3i Group reports positive start to new financial year

20th Jul 2023 07:12

(Sharecast News) - Investment giant 3i Group has reported a positive start to its new financial year on Thursday, with net asset value per share rising to 1,814p on 30 June, compared to 1,745p on 31 March.

The FTSE 100 firm said the total return for the three-month period ended 30 June was 4.1%.

It said its performance was influenced by the negative translation effect of sterling strengthening in the quarter, which amounted to £331m, or 34p.

Despite that impact, the firm said it demonstrated strong performance, particularly from its investee company, the Benelux-focussed discount retailer Action.

It said Action achieved net sales and operating EBITDA of €2.7bn and €374m, respectively, in the quarter from April to June.

That represented significant growth compared to the same period in the prior year, where net sales and operating EBITDA were €2.06bn and €263m.

Action's success was further reflected in its six-month performance up to the end of P6, which concluded on 2 July.

The company experienced like-for-like sales growth of 21.8% during the period, primarily driven by high customer footfall.

Action's trailing 12-month operating EBITDA until the end of P6 reached €1.44bn million, making for a 45% increase compared to the same period last year, when it stood at €991m.

The majority of 3i Group's remaining private equity portfolio showed a resilient performance, with notable contributions from Royal Sanders, AES, European Bakery Group, and MAIT.

Those successes helped offset softer performance in Tato, Luqom, and Mepal, the board said in its update.

During the first quarter of the financial year, 3i Group focussed its investment activity on bolt-on transactions, including transformational transactions for the European Bakery Group.

The company noted that it had successfully issued a €500m euro bond, resulting in gross cash reserves of £660m at the end of the quarter.

Its gearing, meanwhile, stood at a modest 3%.

"3i has made a good start to its new financial year with the private equity and infrastructure portfolios trading resiliently," said chief executive officer Simon Borrows.

"Action has achieved significant growth in its first half and generated impressive LFL sales growth with strong footfall and sales across all countries."

Borrows said the macroeconomic environment was "challenging", with the company remaining cautious over the economic outlook.

"We will maintain our focus on active management of our portfolios and selective investment and realisation activity."

Reporting by Josh White for Sharecast.com.