$III (+3,62%)
Source: Investing.com -- Shares in 3i Group fell 1.6% after the private equity firm said discount retailer Action's first-half operating EBITDA fell short of forecasts, despite the retailer reporting solid sales growth.
According to 3i, Action, the largest portfolio company, achieved an operating EBITDA of € 980 million in the first six months. This fell short of expectations due to a one-off expense of € 26 million for an employee bonus to mark the opening of the 3,000th store. The figure was below RBC's forecast of € 998 million.
Action's sales reached € 7.34 billion in the first half of the financial year, which corresponds to like-for-like growth of 6.8% year-on-year and was in line with forecasts. With 125 net new stores in the first six months, the company exceeded expectations and remains on track to achieve its annual target of 370 new store openings.
3i emphasized that Action's growth was volume-driven and supported by strong seasonal sales. However, weaker consumer demand continues to be observed in France and Germany, which could weigh on investor sentiment.
For the three months to the end of June 2024, 3i reported a Group net asset value of 2,711 pence per share. This represents a total return of 7%, which includes a positive currency translation impact of 40 pence per share.
"We view 3i as a strong player in the global financial market with a solid track record of shareholder returns. Given the size of the holding, action makes up a significant part of the investment case," commented the RBC analysts.
The private equity firm also announced that it has refinanced its existing £900m revolving credit facility with a new £1.2bn five-year facility on improved terms. This strengthens the company's financial position.
