Tesco resumes dividend payments as sales and net profit up

Oct 05, 2017, 00:22
Tesco resumes dividend payments as sales and net profit up

'Today's announcement that we are resuming our dividend reflects our confidence that we can build on our strong performance to date and in doing so, create long-term sustainable value for all our stakeholders, ' said chief executive Dave Lewis.

Tesco has reported a surge in its half-year profits as it continues to see rising sales, and will resume dividend payments to investors.

Group sales were up 3.3% to £25.2bn for the 26 weeks ending August 26 2017, while United Kingdom like-for-like sales - excluding sales from stores opened in the past year - grew by 2.2%.

Meier, who runs the £167.83m Old Mutual UK Equity Income Fund, said: "We have, for a long time, liked the prospects of Tesco's new strategy under CEO Dave Lewis which he says this morning is "firmly on track" to deliver".

Tesco (TSCO) has announced its first dividend since it was plunged into crisis by the revelation of a £263 million black hole in its accounts, after a 27% jump in first-half profits.

In its United Kingdom and Ireland markets, operating profit before exceptional items jumped 21.1 per cent year-on-year to £471 million compared to the same first-half period last year.

Pre-tax profit was also up, rising to £562m for the first half compared with £71m for the same period a year ago.

Mould added that Tesco's still waiting for the latest phase of the Competition and Markets Authority review of its planned £3.7bn merger with wholesaler Booker.

According to analysts, Tesco [IRDX RTSC] is ahead of the game in the United Kingdom with apps and the work it has done on mobile is likely to see it continue to perform well and bring the fight to other grocery retailers.

In Tesco's prime market, the United Kingdom, like-for-like turnover grew 2.2 % and there was a 1.1 % increase in Ireland.

He said the secret of Lewis's success has been to work with fewer suppliers and then use the formidable buying power of the country's largest grocer to drive down prices.

The figures also point to Tesco's success in navigating the current inflationary trading environment as well as fragile consumer confidence in the aftermath of last year's Brexit vote.

The last time Tesco paid dividend was back in the 2014-15, just before three of its former executives were accused of overstating the profits by about £250m.