Action underpinning 3i Group's portfolio performance

3i Group updated the market on its September portfolio company reviews on Tuesday, reporting that despite the overarching difficulties in the current macroeconomic scenario, its portfolios are demonstrating commendable progress.

The FTSE 100 firm said that assets spanning sectors such as value-for-money consumer and private label, healthcare, speciality industrial, and technology services were seeing robust earnings growth in the private equity division.

As the second half of the financial year began, it said the assets were maintaining a promising trajectory, with its travel-related assets experiencing a marked upswing in demand.

However, companies like Luqom and YDEON grappled with sales challenges after the Covid lockdowns.

Additionally, Tato, Formel D, and Wilson faced headwinds from softening end markets, which led to a drop in customer demand.

3i Group emphasised the significance of its robust active asset management processes in cushioning against the prevailing market hurdles.

One of the standout performers in its portfolio was Action, which sustained its stellar track record.

The company posted sales figures of €7.5bn as of 17 September, marking 31% growth compared to the same period in the prior year.

That growth, primarily attributed to high customer footfall, resulted in a year-on-year like-for-like sales increase of 20%.

Even though like-for-like performance metrics could pose challenges as the year progressed, 3i said Action's appeal to customers through competitive pricing and product availability remained undeterred.

The Benelux-focussed discount chain boasted a robust operating EBITDA forecast of €1.53bn - a significant jump from €1.04bn as of September last year.

Additionally, with a healthy cash balance of €1.01bn recorded on 17 September and 140 net new stores added this year, Action was poised to inaugurate an estimated 300 stores by the end of 2023.

At 0845 BST, shares in 3i Group were up 0.24% at 2,090p.

Reporting by Josh White for Sharecast.com.