LONDON (Alliance News) - Private equity and infrastructure investment company 3i Group PLC on Thursday reported a sharp rise in annual net asset value, exceeding expectations, with a strong performance from both its private equity and infrastructure portfolios.
Chief Executive Simon Borrows said the company's performance in the twelve months to March 31 "highlighted its resilience" amid a "backdrop of geo-political uncertainty and market volatility".
At March 31, 3i's NAV per share stood at 815 pence compared to 724p the year prior, a 13% jump. According to company-compiled consensus - based on six analysts - net asset value per share was forecast to reach to 808p.
The investment company's net assets increased 13% in the period to GBP7.91 billion from GBP7.02 billion the year before.
In financial 2019, 3i's total return was GBP1.25 billion, behind the GBP1.43 billion total return the year before, with GBP1.24 billion coming from realisation proceeds. The investment company's portfolio value ended the year at GBP7.55 billion, 13% higher than the GBP6.66 billion value at the end of financial 2018.
"3i continued to perform well in financial 2019, delivering a total return of 18%, supported by good earnings growth across our Private Equity portfolio and by excellent returns from our Infrastructure team. In very competitive markets, we remained disciplined investors and focused on our buy-and-build platforms," said Borrows.
3i said its Private Equity portfolio "performed well", with 93% of the portfolio delivering earnings growth.
"We have remained selective and price disciplined in both making new investments and completing bolt-on acquisitions for our existing portfolio companies, in a market where competition for private assets remains very strong. We did, however, capitalise on record levels of dry powder by exiting some of our long-standing 2008 and 2011 assets at good recovery values. The result is a leaner, stronger and well diversified portfolio, which continues to generate attractive returns for shareholders in an uncertain environment," added Burrows.
3i Group noted the 29% share price increase in financial 2019 of 3i Infrastructure PLC. 3i Group holds a 33% stake in 3i Infrastructure.
"This excellent share price increase reflects the successful management by our Infrastructure team, their impressive recent track record of realisations and the strong performance from the portfolio of European infrastructure assets," said Burrows.
3i revised its dividend policy last year, in an attempt to grow its dividend year-on-year.
In line with this new policy, 3i has recommend a second interim dividend of 20.0p, 9.1% lower than last year, but has resulted in a total dividend of 35.0p which is 17% higher than the 30.0p distributed in financial 2018.
Burrows added: "Financial 2020 appears to be starting in a similar way to financial 2019, with significant political and market uncertainty and a growing tide of funds looking to invest in our markets. We remain cautious in this environment, which will lead us to be careful about the pricing of new investments and to deploy further capital in companies we already know well.
"The group's portfolio of investments is positioned well and has good momentum for further growth. We have a clear strategic focus and will use our active management processes to deliver another good year of progress for our shareholders."
3i Group (III)
3i Infrastructure (3IN)