3i starts GBP750 million share buyback but second half "challenging"

(Alliance News) - 3i Group PLC on Thursday announced a higher net asset value as it said the second financial half has been challenging for shareholders, as like-for-like sales growth for Action slowed recently.

3i shares fell 17% to 2,000.00 pence each on Thursday morning in London.

The London-based private equity investor said diluted net asset value per share was 3,030 pence as at March 31, 19% higher than 2,542p a year prior.

Total return on opening shareholders' funds was 22% in the financial year ended March 31, lower than 25% a year prior.

3i said non-food discounter Action remained its "principal driver" of return. In the first three months of 2026, Action's net sales rose by 14% to EUR4.01 billion from EUR3.52 billion a year ago, with operating earnings before interest, tax, depreciation and amortisation up 7.3% to GBP498 million from GBP464 million.

However, 3i noted that at the end of week 19, to May 10, Action's year to date like for like sales growth was 2.4%, slowed from 6.8% a year prior. 3i said that seasonal categories underperformed amid cooler weather in recent weeks and high comparables last year.

Further, there was continued consumer caution in France and lower traffic in Germany amid a deterioration of the situation in the Middle East at the end of March. Meanwhile, Action's trading in the Netherlands, Belgium and southern Europe is in line or ahead of expectations, 3i said.

Chief Executive Officer Simon Borrows said it was "another good year" with "strong" contributions from Action, the broader private equity portfolio, and infrastructure.

He added: "The market environment remains complex with heightened geopolitical risk from the unresolved Middle East situation in particular. As a result, we expect to see an increase in inflation over the coming months."

The total dividend per share for financial 2026 is 84.5 pence, up 16% from 73.0p a year ago.

3i starts a GBP750 million share buyback programme on Thursday, to run until maximum the end of 2026.

Chair David Hutchison said: "The group's performance in FY2026 was underpinned by our two high-quality long-term hold assets delivering consistent compounding growth and a broader portfolio that has, once again, demonstrated resilience through periods of uncertainty and disruption. This performance provides a strong foundation as we enter FY2027 against an increasingly uncertain geopolitical backdrop."

He added: "Despite the progress in the year, the board is conscious that the second half of the year has been challenging for shareholders, as the share price has adjusted from the significant premium to NAV that had built up, particularly over the preceding two years."

By Tom Budszus, Alliance News slot editor

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