Tesco has released its results for H1 (in the 6 months to August), showing group sales (exc fuel) rose by 3% to £27.3bn. Adjusted retail profit rose 16.6% to £1.39bn, with group profit up 41% to £1.46bn.
Full-year profit for the group is now expected to come in higher than predicted at between £2.5bn and £2.6bn.
UK like-for-like revenue increased by 1.2%, with sales at wholesale division, Booker - despite having been hit by the closure of restaurants and pubs - reporting an 11% uplift.
Tesco stated that events, like the delayed Euro 2020 and staycations, also contributed to push sales higher, while Covid-related costs receded.
Ken Murphy, Chief Executive, said, “We’ve had a strong six months; sales and profit have grown ahead of expectations, and we’ve outperformed the market. This was a strong team effort and I would particularly like to recognise and thank our colleagues who continue to do an incredible job in difficult times.
'I’m really pleased with our progress as we increased customer satisfaction and grew market share leading to a strong financial performance. With various different challenges currently affecting the industry, the resilience of our supply chain and the depth of our supplier partnerships has once again been shown to be a key asset.
“Against a backdrop of profound change, Tesco has many unique advantages. The scale and reach of our store estate and online operations are unmatched in the UK. Our ability to reward loyalty through Clubcard enhances our relationship with customers.
'Our world-class food retail expertise combined with our strong supplier partnerships ensures we can offer our customers great value and quality, removing reasons to shop elsewhere. Together, these strengths mean that Tesco can anticipate and respond to changes in the market, meeting customers’ needs better than anyone.'
Murphy continued, “Today, we are sharing the strategic priorities that will enable us to build on these advantages to stay competitive, accelerate growth and generate between £1.4bn and £1.8bn retail free cash flow per year. These priorities will ensure we do the basics brilliantly, operate as efficiently as possible and grow our business by building unbeatable digital, convenience and loyalty platforms.
'We are committed to creating value for all stakeholders in our business. Our commitments to the communities we serve and society more broadly are reflected in our new purpose: serving customers, communities and the planet a little better every day.”
As a result of the strong first half performance, Tesco has increased its adjusted retail operating profit expectations for this financial year to between £2.5bn and £2.6bn.The compansy stated, ' 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.'
We now expect Tesco Bank to deliver adjusted operating profit of at least £120m for this financial year. This expectation remains highly dependent on the economic outlook.