including secondary markets).
5. These companies were incorporated in the year and no audited accounts are
available, consequently no net assets or earnings are disclosed.
6. The proportion of equity held of Marlborough Stirling plc, reflects the
position immediately before admission to the London Stock Exchange on 9
April 2001. The net assets and earnings figures are taken from the
December 2000 audited accounts and do not reflect the reorganisation of
capital prior to admission.
New investment analysis
2001 2000 1999 1998 1997
UK 786 705 693 752 561
Continental Europe 560 306 137 62 34
Asia Pacific 49 31 6 6 -
US 134 28 1 1 3
Total 1,529 1,070 837 821 598
Investment by geography (including co-investment funds) (£m)
UK 1,006 894 899 909 652
Continental Europe 770 422 241 121 87
Asia Pacific 62 32 6 6 -
US 134 28 1 1 3
Total 1,972 1,376 1,147 1,037 742
Continental European investment (£m)
Austria 19 - - - -
Benelux 63 39 3 - -
Denmark 4 - - - -
Finland 3 - - - -
France 117 84 63 45 38
Germany 301 130 83 42 31
Ireland 17 - - - -
Italy 64 48 21 16 10
Spain 131 95 68 18 8
Sweden 9 - - - -
Switzerland 26 - - - -
Other European(1) 16 26 3 - -
Total 770 422 241 121 87
1 Other European includes investments in countries where 3i did not have an
office at the period end.
Investment by product (£m)
Start-ups 278 82 57 29 21
Management buy-outs 617 440 365 381 261
Management buy-ins 88 142 241 164 152
Growth capital 852 545 330 298 207
Share purchase 90 132 121 142 86
Recoveries 47 35 33 23 15
Total 1,972 1,376 1,147 1,037 742
Number of investments by product
Start-ups 187 104 56 60 43
Management buy-outs 64 60 97 130 119
Management buy-ins 14 32 48 76 73
Growth capital 369 297 324 312 248
Share purchase 34 38 56 72 45
Recoveries 58 62 73 47 44
Total 726 593 654 697 572
New investment analysis (continued)
Investment by FTSE industrial classification (£m)
2001 2000 1999 1998 1997
Resources 67 17 69 20 37
Industrials 256 201 376 421 341
Consumer goods 371 167 237 208 99
Services and utilities 482 546 330 346 240
Financials 55 48 41 42 25
Information technology 741 397 94 n/a n/a
Total 1,972 1,376 1,147 1,037 742
n/a the current FTSE industrial classifications came into effect on 1 April
1999. Changes made included the introduction of information technology. With
the exception of 1999, the classification shown analyses investment and the
portfolio by FTSE classification in use at each balance sheet date.
Technology investment by sector (£m)
Life sciences and
healthcare 136 85 70 * *
Communications and
networking 224 131 75 * *
Electronics and other
technologies 76 93 31 * *
e-Business 185 97 7 * *
Software and computer
services 485 250 109 * *
Total 1,106 656 292 * *
*not previously analysed
Portfolio analysis
Portfolio value by geography (including co-investment funds) (£m)
2001 2000 1999 1998 1997
UK 4,792 5,240 4,565 4,492 3,690
Continental Europe 2,039 1,514 882 538 423
Asia Pacific 98 64 12 6 -
US 246 192 14 12 26
Total 7,175 7,010 5,473 5,048 4,139
Portfolio value by geography (3i only - excluding co-investment funds) (£m)
UK 4,121 4,668 4,036 4,155 3,516
Continental Europe 1,363 1,049 495 304 254
Asia Pacific 86 63 12 6 -
US 235 190 14 12 26
Total 5,805 5,970 4,557 4,477 3,796
Continental European portfolio value (£m)
Austria 18 2 - - -
Benelux 92 59 2 - -
Denmark 10 3 - - -
Finland 5 - - - -
France 254 203 173 120 83
Germany 456 459 196 135 134
Ireland 45 28 - - -
Italy 142 71 44 28 18
Spain 234 135 80 21 19
Sweden 11 3 - - -
Switzerland 82 72 - - -
Other European 1 14 14 - - -
Total 1,363 1,049 495 304 254
1 Other European includes investments in countries where 3i did not have an
office at the year end.
Portfolio value by FTSE industrial classification (£m)
Resources 232 185 176 140 102
Industrials 1,081 1,247 1,258 1,709 1,644
Consumer goods 1,237 1,138 952 779 467
Services and utilities 1,538 1,648 1,559 1,666 1,399
Financials 256 251 196 183 184
Information technology 1,461 1,501 416 n/a n/a
Total 5,805 5,970 4,557 4,477 3,796
n/a the current FTSE industrial classifications came into effect on 1 April
1999. Changes made included the introduction of information technology. With
the exception of 1999, the classification shown analyses investment and the
portfolio by FTSE classification in use at each balance sheet date.
Portfolio analysis (continued)
Portfolio value by valuation method (£m)
2001 2000 1999 1998 1997
Imminent sale or IPO 106 241 88 59 62
Listed 818 1,103 742 687 583
Secondary market 266 483 75 85 90
Earnings 1,033 1,226 1,192 1,509 1,220
Cost 1,078 626 404 276 182
Net assets 147 144 113 102 98
Other 401 262 120 46 52
Loan investments and fixed 1,956 1,885 1,823 1,713 1,509
income shares
Total 5,805 5,970 4,557 4,477 3,796
Technology portfolio value by sector (£m)
Life sciences and healthcare 526 434 200 * *
Communications and networking 400 457 151 * *
Electronics and other
technologies 203 286 193 * *
e-Business 220 158 12 * *
Software and computer services 980 1,044 418 * *
Total 2,329 2,379 974 * *
*Not previously analysed
Technology portfolio value by valuation method (£m)
Imminent sale or IPO 44 171 24 * *
Listed 475 603 287 * *
Secondary market 248 471 42 * *
Earnings 69 168 94 * *
Cost 841 449 221 * *
Further advance 227 143 38 * *
Net assets 1 2 3 * *
Other 79 28 7 * *
Loan investments and fixed
income shares 345 344 258 * *
Total 2,329 2,379 974 * *
*not previously analysed.
Funds under management (£m)
Third party unquoted 2,131 2,261 1,470 1,345 490
co-investment funds
Quoted investment companies(2) 870 818 474 464 379
Total 3,001 3,079 1,944 1,809 869
2 includes the 3i Group Pension Plan
Realisations analysis
Analysis of the Group's equity realisation proceeds (excluding third party
co-investment funds).
Total equity realisations proceeds by geography (£m)
2001 2000 1999 1998 1997
UK 1,147 686 448 353 247
Continental Europe 161 135 84 48 58
Asia Pacific - 1 - - -
US - - - 11 -
Total 1,308 822 532 412 305
Total equity realisations proceeds (£m)
On IPO 253 48 75 31 41
Sale of quoted equity 585 351 165 155 117
Trade and other sales 470 423 292 226 147
Total 1,308 822 532 412 305
Total equity realisations proceeds by FTSE industrial classification (£m)
Resources 36 4 10 6 5
Industrials 141 120 159 135 145
Consumer goods 230 97 66 49 35
Services and utilities 276 375 289 211 111
Financials 25 4 8 11 9
Information technology 600 222 n/a n/a n/a
Total 1,308 822 532 412 305
n/a see previous footnote.
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