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(Alliance News) - 3i Group PLC on Thursday said net asset value was higher at the end of its third quarter, with another strong performance from on-food discount retailer Action.
Private equity and infrastructure investment company 3i said diluted net asset value on December 31 was 877 pence, up 0.5% from 873p on September 30. However, this figure fell to 859.5p after deducting 3i's 17.5p per share dividend paid January 8.
According to 3i, "Action finished the year very strongly", having generated 21% revenue growth in calendar year 2019 and like-for-like sales growth of 5.6%.
This helped 3i's equity portfolio deliver "good return" despite a write down on an investment in Schlemmer, a cable management firm focused on the automotive sector, to zero. Schlemmer filed for bankruptcy in December. The write-down resulted in a GBP67 million unrealised value loss in the third quarter and a total GBP170 million loss since investing in 2016.
Another detractor in the quarter was foreign exchange, with the firm recognising a GBP314 million net loss on foreign exchange in its third quarter, equivalent to 32 pence per share, due to a weakening of the dollar and the euro against sterling.
On January 17, after the end of its third quarter, 3i closed a transaction through which vehicle Eurofund V sold its entire stake in Action.
Action, at the same time, completed term loan refinancing. Action used term loan proceeds to pay a pre-closing dividend to shareholders and 3i reinvested its share of the dividend plus its proportion of Eurofund V carried interest from the sale back into Action.
As a consequence of the deal, 3i's interest in Action - net of ongoing carried interest liability, will rise to 49% as of March end 2020. Its previous interest was 44%.
3i Chief Executive Simon Borrows said: "This was a very busy quarter for the 3i team. We executed two outstanding realisations in the sale of Aspen Pumps from our private equity portfolio and [Wireless Infrastructure Group] from [3i Infrastructure PLC]. New investment and bolt-on activity has continued across both portfolios, as has refinancing activity. And, importantly, we successfully provided liquidity to the [Eurofund V] investors in Action while the company has continued to drive sector-leading sales and profit growth as it expands across Europe."
Shares in 3i were up 0.9% at 1,122.00p in London on Thursday morning.
By Anna Farley; annafarley@alliancenews.com
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