FTSE 100 share 3i Group (LSE:III) has endured a truly miserable time recently. The reason? Weaker-than-expected sales at Action, a European retailer and key plank of its investment portfolio.
At £24.80 per share, 3i’s share price has slumped 37% over the past 12 months. The investment trust holds positions in more than 50 companies. But with value retail specialist Action accounting for three-quarters of total holdings, it’s perhaps no surprise the trust has tumbled in value.
Or is it? I’ve argued that the market has overreacted to recent news, making 3i a top bargain to consider. And today (Thursday, 25 June) it’s surged back after releasing fresh trading numbers.
So what’s happened?
10% price jump
You might not be shocked to hear news of improved performance at Action has driven the trust skywards. 3i’s share price leapt 10% on news that
like-for-like [LFL] sales growth was 3.3% year to date as at the end of week 25 (21 June 2026).
This was better than the 2% rise analysts had been tipping. To cap things off, 3i added that “Action is set for a good quarter of profit growth and had a cash balance of €699 million as at 21 June 2026 after the payment of a €450 million dividend to all shareholders in May.”
The retailer remains set to open 105 new stores in 2026, the trust added.
Elsewhere, 3i said the remainder of its private equity portfolio “continues to demonstrate good momentum in line with our expectations.”
Growing momentum
Conditions at Action will continue to drive the performance of 3i’s share price. And here’s the thing: a sharp sales uptick in recent weeks is a welcome omen for the rest of the year.
As the boffins at RBC Capital note,
Action has already reported like-for-like sales +2.4% for the first 19 weeks, so we think that this implies LFL for the most recent six weeks are up c.+6%.
The retailer has targeted full-year LFL sales growth of 4%-5%, so trading over the last month-and-a-half is encouraging. Can it continue, though? Tough market conditions have endured in key regions, particularly France and Germany.
This could remain a theme given the cost-of-living crisis in Action’s markets, though a sustained fall in oil prices could see consumers splash out more willingly.
Are 3i shares a buy?
Make no mistake: 3i is a high-quality business with a strong record of generating shareholder returns. These have averaged 18.1% a year over the last decade.
Yet following its share price issues of the last year, 3i’s share price sits at a 24.2% discount to the trust’s net asset value (NAV). For me, this represents an attractive dip-buying opportunity.
So what are the dangers? Action operates in a highly competitive industry, and its expansion in the US creates significant execution risks. But given the retailer’s long-term opportunities — not to mention the strength of the rest of 3i’s portfolio — I think it’s an excellent FTSE share to consider.
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Royston Wild does not hold any positions in the companies mentioned.
