3i Group reports growth in net asset value and cash generation in Q1

3i Group (LSE: III), a leading private equity and venture capital company, disclosed positive results for its first quarter, showcasing an increase in net asset value per share and strong cash generation.

As of June 30, the net asset value per share rose by 3.9%, reaching 1,814 pence, compared to 1,745 pence on March 31.

The company recorded a total return of 4.1% for the three-month period, primarily influenced by the negative translation effect of the strengthening of the sterling during the quarter.

Action, which represents 3i’s largest portfolio company, reported impressive figures for the first half, with net sales reaching €2.70 billion, a 31% increase from €2.06 billion, and operating earnings before interest, tax, depreciation, and amortization rising by 42% to €374 million from €263 million. The company emphasized Action’s continued high cash generation, concluding the quarter with a cash balance of €681 million.

Regarding financing, 3i successfully issued a €500 million bond during the quarter. The company ended the three months with gross cash of £600 million and a 3.0% gearing.

However, gross debt as of June 30 increased by 55% to £1.20 billion from £775 million on March 31, and net debt rose by 50% to £544 million from £363 million.

On July 28, 3i will pay its second Financial 2023 dividend of 29.75 pence per share.

Chief Executive Simon Borrows acknowledged the challenging macroeconomic environment and stated the company’s cautious approach towards the economic outlook. 3i’s focus will remain on actively managing its portfolios, along with selective investment and realization activities.

Shares in 3i showed a 0.3% increase to 1,958.00 pence at the opening of trading on Thursday morning.