Final Results - Year Ended 31 March 2000, Part 2
3i Group PLC
25 May 2000
PART 2
Summary
3i has achieved a strong financial performance and made good progress towards
its strategic objectives.
Total return (£m)
2000 1999
Revenue profit before tax 119 109
Net realised capital profits 350 180
Unrealised value growth 1,167 (90)
Tax and other (57) (22)
--------- ---------
Total return for the Group 1,579 177
--------- ---------
Total return by geography (£m)
UK 1,302 52
Continental Europe 221 105
US and Asia Pacific 109 -
Currency adjustment (53) 20
--------- ---------
Total return for the Group 1,579 177
--------- ---------
Realisations
2000 1999
Total net realised profits (£m) 350 180
Equity proceeds (£m) 822 532
Uplift over opening equity
valuation (%) 83 61
Percentage of opening equity
portfolio sold (%) 17 12
Share and loan portfolio (£m) 2000 1999
Listed equity 1,103 742
Secondary market quoted 483 75
Unquoted equity 2,499 1,917
Loan investments 1,292 1,094
Fixed income investments 593 729
--------- ---------
Total 5,970 4,557
--------- ---------
The above excludes £201 million (1999: £nil) invested in FTSE 350 companies.
Investment
2000
3i Unquoted Total
funds
(£m) (£m) (£m) No.
UK 705 189 894 354
Continental Europe 306 116 422 218
Asia Pacific 31 1 32 11
US 28 - 28 10
-------- -------- -------- --------
Total 1,070 306 1,376 593
-------- -------- -------- --------
1999
3i Unquoted Total
funds
(£m) (£m) (£m) No.
UK 693 206 899 495
Continental Europe 137 104 241 152
Asia Pacific 6 - 6 5
US 1 - 1 2
-------- -------- -------- --------
Total 837 310 1,147 654
-------- -------- -------- --------
In addition, investments amounting to £208 million were made during the year
(1999: £nil) in FTSE 350 companies.
Michael Queen
Finance Director
24 May 2000
Consolidated statement of total return
For the year to 31 March 2000
Revenue Capital Total
2000 2000 2000
£m £m £m
------------------------------ ---------- ---------- ----------
Capital profits
Net realised profits over
opening valuation 350.2 350.2
Net unrealised value growth in
the year 1,167.0 1,167.0
------------------------------ ---------- ---------- ----------
1,517.2 1,517.2
Total operating income before
interest payable 324.8 324.8
Interest payable (104.4) (0.7) (105.1)
------------------------------ ---------- ---------- ----------
220.4 1,516.5 1,736.9
Administrative expenses (101.9) (33.1) (135.0)
Amortisation of goodwill - (2.6) (2.6)
------------------------------ ---------- ---------- ----------
Return before tax and currency
translation adjustment 118.5 1,480.8 1,599.3
Tax (3.4) (13.0) (16.4)
------------------------------ ---------- ---------- ----------
Return for the year before
currency translation adjustment 115.1 1,467.8 1,582.9
Currency translation adjustment 3.7 (8.1) (4.4)
------------------------------ ---------- ---------- ----------
Total return 118.8 1,459.7 1,578.5
------------------------------ ---------- ---------- ----------
Total return per share
Basic (pence) 19.9p 244.1p 264.0p
Diluted (pence) 19.7p 241.7p 261.4p
Reconciliation of movement in
shareholders' funds
2000
£m
------------------------------ ----------
Opening balance 3,603.9
------------------------------ ----------
Revenue return 118.8
Capital return 1,459.7
------------------------------ ----------
Total return 1,578.5
Dividends (72.2)
Proceeds of issues of shares 63.3
------------------------------ ----------
Movement in the year 1,569.6
------------------------------ ----------
Closing balance 5,173.5
------------------------------ ----------
Consolidated statement of total return
For the year to 31 March 1999
------------------------------ ---------- ---------- ----------
Revenue Capital Total
1999 1999 1999
as restated as restated
£m £m £m
------------------------------ ---------- ---------- ----------
Capital profits
Net realised profits over
opening valuation 180.1 180.1
Net unrealised value growth in
the year (90.0) (90.0)
------------------------------ ---------- ---------- ----------
90.1 90.1
Total operating income before
interest payable 307.9 307.9
Interest payable (109.7) - (109.7)
------------------------------ ---------- ---------- ----------
198.2 90.1 288.3
Administrative expenses (90.1) (21.2) (111.3)
Amortisation of goodwill - - -
------------------------------ ---------- ---------- ----------
Return before tax and currency
translation adjustment 108.1 68.9 177.0
Tax 2.2 (5.4) (3.2)
------------------------------ ---------- ---------- ----------
Return for the year before
currency translation adjustment 110.3 63.5 173.8
Currency translation adjustment (1.7) 5.0 3.3
------------------------------ ---------- ---------- ----------
Total return 108.6 68.5 177.1
------------------------------ ---------- ---------- ----------
Total return per share
Basic (pence) 18.3p 11.5p 29.8p
Diluted (pence) 18.2p 11.5p 29.7p
---------- ---------- ----------
Reconciliation of movement in
shareholders' funds
1999
£m
Opening balance 3,488.9
------------------------------ ----------
Revenue return 108.6
Capital return 68.5
------------------------------ ----------
Total return 177.1
Dividends (66.3)
Proceeds of issues of shares 4.2
------------------------------ ----------
Movement in the year 115.0
------------------------------ ----------
Closing balance 3,603.9
----------
In accordance with Financial Reporting Standard 16 - Current Tax, dividends
receivable have been recognised at an amount that excludes attributable tax
credits. This represents a change in accounting policy from previous years,
when dividends included attributable tax credits. This change in accounting
policy has been reflected by restating the revenue column for the year to 31
March 1999. No change in the brought forward reserves results from this
change in accounting policy.
Consolidated revenue statement
For the year to 31 March 2000
------------------------------ ---------- ----------
2000 1999
as restated
£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 87.1 92.0
Fixed rate dividends 34.2 41.5
------------------------------ ---------- ----------
121.3 133.5
Other interest receivable and similar income 31.4 37.8
------------------------------ ---------- ----------
152.7 171.3
Interest payable (104.4) (109.7)
------------------------------ ---------- ----------
Net interest income 48.3 61.6
Dividend income from equity shares 116.7 82.9
Income from joint ventures (1.0) (1.2)
Fees receivable 54.4 53.5
Other operating income 2.0 1.4
------------------------------ ---------- ----------
Total operating income 220.4 198.2
Administrative expenses and depreciation (101.9) (90.1)
------------------------------ ---------- ----------
Profit on ordinary activities before tax 118.5 108.1
Tax on profit on ordinary activities (3.4) 2.2
------------------------------ ---------- ----------
Profit for the year 115.1 110.3
Dividends
Interim(4.6p per share paid,1999 4.3p paid) (27.0) (25.2)
Final(7.6p per share proposed,1999 7.0p paid) (45.2) (41.1)
------------------------------ ---------- ----------
Profit retained for the year 42.9 44.0
------------------------------ ---------- ----------
Earnings per share
Basic (pence) 19.3p 18.5p
Diluted (pence) 19.1p 18.5p
------------------------------ ---------- ----------
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 2000
2000 2000 1999 1999
Assets £m £m £m £m
-------------------------- --------- -------- -------- --------
Treasury bills and other
eligible bills - 15.5
Loans and advances to banks 478.6 270.8
Loans and advances to
customers 0.4 0.8
Debt securities held for
treasury purposes 190.7 173.8
Debt securities and other
fixed income securities
held as financial fixed
asset investments
-------------------------- -------- -------- -------- --------
Loan investments 1,291.6 1,094.3
Fixed income shares 593.7 729.5
-------------------------- -------- -------- -------- --------
1,885.3 1,823.8
Equity shares
-------------------------- -------- -------- -------- --------
Listed 1,304.0 742.1
Unlisted 2,982.2 1,991.4
-------------------------- -------- -------- -------- --------
4,286.2 2,733.5
6,171.5 4,557.3
Interests in joint ventures
-------------------------- -------- -------- -------- --------
Share of gross assets 122.1 44.0
Share of gross
liabilities - -
-------------------------- -------- -------- -------- --------
122.1 44.0
Intangible fixed assets
Goodwill 75.5 -
Tangible fixed assets 53.3 48.2
Other assets 121.0 138.1
Prepayments and accrued
income 67.9 58.8
-------------------------- -------- -------- -------- --------
Total assets 7,281.0 5,307.3
-------------------------- -------- -------- -------- --------
Liabilities
-------------------------- -------- -------- -------- --------
Deposits by banks 190.4 68.8
Debt securities in issue 1,613.3 1,425.9
Other liabilities 69.1 50.3
Accruals and deferred income 179.3 142.6
Provisions for liabilities
and charges
Deferred tax 22.8 15.8
Subordinated liabilities 32.6 -
-------------------------- -------- -------- -------- --------
2,107.5 1,703.4
-------------------------- -------- -------- -------- --------
Called up share capital 301.8 297.7
Share premium account 315.7 256.5
Capital redemption reserve 1.3 1.3
Capital reserve 4,340.7 2,881.0
Revenue reserve 214.0 167.4
-------------------------- -------- -------- -------- --------
Equity shareholders' funds 5,173.5 3,603.9
-------------------------- -------- -------- -------- --------
Total liabilities 7,281.0 5,307.3
-------------------------- -------- -------- -------- --------
Memorandum items
Contingent liabilities
Guarantees and assets
pledged as collateral
security 15.9 23.2
Commitments 350.5 359.9
-------------------------- -------- -------- -------- --------
Approved by the Board
Sir George Russell CBE
Brian Larcombe
Directors
24 May 2000
Consolidated cash flow statement
For the year to 31 March 2000
2000 1999
£m £m
----------------------------- -------- --------
Operating activities
Interest received and similar income arising
from debt securities and other fixed income
securities held as financial fixed asset
investments 114.2 126.6
Other interest received and similar income 34.6 37.5
Interest paid on borrowings (102.6) (113.2)
Dividends received from equity shares 115.1 82.8
Fees and other net cash receipts 54.3 51.9
Operating and administrative costs paid (109.5) (81.3)
----------------------------- -------- --------
Net cash inflow from operating activities 106.1 104.3
----------------------------- -------- --------
Taxation received 18.6 9.4
----------------------------- -------- --------
Capital expenditure and financial investment
Investment in equity shares, fixed income
shares and loans (1,277.7) (836.9)
Sale, repayment or redemption of equity
shares, fixed income shares and loan
investments 1,162.0 872.7
Repayment of loans and advances to customers 0.4 0.4
Investment administrative expenses (33.1) (21.2)
Investment interest paid (0.7) -
Net divestment of joint ventures 6.6 11.9
Disposal of investment properties and leases 3.7 6.8
Purchase of tangible fixed assets (11.3) (9.3)
Sale of tangible fixed assets 1.2 1.4
----------------------------- -------- --------
Net cash (outflow)/inflow from capital
expenditure and financial investment (148.9) 25.8
----------------------------- -------- --------
Acquisitions
Acquisition of subsidiary undertakings (78.2) -
----------------------------- -------- --------
Equity dividends paid (68.1) (62.8)
----------------------------- -------- --------
Management of liquid resources (189.3) (20.5)
----------------------------- -------- --------
Net cash (outflow)/inflow before financing (359.8) 56.2
----------------------------- -------- --------
Financing
Debt due within one year 9.3 (15.5)
Debt due after more than one year 309.0 (42.4)
Issue of shares 63.3 4.2
----------------------------- -------- --------
Net cash inflow/(outflow) from financing 381.6 (53.7)
----------------------------- -------- --------
Increase in cash 21.8 2.5
----------------------------- -------- --------
Notes to the financial statements
For the year to 31 March 2000
1 Reconciliation of revenue profit before tax to net cash inflow
from operating activities
2000 1999
£m £m
----------------------------- --------- ---------
Revenue profit before tax 118.5 108.1
Depreciation of equipment and vehicles 6.3 5.7
Increase in other assets associated with
operating activities (12.9) (19.0)
Tax on investment income included within
income from overseas companies (1.7) -
Increase in prepayments and accrued income
associated with operating activities (9.1) (6.5)
Increase in accruals and deferred income
associated with operating activities 4.4 16.1
Reversal of losses of joint ventures less
distributions received 1.0 0.5
Profit on sale of tangible fixed assets (0.4) (0.6)
----------------------------- --------- ---------
Net cash inflow from operating activities 106.1 104.3
----------------------------- --------- ---------
2 Reconciliation to net debt
2000 1999
£m £m
----------------------------- --------- ---------
Increase in cash in the year 21.8 2.5
Cash outflow from management of liquid 189.3 20.5
resources
Cash (inflow)/outflow from debt financing (308.9) 57.9
Cash (inflow) from subordinated liabilities (9.4) -
----------------------------- --------- ---------
Change in net debt from cash flows (107.2) 80.9
Debt acquired with subsidiary undertakings (23.2) -
Foreign exchange movements (2.0) (1.4)
New finance leases and other non-cash
changes (0.1) 0.2
----------------------------- --------- ---------
Movement in net debt in the year (132.5) 79.7
----------------------------- --------- ---------
Net debt at start of year (1,037.5) (1,117.2)
----------------------------- --------- ---------
Net debt at end of year (1,170.0) (1,037.5)
----------------------------- --------- ---------
3 Analysis of net debt
1 April Cash flow Acquisition
1999
£m £m £m
----------------------------- --------- --------- ---------
Cash and deposits repayable on
demand 22.0 21.8 -
Treasury bills, other loans,
advances and treasury debt
securities 438.1 189.3 -
Deposits and debt securities
repayable within one year (281.6) (9.3) -
Deposits and debt securities
repayable after one year (1,213.1) (299.6) -
Subordinated liabilities - (9.4) (23.2)
Finance leases (2.9) - -
----------------------------- --------- --------- ---------
(1,037.5) (107.2) (23.2)
----------------------------- --------- --------- ---------
3 Analysis of net debt (continued)
Other
Exchange Non-cash 31 March
movement Changes 2000
£m £m £m
----------------------------- --------- --------- ---------
Cash and deposits repayable on
demand (1.9) - 41.9
Treasury bills, other loans,
advances and treasury debt
securities - - 627.4
Deposits and debt securities
repayable within one year (0.1) (102.7) (393.7)
Deposits and debt securities
repayable after one year - 102.7 (1,410.0)
Subordinated liabilities - - (32.6)
Finance leases - (0.1) (3.0)
----------------------------- --------- --------- ---------
(2.0) (0.1) (1,170.0)
----------------------------- --------- --------- ---------
Note 1
The statutory accounts for the year to 31 March 2000 have not yet been
delivered to the Registrar of Companies. The statutory accounts for the year
to 31 March 1999 were filed with the Registrar of Companies on 27 July 1999.
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 21 July 2000 to holders of shares on the
register on 9 June 2000.
Note 3
Copies of the Report and Accounts will be distributed to shareholders on 12
June 2000.
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.
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