Tesco has revealed another stunning set of results, with its six-month performance to August 14 netting the group pre-tax profits of £822 million, a 24.4 per cent rise.
Like-for-like UK sales - which eliminate the effect of new openings on the figures - were up 8.6 per cent in the period.
Terry Leahy, chief executive, said: “These results demonstrate the growing success of the four-part strategy we began seven years ago. I am particularly pleased about the way we’ve done it - this year, we have cut our prices by £5m a week, we are creating 20,000 jobs, our efficiency savings will hit £270m and we are improving returns for shareholders. We are well-placed to meet the challenges of tougher comparisons during the second half.’
Group highlights
• Sales up 12.2 per cent to £16.5 billion, up 13.7 per cent at constant exchange rates
• Underlying pre-tax profit up 24.4 per cent to £822 million
• Pre-tax profit up 28 per cent to £804m
• On track to exceed 11 per cent post-tax return on capital employed by the year-end
• Underlying diluted earnings per share up 16.6 per cent to 7.45p
• Diluted earnings per share up 21.5 per cent to 7.22p
• Interim dividend per share up 10.6 per cent to 2.29p
• Net debt reduced to £3.5bn (£4.1bn at year-end and £5bn last year)
• On track to create 20,000 new jobs worldwide this year
UK
• Sales up 11.5 per cent to £13.1bn
• Underlying operating profit up 13.3 per cent to £707m
• Like-for-like sales up 8.3 per cent, including very strong volume of 8 per cent
• Non-food sales up 17 per cent,
Tesco recently agreed to purchase 10 Safeway stores with 250,000 square feet selling area (subject to regulatory approval) from Wm Morrison. A total of 409,000 square feet of new sales area was opened during the first half in all Tesco formats. Of this, 56,000 square feet was in extensions to existing stores. Overall, including the 10 former Safeway stores (more than 1.5m square feet of new selling space will be available to Tesco this year, including 373,000 square feet of extensions. “Looking forward, we are aiming with our programme of space development to maintain our growth in selling area, from a combination of extensions and new stores,” said a statement.
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