Okay. Good morning, everyone, and welcome to 3i's interim results presentation. Well, it's been an eventful few months in the U. K. Since we last met in May.
But I'm pleased to say the 3i team has kept its focus on building long term portfolio value for the shareholders and our limited partners. We've put together another good half. And as you can see from this morning's results, We're making consistent progress against both our strategic and financial objectives. So let's look at some detail. It's been another first half with a total return of 10% and a strong performance in both portfolios.
It's been a quieter period for realizations, But we do have a number of projects in train that will see the pace of the activity step up in the second half. We've remained active but disciplined investors across the group. And we've seen a good level of bolt on activity across both portfolios. But we now have to deal with a dangerous combination of a slowing macro environment together with an enormous supply of dry powder. So more than ever, we've got to maintain our discipline as well as carefully assessing how our investment targets We'll respond to a deteriorating macro.
This morning, we've confirmed the proposed sale of Eurofund 5's interest in action to new 3i managed vehicles. They are backed by existing and new institutional investors and by 3i itself. We're pleased that this transaction also preserves the 3i led governance model, which has been so important to value growth since we acquired the business in 2011. The transaction is priced at an enterprise value of €10,250,000,000 The €10,250,000,000 Represents run rate and last 12 months EBITDA multiples of 18.2 times 20.3 times. Action will pay €745,000,000 distribution to all shareholders just prior to the Eurofund 5 sale as a result of the 6 refinancing of the company.
3i's economic holding in action will increase to just under 50% as a result of reinvesting our distribution proceeds. By any measure, action has been an extraordinary investment. And the opportunity ahead for action is very exciting. At 3i, we continue to see significant growth potential In this exceptional business, Action is delivering very strong current trading With like for likes of 5.6% year to date at the end of P10 in October. The group is on track to open 2 30 stores as it did last year And has already opened 3 new distribution centers this year, as you can see here.
As they say, what doesn't kill you makes you stronger. And that is absolutely the case with action. Last year, we suffered from acute supply chain issues in France, which dramatically reduced availability of stock in some of our busiest stores. We now have significant excess capacity across Supply chain as well as much improved stock availability. Over the last few months, Management have been presenting the 5 year plan for the group to both new and existing investors.
This is a summary profile of the plan. It envisages significant future growth even if in relative terms, That growth is much less dramatic than what Action has delivered over the last 8 years. I very much doubt there are many retailers across the globe that could credibly put together a plan like this. It is certainly reassuring to know that in the 1st year of the plan 2019, We're already comfortably ahead of budget for sales, like for likes and EBITDA growth. We project a doubling of Action's new store base over the 5 year plan, and that increase will lead to a more than doubling of turnover and to a significant increase in EBITDA as material scale benefits come through across key markets.
Over the course of the plan, we expect group EBITDA margin will improve to a little over 12%. So action has never been better positioned. And its growing scale advantages are beginning to really to set it apart from the competition. Turning to the rest of the Private Equity portfolio. We have a good performance overall.
There was some softness in industrials, particularly in automotive and particularly in Germany. And I'm pleased to say that our bolt on activity has continued at a pace. 91% of our top 20 investments ranked by value Grew their earnings. 6 of those 20 companies delivered very strong growth. And once again, Schlemmer has been struggling with sales and margin pressure, particularly in its German plants.
We completed the purchase of Evonex for £214,000,000 Evonex is a strong business With a background of good growth based on its international presence, where they provide 3rd party maintenance of critical IT infrastructure. This is another business where bolt on M and A will be an important part of its growth strategy. We continue to focus on investing into sustainable growth trends. We don't always get it right, And it is often difficult to spot where the next piece of disruption will come from. But in the main, We feel the portfolio is defensive as well as being well positioned for continued good growth.
As I said earlier, we continue to pay particular attention to portfolio M and A. We've been busy in the first half and We have a good pipeline of further bolt ons to come in the second half. The portfolio continues to be weighted towards our better assets, with only 6% of our portfolio in our 2 problem buckets. We're also fortunate to have a high performing infrastructure team. Once again, They delivered very solid performance in the first half.
Share price performance from 3iN and cash income were both strong. And the team have made some interesting investments with Jules in Holland and Eonesos in France as well as 2 rail companies in the U. S. 3iN continues to be the quality share in the listed infrastructure space. And just last month, Phil White and his team organized a very effective placing to raise £220,000,000 of new share capital at a substantial premium to NAV.
ScanLines continues to generate good levels of cash as well as delivering a very decent return of 8% in the first half. The team managed to achieve a refinancing earlier than we expected with €70,000,000 of cash proceeds to 3i in August. Now I first showed you this slide last year And not much has changed, except for the fact that these defensive companies Now account for 75% of our portfolio rather than 69%. We love our value stocks, and they are growing strongly. 3N and ScanLines keep delivering the cash and we have some very interesting platform assets in Certik and Kew, which is set to achieve very good growth over the coming years.
So I'll close my section by saying this has been another strong half for 3i, with some judicious investment, Execution of the complex Eurofund V transaction and decent portfolio performance from both divisions. Now I know everyone has been very excited about the Eurofond V realization transaction. I also know that there were some punchy price expectations for this transaction. We ran a very thorough process Against the backdrop of declining growth and accelerating structural decline in many parts of the High Street. Look around.
With the exception of Primark and some of the discount food concepts, A lot of the U. K. Household retail names are facing an existential crisis due to disruption, either from the value sector or from digital. Action, meanwhile, Has traded outstandingly well and has stood up brilliantly to multiple investor reviews over the last 4 months. Those folks who have put the work in have a new respect for the power of the format and its significant white space potential across Europe.
Management have done a great job in presenting the business to investors, But they have done an even better job in excelling in operational performance this year in what is clearly a very challenging environment for many businesses across Europe. To achieve a 20 times LTM EBITDA exit multiple is a huge credit to the business. And by the way, the share price we achieved for this minority sale After taking account of the last two cash distributions from the company, is 2.4 times The cash offer for the whole company we rejected from a 3rd party in the summer of 2016. But our prime focus at 3i is not price per se. It really is on value and in particular on long term compounding value, as that 2016 transaction Benchmark suggests.
So let me give you my view on action. Discount general merchandise is one of the most attractive categories in retail. Action can select The best selling products from across 14 different categories. It simply doesn't need to sell products that are not bestsellers all that don't fit with its deep discount approach to pricing. And Discount is here to stay.
Consumers love it and pricing in today's world is very transparent. Action is the best format in this discount sector in Europe. Our sales per square meter a 2 to 3 times greater than any of our competitors. And our mix of low price, surprise and convenience DRY's very significant footfall. Whichever country we have opened in, the action store works.
This is the Holy Grail of retail and very few companies have a format with this type of universal appeal. And we have industrialized the store opening process, so the rollout potential is enormous. And history tells us this format works in good times and in bad. New Action Stores pay back invested capital on average in 1 year. In our language, that's 100% IRR return on each store we open.
I don't know another retailer that's got those economics. And that accelerated return results in significant excess cash flow And over time, as we fill out the store network in Action's larger new countries like France, Germany and Poland, We can expect to see country profitability in those countries move up from single figure or loss making EBITDA percentages To the higher teens like our Benelux markets, that will drive up group EBITDA very materially. So I'll close my section by urging you to focus on the compounding value growth potential of action. The same way our rolling LPs have done. We understand why some parties had to step out of Euron Fund 5 At the end of its life and after a very good run, but it was never 3i's intention to sell any of our stake at this point.
When the transaction completes in the New Year, 3i will own just under 50% of action. That's net of any carry drag and I'm very confident that the enhanced position is going to become very valuable to 3i and its shareholders. Okay. Let's not forget that we're here to talk about 3i's half year So I'll hand over to Giulio to take you through the detail. Thank you.
Thanks, Simon, and good morning, everyone. We have delivered another 6 months of good performance from our portfolio. And as Simon has just explained, we have been very busy managing the Action Liquidity transaction on behalf of the LP investors in Eurofund 5. I'll take you through how that transaction is expected to impact on 3i's investment in action. But first, I will go through the rest of our financials.
We closed the first half with an NAV per share Of 8.73p That's after paying out the dividend of 20p in July. As you can see here, that increase in NAV was principally due To 51p of value growth from our portfolio. And as at the 30th September, We had a net translation benefit of 0.21p from FX. In the 6 months, our Private Equity business delivered an 11% gross investment return. As I talked about in May, we expected this to be a quieter half for realizations, But we are still in line with my assumption of GBP 350,000,000 to GBP 500,000,000 proceeds for the year.
The cash investment of £221,000,000 includes Magnitude, the data management solutions business we completed in May. As a result, our private equity portfolio value Increased from £6,000,000,000 to £6,900,000,000 The £429,000,000 of value growth is underpinned by earnings growth from our portfolio companies. As you can see here, 17 of the top 20 investments have earnings growth. Hans Anders and Royal Sanders, for example, were particularly strong as was our long standing investment in Tayto. Simon has talked about the sharp slowdown that we've seen in the automotive sector and that has certainly not helped the performance of Schlemmer.
As a result, we have had to take down its value through both its earnings and multiple. £381,000,000 of the £471,000,000 of performance comes from action And it's growth in like for likes, store openings and a much improved supply chain. Now what about the Eurofirm 5 liquidity transaction and how it impacts 3i's investment in action? We had thought that we might use the Scanline's transaction as a template. But in the event, This Eurofem 5 liquidity event has been much more complicated.
We have carried out a very thorough process, Which importantly from a 3i perspective has both validated our valuation approach and preserved our governance model. The implied transaction value, which uses a multiple of 18.2 times Is ahead of actions value at 30th September based on our long standing methodology, Which uses a multiple of 18 times. This is what I call our clean September value. Now when you've adjusted for changes to Action's capital structure and related costs, The transaction value is still ahead of that clean value, but it's not materially different. So we have not tried to reflect the transaction in our value at the 30th September.
And our current intention It's to maintain our run rate valuation methodology going forward. As well as valuation, There are a number of other transaction features which will have an effect on 3i. Action will complete a refinancing when the transaction completes in January. The proceeds of that refinancing We'll be distributed to all of the current investors in action. And we intend to reinvest our share of those proceeds Back into action.
The sale of Eurofem 5's interest in action also triggers a number of carry transactions. These are complicated. So to keep it simple and using our 30th September numbers, £681,000,000 of our total £684,000,000 carry receivable It's due from Eurofon 5. We expect to receive that in January. Of the £998,000,000 total private equity carry payable, £481,000,000 relates to the carry participant share of the Eurofon 5 Carry receivable, the £681,000,000 that Eurofund V pays to 3i.
Again, assuming that the transaction completes in January, I expect the GBP 481,000,000 Will be paid out to carry participants in May. We had already set aside £109,000,000 of the £481,000,000 in a cash escrow. So the net cash payment made by 3i should be the difference £372,000,000 So we are paying out the carry participant share of the Eurofon 5 carry received, But we will continue to accrue the carry payable on 3i's pre transaction investment in action. This was a transaction feature that was important to the rolling LPs and new investors. We're planning to reinvest the excess of the carry that we receive £681,000,000 Over the net cash outflow of the carry paid £372,000,000 We think of this new investment as a natural hedge against the ongoing carry liability, But we will have to show the investment and liability grossed in our balance sheet.
Now the exact amounts and percentages won't be finalized until January. That said, You should assume that we will have a net interest of just under 50% in action when the transaction completes. That's net after any carry charge and when you take account of that hedging. One final point on the presentation of action post transaction. We have stayed invested and will increase our stake Because we see it as a long term hold, which will continue to produce compounding growth.
As a long term hold, it fits in our Corporate Assets segment. The governance is unchanged and we are not planning to make any changes to the way that we manage the asset. Regardless of the accounting presentation, we will continue to separate out its performance So you can easily see the value that action generates. Turning then to our infrastructure business. Those of you at 3iN's results last week We'll have seen what a good first half that they have had.
We got £53,000,000 of value growth from the increase in 3i's share price. That together with £12,000,000 of 3iN dividend income accounts for most of the £88,000,000 gross investment return. We were busy with our reinvestment in Scanlines. An earlier than expected refinancing In addition to its planned dividend of £6,000,000 we received another £91,000,000 of cash from the investment. We took £70,000,000 of the refinancing proceeds as capital and the remainder as income.
So since reinvesting 15 months ago, we have already received over 20% of our reinvestment back. Scanlines is an important contributor to our cash operating profit along with our infrastructure business. We generated a small operating cash loss in the first half. This was impacted by the timing of variable pay and we do expect to have generated a profit by the end of the year. We closed the period with net cash of £50,000,000 Reflecting the balance of investments and realizations.
We've talked about being comfortable operating in a corridor of net cash To net debt of £500,000,000 which by the way is gearing of about 5%. With liquidity of just under £1,000,000,000 we remain well funded for new investments. But as Simon said, we remain cautious about the environment. This balance sheet strategy is a critical factor in our dividend policy. In keeping with our policy, We have today confirmed that we will pay a first dividend for FY 2020 of 17.5p That's 50% of last year's total.
So we have had a very busy first half. It has been a good half for both our Private Equity and Infrastructure businesses and we head into the second half with decent momentum, But also with a careful eye on the macro environment. So thank you and we're now happy to take questions.
Any questions?
Thank you. Liz Miliades from Bank of America. If I can ask 2 questions on action. Firstly, I'm a little surprised by the increase of your stake from about 45% to 50%, to be honest. Is that perhaps a reflection of the price that it came in at and therefore you think it's a good deal and therefore why not increase your stake?
Is it perhaps a reflection of the appetite of new investors into the asset? I'd just be interested to get color as to why the increase in the stake. And secondly, is there any announcement perhaps on the on new countries that you're potentially going into next year or the year after? Thank you.
I mean, on the question of increase in the stake, It was always our intention when we set off on this to either go a route, which would involve an entire restructuring of the company, In which case, the refinancing would have been used to replace part of the share capital of the company, which would have had the effect because we weren't selling of enhancing our stake Or if we went this fund route, fund replacement route to use our distribution in the same way. So it hasn't really changed for us. The only Circumstance under which we would not have done this would have been if we'd have had a really punchy price. For us, this price is not punchy. It's we're very comfortable with this price.
We see significant investment return from this level. So we're very happy To continue with the objective of recycling this distribution into the company, and that's really what drove it. And I think the second thing What really dawned on us going through the process is that our control and stewardship of this investment is vital to it. And so we didn't want any compromise to that position, and this reinforces that position. So they're the 2 things that really weighed very heavily on our approach to this transaction.
In terms of Sorry, what was this? The new countries. The new countries. I think they're going to make a presentation in March as usual, and I don't want to steal Sander's thunder, so He will tell you about that, but there are going to be 2 new countries coming in fairly soon. It will be the first time we move into 2 new countries at the same time.
Chris?
Chris Brown from JPMorgan. Are you able to sort of give any hints or clues about the New investors perhaps that came in, and whether they were significant overall or whether it's mainly existing investors rolling over and buying stock off the existing investors?
I mean, there's a good chunk of both. The new ones coming in, I would say, are the classic blue chip secondary type global institutions. They don't want their names publicized, and this is a private fund, but they are Names you would recognize from being very prominent in secondaries activity.
And can you give any Giulio, you mentioned that there was not a material uplift in value. You able to be a bit more specific on that in terms of a pro form a number of what your investment would like to look like? Or is that difficult because of the you don't quite know where your state is going to end up.
Yes. I suppose in headline terms, we had an 8.2 multiple versus our 18 times multiple. You then you start to sort of diverge straight away because we then got a different capital structure Under the transaction, which includes the refinancing. And then there are a number of costs that come through as well because of the various transactions that happened. So I'm not going to give you the absolute number, but you can take it that it wasn't a material difference.
The transaction is a little ahead of our September value, but not so much so that we thought it was worth putting it into the NAV.
I guess a point to add on that is the transaction was hinged off the P9 result. So that was important for the banks on the refinancing. That was important in terms of due diligence to the new parties coming in. So the focus of the transaction was really the P9 number. Any other questions?
So we need to have the microphone so it goes on the webcast.
Say your name, Bruce.
Thanks. It's Bruce Hamilton from Morgan Stanley. Just on the general investment environment, obviously, you've noted caution given the Dry powder, macro conditions and so forth. But can you give a little color on segments or sectors or geographies where you do think there's still value? And where, on the other hand, you'd be particularly careful in terms of any new deployment or where perhaps you're worried about existing investments Above and beyond Germany and autos.
I think where I'll just maybe focus on current I think we're still looking hard in the services area. In that area in a number of companies. So those sorts of things make up our WIP. We're also looking in the healthcare Sector, and we're going a bit deeper into some of those things that we're already doing there. So we would see both of those offering up New investment opportunity as well as bolt on opportunity rolling forward.
Industrials is Quite challenging at the moment, so you have to be very careful in that space, I would suggest. And again, consumer, you have to pick your spot. I've talked about a good spot today, but there's plenty of dodgy spots as well.