2Sem.·

Why is 3i falling today? Good entry, normal volatility or are there bigger problems?

Why is 3i falling so sharply this morning? Is now a good entry point? Is this normal volatility or are there bigger problems? I have already checked the dividend Attack is not today and not tomorrow.

6 Commentaires

Dussel D.@DusselDuck

1Sem.

Shares in 3i Group PLC fell on Thursday after the company said supply issues had led to a slow start to 2025 at Dutch discount retailer Action.

The London-based private equity and venture capital firm holds a majority stake in Action, which it increased from 54.8% to 57.6% in early July 2024.

In a statement to a capital markets seminar on Thursday, 3i said like-for-like sales growth in the first 11 weeks of 2025 at Action was 6.1%, with transaction growth of 6.5%.

Broker Citi said this was "significantly below" its estimate of 9.0%.

In response, shares in 3i fell 6.8% to 3,555.00p apiece in London on Thursday morning.

Action's like-for-like sales so far this year have been hit by temporary availability issues in certain stores and distribution centers due to the changeover of Action's inventory management system at the turn of the year, 3i said.

These issues have now been resolved, the company said.

In 2024, Action generated net sales of EUR 13.78 billion and operating earnings before interest, taxes, depreciation and amortization of EUR 2.08 billion, up 22% and 29% respectively on 2023.

Like-for-like sales grew by 10% and the company opened 352 new stores in the year.

Operating leverage and good cost discipline were the main reasons for the increased EBITDA margin of 15.1%, 3i explained.

Action's cash and cash equivalents amounted to 927 million euros on March 16 and the retailer plans to pay another dividend to shareholders in the last week of March.

For 2025, 3i expects Action's like-for-like sales growth to be in the mid to high single digits. It assumes that Action will open 370 stores and expects the EBITDA margin to expand by 10 to 20 basis points from 2024.

3i said its other long-term held asset Royal Sanders, a personal care products manufacturer, continues to perform well.

The private equity portfolio in general continues to make good progress in a challenging macroeconomic and uncertain geopolitical environment with good performance across a number of 3i's larger investments, the company added.

"Overall, the performance of the entire portfolio has been encouraging in the first few weeks of 2025, with only a small number of companies still facing significant headwinds," 3i said.

Source: Marketscreener.

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Jun@Ji_hyun

1Sem.

@DusselDuck that sounds like a correction, rather than a one-day crash. So maybe it's better to start a savings plan than to go in today in the hope that it's an overreaction?

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Dussel D.@DusselDuck

1Sem.

@Ji_hyun I would also make a savings plan (I have one).

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