Interim Results
3i Group PLC
06 November 2003
3i Group plc announces
Interim results for the six months to 30 September 2003
For further information regarding the announcement of 3i's interim results to 30
September 2003 please see www.3igroup.com
6 November 2003
Results
• Positive total return of £359 million
• Return on opening shareholders' funds of 12.2%
• Diluted net asset value per share of 534p
• Realisation proceeds of £503 million and realisation profits of £129
million over opening valuation
• Significant reduction in the level of provisions to £65 million
• Investment of £273 million (including co-investment funds managed by 3i)
• Recommended interim dividend of 5.1p per share, an increase of 4.1%
Baroness Hogg, chairman of 3i Group plc, said:
'This encouraging performance was driven by better results in all of our key
areas of activity - buy-outs, growth capital and early stage technology.'
Financial Overview
• The Group achieved a positive total return of £359 million for the six
months to 30 September 2003; a return on opening shareholders' funds of 12.2%.
• Realised profits totalled £129 million. The aggregate uplift on
equity realisations over 31 March 2003 valuations, net of losses, was 61%.
• A net cash inflow of £225 million during the period results in gearing
being reduced to 25% at 30 September from 35% at 31 March 2003. €550 million
was raised through the issue of convertible bonds.
• Investment of £273 million (including co-investment funds) compares
with £393 million for the same period last year.
Commenting on the performance and outlook, 3i's chief executive, Brian Larcombe,
said:
'We have seen a strong turnaround in 3i's financial performance, as the benefits
of changes to the business over the last two years have flowed through. With
positive returns, a strong balance sheet and increasing corporate activity, 3i
is well placed to increase investment.'
- ends -
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
Patrick Dunne, Group Communications Director Tel: 020 7975 3283
3i Group plc
Issued by:
Philip Gawith Tel: 020 7379 5151
The Maitland Consultancy
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, the US and Asia Pacific. To date, 3i has invested over £14.5 billion
(including co-investment funds).
Chairman's statement
In October, 3i's European Enterprise Barometer indicated that business
confidence amongst the companies in which we invest was at its highest level for
three years. 3i's own half-year results, for the six months to 30 September,
were the strongest since 2000. The total return was £359 million, an
encouraging performance, driven by better results in all of our key areas of
activity - buy-outs, growth capital and early stage technology.
The Directors have announced an interim dividend of 5.1p, representing an
increase of 4.1%.
During a period in which share prices, including 3i's own, rose markedly, the
FTSE All-Share index increased by more than our net asset value. Total return
on opening shareholders' funds of 12.2% compared with an index return of 19.0%.
Provisions were significantly lower than a year ago. But we have continued to
take a cautious approach to the valuation of our early stage technology
portfolio. We have made some further individual downward 'fair value'
adjustments, while not adjusting the total upwards for the rise in technology
market indices.
However, we were able to take advantage of the improvement in markets to achieve
a good level of realisations across the business as a whole, yielding profits of
£129 million on proceeds of £503 million. Combined with the low level of
investment during much of this period, this resulted in a positive cash flow in
the half-year of £225 million.
3i's combination of financial strength, international network and in-depth
expertise enables us to take advantage of opportunities in a range of different
markets, and to add value to those companies in which we invest.
As business confidence rose towards the end of the half-year, so too did our
levels of investment. Signs of growth in the world economy offer the prospect
that momentum will build in our markets through the second half of the year.
There are still threats to business confidence, with structural imbalances in a
number of the major economies. However, we believe these markets will provide
some excellent opportunities for 3i, and we will continue to be rigorous and
selective in our approach.
Baroness Hogg
Chairman
5 November 2003
Operating and financial review
Economic and market conditions
After almost two years of geo-political and economic uncertainty and difficult
stock markets, we have seen signs of stronger economic activity. This has been
evidenced by a number of indicators, including our own Barometer survey of
business confidence across Europe.
The Barometer survey taken in March 2003, which was affected by the considerable
anxiety over the Iraq war, produced a record low score of minus 117. Our survey
covering August showed a significant improvement to minus 17 and our latest
survey, taken in October, came out at plus 11, the first positive result since
the end of 2000.
The period also saw strong growth in stock market indices, in anticipation of
growth in corporate profits. In addition, the level of mergers and acquisitions
('M&A'), a key driver of activity in our market, picked up through the summer
after being at a subdued level since 2000.
The private equity and venture capital markets are also starting to show
increased activity after a slow first half of 2003. Market statistics for the
first half show aggregate European investment 8% down on the first half of 2002,
with buy-outs being flat, growth capital being down 24% and early stage
investment down by 18%. Market statistics for the US venture market for the
second quarter of 2003 showed a slight increase in investment levels after a two
and a half year decline.
Conditions for realisations were difficult for most of the period, though we are
now beginning to see the re-emergence of trade buyers as corporates re-enter the
M&A market. There are also indications that IPO markets, particularly in the UK
and US, may be re-opening.
Total return
The Group achieved a positive total return of £359 million for the six months to
30 September 2003, which equates to 12.2% on opening shareholders' funds. This
return is lower than those on a number of quoted market indices, largely because
of a lag in recognising value increases in our portfolio. Only our quoted
assets and unquoted investments valued using the earnings basis are directly
linked to stock market movements. These made up 6% and 24% respectively of our
opening portfolio.
The main drivers of our total return were a good level of profitable
realisations and growth in the value of our portfolio, the latter being
primarily due to higher price-earnings ratios ('P/Es') used to value our
investee companies.
Improved results in each of our business areas underpinned the overall Group
return. Returns in the smaller buy-out and growth capital businesses, aided by
good levels of realisations, were particularly strong at 15% and 13%
respectively on the opening portfolio. The mid-market buy-out return of 8%
included a number of significant valuation uplifts on recent investments as they
moved from being valued on a cost basis for the first time. Our early stage
technology business produced a small negative total return despite some
profitable realisations and a significantly lower level of value reductions.
Although there was a significant rise in quoted technology indices during the
period, we have not increased the valuations of early stage technology
investments unless there has been a financing 'up round'.
Investment
We invested £273 million, including co-investment funds, which compares with
£393 million for the equivalent period last year. The period of economic
uncertainty during the latter half of 2002 and the early months of this year led
to a deferral of many strategic decisions by businesses and investors. This
lowered our new investment pipeline coming into the period. Since then,
economic confidence has improved and corporate activity has risen.
Buy-out transactions represented 51% of our investment and growth capital 28%.
Early stage technology represented 21%, with 80% of this to support existing
portfolio companies.
Continental European investment rose to 67% of total investment following
several significant buy-out investments. UK investment represented 23%, the US
7% and Asia Pacific 3%.
Realisations
We generated realisation proceeds of £503 million and realised profits of £129
million. The aggregate uplift over 31 March 2003 valuations on equity
realisations was 61%. Including sales and redemptions of loans and fixed income
shares, 10% of the opening portfolio was realised.
Realised profits are stated net of write-offs of £25 million (2002: £32 million).
The majority of the realisations were from our smaller buy-out and growth
capital portfolios.
Unrealised value movement
The unrealised value movement on the revaluation of investments was £215
million, representing a strong improvement on the £701 million value reduction
for the same period last year.
The weighted average P/E applied to investments valued on an earnings basis rose
from 8.1 at 31 March to 10.7 at 30 September. The impact of increased P/E
ratios generated value growth of £235 million. The quoted investments we
retained increased in value by £44 million (2002: £192 million reduction).
A small number of recent investments in our mid-market buy-out portfolio
generated most of the increase in value arising from 'first time uplift'.
Provisions for investments in companies which might fail were £65 million (2002:
£141 million), and valuation reductions relating to down rounds and
restructuring provisions fell significantly to £68 million from £130 million in
the six months to 30 September 2002 and £361 million for the 12 months to 31
March 2003.
The British Venture Capital Association recently issued new best practice
Valuation Guidelines. 3i adopted these guidelines at 30 September 2003. There
was no material impact on the overall valuation of the portfolio.
The portfolio
Following two difficult years, the health of our portfolio has stabilised. In
line with our strategy, the portfolio remains balanced in terms of both product
and geography. At 30 September, 53% of the portfolio is represented by
buy-outs, 33% by growth capital investments and 14% by early stage technology
investments. Geographically, 62% of our portfolio is in the UK, 32% in
continental Europe, 4% in the US and 2% in Asia Pacific.
Income and costs
Total operating income before interest payable was £130 million (2002: £153
million). The decrease from 2002 is a result of the realisation of a small
number of higher yielding investments, a lower level of special interest
receipts on the sale or restructuring of assets and a fall in deal-related fees
due to the lower level of investment activity.
Net interest payable has decreased in line with the reduction in net borrowings.
Management expenses were £6 million lower than in the same period last year, as
cost reduction measures taken over the past two years continue to work through.
Cash flows and capital structure
There was a net cash inflow of £225 million during the period. We raised €550
million through the issue of convertible bonds in August. The bonds are due in
2008 and have a conversion price of 842p (a 45% premium to the 'reference price'
of 580p) and an annual coupon rate of 1.375%. Net borrowings decreased by £206
million and our gearing reduced to 25% at 30 September from 35% at 31 March.
Outlook
Improving business confidence, rising stock markets and increased levels of M&A
activity are helpful to our industry. In addition, within each of 3i's
businesses there are specific factors indicating a more positive outlook - in
buy-outs, the continuing pressure on corporates to focus on their core
activities is generating opportunities and vendors' pricing expectations are now
more realistic; in growth capital, opportunities are being created as businesses
re-launch deferred growth strategies; and, in early stage technology, we are
starting to see increased levels of technology spending in some sectors by major
corporates.
Our new investment pipeline is currently strong and we expect to increase
investment levels in the second half.
Brian Larcombe
Chief Executive
5 November 2003
Consolidated statement of total return
for the six months to 30 September 2003
6 months to 30 September 6 months to 30 September 12 months to 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£m £m £m £m £m £m £m £m £m
Capital profits
Realised profits on 129 129 118 118 184 184
disposal of investments
Unrealised profits/ 215 215 (701) (701) (1,165) (1,165)
(losses)
on revaluation of
investments
344 344 (583) (583) (981) (981)
Total operating income 130 - 130 153 - 153 298 10 308
before interest payable
Interest payable (27) (23) (50) (52) (3) (55) (57) (53) (110)
103 321 424 101 (586) (485) 241 (1,024) (783)
Administrative expenses (30) (40) (70) (53) (23) (76) (64) (89) (153)
Cost of changes to - - - - - - (5) (5) (10)
organisational
structure
Return before tax and 73 281 354 48 (609) (561) 172 (1,118) (946)
currency translation
adjustment
Tax (9) 8 (1) (1) 2 1 (32) 35 3
Return for the period 64 289 353 47 (607) (560) 140 (1,083) (943)
before currency
translation adjustment
Currency translation 12 (6) 6 1 (11) (10) 6 2 8
adjustment
Total return 76 283 359 48 (618) (570) 146 (1,081) (935)
Total return per share
Basic (pence) 12.4p 46.3p 58.7p 7.8p (101.3)p (93.5)p 23.9p (177.1)p (153.2)p
Diluted (pence) 12.1p 45.1p 57.2p 7.8p (101.0)p (93.2)p 23.9p (176.9)p (153.0)p
Movement in shareholders' funds
for the six months to 30 September 2003
6 months to 6 months to 12 months
to
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
£m £m £m
Opening balance 2,936 3,945 3,945
Revenue return 76 48 146
Capital return 283 (618) (1,081)
Total return 359 (570) (935)
Dividends (31) (29) (81)
Proceeds of issues of shares 6 4 7
Movement in the period 334 (595) (1,009)
Closing balance 3,270 3,350 2,936
Consolidated revenue statement
for the six months to 30 September 2003
6 months to 6 months to 6 months to 12 months
to
30 September 30 September 30 September 31 March
2003 2002 2002 2003
(pro forma)*
(unaudited) (unaudited) (unaudited) (audited)
£m £m £m £m
Interest receivable on loan investments 43 48 48 96
Fixed rate dividends 4 10 10 17
Other interest receivable and similar income 17 17 17 34
Interest payable (27) (28) (52) (57)
Net interest income 37 47 23 90
Dividend income from equity shares 45 50 50 106
Share of net losses of joint ventures - (1) (1) (1)
Fees receivable 21 23 28 46
Other operating income - 1 1 -
Total operating income 103 120 101 241
Administrative expenses and depreciation (30) (33) (53) (64)
Cost of changes to organisational structure - - - (5)
Profit on ordinary activities before tax 73 87 48 172
Tax on profit on ordinary activities (9) (14) (1) (32)
Profit for the period 64 73 47 140
Dividends
Interim (5.1p per share proposed, 2003: 4.9p per (31) (29) (29) (29)
share paid)
Final (2003: 8.6p per share paid) (52)
Profit retained for the period 33 44 18 59
Dividends per share (pence) 5.1p 4.9p 4.9p 13.5p
Earnings per share
Basic (pence) 10.5p 12.0p 7.7p 22.9p
Diluted (pence) 10.2p 11.9p 7.7p 22.9p
*In the year to 31 March 2003, the Group adopted the recommendations in the
revised Statement of Recommended Practice - Financial Statements of Investment
Trust Companies, and revised the method of allocation of expenses between
revenue and capital. To aid comparability, the comparatives to 30 September
2002 have been restated to reflect these changes and are included as a 'pro
forma' above. These changes are explained in more detail in the Basis of
preparation.
Consolidated balance sheet
as at 30 September 2003
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
Assets £m £m £m £m £m £m
Treasury bills and other eligible bills 1 1 1
Loans and advances to banks 800 695 527
Debt securities held for treasury 218 198 283
purposes
Debt securities and other fixed income
securities held as financial fixed asset
investments
Loan investments 1,229 1,326 1,336
Fixed income shares 199 264 228
Equity shares
Listed 168 210 187
Unlisted 2,410 2,451 2,188
4,006 4,251 3,939
Interests in joint ventures
Share of gross assets 116 - 104
Share of gross liabilities (85) - (81)
31 - 23
Tangible fixed assets 43 52 45
Other assets 214 185 181
Total assets 5,313 5,382 4,999
Liabilities
Deposits by banks 290 343 423
Debt securities in issue 1,103 1,373 1,350
Convertible bonds 384 - -
Other liabilities 217 221 239
Provision for joint venture deficit
Share of gross assets - (74) -
Share of gross liabilities - 80 -
- 6 -
Subordinated liabilities 49 89 51
2,043 2,032 2,063
Called up share capital 306 305 305
Share premium and redemption reserve 355 347 350
Capital reserve 2,223 2,403 1,940
Revenue reserve 386 295 341
Equity shareholders' funds 3,270 3,350 2,936
Total liabilities 5,313 5,382 4,999
Net asset value per share
Basic (pence) 534p 549p 481p
Diluted (pence) 534p 548p 480p
Approved by the Board
5 November 2003
Consolidated cash flow statement
for the six months to 30 September 2003
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
£m £m £m
Operating activities
Interest received and similar income arising from debt 29 44 75
securities
and other fixed income securities held as financial fixed
asset
investments
Other interest received and similar income 17 16 31
Interest paid on borrowings (31) (54) (58)
Dividends received from equity shares 45 47 102
Fees and other net cash receipts 20 31 46
Operating and administrative costs paid (51) (59) (68)
Net cash inflow from operating activities 29 25 128
Taxation (paid)/received (2) 3 4
Capital expenditure and financial investment
Investment in equity shares, fixed income shares and loans (194) (299) (673)
Investment in equity shares and loans acquired from joint - (10) (17)
ventures
Sale, repayment or redemption of equity shares, fixed income 501 624 975
shares and loan investments
Fees intrinsic to acquisition or disposal of investments - - 10
Investment interest paid (23) (3) (53)
Investment administrative expenses (40) (23) (94)
Investment in joint ventures - (5) (54)
Divestment or repayment of interests in joint ventures - 10 19
Purchase of tangible fixed assets (1) (3) (5)
Sale of tangible fixed assets 1 - 1
Net cash flow from capital expenditure and financial 244 291 109
investment
Equity dividends paid (52) (49) (78)
Management of liquid resources (162) (122) 15
Net cash flow before financing 57 148 178
Financing
Debt due within one year (283) (87) (104)
Debt due after more than one year 265 (50) (32)
Issues of shares 6 4 7
Net cash flow from financing (12) (133) (129)
Increase in cash 45 15 49
Notes to the financial statements
for the six months to 30 September 2003
1 Reconciliation of revenue profit before tax to net cash inflow from operating activities
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
£m £m £m
Revenue profit before tax 73 48 172
Depreciation of equipment and vehicles 3 3 7
Tax on investment income included within income from
overseas - - (1)
companies
Interest received by way of loan notes (15) (15) (41)
Movement in other assets associated with operating (11) 7 (9)
activities
Movement in prepayments and accrued income associated with (13) (10) 12
operating activities
Movement in accruals and deferred income associated with (3) (5) (15)
operating activities
Movement in provisions for liabilities and charges (5) (4) 2
Reversal of losses of joint ventures less distributions - 1 1
received
Net cash inflow from operating activities 29 25 128
2 Reconciliation of net cash flows to movements in net debt
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002 2003
(unaudited) (unaudited) (audited)
£m £m £m
Increase in cash in the period 45 15 49
Cash flow from management of liquid resources 162 122 (15)
Cash flow from debt financing 13 142 143
Cash flow from subordinated liabilities 5 (5) (7)
Change in net debt from cash flows 225 274 170
Foreign exchange movements (17) - (46)
Non-cash changes (2) 2 50
Movement in net debt in the period 206 276 174
Net debt at start of period (1,015) (1,189) (1,189)
Net debt at end of period (809) (913) (1,015)
3 Analysis of net debt
Other
1 April Exchange non-cash 30
September
2003 Cash flow movement changes 2003
(audited) (unaudited) (unaudited) (unaudited) (unaudited)
£m £m £m £m £m
Cash and deposits repayable on demand 99 45 - - 144
Treasury bills, other loans, advances and 712 162 1 - 875
treasury debt
securities
Deposits and debt securities repayable within one (401) 283 - (2) (120)
year
Deposits and debt securities repayable after one (1,372) (270) (17) 2 (1,657)
year
Subordinated liabilities repayable after one year (51) 5 (1) (2) (49)
Finance leases (2) - - - (2)
(1,015) 225 (17) (2) (809)
Basis of preparation and independent review report
Basis of preparation
The accounting policies used in the preparation of this Interim report are the
same as those used in the statutory accounts for the year to 31 March 2003 and
those expected to be used for the year to 31 March 2004.
The six month period is treated as a discrete period except in so far as tax in
the revenue account is charged on the basis of an estimated annual effective
rate.
The figures for the year to 31 March 2003 have been extracted from the accounts
filed with the Registrar of Companies on which the auditors issued an
unqualified report. This Interim report does not constitute statutory accounts.
In the year to 31 March 2003, the Group adopted the recommendations contained in
the revised Statement of Recommended Practice - Financial Statements of
Investment Trust Companies, issued in January 2003. Fee income and costs earned
or incurred as an intrinsic part of an intention to acquire or dispose of an
investment have been accounted for in full as part of capital return. To the
extent taxation losses have been transferred between capital and revenue in
order to be utilised against excess taxable profits, the transfer is reflected
in the Statement of total return and Revenue statement. In the year to 31 March
2003, the methodology used to identify the administrative expenses available for
allocation to the capital reserve was modified. The methodology for allocation
of finance costs has also been revised to allocate all finance costs less
interest income between capital and revenue. The proportion of costs allocated
to the capital reserve was decreased from 80% to 70%. Consequently, to aid
comparability, a pro forma of the Revenue statement has been presented to show
the results as if these changes had been adopted for the six months to 30
September 2002.
Independent review report to 3i Group plc
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 30 September 2003 which comprises Consolidated statement of
total return, Movement in shareholders' funds, Consolidated revenue statement,
Consolidated balance sheet, Consolidated cash flow statement and the related
notes 1 to 3 and the Basis of preparation. We have read the other information
contained in the Interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the Company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company, for our work,
for this report or for the conclusions we have formed.
Directors' responsibilities
The Interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors. The Directors
are responsible for preparing the Interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial
data, and based thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise disclosed. A
review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than an
audit performed in accordance with United Kingdom Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly, we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review, we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2003.
Ernst & Young LLP
London
5 November 2003
New investment analysis
Analysis of the equity, fixed income and loan investments made by 3i Group. The
analyses below exclude
investments in joint ventures.
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002
2003
Investment by product (£m)
Buy-outs 141 177 482
Growth capital 76 123 273
Early stage technology 56 93 176
Total 273 393 931
Investment by geography (3i only - excluding co-investment funds) (£m)
UK 53 197 318
Continental Europe 134 84 304
US 18 31 74
Asia Pacific 6 3 20
Total 211 315 716
Investment by geography (£m)
UK 65 248 399
Continental Europe 182 111 436
US 18 31 74
Asia Pacific 8 3 22
Total 273 393 931
Continental European investment (£m)
Benelux 52 3 67
France 12 12 36
Germany/Austria/Switzerland 48 48 149
Italy 18 7 32
Nordic 27 23 69
Spain 20 17 75
Other European* 5 1 8
Total 182 111 436
* Other European includes investments in countries where 3i did not have an office at the period end.
Investment by FTSE industrial classification (£m)
Resources 4 3 12
Industrials 53 86 328
Consumer goods 80 130 194
Services and utilities 66 61 197
Financials 20 33 54
Information technology 50 80 146
Total 273 393 931
Portfolio analysis
The Group's equity, fixed income and loan investments total £4,006 million at 30
September 2003 (excluding co-investment funds). The analyses below exclude joint
ventures.
Portfolio value by product (£m) At 30 September At 31 March
2003 2003
Buy-outs 2,131 2,001
Growth capital 1,331 1,349
Early stage technology 544 589
Total 4,006 3,939
Portfolio value by geography (including co-investment funds) (£m)
UK 3,031 3,041
Continental Europe 1,977 1,773
US 177 182
Asia Pacific 80 101
Total 5,265 5,097
Portfolio value by geography (£m)
UK 2,495 2,494
Continental Europe 1,271 1,175
US 170 180
Asia Pacific 70 90
Total 4,006 3,939
Continental European portfolio value (£m)
Benelux 141 101
France 205 186
Germany/Austria/Switzerland 328 319
Italy 82 69
Nordic 279 273
Spain 218 211
Other European* 18 16
Total 1,271 1,175
* Other European includes investments in countries where 3i did not have an
office at the period end.
Portfolio value by FTSE industrial classification (£m)
Resources 171 186
Industrials 1,028 944
Consumer goods 923 873
Services and utilities 1,046 1,018
Financials 230 274
Information technology 608 644
Total 4,006 3,939
Portfolio value by valuation method (£m)
Imminent sale or IPO 83 37
Listed 168 187
Secondary market 48 30
Earnings 1,251 938
Cost 514 607
Further advance 125 155
Net assets 114 139
Other (including other technology assets valued below cost) 275 282
Loan investments and fixed income shares 1,428 1,564
Total 4,006 3,939
Portfolio analysis
Buy-out portfolio value by valuation method (£m) At 30 September At 31 March
2003 2003
Imminent sale or IPO 18 12
Listed 70 67
Secondary market 7 7
Earnings 750 536
Cost 141 149
Net assets 24 40
Other 61 115
Loan investments and fixed income shares 1,060 1,075
Total 2,131 2,001
Growth capital portfolio value by valuation method (£m)
Imminent sale or IPO 47 14
Listed 98 120
Secondary market 41 23
Earnings 500 377
Cost 147 187
Further advance 19 42
Net assets 90 98
Other 85 69
Loan investments and fixed income shares 304 419
Total 1,331 1,349
Early stage technology portfolio value by valuation method (£m)
Imminent sale or IPO 18 11
Earnings 1 25
Cost 226 271
Further advance 106 113
Net assets - 1
Other technology assets valued below cost 107 79
Other 22 19
Loan investments and fixed income shares 64 70
Total 544 589
Technology portfolio value by stage (£m)
Early stage 544 589
Late stage
Quoted 124 103
Buy-outs 339 294
Growth capital 260 250
723 647
Total 1,267 1,236
The early stage portfolio comprises investments in immature businesses which typically require further
funding. The late stage portfolio comprises investments in more mature, typically self-funding
businesses, including investments made by way of buy-outs and growth capital.
Early stage technology portfolio value by sector (£m)
Healthcare 183 195
Communications 111 112
Electronics, semiconductors and advanced technologies 74 72
Software 176 210
Total 544 589
Realisations analysis
Analysis of the Group's realisation proceeds (excluding co-investment funds).
Realisations proceeds by product (£m) 6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002 2003
Buy-outs 229 428 613
Growth capital 197 145 270
Early stage technology 77 46 93
Total 503 619 976
Realisations proceeds by geography (£m)
UK 317 535 727
Continental Europe 119 79 238
US 11 1 2
Asia Pacific 56 4 9
Total 503 619 976
Realisations proceeds (£m)
IPO - 33 37
Sale of quoted investments 73 79 110
Trade and other sales 298 257 493
Loan and fixed income share repayments 132 250 336
Total 503 619 976
Realisations proceeds by FTSE industrial classification (£m)
Resources 13 53 60
Industrials 73 167 294
Consumer goods 78 117 192
Services and utilities 225 217 330
Financials 68 32 42
Information technology 46 33 58
Total 503 619 976
Funds under management
(£m) At 30 September At 31 March
2003 2003
Third party unquoted co-investment funds 1,778 1,587
Quoted investment companies* 558 452
Total 2,336 2,039
* Includes the 3i Group Pension Plan.
Ten largest investments
At 30 September 2003, the Directors' valuation of the ten largest investments
was a total of £438 million. These investments cost £277 million.
Investment (date first invested in) and description of business Directors'
Cost Proportion valuation
£m of equity £m
(Note 1) shares held (Note 1)
Travelex Holdings Ltd (Note 2) (1998) Foreign currency services
Equity shares
- 19.6% 64
- 64
Westminster Health Care Holdings Ltd (2002) Care homes operator
Equity shares 1 49.6% 14
Loans 38 38
39 52
Fonecta Group Oy (2002) Directory services
Equity shares 4 33.5% 36
Loans 12 12
16 48
Malmberg Investments BV (2001) Educational publisher 7 41.8% 26
Equity shares 18 18
Loans
25 44
Pets At Home Group Ltd (1995) Retailer of pets and pet supplies 2
Equity shares 25 26.0% 18
Loans 25
27 43
ERM Holdings Ltd (Note 3) (2001) Environmental consultancy - 7
Equity shares 34 38.1% 34
Loans
34 41
SR Technics Holding AG (2002) Repair and maintenance of 7 7
aeroplane engines and frames 33 33
Equity shares 32.2%
Loans
40 40
Refresco Holding BV (2003) Fruit juice producer 3 3
Equity shares 18 62.8% 18
Fixed income shares 18 18
Loans
39 39
Tato Holdings Ltd (1989) Manufacture and sale of specialist 2 25.0% 34
chemicals
Equity shares
2 34
Beltpacker plc (2000) Manufacturer/marketing of healthcare/beauty 12 -
products, footwear and accessories 43 33
Equity shares 38.9%
Loans
55 33
Notes
1 The investment information is in respect of 3i's holding and excludes any
co-investment by 3i managed funds.
2 The cost of the equity held in Travelex Holdings Ltd is £121,000.
3 The cost of the equity held in ERM Holdings Ltd is £437,000.
Note 1
The Interim report 2003 will be posted to shareholders on 17 November 2003 and
thereafter copies will be available from the Company Secretary, 3i Group plc, 91
Waterloo Road, London SE1 8XP.
Note 2
The interim dividend will be payable on 7 January 2004 to holders of shares on
the register on
5 December 2003. The ex-dividend date will be 3 December 2003.
Note 3
Investments statistics referred to in this announcement relate to investments
made by 3i Group and third party unquoted co-investment funds managed by 3i
unless otherwise stated.
This information is provided by RNS
The company news service from the London Stock Exchange
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