3i Group reports strong growth at Action

(Sharecast News) - 3i Group said in its third-quarter update on Thursday that its largest portfolio company, the Benelux discount retailer Action, recorded notable growth in its 2023 financial year, with net sales reaching €11.32bn and operating EBITDA hitting €1.62bn, marking a 28% and 34% increase, respectively, compared to 2022. The FTSE 100 investment company said like-for-like sales jumped 16.7%, as Action expanded its footprint with the addition of 303 stores.

Improved operating leverage and cost discipline contributed to an enhanced EBITDA margin of 14.3%.

3i said Action's robust performance continued into 2024, with net sales for the period up to the end of week 11 reaching €2.5bn, representing a 21% increase from the same period in 2023.

Notably, like-for-like sales growth stood at 9.6% for the first 11 weeks of the year, despite having one fewer trading day compared to the same period last year.

Transaction growth was a key driver behind the performance.

As of 17 March, Action held cash and cash equivalents totaling €1.08bn.

The company had expanded its presence with the addition of 32 stores year-to-date, including its inaugural stores in Portugal.

Action was planning to distribute another dividend payment to shareholders in the final week of March.

3i Group said it had also concluded its semi-annual portfolio company review meetings, noting overall resilience across the rest of its portfolio.

The board said most companies showed positive momentum heading into 2024.

Its full-year results were set for publication in May.

At 1011 GMT, shares in 3i Group were up 4.35% at 2,638p.

Reporting by Josh White for Sharecast.com.