Tesco reinstates dividend as half-year profits swell to £562m


In the first six months of the fiscal year, Tesco's turnover reached 25.2 billion pounds (28 billion euro), up 3.3 % compared to the year before.

Mr Lewis said the group was as "shocked as anybody" by the undercover media investigation, but it would keep the brand, which he insisted had a quality specification unique to Tesco.

"Today's announcement that we are resuming our dividend reflects our confidence that we can build on our strong performance to date".

Tesco's reinstated shareholder dividend payments as its group sales rise 3.3% and operating profits by 27% to £759m, its first half results reveal.

In its United Kingdom and Ireland markets, operating profit before exceptional items jumped 21.1 per cent year-on-year to £471 million compared to the same first-half period last year.

"It's a significant milestone in the recovery of the business and one which demonstrates the confidence we and the board have in our plans", he told reporters.

Tesco has also reduced its net debt from £4.4bn previous year to £3.3bn in H1 2017/18. Further, Tesco resumed its dividend, for the first time since 2014/15 accounting scandal.

Tesco is still awaiting the go-ahead for its merger with wholesale retailer Booker Group (LON:BOK), which is now under investigation by the UK Competition and Markets Authority (CMA).

'Management's long-term ambition to offer a dividend that is covered two times by earnings per share looks perfectly sensible, even if the prospective 1.7% yield on offer for this year may not be enough to excite income seekers just yet'.

The supermarket chain struck a £3.7bn deal to buy food wholesaler Booker in January, which is now being probed by the Competition and Markets Authority. "While Sainsbury's tests a checkout-free payment app and Costcutter trials fingerprint payment, Tesco's new Tesco Pay+ is a much simpler yet effective move", he said.

"Tesco has been under pressure for more transparency in recent weeks so the retailer will do everything it takes to ensure shopper satisfaction".

Tesco said that despite "challenging" market conditions, it had "worked hard to minimise price increases". Provisional findings are expected to be made public by the CMA by the end of this month, ahead of a final report by the end of this year.