LSE:III

Stock Analysis Report

Executive Summary

3i Group plc is a private equity firm specializing in mature companies, growth capital, middle markets, infrastructure, and management leveraged buyouts and buy-ins.

Rewards


Snowflake Analysis


Similar Companies

Share Price & News

How has 3i Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: III has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

III

0.5%

GB Capital Markets

-3.0%

GB Market


1 Year Return

32.3%

III

22.7%

GB Capital Markets

11.0%

GB Market

Return vs Industry: III exceeded the UK Capital Markets industry which returned 21.7% over the past year.

Return vs Market: III exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

IIIIndustryMarket
7 Day-2.0%0.5%-3.0%
30 Day-0.4%-2.7%-2.4%
90 Day-3.0%6.5%3.9%
1 Year37.1%32.3%25.7%22.7%16.8%11.0%
3 Year74.7%57.0%72.2%60.2%20.0%4.7%
5 Year178.4%130.6%132.3%105.2%38.9%6.8%

Price Volatility Vs. Market

How volatile is 3i Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is 3i Group undervalued compared to its fair value and its price relative to the market?

30.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: III (£11.01) is trading below our estimate of fair value (£15.78)

Significantly Below Fair Value: III is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: III is good value based on its PE Ratio (8.3x) compared to the Capital Markets industry average (20.9x).

PE vs Market: III is good value based on its PE Ratio (8.3x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: III is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: III is good value based on its PB Ratio (1.3x) compared to the GB Capital Markets industry average (1.4x).

Future Growth

How is 3i Group forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

12.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: III's forecast earnings growth (10.1% per year) is above the savings rate (0.5%).

Earnings vs Market: III's earnings (12.4% per year) are forecast to grow faster than the UK market (12.1% per year).

High Growth Earnings: III's earnings are forecast to grow, but not significantly.

Revenue vs Market: III's revenue (14.1% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: III's revenue (14.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: III's Return on Equity is forecast to be low in 3 years time (17.2%).

Past Performance

How has 3i Group performed over the past 5 years?

15.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: III has high quality earnings.

Growing Profit Margin: III's current net profit margins (92.8%) are higher than last year (92.2%).


Past Earnings Growth Analysis

Earnings Trend: III's earnings have grown by 15.1% per year over the past 5 years.

Accelerating Growth: III's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: III had negative earnings growth (-15.3%) over the past year, making it difficult to compare to the Capital Markets industry average (14.5%).


Return on Equity

High ROE: III's Return on Equity (15.2%) is considered low.


Return on Assets


Return on Capital Employed

Financial Health

How is 3i Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: III has a low level of unsold assets or inventory.

Debt Coverage by Assets: III's debt is covered by short term assets (assets are 1.1x debt).


Financial Institutions Analysis

Asset Level: III's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if III has a sufficient allowance for bad loans.

Low Risk Liabilities: III reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if III has an acceptable proportion of non-loan assets held.

Low Risk Deposits: III has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if III has an appropriate level of bad loans.

Dividend

What is 3i Group's current dividend yield, its reliability and sustainability?

3.64%

Current Dividend Yield


Dividend Yield vs Market

company3.6%marketbottom25%1.9%markettop25%5.1%industryaverage2.1%forecastin3Years3.5%

Current dividend yield vs market & industry

Notable Dividend: III's dividend (3.63%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: III's dividend (3.63%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: III's dividend payments have been volatile in the past 10 years.

Growing Dividend: III's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.2%), III's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: III's dividends in 3 years are forecast to be well covered by earnings (26% payout ratio).

Management

What is the CEO of 3i Group's salary, the management and board of directors tenure and is there insider trading?

9.0yrs

Average management tenure


CEO

Simon Borrows (60yo)

7.7yrs

Tenure

UK£6,847,000

Compensation

Mr. Simon A. Borrows serves as the Chief Executive Officer of 3i Group plc since May 17, 2012 and also has been its Executive Director since October 2011. He joined 3i Group as the Chief Investment Officer ...


CEO Compensation Analysis

Compensation vs Market: Simon's total compensation ($USD0.00) is below average for companies of similar size in the UK market ($USD4.48M).

Compensation vs Earnings: Simon's compensation has been consistent with company performance over the past year.


Management Age and Tenure

9.0yrs

Average Tenure

54yo

Average Age

Experienced Management: III's management team is seasoned and experienced (9 years average tenure).


Board Age and Tenure

6.7yrs

Average Tenure

61yo

Average Age

Experienced Board: III's board of directors are considered experienced (6.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£14,88301 Aug 19
Jonathan Asquith
EntityIndividual
Role
Vice Chairman
Deputy Chairman & Senior Independent Director
Shares1,342
Max PriceUK£11.09
BuyUK£14,88301 Aug 19
David A. Hutchison
EntityIndividual
Shares1,342
Max PriceUK£11.09
BuyUK£21,08201 Aug 19
Coline McConville
EntityIndividual
Shares1,901
Max PriceUK£11.09
BuyUK£14,88301 Aug 19
Caroline Banszky
EntityIndividual
Role
Member of the Board of Directors
Independent non-executive Director
Shares1,342
Max PriceUK£11.09
BuyUK£69,46801 Aug 19
Simon Thompson
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares6,264
Max PriceUK£11.09
BuyUK£14,88301 Aug 19
Stephen Daintith
EntityIndividual
Shares1,342
Max PriceUK£11.09
BuyUK£14,88301 Aug 19
Peter Grosch
EntityIndividual
Shares1,342
Max PriceUK£11.09
SellUK£241,92325 Jun 19
Julia Wilson
EntityIndividual
Role
Member of the Board of Directors
Group Finance Director & Executive Director
Shares22,421
Max PriceUK£10.79
BuyUK£525,50017 May 19
Simon Borrows
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares50,000
Max PriceUK£10.51
BuyUK£26,50805 Feb 19
Caroline Banszky
EntityIndividual
Role
Member of the Board of Directors
Independent non-executive Director
Shares3,000
Max PriceUK£8.84

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Simon Borrows (60yo)

    CEO & Executive Director

    • Tenure: 7.7yrs
    • Compensation: UK£6.85m
  • Richard Relyea (42yo)

    Partner

    • Tenure: 5.7yrs
  • Kevin Dunn (56yo)

    General Counsel & Company Secretary

    • Tenure: 1yrs
  • Alan C. Giddins (53yo)

    • Tenure: 0.8yrs
  • Tony Lissaman

    Chief Operating Officer of Private Equity

    • Tenure: 10yrs
  • Julia Wilson (52yo)

    Group Finance Director & Executive Director

    • Tenure: 11.3yrs
    • Compensation: UK£3.33m
  • Pieter de Jong (55yo)

    Co-Head of Private Equity

    • Tenure: 9yrs
  • Ulf Von Haacke

    Partner

    • Tenure: 10.7yrs
  • Silvia Santoro

    Director of Investor Relations

    • Tenure: 12.5yrs
  • George Archer

    Senior Director of Banking


    Board Members

    • Jonathan Asquith (63yo)

      Deputy Chairman & Senior Independent Director

      • Tenure: 4.8yrs
      • Compensation: UK£139.00k
    • Simon Borrows (60yo)

      CEO & Executive Director

      • Tenure: 7.7yrs
      • Compensation: UK£6.85m
    • Frank Ning (61yo)

      Member of China Advisory Board

      • Tenure: 7.9yrs
    • Caroline Banszky (65yo)

      Independent non-executive Director

      • Tenure: 5.5yrs
      • Compensation: UK£107.00k
    • Winston Fritsch

      Member of Brazilian Advisory Board

      • Simon Thompson (60yo)

        Non-Executive Chairman

        • Tenure: 4.6yrs
        • Compensation: UK£310.00k
      • Carlos António da Rocha Moreira da Silva (67yo)

        Member of Advisory Board

        • Julia Wilson (52yo)

          Group Finance Director & Executive Director

          • Tenure: 11.3yrs
          • Compensation: UK£3.33m
        • Marcelo José e Silva

          Member of Brazilian Advisory Board

          • Reginaldo Zero

            Member of Brazilian Advisory Board

            Company Information

            3i Group plc's company bio, employee growth, exchange listings and data sources


            Key Information

            • Name: 3i Group plc
            • Ticker: III
            • Exchange: LSE
            • Founded: 1945
            • Industry: Asset Management and Custody Banks
            • Sector: Diversified Financials
            • Market Cap: UK£10.641b
            • Shares outstanding: 968.29m
            • Website: https://www.3i.com

            Number of Employees


            Location

            • 3i Group plc
            • 16 Palace Street
            • London
            • Greater London
            • SW1E 5JD
            • United Kingdom

            Listings

            TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
            TGOP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 1994
            IIILSE (London Stock Exchange)YesOrdinary SharesGBGBPJul 1994
            IGQ5DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 1994
            IIILBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJul 1994
            TGOP.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDOct 2008

            Biography

            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. 


            Company Analysis and Financial Data Status

            All financial data provided by Standard & Poor's Capital IQ.
            DataLast Updated (UTC time)
            Company Analysis2020/01/28 21:17
            End of Day Share Price2020/01/28 00:00
            Earnings2019/09/30
            Annual Earnings2019/03/31


            Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.