Economy

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

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

The half-year profit figure for Britain's biggest supermarket was almost eight times the £71m reported in the same period previous year when the company was hit by a series of one-off costs.

Tesco has been back in the news for the wrong reasons in recent weeks as the trial of three former directors began in London on Friday on charges that the supermarket giant's "generals" had pressured staff members into massaging profits, leading to 2014's accounting scandal and then in 2015 one of the largest losses in United Kingdom corporate history.

Tesco, which in January agreed to buy wholesaler Booker for 3.7 billion pounds, said United Kingdom like-for-like sales rose 2.1 percent in the second quarter.

The results come as Tesco awaits the findings of an investigation from the Competition Markets Authority into its proposed £3.7 billion takeover of wholesaler and convenience retailer Booker, with provisional results due later this month and a final decision in December.

Tesco shares rose 2% at the open in London on the back of the numbers.

The grocery giant said operating profit before exceptional items soared 27.3 per cent year-on-year from £596 million to £759 million at actual exchange rates, while sales rose 3.3 per cent to £25.2 billion - making it its seventh consecutive quarter of rising sales.

"All of this is possible because of the focus we have placed on serving shoppers a little better every day".

"Today's announcement that we are resuming our dividend reflects our confidence that we can build on our strong performance to date".

Tesco boasted that despite "challenging" market conditions, it had "worked hard to minimise price increases". "Our overall sales inflation in the half was around 1% less than that of the rest of the market, helping us become even more competitive".

It also coincides with the trial of three former Tesco execs who have been charged with fraud and false accounting.

Tesco reinstated its dividend on Wednesday as half-year results showed the second phase of CEO Dave Lewis' turnaround plan is paying off.



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