// Tesco half-year profit increases 28.7% to £551m, on back of 0.7% increase in revenue of £28.7bn
// Shareholders will receive a 3.2p dividend, a 21% increase, plus a one-off 51p dividend once Tesco’s sale of Asian arm finalised
// Tesco also announced the appointment of Imran Nawaz as its new CFO
Tesco investors are in line for a big payout after the grocery giant said it would increase the dividend and make a one-off payment after interim profits soared by more than a quarter.
The Big 4 retailer said it made a pre-tax profit of £551 million in the first half of the year, a 28.7 per cent year-on-year increase, on the back of statutory revenue of £28.7 billion, up 0.7 per cent.
Shareholders will be paid a 3.2p interim dividend, up 21 per cent compared with last year, but can also expect to a share of a £5 billion payout after the sale of Tesco’s Asian arm completes at the end of the year.
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In March, the global chain sold off its Thai and Malaysian arm, consisting of about 2000 shops, for £8 billion.
Following the sale, bosses promised to return £5 billion from the sale to shareholders – around 51p per share.
Meanwhile, Tesco’s headline group sales were up by more than six per cent at £26.7 billion, with sales in its core UK and Ireland market rising 8.6 per cent to £24.3 billion.
Meanwhile, group operating profit before exceptional items and amortisation of acquired intangibles decreased 15.8 per cent year-on-year to £1.03 billion.
Tesco’s interim period covers the height of the Covid-19 lockdown when most shops were forced to close for about three months, except for “essential” retailers such as grocers.
Tesco revealed a £533 million hit from coronavirus crisis costs but said this was offset by the business rates holiday during the first half of the year.
It marks the first trading update as chief executive for Ken Murphy, who took over the reins at the UK’s biggest supermarket last week.
The former Walgreens Boots Alliance executive said Tesco would continue to invest in providing value for its customers through uncertain times.
“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,” he said.
“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.”
Tesco also announced the appointment of Imran Nawaz as its new chief financial officer to replace Alan Stewart, who announced his resignation in June.
Nawaz is currently a chief financial officer and executive director of Tate & Lyle and senior vice president of finance for Mondelēz Europe.
He started his career with Deloitte and then with Philip Morris in corporate audit.
He spent 16 years working at Mondelēz and Kraft Foods in a variety of roles gaining broad financial, business and international experience.
“After an extensive search and selection process, I am delighted to welcome Imran to our board as CFO,” Tesco chairman John Allan said.
“He brings a wealth of skills, experience and knowledge in the food sector and will be an incredibly valuable asset to Tesco.”
with PA Wires