Tesco's turnaround continues as half-year profits surge despite inflation

Marco Green
October 4, 2017

Tesco also delivered 2.2pc like-for-like growth as Mr Lewis hailed "strong progress" at the retailer.

United Kingdom like-for-like sales in the second quarter lifted 2.1%, although this was down slightly on the 2.3% recorded in the previous three months.

Like-for-like sales, which strip out new store openings, rose 2.1% in the second quarter.

The performance was enough for Tesco to announce that it would resume dividend payments to shareholders for the first time since the 2014/15 financial year.

Statutory revenue was up 3.7 per cent to £28.3bn while profit before tax rose from £491m to £562m.

"If you look at independent brand measures we've seen a strong improvement since that low point, there's always more we can do, but for us it's about the integrity with which we talk and interact with our customers". Sales are up, profits are up, cash generation continues to...

Tesco said: "Market conditions have been challenging with inflationary pressure being felt throughout the half but we have worked hard with our supplier partners to minimise price increases for customers".

Group sales were up 3.3 per cent to £25.2bn, while United Kingdom like-for-likes were in line with expectations, rising 2.2 per cent over the first half.

Tesco said sales growth in United Kingdom was driven by strong demand for its fresh food brands, which featured in over 70% of customer baskets.

The results come as Tesco awaits the findings of an in-depth competition probe into its planned £3.7 billion takeover of wholesale giant Booker, with provisional results due from the Competition and Markets Authority later this month and a final decision in December.

Interim results for the six months to 26 August also however showed United Kingdom sales growth stuttering, as it slipped back to 2.1% in the second quarter compared to 2.3% in the previous three months.

The group's pension deficit stood at £3 billion at the end of March, up around £250 million since the last review three years ago.

Other reports by Click Lancashire

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