Shares in 3i Group drop as IT disruption knocks sales at Action

(Alliance News) - Shares in 3i Group PLC on Thursday fell after it said supply issues had ...

Alliance News 20 March, 2025 | 8:51AM
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(Alliance News) - Shares in 3i Group PLC on Thursday fell after it said supply issues had resulted in a sluggish start to 2025 at Dutch discount retailer Action.

The London-based private equity and venture capital company holds a majority stake in Action having increased it to 57.6% from 54.8% in early July 2024.

In a statement ahead of a capital markets seminar on Thursday, 3i said like-for-like sales growth in the first 11 weeks of 2025 at Action was 6.1%, with growth in transactions being 6.5%.

Broker Citi said this was "meaningfully below" its 9.0% estimate.

In response, shares in 3i were 6.8% lower at 3,555.00 pence each in London on Thursday morning.

Year-to-date like-for-like sales at Action have been affected by temporary availability issues in certain stores and distribution centres as a result of the changeover of Action's enterprise resource planning system at the turn of the year, 3i said.

These issues have now been dealt with, it noted.

In 2024, Action generated net sales of EUR13.78 billion and operating earnings before interest, tax, depreciation and amortisation of EUR2.08 billion, up 22% and 29% respectively than in 2023.

Like-for-like sales growth was 10% and the business added 352 stores in the year.

Operating leverage and good cost discipline were the main drivers behind the increased Ebitda margin of 15.1%, 3i explained.

Cash and cash equivalents at Action at March 16 was EUR927 million and the retailer is planning to make another dividend payment to shareholders in the last week of March.

For 2025, 3i expects Action to report like-for-like sales growth in the mid to high single digit range. It expects Action to open 370 stores and sees an Ebitda margin expansion of 10 to 20 basis points from 2024.

3i said its other long term hold asset Royal Sanders, a maker of personal care products, continues to trade well.

The private equity portfolio more generally continues to make good progress against a difficult macro and uncertain geopolitical environment with good performance across a number of 3i's larger investments, the firm added.

"Overall, across the whole portfolio the performance in the initial weeks of 2025 was encouraging with only a small number still facing material headwinds," 3i said.

By Jeremy Cutler, Alliance News reporter

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
3i Group Ord 3,689.00 GBX -3.30

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