Tesco’s first-half sales grew 4.0% to £31.5bn, ignoring fuel sales and exchange rates. Growth has been led by increased volumes as Tesco continued to invest in keeping prices low and goods inflation eased. Volumes in its Finest range were up 14.9%.
Retail underlying operating profit rose 10.0% to £1.6bn. Cost cuts and productivity improvements more than offset increases in staff pay and efforts to keep prices down.
Free cash flow fell from £1.4bn to £1.3bn. Net debt of £9.7bn was 2.1% lower at the half-year mark.
Full-year guidance has been upgraded as a result of better-than-expected volume growth. Underlying Retail operating profit is now expected to be around £2.9bn, up from “at least £2.8bn”.
An interim dividend of 4.25p per share has been announced, up 10.4%. Tesco’s “on track” to complete its £1.0bn share buyback programme by April 2025, with £575mn completed in the first half.
The shares rose 1.7% following the announcement.
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Tesco key facts
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