2nd Oct 2019 08:22
(Alliance News) - Tesco PLC on Wednesday said it has delivered its turnaround goals during the first half of its current financial year and said Chief Executive Dave Lewis will step down.
Lewis will leave the company next summer and will be replaced by Ken Murphy, the former commercial chief of retail pharmacy Walgreens Boots Alliance Inc, which owns Boots UK Ltd.
Turning to the grocer's half-year figures, in the six months to August 31, Tesco reported 0.6% year-on-year growth in revenue to GBP31.91 billion from GBP31.73 billion. Pretax profit was up by 6.7% to GBP494 million from GBP463 million.
Group sales, excluding fuel, rose slightly to GBP28.30 billion from GBP28.29 billion.
UK & Ireland sales stayed at GBP22.42 billion, up 0.1% from GBP22.40 billion and in Asia sales grew by 8.1% to GBP2.56 billion from GBP2.37 billion. Central Europe sales, however, lagged by 7.4% to GBP2.76 billion from GBP2.98 billion.
Tesco Bank sales stayed broadly flat at GBP562 million, Tesco added.
On a like-for-like basis, group sales fell 0.4% year-on-year with 0.1% growth in the UK & Ireland being hampered by a 3.1% decline in Central Europe and a 1.3% lag in Asia.
The company announced in May that it would cease new mortgage lending and mulled selling the portfolio. In September, Lloyds Banking Group PLC acquired the grocer's residential mortgage portfolio for GBP3.8 billion.
The grocer hiked its interim dividend by 59% to 2.65 pence per share from 1.67p paid the year before.
With the turnaround plan complete and operating costs reduced, Tesco said it will press on with plans to open 750 express stores in Thailand and 150 in the UK over the next three years. It will also proceed with its plan to open four new "superstores" in the UK & Ireland.
Lewis said: "Despite challenging external conditions we have delivered a very good start to the year. I'm very pleased to say that we have now delivered every element of the turnaround plan and from this position of strength, the transformation of our business continues at pace.
"With the turnaround complete and as we begin to implement the next steps of our sustainable growth strategy, now is the right time to plan a smooth and orderly succession. As such, I will step down as chief executive next summer and pass the baton to Ken Murphy."
Shares in Tesco were trading marginally lower on Wednesday morning in London at 239.40 pence each.
By Eric Cunha; [email protected]
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