3i Group annual results 2026: another strong year, but the buyback is the real tell
3i Group has posted another very strong set of annual results for the year to 31 March 2026. Total return came in at £5,304 million, equal to 22% on opening shareholders’ funds, while diluted net asset value – or NAV, the value of the assets less liabilities – rose to 3,030 pence per share from 2,542 pence.
That is the headline win. The more interesting bit, though, is the newly announced share buyback of up to £750 million, which management says is aimed at reducing share capital and should be completed by 31 December 2026. When a company with a big asset base starts buying back stock after the share price has weakened, it usually means the board thinks the market is underpricing the business.
| Key number | FY2026 | FY2025 |
|---|---|---|
| Total return | £5,304 million | £5,049 million |
| Total return on opening shareholders’ funds | 22% | 25% |
| NAV per share | 3,030 pence | 2,542 pence |
| Total dividend per share | 84.5 pence | 73.0 pence |
| Liquidity | £1,864 million | £1,323 million |
| Net debt | £547 million | £771 million |
| Gearing | 2% | 3% |
Action remains the engine of 3i Group’s returns
Let’s be blunt about it: this is still the Action story. 3i’s stake in the discount retailer generated a gross investment return, or GIR, of £4,510 million in FY2026, which was 25% on its opening value. That is the vast majority of the Group’s Private Equity performance.
At 31 March 2026, 3i valued its 65.4% stake in Action at £23,743 million, up from £17,831 million for a 57.9% stake a year earlier. During the year, 3i increased its ownership from 57.9% to 65.4%, using a mix of £827 million of cash and £1,739 million of non-cash consideration, including the issue of new 3i shares.
Operationally, Action still looks impressive. In 2025 it delivered net sales of €16,000 million, up 16%, with like-for-like sales growth of 4.9% and operating EBITDA of €2,367 million, up 14%. It also added 384 net new stores and ended 2025 with 3,302 stores across 14 countries.
That said, this was not a flawless update. In the first three periods of 2026, like-for-like sales growth slowed to 3.6%, and at the end of week 19 on 10 May 2026, year-to-date like-for-like growth was only 2.4%. 3i blamed weaker seasonal trading due to cooler weather, continued consumer caution in France, and lower traffic in Germany following the deterioration in the Middle East situation at the end of March.
That matters because Action is so big inside 3i. If Action keeps compounding, 3i looks great. If Action stumbles, the whole investment case gets noisier very quickly.
3i Group buyback of up to £750 million: why this matters more than it first appears
The buyback is a serious capital allocation move, not window dressing. 3i says the programme will be for up to £750 million and is intended to reduce share capital, with completion targeted before 31 December 2026.
Why now? The company openly said the share price declined materially in the second half of FY2026 after trading at a significant premium to NAV, particularly over the preceding two years. In plain English, management thinks the market has become less enthusiastic even though the underlying portfolio kept growing.
For retail investors, that is important. A buyback can support per-share value if shares are bought at attractive levels, and it signals confidence from the board. It also gives 3i another way to return capital on top of dividends.
3i dividend, balance sheet and cash proceeds all look solid
Income investors got a decent upgrade too. Total dividend for FY2026 is 84.5 pence per share, up from 73.0 pence, with a proposed second dividend of 48.0 pence per share due in July 2026, subject to shareholder approval.
The balance sheet also looks strong. 3i finished the year with liquidity of £1,864 million, net debt of £547 million and gearing of just 2%. It also refinanced its revolving credit facility – basically a standby borrowing line – from £900 million to £1.2 billion at improved pricing.
Cash generation was healthy, with £1.9 billion of cash proceeds received from the portfolio in the year. One figure that might look a bit soft at first glance is operating cash profit, which fell to £276 million from £469 million, but 3i says that was mainly due to the timing of Action’s second dividend, expected in May 2026 instead of March as in the prior year. That’s an important distinction.
Private Equity and Infrastructure results show there is life beyond Action
Although Action dominates, it was not a one-asset year. The Private Equity business delivered a GIR of £5,303 million, or 23%, and Royal Sanders was flagged as another standout, contributing £272 million of value growth and continuing its buy-and-build strategy.
3i also showed it can still exit assets well. The sales of MPM and MAIT generated combined proceeds of £542 million, with money multiples – the return versus invested capital – of 3.2x and 2.8x respectively, both ahead of 3i’s 2x target.
Infrastructure had a better year too, generating a GIR of £106 million, or 7%. The big event there was 3iN’s announced sale of TCR, expected to return €1,140 million to 3i Infrastructure plc and representing about a 50% uplift to its opening valuation, plus a 3.6x money multiple including prior distributions.
That said, not everything was rosy. DNS:NET was written down to nil because financing conditions for fibre roll-out in Germany deteriorated materially. That’s a reminder that even infrastructure assets can get hit when funding markets turn awkward.
Key risks in the 3i results: concentration, valuation and foreign exchange
The biggest risk is obvious: concentration in Action. The company even said that after increasing its Action stake, its aggregate cost exposure to a single asset has risen enough that the board will seek shareholder approval at the 2026 AGM to increase its investment policy limit for one asset. That tells you just how central Action has become.
Valuation is the next big one. 3i kept Action’s post-discount valuation multiple unchanged at 18.5x run-rate EBITDA, and said that a 1.0x movement in that multiple would move the value of 3i’s investment by £1.5 billion. That’s not a criticism – it is useful disclosure – but investors should respect how sensitive the numbers are.
Then there is foreign exchange. NAV per share included a 77 pence gain from foreign exchange translation, and the Group recorded a total foreign exchange translation gain of £786 million in the year. Helpful when sterling moves your way, less helpful when it doesn’t.
One more point: 3i issued 51 million new ordinary shares during the year as part of transactions to buy more of Action. The buyback now partly offsets that dilution story, but it is still worth noting that not all growth in headline value automatically translates into the same level of growth per share.
My view on 3i Group’s FY2026 results and the outlook for shareholders
This is a strong result, full stop. NAV is up sharply, the dividend is higher, leverage is low, liquidity is strong, and management has added a £750 million buyback to underline confidence.
The bull case remains straightforward: Action continues to expand, 3i keeps compounding NAV, and shareholders benefit from both dividends and buybacks. The bear case is just as clear: the company is increasingly tied to one outstanding asset, and any wobble in Action’s growth rate, valuation multiple or European consumer demand will be felt across the whole group.
On balance, this RNS reads positively to me. 3i is still doing what it has done well for years – backing winners, holding them for longer, and recycling cash sensibly. The catch is that investors now need to be comfortable owning a brilliantly managed investment group that is also, in practice, heavily powered by one retail superstar.
