(Amended to correct spelling of chief executive officer's name to Simon Borrows.)
(Alliance News) - 3i Group PLC on Thursday said its investment returns and profit both fell in its latest half year, but increased its interim dividend and noted the "challenging macroeconomic and geopolitical backdrop".
The FTSE 100 London-based investment manager said pretax profit decreased 4.9% to GBP1.67 billion from GBP1.76 billion.
3i Group also said its gross investment return for the six months ended September 30 decreased 7.4% to GBP1.71 billion, from GBP1.78 billion the previous year. The gross return for its private equity investments fell 7.3% to GBP1.83 billion from GBP1.97 billion.
3i Group, which focuses on mid-market private equity and infrastructure in northern Europe and North America, said its investees in the healthcare, private label and value-for-money sectors made good contributions. Action, a Dutch non-food discount retailer in which 3i Group owns a 52.9% stake worth GBP12.86 billion, delivered a very strong performance.
However, these were offset by "weaker performance" from investees "exposed to discretionary consumer spending and more cyclical end-markets".
Despite this, 3i Group increased its second interim dividend to 29.75 pence from 27.25p the year before. It previously declared a 26.50p first interim dividend, up from 23.25p.
Cash and equivalents at September 30 totalled GBP41 million, up from GBP38 million at the same time last year.
"Against a tough macroeconomic environment, we delivered another good result in the period for 3i," commented Chief Executive Officer Simon Borrows. He highlighted Action's "exceptional" performance, adding: "The strong performance of a number of our other investments in the value-for-money, private label and healthcare sectors underpins our confidence that a number of these investments will also become longer-term compounders over time."
Borrows continued: "We remain cautious about the investment and realisation market given the macroeconomic environment in general, the breadth of geopolitical risk and our belief that the full implications of the global recalibration of interest rates are still yet to work fully through the system.
"We will continue to look for opportunities to deploy capital into this uncertainty, but we will not change our patient and disciplined approach," he continued. "We have a strong balance sheet and are under no pressure to sell companies if the price or terms do not properly reflect the prospects of the business."
3i Group shares were down 0.6% at 2,028.00 pence in London on Thursday afternoon.
By Emma Curzon, Alliance News reporter
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3i Infrastructure (3IN)