Tesco Hikes Full Year Forecasts

Pretax profit jumped to £1.22 billion from £396 million

Alliance News 4 October, 2023 | 10:56AM
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Tesco (TSCO) on Thursday upped its full-year profit outlook, as its interim profit surged.

Tesco said in the 26 weeks to August 26, pretax profit jumped to £1.22 billion from £396 million.

Revenue climbed 5% to £34.15 billion from £32.52 billion a year before.

The grocery chain reported strong sales across the group, with retail like-for-like sales rising 7.8%. Inflation eased over the period, Tesco said, also noting that volume and sales mix trends were ahead of expectations.

On the back of the results, Tesco announced an interim dividend of 3.85 pence, unchanged year-on-year. It said that this is in line with its interim dividend policy at 35% of prior year full year dividend.

Looking ahead, it now expects to deliver between £2.6 billion and £2.7 billion retail adjusted operating profit for the financial year. Previously, Tesco said it has expected it to be "broadly flat level", at about £2.5 billion.

It also expects retail free cash flow for the year to be ahead of its medium-term guidance.

Meanwhile, bank adjusted operating profit is still expected between £130 million and £160 million.

Further, Tesco said that so far it has bought back £503 million worth of shares from its £750 million share buyback programme, which runs until April.

Chief executive Ken Murphy said: "This relentless focus on customers, combined with significant cost reductions from our Save to Invest programme, has driven our strong performance in the first half of the year. Food inflation fell across the half and while external pressures remain, we expect that it will continue to do so in the second half of the year.

"We are in a strong position to keep investing for customers, and will continue to lower prices wherever we can - doing everything in our power to make sure customers can have a fantastic, affordable Christmas by shopping at Tesco."

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Security NamePriceChange (%)Morningstar
Rating
Tesco PLC277.60 GBX-0.43Rating

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