2nd Oct 2013 06:36
CHESHUNT (Alliance News) - Supermarket chain Tesco Plc. (TSCDY.PK, TSCO.L) reported that profit before tax for 26 weeks ended 24 August 2013 declined 23.5% to 1.387 billion pounds from last year's 1.814 billion pounds, due to the impact of significantly reduced profits from property-related items.
Profit for the period slipped 33.6% to 820 million pounds from the previous year's 1.235 billion pounds, with earnings per share declining to 10.15 pence from 15.38 pence last year.
Profits on property-related items for the first half fell significantly to 45 million pounds from last year's 342 million pounds last year.
Underlying profit before tax from continuing operations was 1.466 billion pounds, down 7.4% from 1.583 billion pounds in the prior year period.
Underlying earnings per share decreased to 14.88 pence from 15.99 pence last year.
Group sales, including VAT, increased by 2.0% to 35.6 billion pounds. At constant exchange rates, sales increased by 0.5% (including petrol) and 0.9% (excluding petrol).
Revenue grew 1.9% 31.914 billion pounds from 31.306 billion pounds in the previous year.
The company stated that its board has approved a maintained interim dividend of 4.63 pence per share. The interim dividend will be paid on 20 December 2013 to shareholders on the Register of Members at the close of business on 11 October 2013.
The company said it remains committed to achieving its guidance of mid-single digit trading profit growth in the medium-term and retain its absolute focus on driving improving returns, generating positive free cash flow and ensuring a disciplined allocation of capital.
Separately, Tesco PLC and China Resources Enterprise Limited announced that they have entered into definitive agreements to combine their Chinese retail operations to form the leading multi-format retailer in China.
Tesco said it will receive an initial shareholding of 20% of the enlarged issued share capital of the JV entity, with a right to acquire a further 5% at fair market value after five years following completion of the transaction. The board of directors of the JV will consist of a maximum of 10 directors. Tesco will be entitled to appoint two directors to the JV Board and will have a range of shareholder and governance rights consistent with its 20% shareholding.
Tesco noted that it will also make a payment of HK$1.000 billion to China Resources Enterprise at completion and a further HK$1.000 billion on the first anniversary of completion.
It is expected that the transaction will complete during the first half of 2014.
Copyright RTT News/dpa-AFX
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