Britain’s flagship venture capital company 3i has continued to invest in technology in a year in which it had to write down the value of existing technology investments by pounds 361 million,severely denting its full-year result.
Yesterday 3i reported pounds 935 million loss in terms of total return for the year to March, only marginally less bad than the previous pounds 960 million.
Despite that, the stock market was heartened to see sales of earlier investments raised pounds 976 million, crystallising capital profits of pounds 184 million and by a 8.6p final dividend giving shareholders a 3.8 per cent increase for the year.
The shares gained 38p to 521 3 /4p, a nine per cent premium over an asset value of 480p on March 31.
Of pounds 931 million invested during the year, pounds 176 million was committed to early stage technology, although all but pounds 39 million of that went to support existing investments.
‘We made good returns out of technology pre-bubble and we believe we can do it again,’ a spokesman said.
In Birmingham, 3i’s Midlands office invested nearly pounds 40 million and realised nearly pounds 60 million from existing holdings.
It backed six firms where it had not been involved before, in activities ranging from information technology to logistics and computer games.
The biggest realisation in the region was a holding in the builders’ merchant Jacksons for almost pounds 20 million. It was bought for pounds 38,000 33 years ago.
Other realisations were investments in Robinsons Health Care sold to a secondary buy-out.
‘Given the climate for Midlands business, I am very pleased with what we have achieved,’ said Richard Bishop, Midlands director.
His predecessor, Chris Rowlands, returned to 3i last September to take charge of the 3i spokesman national growth capital operation, which invested pounds 273 million last year.
This seeks to make investments of between pounds 2 million and pounds 30 million in established companies. It has seen increasing demand in recent months from companies that cannot raise the capital they need by floating their shares, or where lenders are unwilling to put up more money. ‘Although we are cautious about the short- term market, we are confident about the prospects for the business,’ said Brian Larcombe, chief executive.
Baroness Hogg, chairman, said: ‘This has been a year of challenge and change for 3i. The rigour with which we have reviewed the value of our technology portfolio has had an impact on our net asset value, contributing to a negative return on shareholders’ funds.’
