LONDON – British supermarket giant Tesco today posted a near 70% surge in first-half net profit on the back of higher pandemic sales and its “resilient” supply chain.
Profit after tax jumped to £781 million (RM4.4 billion) in the six months to the end of August, the nation’s biggest retailer said in a statement.
That compared with £465 million a year earlier, when the group was also buoyed by the Covid pandemic.
Tesco experienced “sustained strong UK sales, a reduction in Covid-19 related costs in our retail businesses and a return to profitability in Tesco Bank”, it said.
Revenue rose 6% to £30.4 billion as it “continued to benefit from elevated sales as a result of the Covid-19 pandemic”.
Tesco also ramped up its annual profit forecast and unveiled a £500 million share buyback.
“We’ve had a strong six months; sales and profit have grown ahead of expectations and we’ve outperformed the market,” said chief executive Ken Murphy.
He pointed to “the resilience of our supply chain and the depth of our supplier partnerships” as a key factor.
The group however took a £193 million hit from settling claims relating to its misstatement of profits in 2014.
Operating profit leapt 28% to £1.3 billion in the reporting period.
And, Tesco lifted its annual operating profit target to between £2.5 billion and £2.6 billion.
“Although we do not yet know how the external environment and consumer behaviour will evolve in the second half, we have assumed that some of the elevated sales fall away and that we will continue to invest in our customer offer,” it noted. – AFP, October 6, 2021
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