3i says Action's open stores trading strongly

3i said stores of its Action discount retail business that are fully open were trading strongly but that outlets in countries under lockdown had lost “significant sales”.

All but 18 stores in France and all stores in Belgium, Luxembourg, Austria and Poland are open and doing good business, the private equity group said. In France, Belgium, Luxembourg and Poland earnings are “materially ahead of budget” and like-for-like sales were at least 25% higher than 2020 in the first 10 weeks of 2021.

Action’s shops in the Netherlands, Germany and the Czech Republic are still operating under Covid-19 restrictions.

“Action lost significant sales compared to budget in the Netherlands and Germany in January and February, although the recent relaxation of restrictions has lifted trading in March which is now moving up to budget levels in both countries,” the FTSE 100 group said. “Product availability across all countries is good and the distribution centre network is operating well.”

3i shares fell 1% to £11.85 at 08:26 GMT. The company released its update before a capital markets seminar scheduled for 09:30 GMT.

Action is the biggest business in 3i’s portfolio of private equity investments. The business’s cash and liquidity is about €525m and it is on course to open more stores in the first quarter of 2021 than in the same period a year earlier.

3i said the rest of its portfolio was showing resilient performance and had momentum with a number of companies benefiting from shifts towards ecommerce, health and hygiene and value retail.

The pound has strengthened during the financial year. A 1% movement in the euro results in a total return movement of $62m and a 1% movement in the US dollar moves total return by £13m, 3i said.