Private equity giant 3i Group upped its dividend as its full year results were boosted by the “remarkable growth story” of Dutch retailer Action.
3i reported that its net asset value (NAV) per share was 2,085p at 31 March, up from 1,745p a year ago. Its total portfolio value was £21.6bn, having surpassed £20bn last November thanks to the rapid growth of Action.
3i owns a majority stake in the Dutch discount retailer, which made up 65 per cent of assets at the end of March.
Action generated a gross investment return of 33 per cent after delivering a 28 per cent increase in profit and like-for-like sales growth of 17 per cent in the 2024 financial year.
“Action’s remarkable growth story continued in 2023, as the business once again generated sector-leading results across its key performance indicators and increased its store presence across Europe,” 3i said.
“We increased our exposure to these returns, through the allocation of further 3i capital into Action in full year 2024.”
The firm said it continued to see strong growth for the rest of it portfolio companies in the value-for-money and healthcare sector, which would more than offset the softer performance of firms in the discretionary consumer sector.
Its infrastructure business generated a gross investment return of £99m, or growth of seven per cent, which reflected the “modest share price gains for 3i Infrastructure plc.”
On the back of its results, 3i upped its final dividend to 61p from 53p last year.
However, despite reporting an increase in NAV, 3i saw its total return from the year drop to £3.9bn from £4.6bn last year.
“The shape of today’s portfolio has served us well in this challenging year and reflects investment decisions taken over the last 12 years,” Simon Borrows, 3i’s chief executive said.
“Action’s compelling growth story continues to be a major driver of the Group’s return, with overall resilient performance across the remaining portfolio.
“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,” Borrows concluded.