First-half retail sales rose 1.6% to £33.8bn, ignoring exchange rates. This reflected growth across the UK & Ireland, which more than offset a small decline at Booker.
Adjusted operating profit rose 6.3% to £1.8bn, with margins expanding thanks to an improved sales mix and a tight grip on costs.
Free cash flow rose by 21% to £1.6bn, reflecting higher profits and favourable timing of payments and receipts. Net debt fell by £0.5bn to £10.0bn over the first half.
Management raised the bottom end of its full-year adjusted operating profit guidance, now expecting between £3.15-3.30bn (previously: £3.00-3.30bn). Free cash flow guidance of £1.5-2.0bn was reiterated.
An interim dividend of 5.05p per share was announced, up 5.2%. This year’s share buyback programme has been raised by £0.2bn to just under £1.0bn.
The shares rose 2.2% in early trading.
Our view
HL view to follow.
Tesco key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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