Tesco Plc (LON:TSCO) have seen a hike in pre-tax profits, despite restructuring costs and fines.
The firm’s pre-tax profits rose 2.2% for the half through August, peaking at £564 million. At the same time, revenue jumped sharply by 11.8% to £31.7 billion. This news came as the company’s sales for the second half to-date have grown 2.7% on-year, sales for the year as a whole of course being supplemented by the acquisition of wholesalers Booker Group Plc (LON:BOK).
“We have made a good start to the year,” chief executive Dave Lewis said.
“The step up in the second quarter is driven mainly by the UK and Ireland and delivers our eleventh consecutive quarter of growth.”
Lewis said he was “delighted” with the performance of Booker since it was acquired in March.
“And we are now more than half-way through the biggest own brand re-launch in our nearly 100-year history, including a significant investment in over 300 new ‘Exclusively at Tesco’ products at market-leading prices,” he said.
However, what has thus far prevented 2018 from being an astronomical success for the supermarket giant have been a series of one-off expenses. In addition to its £3.7 billion takeover of Bookers, Tesco has had to bare the brunt of £57 million to close Tesco Direct, £22 million for restructuring and redundancy, a £16 million in fines for a cyber attack, and then undisclosed costs from their new merger deal with French giant Carrefour (EPA:CA) and the launch of it’s discount chain – Jack’s.
Despite the costs, the company’s chief executive remains understandably optimistic.
“We are firmly on track to deliver our medium-term ambitions and are continuing to improve the quality and value of our offer for customers in all of our markets.”
“In doing so, we are well-positioned to deliver strong, sustainable returns for shareholders.”
The firm have however suffered a dive of 9.69% in their share price, with shares currently trading down 22.8p at 212.4p. Analysts from Shore Capital have reiterated their ‘Buy’ stance on Tesco stock.