3i Group PLC (LSE:III) shares jumped 10% to 2,499p after saying that its largest portfolio company, Action, remained on track for a good second quarter despite like-for-like sales growth slowing.
Ahead of its annual general meeting on Thursday, the FTSE 100-listed private equity investor said the European discount retailer delivered like-for-like sales growth of 3.3% in the year to 21 June.
That compares with LFL sales growth of 3.6% in the first quarter and previous guidance for full-year like-for-like growth of between 4% and 5%.
The discount retailer has opened 105 new stores so far this year, which 3i CEO Simon Borrows said kept it "on track" for its plans to open at least 400 stores during the year.
Borrows said Action was set for "a good quarter of profit growth" and had a cash balance of €699 million at 21 June. That was after paying a €450 million dividend to shareholders in May.
He said the remainder of 3i's private equity portfolio continued to perform in line with expectations, with businesses across the portfolio demonstrating "good momentum in line with our expectations".
After hitting an all-time high of almost 4,500p last autumn, on the back of strength in Action, shares in 3i have fallen to two-and-a-half-year lows of below 1,900p in recent months.
Last month, analysts at Citi said the market seemed to be valuing Action based on LFL growth of just 2.2% over the medium term.
** UPDATE: Adds share price and analyst view **
