Tesco resumes dividend payments as sales and net profit up

Tesco has said its turnaround is "firmly on track" after posting a surge in profits in its interim results and resuming dividend payments.

"We are continuing to make strong progress", Tesco chief executive Dave Lewis said.

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

A restored interim dividend has been set at 1.0 pence per ordinary share.

Supermarket group Tesco, Britain's biggest retailer, said Wednesday it returned to profit in the first half as its campaign to attract customers with low food prices paid off.


Revenue increased 3.7 percent to 28.3 billion pounds from 27.3 billion pounds a year ago.

Tesco, which has been battling to recover from a 2014 downturn when it lost the edge to rivals and uncovered an accounting scandal, reported a seventh straight quarter of underlying sales growth in its home market, having successfully navigated inflationary pressures.

He said: "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".

Tesco, Britain's largest grocer by market share, on October 4 said that it will pay an interim dividend of 1 pence per share, its first dividend payment in three years.

The company's increased optimism comes as it inches closer to clinching its deal with wholesaler Booker, in a £3.7bn acquisition first unveiled in January this year.


The results come as Tesco is awaiting the results of an in-depth competition probe into its proposed £3.7bn takeover of wholesale giant Booker.

Despite facing stiff competition from discount rivals like Lidl and Aldi, Tesco's fresh food performed well in the United Kingdom with sales up by 1.5 per cent.

Tesco agreed to pay a fine of £129m to the Serious Fraud Office earlier this year to avoid prosecution for its 2014 accounting irregularities scandal.

Danielle Pinnington, managing director at independent shopper research agency Shoppercentric, said: "Things are certainly looking up for Tesco, and the hard work over the last couple of years is paying off".

Tesco says it is well on its way to reaching its 2020 forecast, which includes 1.5 billion pounds (1.7 billion euro) in cost-saving measures. 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.



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