UK-based private equity firm 3i Infrastructure has reported that in the six months to September 30 the company’s portfolio has generated income of £30.5 million (€35.4 million; $49.3 million) – more than double what it generated in the previous comparable period.
The company said that there has been a steady increase in its net asset value (NAV) with a total return of £31.1 million and a return on shareholders’ equity of 3.4 percent. This is in comparison with a total return of £16.3 million and a return on shareholders’ equity of 1.8 percent, recorded in the corresponding period last year, the company said in a press release.
“There was little change in NAV over the half year and this was in line with our expectations,” said Iain Scouller, partner at Oriel Securities, a London-based corporate advisory firm. “The more than doubling of the income receivable is important and means that the dividend is covered by cash earnings. We expect dividend cover to improve further following the Eversholt acquisition and the reduction of cash drag in the portfolio,” he added.
Last week, 3i infrastructure together with Morgan Stanley and STAR Capital Partners acquired HSBC’s Eversholt Rail Group for £2.1 billion. The consortium is expected to fund the acquisition through a combination of debt and equity.
3i also announced a stable asset performance with a 1.8 percent growth in earnings before interest, tax, depreciation and amortisation (EBITDA) of underlying equity investments.
Peter Sedgwick, chairman of 3i Infrastructure said: “The company has made significant progress, which has resulted, since the period end, in the addition of two new assets to its portfolio. Our assets continue to perform well operationally and financially, generating strong income. The board intends to build on this positive momentum, working with the Investment Adviser on the investment pipeline.”
3i said it has an attractive pipeline of investment opportunities with total investments of up to £191 million announced since September 30, 2010.