3i Group plc (III) AI Stock Analysis

• Market Cap: £34.72B
• Dividend Yield: 1.8%
• Average Volume (3M): 2.18M
• Price to Earnings (P/E): 8.2
• Beta (1Y): 1.05
• Revenue Growth: 78.18%
• EPS Growth: -6.27%
• Country: UK
• Employees: 249
• Sector: Industrials
• Sector Strength: 61
• Industry: Asset Management
• EPS (TTM): 4.37
• Shares Outstanding: 973,399,000
• 10 Day Avg. Volume: 2,161,570
• 30 Day Avg. Volume: 2,180,856
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 9.07
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 4,350.83p
• Price Target Upside: 12.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

3i Group plc exhibits a robust financial profile and a positive technical trend. Its solid valuation metrics and recent corporate actions further enhance its attractiveness. While revenue growth and cash flow generation could see improvements, the overall outlook remains favorable for investors.

Positive Factors

Cost Savings

Action completed a successful repricing of 53% of its debt facilities, generating significant annual interest cost savings.

Financial Performance

3i reports that Action net sales were €2.95bn, 2.8% ahead of expectations, indicating a strong start to 2025 despite earlier ERP system issues.

Growth and Expansion

3i plans for Action to add 370 new stores in 2025, reflecting growth and expansion ambitions.

Negative Factors

Market Reaction

Overall, a negative initial reaction to the LFL print is expected.

Sales Growth Challenges

Temporary availability issues due to an ERP system change affected Action's LFL sales growth, which fell below initial estimates.

Stock Valuation

3i trades at a 47% premium to September 2024 NAV, which is towards the upper end of its historical range.

3i Group plc Business Overview & Revenue Model

Company Description

3i Group plc is a private equity firm specializing in mature companies, growth capital, middle markets, infrastructure, and management leveraged buyouts and buy-ins. The firm also provides infrastructure financing and debt management. For debt management, it invests in senior and mezzanine corporate debt in typically large and private companies in United Kingdom, Europe, Asia, and North America. It makes private equity investments in business and technology services, financial services, consumer, healthcare, consumption and distribution, media and telecom, renewable energy, wind, and industrial sector. Within business and technology services, the firm seeks to invest in sub sectors such as testing, inspection and certification; BPO and consultancy; human capital including staffing, governance, risk and compliance, services to pharmaceutical companies, vertical application software, education and training businesses; facilities management; support services to industrial sectors such as oil and gas and utilities; human resources outsourcing and advising; recruitment; logistics and infrastructure support services including distribution, waste, and rental. In the consumer sector, it focuses on polarization, health and wellness, ageing population, millennials, consumer goods; e-commerce; retail; food and drinks; and leisure. In the healthcare sector, the firm focuses on pharmaceuticals and biotechnology including specialty pharma, generics / OTC, drug delivery, and animal health; healthcare Services including activities such as elderly and specialty care, including caring for people in their own homes, in hospital and in community facilities, as well as operational services such as outsourced support, clinical services and B2B contract services; medical devices and technology including devices, medical equipment and consumables, diagnostics, and healthcare IT. In the industrial sector, it focuses on automotive, chemicals, construction and building products, electronics and electrical components, flow control and filtration, life science manufacturing, mobility, packaging, software, oil, gas and power. Through 3i BIFM Limited and 3i Infrastructure plc the firm makes infrastructure investments where it focuses principally on the utilities including energy transmission and storage, electricity and gas distribution, water, power generation, and communication network; transportation including airports, ports, ferries, toll roads, and rail; and social infrastructure sector including primary and secondary PFI, public private partnerships, healthcare, education, and government accommodation. In infrastructure it invests primarily in utilities, transportation and social infrastructure in the United Kingdom, France, Italy, Europe, and Ireland. The firm prefers to invest in companies across Europe, France, United States, South America, and Asia. It seeks to make new investments in Northern Europe and North America. The firm typically invests between 5 million ($5.59125 million) and 300 million ($335.475 million) in companies with an enterprise value typically between 100 million ($111.825 million) and 500 million ($559.125 million) and sales value between 80 million ($89.46 million) and 1500 million ($1677.38 million). It seeks to take either majority or minority stakes. It seeks to take a board seat in its portfolio companies with regards to infrastructure investments. The firm invests through a combination of third-party and proprietary capital. It invests through its personal capital. 3i Group plc was founded in 1945 and is based in London, United Kingdom with additional offices across Europe, North America, and Asia.

How the Company Makes Money

3i Group makes money primarily through its private equity and infrastructure investment activities. The company earns revenue from capital gains on its investments, management fees, and carried interest. In private equity, 3i invests in mid-market companies, aiming to enhance their value and sell them at a profit. The infrastructure business focuses on investing in and managing assets in sectors like transport and utilities, generating consistent returns through dividends and capital appreciation. Additionally, the company benefits from strategic partnerships and co-investments with other financial institutions, which can enhance deal flow and investment opportunities.

3i Group plc Financial Statement Overview

Summary

3i Group plc presents a strong financial position with high profitability and efficient equity utilization. The company benefits from low leverage and a healthy cash flow situation, although improvements in revenue growth and operating cash flow generation could further strengthen its financial standing.

Income Statement

3i Group plc has shown robust profitability with consistently high gross and net profit margins over the years. Despite a decline in revenue in the latest year, the company maintained strong EBIT and EBITDA margins, indicating effective cost management and operational efficiency. However, the revenue growth rate was negative, highlighting a potential area for improvement in sales expansion.

Balance Sheet

The company's balance sheet is solid, with a low debt-to-equity ratio and strong equity backing. The return on equity is impressive, reflecting efficient utilization of shareholder funds. The equity ratio is also high, indicating financial stability and low leverage.

Cash Flow

3i Group plc has demonstrated positive operating and free cash flow over recent periods, with significant growth in free cash flow. However, the operating cash flow to net income ratio is relatively modest, suggesting potential for better cash generation relative to reported earnings.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
3.98B	4.75B	4.16B	1.99B	325.00M
	Gross Profit
3.98B	4.71B	4.11B	1.97B	295.00M
	EBIT
3.82B	4.60B	4.02B	1.86B	204.00M
	EBITDA
3.82B	4.61B	4.03B	1.87B	211.00M
	Net Income Common Stockholders
3.84B	4.57B	4.01B	1.85B	214.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
358.00M	162.00M	212.00M	216.00M	771.00M
	Total Assets
21.64B	17.82B	13.95B	10.33B	8.57B
	Total Debt
1.25B	785.00M	989.00M	992.00M	595.00M
	Net Debt
893.00M	623.00M	777.00M	776.00M	-176.00M
	Total Liabilities
1.47B	975.00M	1.19B	1.17B	810.00M
	Stockholders Equity
20.17B	16.84B	12.75B	9.16B	7.76B
Cash Flow		Free Cash Flow
363.00M	185.00M	132.00M	-66.00M	581.00M
	Operating Cash Flow
366.00M	186.00M	132.00M	-65.00M	584.00M
	Investing Cash Flow
-3.00M	486.00M	306.00M	-541.00M	-408.00M
	Financing Cash Flow
-164.00M	-719.00M	-446.00M	53.00M	-425.00M

3i Group plc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3879.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:III, the sentiment is Positive. The current price of 3879 is above the 20-day moving average (MA) of 3697.45, above the 50-day MA of 3854.56, and above the 200-day MA of 3462.34, indicating a neutral trend. The MACD of -59.94 indicates Positive momentum. The RSI at 38.13 is Neutral, neither overbought nor oversold. The STOCH value of 48.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:III.

3i Group plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
III	81 Outperform	£34.72B	8.25	20.99%	1.80%	78.18%	-6.27%
PSON	72 Outperform	£7.51B	17.72	10.83%	2.10%	-3.32%	20.38%
SVT	71 Outperform	£7.47B	31.99	17.17%	4.78%	5.38%	86.34%
SSE	71 Outperform	£16.45B	8.47	21.94%	4.09%	-13.09%	231.40%
NG	67 Neutral	£47.66B	22.55	5.28%	5.65%	-6.68%	-77.57%
UU	64 Neutral	£6.91B	61.02	5.50%	4.98%	8.61%	―
Sector *	62 Neutral	$7.68B	13.06	3.21%	3.34%	3.62%	-14.40%

3i Group plc Corporate Events

3i Group plc Confirms Compliance with UK Listing Rule 11.7.8R

3i Group plc, a leading investment company, announced that as of the last business day of March 2025, it had no investments in listed closed-ended investment funds that do not have policies limiting their investments in other such funds. This disclosure aligns with UK Listing Rule 11.7.8R, indicating 3i Group’s compliance with regulatory requirements, potentially affecting its investment strategy and reassuring stakeholders of its adherence to governance standards.

3i Group Updates Total Voting Rights Following Share Allotment

3i Group plc has announced an update regarding its total voting rights following the allotment of shares under its Share Incentive Plan. As of March 31, 2025, the company has 973,398,978 issued ordinary shares, each carrying one vote at general meetings, with no shares held in treasury. This update is significant for shareholders and others with notification obligations as it affects the calculations required under the FCA’s Disclosure Rules and Transparency Rules.

3i Group Directors Acquire Shares Under Incentive Plan

3i Group plc announced that several of its directors and persons discharging managerial responsibilities have acquired beneficial interests in the company’s ordinary shares through the 3i Group Share Incentive Plan. This transaction, which includes both purchased Partnership Shares and awarded Matching Shares, reflects the company’s ongoing efforts to align management interests with shareholder value, potentially strengthening stakeholder confidence in the company’s governance and strategic direction.

3i Group Executive Donates Shares to Charity

3i Group plc announced that James Hatchley, a person with managerial responsibilities, transferred 10,000 ordinary shares to The Charities Aid Foundation as a gift. This transaction, which occurred outside a trading venue, reflects the company’s involvement in charitable activities and may enhance its corporate social responsibility profile.

3i Group Highlights Action’s Strong Performance and Growth Plans

3i Group plc announced a capital markets seminar highlighting the performance of its largest portfolio company, Action. In 2024, Action achieved significant financial growth with net sales of €13,781 million and an operating EBITDA of €2,076 million, driven by strong sales and cost management. The company plans to expand further in 2025, targeting 370 new store openings and an EBITDA margin increase. Action also completed a debt repricing, saving €19 million annually, and is poised for continued growth despite temporary challenges. The overall portfolio shows resilience in a challenging macroeconomic environment, with full-year results expected in May.

3i Group Directors Acquire Shares Under Incentive Plan

3i Group plc announced that several of its directors and persons discharging managerial responsibilities have acquired beneficial interests in the company’s ordinary shares as part of the 3i Group Share Incentive Plan. These transactions, involving both Partnership Shares purchased at a subscription price and Matching Shares awarded for nil consideration, were reported to the company on 28 February 2025 and occurred outside a trading venue.

3i Group Updates Total Voting Rights Post Share Allotment

3i Group plc announced an update regarding its total voting rights following the allotment of shares under its Share Incentive Plan. As of February 28, 2025, the company has 973,397,391 issued ordinary shares, each carrying one vote, which impacts shareholder calculations under the FCA’s Disclosure and Transparency Rules. This update is significant for stakeholders as it affects the denominator used for determining changes in shareholding interests, reinforcing the company’s commitment to transparency and regulatory compliance.

3i Group’s Leadership Acquires Shares Under Incentive Plan

3i Group plc announced that on January 31, 2025, several of its directors and managerial staff became beneficially interested in a series of ordinary shares under the 3i Group Share Incentive Plan. These shares, comprising Partnership Shares, Matching Shares, and Dividend Shares, were acquired at a subscription price of 3820.66667 pence per share for the Partnership and Dividend Shares, while the Matching Shares were awarded for nil consideration. The notification of these transactions, which occurred outside a trading venue, was disclosed to the company on February 3, 2025. This move likely reflects the company’s ongoing strategy to align the interests of its leadership with those of its shareholders, potentially impacting its market positioning and stakeholder relations.

3i Group Appoints Hemant Patel as Non-Executive Director

3i Group plc has appointed Hemant Patel as a non-executive Director, effective 3 February 2025. Hemant brings significant financial and commercial expertise from his roles at Whitbread, Greene King, Asda, and Mars, enhancing 3i’s strategic positioning in the investment sector. This appointment underscores 3i’s commitment to maintaining a robust portfolio capable of delivering resilience and superior returns across economic cycles, benefiting shareholders.

3i Group Updates Total Voting Rights Following Share Allotment

3i Group plc has announced an update on its total voting rights following a share allotment under its Share Incentive Plan, resulting in 973,396,464 issued ordinary shares. This update is significant for shareholders and stakeholders as the total voting rights figure is essential for determining notification obligations under the FCA’s Disclosure Rules and Transparency Rules.

3i Group Reports Robust FY2025 Q3 Performance Driven by Strong Returns and Strategic Investments

3i Group plc reported strong financial performance in its FY2025 Q3 update, with a 20% total return for the nine months ending December 2024 and an increase in NAV per share. Action, a major investment of 3i, delivered exceptional sales and EBITDA growth, adding 352 new stores and achieving significant debt restructuring benefits. Despite challenging macroeconomic conditions, the majority of 3i’s private equity portfolio companies performed well, with notable investments in WaterWipes and OMS Prüfservice. The company’s financial position remains robust, with substantial cash reserves and low gearing, indicating a strong outlook for the remainder of the financial year.