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Investing.com -- 3i (LON:III) Group shares dropped 1.6% after the private equity firm reported Action (WA:ACT)’s first-half operating EBITDA came in below forecasts, despite solid sales growth at the discount retailer.
3i reported that Action, its largest portfolio company, generated operating EBITDA of €980 million in the first six months, falling short of expectations after a one-off expense of €26 million related to a payment to employees marking Action’s 3,000th store opening. The figure came in below RBC’s forecast of €998 million.
Action’s sales reached €7.34 billion for the first half of its fiscal year, representing like-for-like growth of 6.8% YoY, which was in line with forecasts. The company has added 125 net new stores in the first six months, ahead of expectations, and remains on track to meet its target of 370 new stores this year.
3i noted that Action’s growth has been volume-driven with strong seasonal sales contributions. However, the company continues to experience weaker consumer demand in France and Germany, potentially weighing on investor sentiment.
For the three months to June 2025, 3i reported a Group Net Asset Value per share of 2,711p, representing a total return of 7%, which included a positive foreign exchange translation impact of 40p per share.
"We view 3i as a strong player in the global financials market, with a solid track record of total shareholder returns. We note that, given the size of the holding, Action makes up a significant portion of the investment case," RBC analysts commented.
The private equity firm also announced it has refinanced its existing £900 million revolving credit facility with a new five-year £1.2 billion facility at improved pricing, strengthening its financial position.
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