In key news on UK stocks, 3i Group PLC (GB:III) shares fell by over 4% as of writing after the company issued a cautious outlook in its full-year results for FY24. The market reacted negatively to the results, despite the company delivering a resilient performance and registering growth in its portfolio companies. Overall, the stock has risen 22% year-to-date.
The company expects the ongoing macro challenges and geopolitical tensions to persist in the near term and impact consumer confidence and pricing expectations in the wider mid-cap M&A market.
3i Group Plc is a private equity and venture capital firm operating across distinct segments, including Private Equity, Infrastructure, and Others.
Highlights from 3i’s FY24 Results
For the full year, 3i reported a total return of £3.8 billion, equivalent to a 23% return on opening shareholders’ funds. However, this marked a decrease from £4.59 billion, or a 36% return recorded in the previous year. By year-end on March 31, its NAV (net asset value) per share saw an improvement to 2,085p, compared to 1,745p in the FY23 period.
Among its segments, its Private Equity business achieved a gross investment return of £4.06 billion, resulting in a 25% return, down from £4.97 billion and a 40% return in the previous year.
The company attributed its resilient performance to its portfolio company, European discount retailer Action, which generated a gross investment return of £3.7 billion. 3i further highlighted that it observed robust growth from several portfolio companies operating across multiple sectors.
Meanwhile, the company reported a gross investment return of £99 million, equivalent to 7% in its Infrastructure segment, up from £86 million and 6% in the previous financial year.
Speaking of shareholders’ returns, 3i Group announced a second dividend of 34.5p per share for FY24, which will be payable in July 2024. This led to a total dividend of 61p per share for FY24, up from 53p in the last year.
Is 3i a Buy or Sell?
As per the consensus of analysts on TipRanks, III stock holds a Strong Buy rating, supported by four Buy recommendations. The 3i share price forecast is 3,040.75p, which is 6% higher than the current trading level.
