3i Group reports progress at Action, shares slide
Shares in investing giant were sliding on Thursday morning, even after it reported positive progress ahead of a capital markets seminar focused on its largest portfolio company, the Benelux-focussed general discount retailer Action.
The FTSE 100 company said the retailer reported strong growth in 2024 and a solid start to 2025, while its broader private equity portfolio continued to perform well, despite macroeconomic and geopolitical uncertainties.
It said Action recorded net sales of €13.78bn in 2024, a 22% increase from the prior year, while operating EBITDA rose 29% to €2.08bn.
Like-for-like sales grew 10.3%, supported by disciplined cost management and operating leverage, which drove EBITDA margins up to 15.1%.
The firm expanded its footprint significantly, adding 352 stores in 2024.
Momentum reportedly carried into 2025, with net sales reaching €2.95bn in the first 11 weeks of the financial year, up 17% year-on-year.
Like-for-like sales growth stood at 6.1%, with transactions increasing by 6.5%.
Temporary availability issues caused by an ERP system transition at the start of the year had now been resolved.
Action had opened 38 new stores so far in 2025, and held €927m in cash as of mid-March.
The company said it was planning another dividend distribution by the end of the month.
Looking ahead, 3i said Action expected like-for-like sales growth for 2025 to exceed year-to-date levels and remain in the mid-to-high single-digit range.
The firm was targeting around 370 net new store openings and aims to expand its EBITDA margin by 10 to 20 basis points from the 15.1% recorded in 2024.
Action had also increased its estimate of total store potential in its core European markets to 4,850 locations, up from the previous estimate of 4,350, reflecting further expansion opportunities.
The retailer had strengthened its financial position, completing a leverage-neutral repricing of 53% of its debt facilities in March, generating annual interest savings of approximately €19m.
That, 3i said, followed a similar debt transaction in November that secured €14m in savings.
Elsewhere in 3i's portfolio, Royal Sanders continued to perform well, and the broader private equity portfolio was making steady progress despite a challenging macroeconomic environment.
The company said that while a small number of investments still faced headwinds, performance in early 2025 had been encouraging across most of its holdings.
3i said it would report full-year results in May.
At 0853 GMT, shares in 3i Group were down 6.95% at 3,550p.
Reporting by Josh White for Sharecast.com.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.