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Investing.com -- 3i reported a £3.29 billion total return in the first half (H1), but its shares fell more than 10% as softer recent trading at Action overshadowed the in-line results.
Net asset value (NAV) per share rose to 2,857 pence, helped by a 78-pence gain from foreign-exchange translation and roughly in line with consensus expectations. Group gross investment return (GIR) was £3.41 billion, also matching market forecasts, while gearing remained low at 3%.
Action remained the key driver of performance, though recent trading showed signs of softening. For the period to the end of P9, the retailer generated €11.23 billion in net sales, 6.3% like-for-like (LFL) growth and €1.56 billion in operating EBITDA.
For P10, sales reached €12.5 billion, with EBITDA at €1.76 billion and like-for-like growth easing to 5.7% because of tougher comparables, softer seasonal categories and notably weaker trading in France.
The business still added 255 stores year-to-date and new markets like Switzerland and Romania have been received “very well,” according to RBC Capital Markets analyst Manjari Dhar.
He said the results were “in line with consensus,” though they flagged October’s softer Action performance as a point to watch. Dhar highlighted that France, which accounts for roughly a third of Action sales, was “meaningfully worse in October,” and noted that categories such as decoration and toys underperformed last year’s strength.
He added that despite the near-term slowdown, new-store performance remains strong and the biggest trading weeks of the year are still ahead.
3i continued to increase its exposure to Action, lifting ownership to 60.1% in September through a £739 million share exchange with GIC, and then to 62.3% in October after reinvesting £755 million from Action’s capital restructuring, which returned £944 million in gross proceeds to 3i.
Action also raised €1.6 billion in new term loan debt and repriced €3.1 billion of existing loans, generating €14 million in annual interest savings.
The wider portfolio showed solid momentum. Royal Sanders delivered another period of robust growth, while MPM and MAIT achieved strong exits with money multiples of 3.2x and 2.8x respectively.
Infrastructure contributed £139 million to gross investment return, supported by a 14% rise in 3i Infrastructure’s share price and a valuation uplift in TCR. Liquidity stood at £1.64 billion, with net debt at £772 million.