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Tesco PLC
STRONG H1 OUTPERFORMANCE LEADING TO INCREASED FY PROFIT OUTLOOK.
STRATEGIC PRIORITIES SET OUT; SHARE BUYBACK PROGRAMME ANNOUNCED.
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Headline measures 1,2 : |
H1 21/22 |
H1 20/21 |
Change at actual rate |
Change at constant rate |
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Group sales (exc. VAT, exc. fuel)3 |
£27,331m |
£26,652m |
2.6% |
3.0% |
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Adjusted operating profit4 |
£1,458m |
£1,037m |
40.6% |
41.0% |
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– Retail |
£1,386m |
£1,192m |
16.3% |
16.6% |
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– Tesco Bank |
£72m |
£(155)m |
146.5% |
146.5% |
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Retail free cash flow5 |
£1,543m |
£797m |
93.6% |
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Net debt2,5 |
£(10.2)bn |
£(12.5)bn |
down 18.5% |
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Adjusted diluted EPS6 |
11.22p |
7.29p |
54.0% |
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Interim dividend per share |
3.20p |
3.20p |
–
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Statutory measures: |
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Revenue (exc. VAT, inc. fuel) |
£30.4bn |
£28.7bn |
5.9% |
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Operating profit |
£1,304m |
£1,007m |
29.5% |
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Profit before tax |
£1,143m |
£551m |
107.4% |
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Diluted EPS |
10.70p |
4.06p |
163.5% |
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A strong first half leading to an upgrade in full year profit expectations:
· Elevated sales continued into first half; Group Retail 1-yr LFL7 sales growth includes UK market outperformance and sharp recovery of Booker catering; 2-yr LFL reflects strong performance throughout pandemic across all businesses:
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· Total adjusted retail operating profit4 £1,386m, +16.6% at constant rates
· UK & ROI adjusted operating profit £1,318m, +16.5% due to higher sales and lower COVID-19 costs, part offset by YoY effect of last year's £249m business rates relief (repaid in H2 last year)
· Central Europe adjusted operating profit £68m, +18.6% due to lower COVID-19 costs & higher YoY mall income
· Bank adjusted operating profit £72m, returning to profit following last year's increase in potential bad debt provision
· Retail free cash flow5 £1,543m, +93.6% inc. higher profit, lower pension contribution & c.£400m working capital phasing
· Net debt2,5 reduced by +£1.7bn since February reflecting strong cash flow
· Adjusted diluted EPS6 11.22p, +54.0% reflecting higher retail profits and return to profitability for Tesco Bank
· Interim dividend of 3.20p, in line with prior year; aligned to policy at 35% of last year's full year dividend
· Strong first half performance leading to increased full year profit expectations: adjusted retail operating profit now expected to be between £2.5bn and £2.6bn