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TOP NEWS: 3i NAV increase driven by compelling growth story at Action

9th May 2024 10:00

(Alliance News) - 3i Group PLC on Thursday boosted its dividend, despite a drop in profits, after an "excellent" performance from retailer Action.

Shares in the London-based private equity and venture capital investor fell 4.1% to 2,853.00 pence in London on Thursday. The wider FTSE 100 was up 0.1%.

In the year March 31, 3i reported a total return of GBP3.84 billion, down 16% from GBP4.59 billion a year prior.

Net asset value though rose to 2,085 pence from 1,745p. This includes a 33p per share loss on foreign exchange translation compared to a 65p per share gain in the year before.

Analysts at UBS said the NAV was 1% below Visible Alpha consensus of 2,109p.

Operating profit before tax fell 16% to GBP3.84 billion from GBP4.58 billion. Earnings per diluted share also fell 16% to 396.7p from 473.8p.

The company declared a second dividend of 34.5p for the year, up from 29.75p a year ago. This took the total payout to 61.0p, up 15% from 53.0p a year prior.

"3i delivered a strong result....underpinned by another year of excellent performance from Action and overall resilient performance from the wider portfolio, which continues to operate well through a challenging macro-economic environment and geopolitical uncertainty," the company said.

3i said Action had delivered another year of strong performance and was the major driver of the full-year result.

3i said Action, the Dutch discount retailer, was the fastest growing non-food discount retailer in Europe and its largest portfolio company.

"Action's compelling growth story continues to be a major driver of the Group's return, with overall resilient performance across the remaining portfolio," 3i said.

Action generated a gross investment return of GBP3.72 billion, 3i said.

3i said its Private Equity business delivered a full-year gross investment return of GBP4.06 billion down 18% from GBP4.97 billion a year prior.

Chief Executive Simon Borrows said the "shape of today's portfolio has served us well in this challenging year and reflects investment decisions taken over the last 12 years."

"We expect that the current macro-economic conditions and geopolitical uncertainty will persist in the near term and that this will continue to impact confidence and pricing expectations in the wider mid-cap M&A market."

Looking ahead, 3i said trading momentum at the start of the new financial year "remains strong at Action, whilst a number of other assets are well positioned to continue to grow despite the uncertain macro-economic outlook."

By Jeremy Cutler, Alliance News reporter

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