3i Group plc

3i reported a 13% total return on equity for the half year. NAV per share ended at GBP 28.57 versus GBP 22.61 a year earlier; the increase was driven mainly by 250p per share of value growth and a positive 78p per share FX impact, partly offset by a 43p per share dividend payment. Private equity generated a 14% gross investment return, infrastructure generated 9%, and the portfolio ended at GBP 29.3 billion. Action’s first 9 months featured 17.4% net sales growth, 16.3% operating EBITDA growth to GBP 1.563 billion, and 6.3% like-for-like sales to the end of September; by the end of October, Action net sales were EUR 12.54 billion and year-to-date like-for-like sales were 5.7%. Management said gross margin was slightly above 40.0% and that Action’s pro forma leverage was 3x at the end of October after the refinancing. For guidance, 3i expects the first FY26 dividend of 36.5p per share in early January. For Action, management reiterated the March CMD framework but said 380 new stores now looks likely for the year, up from prior guidance; they also said France creates risk that full-year like-for-like sales could come in below 6.1%, while EBITDA margin remains dependent on the final trading period.

Simon Borrows struck an upbeat but cautious tone. He said 3i had another good half, with Action continuing to outperform and the broader private equity portfolio showing resilient earnings growth despite a difficult macro backdrop. He emphasized that Action’s long-term growth model remains intact, with store rollout still the main growth driver and no change to the company’s medium-term ambition.

James Hatchley focused on the mechanics behind the NAV and portfolio returns. He said NAV rose mainly because of 250p per share of value growth, aided by a 78p FX tailwind from sterling weakness, while the dividend reduced NAV by 43p. He also cited GBP 3.2 billion of gross investment return in private equity, GBP 391 million of cash realizations, GBP 732 million of investments, net debt of GBP 772 million, gearing of 3%, liquidity of over GBP 1.6 billion, and cash of GBP 777 million as of 11 November 2025. On infrastructure, he noted GBP 87 million of cash income and a small GBP 12 million cash operating loss, while saying the business still expects a cash operating profit for the year.

Analysts pressed management on Action’s softer October trading, especially in France, the risk of seasonal markdowns, gross margin trends, the new store rollout, and the U.S. research project. Simon Borrows said France was clearly negative in October, with lighter baskets across the month and weak Christmas buying, but he did not expect significant seasonal write-downs and said France remained a big market where Action was still taking share. On capital allocation and ownership, he said 13% of the remaining 38% stake is held by Hellman & Friedman and the balance by LPs and some management, and that 3i still has appetite to buy more Action when opportunities arise. He also said the U.S. is still in research phase, with employees on the ground, but no further timing detail was given.