Tesco said it would buy back £500m worth of shares and upgraded its full-year profit forecast after a stronger than expected first-half performance.
The UK’s largest food retailer said it now expected full-year adjusted operating profit to be between £2.5bn and £2.6bn, having previously limited itself to predicting a “strong recovery in profitability”, as the costs of coping with the coronavirus pandemic receded.
Analysts have pencilled in annual adjusted operating profit of just below £2.5bn, according to estimates collated by Tesco. The group reported £1.82bn in the year to February this year.
“We’ve had a strong six months; sales and profit have grown ahead of expectations, and we’ve outperformed the market,” said chief executive Ken Murphy. “With various different challenges currently affecting the industry, the resilience of our supply chain and the depth of our supplier partnerships has once again been shown to be a key asset”.
Tesco shares were up by 4.5 per cent in early trading.
Operating profit in the six months to August 28 was £1.3bn, a 29 per cent rise compared to a year earlier when the costs of hiring new staff and putting in place additional cleaning and protective screens in stores weighed heavily on the bottom line.
Group same-store sales, excluding VAT but including fuel, were up 5.9 per cent — a stronger performance than expected.
Sales in the UK, by far Tesco’s biggest market, were 1.2 per cent higher with revenue at wholesale arm Booker — which was hit last year by the closure of pubs and restaurants — rising 11 per cent.
Credit: Source link
