4th Oct 2023 08:27
(Alliance News) - Tesco PLC 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 GBP1.22 billion from GBP396 million.
Revenue climbed 5.0% to GBP34.15 billion from GBP32.52 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 GBP2.6 billion and GBP2.7 billion retail adjusted operating profit for the financial year. Previously, Tesco said it has expected it to be "broadly flat level", at about GBP2.5 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 GBP130 million and GBP160 million.
Further, Tesco said that so far it has bought back GBP503 million worth of shares from its GBP750 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."
Shares in Tesco rose 2.1% to 265.00p each in London on Wednesday morning.
By Sophie Rose, Alliance News reporter
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