Interim Results - Part 2
3i Group PLC
23 November 2000
Part 2
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 2000. The Group adopted Financial
Reporting Standard 16 - Current Tax - (FRS16) for the year to 31
March 2000. This gave rise to a change in accounting policy.
The implementation of FRS16 had no effect on the brought forward
reserves of the Group. Certain comparative figures within the
consolidated revenue statement for the six months to 30
September 1999 have been restated to reflect the adoption of
FRS16. 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 2000 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.
INDEPENDENT REVIEW REPORT TO 3i GROUP PLC
INTRODUCTION
We have been instructed by the Company to review the financial
information and 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.
DIRECTORS' RESPONSIBILITIES
The Interim report, including the financial information
contained therein, is the responsibility of, and has been
approved by the Directors. The Listing Rules of the Financial
Services Authority 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. 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 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 2000.
ERNST &YOUNG
LONDON
22 November 2000
NOTE 1
The statutory accounts for the year to 31 March 2000 were filed
with the Registrar of Companies on 9 October 2000. The
auditors' report on those statutory accounts was unqualified and
did not contain any statements under Section 237 (2) or (3) of
the Companies Act 1985.
NOTE 2
The Interim report 2000 will be posted to shareholders on 4
December 2000 and thereafter copies will be available from the
Company Secretary, 3i Group plc, 91 Waterloo Road, London SE1
8XP.
NOTE 3
The interim dividend will be payable on 10 January 2001 to
holders of shares on the register on 8 December 2000. The ex-
dividend date will be 4 December 2000.
NOTE 4
Investment statistics referred to in this announcement relate to
investments made by 3i Group and third party co-investment funds
unless otherwise stated.
TEN LARGEST INVESTMENTS
At 30 September 2000, the Directors' valuation of the ten
largest investments was a total of £1,021 million. The cost of
these equity investments was £27 million.
Investment Description of First Cost Proportion Directors'
business investe £m of equity valuation
d in shares held £m
TeleCity Internet and 1998
plc* telecoms
engineering
services
Equity 1 30.4% 329
shares
Morse plc* Leading 1995
technology
integrator
Equity 10 23.1% 163
shares
Bookham Integrated 1996
Technology silicon
plc* optical
circuitry
Equity 3 3.3% 110
shares
Actelion AG* Research and 1998
development of
advanced
medicines
Equity 1 7.9% 81
shares
Biosearch Research and 1998
Italia SpA* development of
anti-infective
drugs
Equity 6 21.9% 65
shares
Virata Electronic 1994
Incorpor- component
ated* manufacturer
Equity 2 2.5% 63
shares
Content Content 1989
Technologies security and
Holdings policy
Limited management
services
Equity - 17.8% 57
shares
Weston Needle-free 1993
Medical medical device
Group plc* manufacture
Equity 1 20.5% 52
shares
Indigo- Networked 1995
Vision video
Group plc* technology
supplier
Equity 2 15.8% 52
shares
TTP Wireless 1988
Communica- communications
tions plc
Equity 1 12.7% 49
shares
The investment information is in respect of 3i's holding and
excludes any co-investment by 3i managed funds.
*Quoted company (including secondary markets).
NEW INVESTMENT ANALYSIS
Analysis of the equity, fixed income and loan investments made
by 3i Group (excluding third party unquoted funds). This
analysis excludes investments in joint ventures and non-venture
capital investments made in FTSE 350 companies. The tabular
representations below are for the 6 months to 30 September 2000.
Investment by FTSE category
(£m)
6 months to 6 months to
30 September 30 September
2000 1999
1 Resources 43 7
2 Industrials 67 62
3 Consumer goods 117 78
4 Services and utilities 145 152
5 Financials 19 7
6 Information technology 310 94
Total 701 400
Investment by product (£m)
1 Start ups 118 27
2 Management buy-outs 164 70
3 Management buy-ins 21 44
4 Growth capital 350 186
5 Share purchase 35 56
6 Rescues 13 17
Total 701 400
Number of investments by
product
1 Start ups 120 39
2 Management buy-outs 36 23
3 Management buy-ins 9 18
4 Growth capital 212 166
5 Share purchase 26 19
6 Rescues 37 36
Total 440 301
Investment by geography -
including co-investment funds
(£m)
1 UK own investment 425 264
2 UK co-investment 86 65
3 Continental Europe own 239 128
investment
4 Continental Europe co- 113 67
investment
5 Asia Pacific own investment 8 8
6 Asia Pacific co-investment 2 -
7 USA own investment 29 -
Total 902 532
PORTFOLIO ANALYSIS
The Group's equity, fixed income and loan investments (excluding
third party unquoted funds) total £7,091 million at 30 September
2000. The analyses below exclude investments in joint ventures
and non-venture capital investments made in FTSE 350 companies,
30 September 2000, £198 million (March 2000: £201 million). The
tabular representations are as at 30 September 2000.
Portfolio value by FTSE
classification (£m)
At 30 At 31 March
September 2000
2000
1 Resources 237 185
2 Industrials 1,215 1,247
3 Consumer goods 1,400 1,138
4 Services and utilities 1,980 1,648
5 Financials 274 251
6 Information technology 1,787 1,501
Total 6,893 5,970
Portfolio value by product (£m)
1 Start ups 635 429
2 Management buy-outs 1,507 1,523
3 Management buy-ins 557 645
4 Growth capital 3,164 2,333
5 Share purchase 957 936
6 Rescues 73 104
Total 6,893 5,970
Portfolio value by geography
(£m)
1 UK 5,161 4,668
2 Continental Europe 1,430 1,049
3 Asia Pacific 56 63
4 US 246 190
Total 6,893 5,970
US comprises mainly technology investments made by our offices
there together with investments in US companies acquired through
the realisation of European companies.
Continental Europe portfolio
value by location of business
(£m)
1 Germany 492 459
2 France 256 203
3 Spain 206 135
4 Italy 170 71
5 Switzerland 157 72
6 Benelux 57 59
7 Nordic 16 8
8 Other European* 76 42
Total 1,430 1,049
*Other European includes investments in countries where 3i did
not have an office at the period end.
Portfolio value by valuation
method (£m)
1 Imminent sale or flotation 259 241
2 Listed 1,671 1,103
3 Secondary market 608 483
4 Earnings 1,087 1,226
5 Cost 853 626
6 Further advance 259 143
7 Net assets 153 144
8 Other 136 118
9 Loans and preference shares 1,867 1,886
Total 6,893 5,970
Analysis of total investment
portfolio owned or managed by
3i (£m)
At 30 At 31 March
September 2000
2000
1 UK - owned* 5,368 4,878
2 UK - managed** 1,945 1,394
3 Continental Europe - owned 1,430 1,049
4 Continental Europe - managed 588 463
5 Asia Pacific - owned* 85 134
6 Asia Pacific - managed 3 1
7 USA - owned* 272 241
Total 9,691 8,160
* Includes investments in joint ventures, FTSE 350 companies and
investment properties held as investment assets as well as
equity, fixed income and loan investments.
** UK managed funds includes unquoted funds and other funds
managed by 3i.
TECHNOLOGY PORTFOLIO ANALYSIS
Analysis of the Group's equity, fixed income and loan
investments (excluding third party unquoted funds). The tabular
representations below are as at 30 September 2000
Investment made during the
period by sector (£m)
6 months to 6 months to
30 September 30 September
2000 1999
1 Life sciences and healthcare 49 42
2 Communications and networking 74 57
3 Electronics and other 35 18
technologies
4 e Business 86 30
5 Software and computer 221 66
services
Total 465 213
Number of investments made
during the period by sector
1 Life sciences and healthcare 60 49
2 Communications and networking 43 27
3 Electronics and other 46 22
technologies
4 e Business 58 18
5 Software and computer 106 55
services
Total 313 171
Portfolio value by sector (£m)
At 30 At 31 March
September 2000
2000
1 Life sciences and healthcare 719 434
2 Communications and networking 878 457
3 Electronics and other 346 286
technologies
4 e Business 204 158
5 Software and computer 1,255 1,044
services
Total 3,402 2,379
Number of portfolio investments
by sector
1 Life sciences and healthcare 164 164
2 Communications and networking 100 88
3 Electronics and other 186 192
technologies
4 e Business 89 60
5 Software and computer 273 244
services
Total 812 748
Technology portfolio value by
valuation method (£m)
1 Imminent sale or flotation 197 171
2 Listed 1,157 603
3 Secondary market 581 471
4 Earnings 142 168
5 Cost 673 449
6 Further advance 238 143
7 Net assets 2 2
8 Other 25 28
9 Loans and preference shares 387 344
Total 3,402 2,379
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