Tesco has posted a 0.7% increase in group sales (at constant rates) in the first half of its financial year, posting sales of £25.2 billion for the period. At actual rates, sales were up 3.3%.
The retailer said that group operating profit was up 23.7% for the period to £759 million, which chief executive Dave Lewis described as “strong progress. Sales are up, profits are up, cash generation continues to strengthen and net debt levels are less than half what they were when we started our turnaround three years ago.
“All of this is possible because of the focus we have placed on serving shoppers a little better every day. Our offer is more competitive and more customers are shopping at Tesco.”
If H1 is taken as two separate quarters, Tesco has now posted its seventh consecutive quarter of growth.
UK Performance
In its core UK market, like-for-like sales were up 2.2% for the period, with the UK and ROI businesses combined posting a 2.1% increase. Its Irish operation saw a 1.1% increase in like-for-like sales in the half.
In Central Europe, despite a 0.4% decrease in like-for-likes in the first quarter, the group still posted a marginal increase (+0.1%) in the first half. In Asia, like-for-like sales in the period were down 8.3%, as a result of the closure of businesses in the region.
Overall group like-for-like sales were up 0.8%, incorporating a 1.0% increase in the first quarter, and a 0.6% increase in Q2.
Confidence
“Today’s announcement that we are resuming our dividend reflects our confidence that we can build on our strong performance to date and in doing so, create long-term, sustainable value for all of our stakeholders,” said Lewis.
The group said that it is ‘making good progress’ towards realising the medium-term ambitions it shared in October 2016.
It remains ‘firmly on track to reduce our costs by £1.5 billion, generate £9 billion of retail cash from operations and improve operating margins to between 3.5% and 4.0% by 2019/20.’
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
