REG - 3i Group PLC - 3i Group plc - Q1 performance update
24/07/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250724:nRSX3183Sa&default-theme=true
RNS Number : 3183S 3i Group PLC 24 July 2025
24 July 2025
3i Group plc
FY2026 Q1 performance update
A good start to FY2026
· Increase in NAV per share to 2,711 pence (31 March 2025: 2,542
pence) and total return of 7% for the three months to 30 June 2025, after a
positive foreign exchange translation impact of £392 million, or 40 pence.
· For the six months ending 29 June 2025 (P6), Action's
like-for-like ("LFL") sales growth was 6.8% (P6 2024: 9.0%). YTD operating
EBITDA to the end of P6 was €980 million. This period's operating EBITDA is
after a one-off expense of €26 million related principally to a payment to
eligible Action employees in June 2025 to mark Action's 3000th store opening.
This has been normalised for the Action valuation at 30 June 2025.
· Action delivered a strong performance in the quarter of P4-P6
2025, achieving net sales and operating EBITDA (after the one-off expense
detailed above) of €3,819 million and €516 million respectively (P4-P6
2024: €3,224 million and €446 million).
· In June 2025, we announced the sale of our investment in MPM,
achieving a 3.2x money multiple and an IRR of 29%, with expected total gross
proceeds of c.£400 million. This represents a c.17% uplift on MPM's 31 March
2025 valuation and c.29% uplift on its 31 December 2024 valuation.
· Resilient performance from the majority of the remaining Private
Equity portfolio.
· Increase of 8% in 3i Infrastructure plc's share price in the
quarter and good level of dividend income recognised.
· In early July 2025, we refinanced our existing £900 million RCF
with a new five year £1.2 billion RCF at improved pricing. At the end of June
2025, the Group had gross cash of £428 million, an undrawn RCF of £900
million and gearing was 3%.
Simon Borrows, Chief Executive, commented:
"We have started FY2026 well, with the Private Equity and Infrastructure
portfolios trading in line with our expectations. The MPM transaction also
provided further evidence of how our active asset management can lead to
material value creation over time.
Action had a good first half, with trading across the majority of its key
financial metrics well ahead of the same period last year, and with notable
milestones achieved, including its 3000th store and a very strong start from
the first five stores in Switzerland.
Against an uncertain macro-economic and geopolitical environment, we continue
to focus on actively managing our portfolio and remain cautious on pricing for
new investment."
Private Equity
Long-term hold portfolio companies
Action
In the six months ending 29 June 2025 (P6), Action generated net sales of
€7,340 million and operating EBITDA of €980 million, 18% and 16%
respectively ahead of the same period last year. Adjusted for the one-off
payment to eligible Action employees in June 2025 to mark Action's 3000th
store opening, the operating EBITDA in the YTD to the end of P6 would have
been 19% ahead of the same period last year. Over the same period, LFL sales
growth was 6.8%, driven by a high volume of transactions, with a strong
contribution from seasonal sales. LFL sales growth remains ahead of budget
across the majority of Action's geographies, albeit we continue to see a
weaker consumer in France and Germany.
Action added 125 net new stores in the year to date to the end of P6 (YTD P6
2024: 119) and remains on track to meet its target of 370 stores added this
year. Action ended the period with cash of €456 million and a net debt to
run-rate EBITDA ratio of 2.5x, down from 3.2x post the last refinancing event
in July 2024.
Action financial metrics
YTD to P6 2025 YTD to P6 2024
(29 June 2025) (30 June 2024)
Financial metrics €m €m
Net sales 7,340 6,228
LFL sales growth 6.8% 9.0%
Operating EBITDA 980 843
Operating EBITDA margin 13.3% 13.5%
Operating EBITDA margin normalised for one-off expense(1) 13.7% n/a
Net new stores added 125 119
1 Normalised for a one-off expense of €26 million, related principally to
a payment to eligible Action employees in June 2025 to mark Action's 3000th
store opening.
LTM to P6 2025 LTM to P6 2024
(29 June 2025) (30 June 2024)
Financial metrics €m €m
Net sales 14,894 12,365
Operating EBITDA 2,213 1,775
Operating EBITDA margin 14.9% 14.4%
Run-rate EBITDA 2,431 1,936
At 30 June 2025, Action was valued using an LTM run-rate EBITDA to 29 June
2025 of €2,431 million, which includes the usual adjustment to reflect
stores opened in the last 12 months and is normalised for a one-off expense of
€26 million, related principally to a payment to eligible Action employees
in June 2025 to mark Action's 3000th store opening.
The multiple of 18.5x, net of the liquidity discount, remained unchanged,
resulting in a valuation of £19,269 million for 3i's 57.9% equity stake (31
March 2025: £17,831 million).
Royal Sanders continues to perform well, showing solid volume growth. Its most
recent acquisitions of Karium and Treaclemoon are performing in line with our
expectations.
Other PE portfolio performance
Audley Travel saw strong year-on-year departure performance, driven primarily
by its UK market. The value of our quoted holding in Basic-Fit increased by
37% in the quarter, as its share price closed at €25.84 at 30 June 2025 (31
March 2025: €18.86). We also saw notable contributions from AES and Tato,
whilst all four of our healthcare portfolio companies are showing good
commercial momentum. Trading across the majority of the remaining portfolio
was in line with our expectations.
The ratio of net debt to EBITDA across the Private Equity portfolio decreased
from 2.9x at 31 March 2025 to 2.8x at 30 June 2025. The average Private Equity
portfolio leverage excluding Action was 3.6x (31 March 2025: 3.5x).
No changes were made to any of our portfolio company valuation multiples in
the period. The overall averages of our quoted comparable multiples across the
portfolio increased slightly over the period.
Private Equity investments and realisations
In June 2025, we announced the sale of MPM, for expected gross proceeds to 3i
of c.£400 million which represents a c.17% uplift on its 31 March 2025
valuation. Since 3i's investment in December 2020, MPM's sales and EBITDA have
more than doubled. The company has broadened its omnichannel and international
footprint and scaled significantly, driven by strong growth across pet
specialty, food / drug / mass retail, and online channels. This resulted in a
3.2x money multiple and a 29% IRR. Subject to regulatory clearance, this
transaction is expected to complete in H2 2025.
In the period, we completed total investment of £11 million, including £8
million in ten23 health as we continue to develop the platform and, we
received realised proceeds of £8 million relating to deferred consideration
from the previous sale of WP.
Infrastructure
3i Infrastructure plc's ("3iN") share price increased by 8% in the quarter to
June 2025, closing at 342 pence (31 March 2025: 318 pence), valuing 3i's 29%
stake at £921 million (31 March 2025: £856 million). We also recognised
dividend income of £17 million from 3iN in the quarter.
Our remaining infrastructure portfolio companies are performing largely in
line with our expectations.
Scandlines saw resilient trading over the period, with good leisure
performance. Freight continues to be impacted by the challenging
macro-economic conditions. Cash generation remains strong, and we received a
dividend of £6 million in the period.
Top 10 investments by value(1) at 30 June 2025
Valuation Valuation
Activity in the quarter
Valuation Valuation Mar-25 Jun-25
basis currency £m £m
Action Earnings EUR 17,831 19,269
3iN Quoted GBP 856 921 £17 million dividend recognised
Royal Sanders Earnings EUR 865 893
Cirtec Medical Earnings USD 614 586
Scandlines DCF EUR 529 543 £6 million dividend received
AES Earnings GBP 419 428
Tato Earnings GBP 382 390 £7 million dividend received
MPM Imminent sale GBP 334 382 Sale agreed in June 2025
Evernex Earnings EUR 350 357
Audley Travel Earnings GBP 276 328
1. The valuations are translated at the spot rate of the balance sheet date.
Sterling strengthened by 6% against the US dollar and weakened by 2% against
the euro in the quarter to 30 June 2025. Individual valuations exclude the
benefit of the foreign exchange hedges.
The 10 investments in the table above comprised 89% (31 March 2025: 88%) of
the total investment portfolio value of £27,227 million (31 March 2025:
£25,579 million).
Total return and NAV position
In the first quarter of our financial year, the Group recorded a total foreign
exchange translation gain of £392 million, including the impact of foreign
exchange hedging, as a result of sterling weakening by 2% against the euro,
partially offset by the strengthening against the US dollar by 6%.
Based on the net assets at 30 June 2025 and including the impact of hedging, a
1% movement in the euro and US dollar would result in a net total return
movement of £193 million and £12 million respectively. The diluted NAV per
share increased to 2,711 pence (31 March 2025: 2,542 pence) or 2,668.5 pence
after deducting the 42.5 pence per share (£408 million) second FY2025
dividend, which will be paid on 25 July 2025.
Balance sheet
At 30 June 2025, cash was £428 million (31 March 2025: £423 million), and,
including our undrawn £900 million Revolving Credit Facility ("RCF"),
liquidity was £1,328 million (31 March 2025: £900 million and £1,323
million respectively). Net debt was £776 million, and gearing was 3% (31
March 2025: £771 million and 3%).
In early July 2025, we refinanced our existing £900 million RCF with a new
five year £1.2 billion RCF at improved pricing. The new RCF provides the
Group with additional financial flexibility at low cost until July 2030, with
extension options to July 2032. The RCF continues to have no financial
covenants.
- ENDS -
Notes
1. Balance sheet values are stated net of foreign exchange translation. Where
applicable, the GBP equivalents at 30 June 2025 in this update have been
calculated at a currency exchange rate of €1.1652: £1 and $1.3708: £1
respectively.
2. At 30 June 2025 3i had 968 million diluted shares.
3. Action was valued using a post-discount run-rate EBITDA multiple of 18.5x
based on its LTM run-rate earnings to 29 June 2025 of €2,431 million.
4. As at 30 June 2025, the notional amount of the forward foreign exchange
contracts held by the Group was €3.0 billion (including €600 million
associated with Scandlines) and $1.2 billion.
For further information, please contact:
Silvia Santoro
Group Investor Relations Director
Telephone: 020 7975 3258
Kathryn van der Kroft
Communications Director
Telephone: 020 7975 3021
About 3i Group
3i is a leading international investment manager focused on mid-market Private
Equity and Infrastructure. Our core investment markets are Europe and North
America. For further information, please visit: www.3i.com
(http://www.3i.com/) .
All statements in this performance update relate to the three-month period
ended 30 June 2025 unless otherwise stated. The financial information is
unaudited and is presented on 3i's non-GAAP Investment basis in order to
provide users with the most appropriate description of the drivers of 3i's
performance. Net asset value ("NAV") and total return are the same on the
Investment basis and on an IFRS basis. Details of the differences between 3i's
consolidated financial statements prepared on an IFRS basis and under the
Investment basis are provided in the Annual report and accounts. There have
been no material changes to the financial position of 3i from the end of this
quarter to the date of this announcement.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END TSTPPURAMUPAGMWRecent news on 3i
See all newsREG - 3i Group PLC - Director/PDMR Shareholding
AnnouncementREG - 3i Group PLC - Total Voting Rights
AnnouncementREG - 3i Group PLC - Director/PDMR Shareholding
AnnouncementREG - 3i Group PLC - 3i Group plc - Q1 performance update
AnnouncementREG - 3i Group PLC - Portfolio Update
Announcement