This article first appeared on GuruFocus .
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Return on Equity:22%, exceeding the target of 15%.
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NAV per Share:GBP30.30, up 19% from last year.
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Private Equity Gross Investment Return:23%.
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Cash Generated from Private Equity:GBP1.8 billion.
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Dividend per Share:84.5p, a 15% increase from last year.
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Share Buyback Program:GBP750 million launched.
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Action Net Sales Growth:16% with over 380 new store openings.
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Action Like-for-Like Growth:4.9% in 2025.
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Action Operating Cash Flow:Almost EUR2 billion with 83% cash conversion of operating EBITDA.
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Portfolio Cash Proceeds:GBP1.5 billion from realizations and refinancings.
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Dividend Income:Over GBP80 million received.
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Infrastructure Cash Income:GBP104 million.
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Infrastructure Portfolio Value:GBP2.1 billion.
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Leverage:Action leverage at 2.8x net debt to run rate EBITDA; non-action portfolio leverage at 3.2x.
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Total Portfolio Value:GBP31.8 billion.
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Action Enterprise Value:EUR49.1 billion.
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Action Holding Valuation:GBP23.7 billion for 65.4% holding.
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Cash at Year-End:GBP664 million with liquidity of GBP1.9 billion.
Release Date: May 14, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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3i Group PLC ( TGOPF ) delivered a strong return on equity of 22%, significantly exceeding their target of 15%.
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The company announced a 15% increase in dividends, amounting to 84.5p per share.
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A GBP750 million share buyback program was launched, indicating confidence in the company's valuation.
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The private equity portfolio achieved a 23% gross investment return, with Action contributing a 25% return despite challenging market conditions.
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96% of the portfolio by value experienced earnings growth, showcasing the resilience and performance of their investments.
Negative Points
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The trading environment in France and Germany has been challenging, with weaker consumer confidence and lower footfall impacting performance.
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Action's like-for-like sales growth is behind expectations due to cooler weather affecting seasonal sales.
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The geopolitical situation, including the Middle East tensions, has created uncertainty and impacted consumer behavior, particularly in Germany.
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There is a cautious outlook on the potential for sustained lower like-for-like growth, which could affect future valuations.
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The company faces potential headwinds from supplier price increases, which could impact margins if not managed effectively.
Q & A Highlights
Q: Do you still believe that the pressure you're experiencing in Action is cyclical and not structural? A: Yes, we do. The year started well, but cooler weather in Europe affected seasonal categories like Garden and Outdoor, which saw a decline compared to last year's heat wave. However, FMCG performance has picked up due to price reductions.
Q: What is happening in Germany, and do you need to change anything to support the market there? A: We remain confident in the German business. The drop in footfall is likely due to the Middle East situation affecting consumer confidence. Unlike France, where footfall remains good, Germany's consumer confidence has been impacted, affecting discretionary spending.
Q: Are you still comfortable with the 4% to 5% like-for-like range and stable margins for the second half? A: We are not changing guidance at the moment. The guidance was given five weeks ago, and it's too early to reassess. We need to see how the year develops, especially since significant sales and profit periods are still ahead.
Q: Can you explain the thought process behind the GBP750 million share buyback, and is there scope to upsize it if the share price stays low? A: The buyback is based on our strong balance sheet and is sized to maintain capital for normal business operations. We have plenty of capital to deploy, and the buyback is a sensible allocation given the current share price.
Q: How do you view Action's inventory position, and is there potential for future discounting if weather doesn't improve? A: Despite missing high seasonal sales from last year, we are not facing an inventory challenge. Sales have been decent, and summer is not over yet. We are competitive in FMCG areas and plan further price reductions to remain consumer-friendly.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
