Tesco profit surges 28%, shares rise

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Tesco (LON: TSCO) has reported a 28.7% surge in profits, causing shares to rise 2.92% on Wednesday’s opening.

In the 26 weeks to 29 August, pre-tax profit grew to £551m thanks to a surge in online sales during the pandemic.

Total sales at the UK’s largest supermarket rose 6.6% to £26.7bn, whilst like-for-like sales rose 7.2%.

The beginning of lockdown saw average basket size increase by over 50% due to panic buying and the shift of people working from home.

Over the course of the pandemic, Tesco significantly increased the number of home deliveries to reach vulnerable people in lockdown. The group more than doubled its weekly delivery slots to 1.5 million.

Operating profit, however, fell by 15.6% to £1.037bn. The Tesco Bank made a £155m loss whilst Corona-related costs reached £533m.

This is the first result of the supermarket since the group’s new chief executive, Ken Murphy, started just last week and replaced Dave Lewis.

The group will pay out a dividend of 3.2p per share.

Chief executive Murphy said on the latest results: “The first half of this year has tested our business in ways we had never imagined, and our colleagues have risen brilliantly to every challenge, acting in the best interests of our customers and local communities throughout. I would like to thank all our colleagues for their amazing contribution and I am delighted and proud to be part of such an incredible team.

“Tesco is a great business with many strategic advantages. I’m excited by the range of opportunities we have to use those advantages to create further value for our customers and, in doing so, create value for all of our other stakeholders,” he added.

Tesco also announced a new chief financial officer, Imran Nawaz, who previously worked at Tate & Lyle.

Tesco shares (LON: TSCO) are currently trading +2.48% at 219,30 (0839GMT).

 

 

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Safiya focuses on business and political stories for UK Investor Magazine. Her interests include international development, travel and politics.