Profits at Tesco UK and Ireland jump by over 20pc
Grocery giant Tesco saw its operating profit in the UK and Ireland jump 21.1pc to £471m (€530m) in the first six months to August 26, according to the group's half-year report.
Overall the company recorded an operating profit of £759m in the six-month period, an increase of 27.3pc on the same period in 2016.
The performance was driven by an increase in group sales which rose to £25.2bn, a 3.3pc increase on the same period last year.
This is the seventh quarter of sales growth for the company.
In Ireland like-for-like sales grew by 1.1pc, as customers responded well to the grocery store’s price investment.
Volumes of fresh food sold in Ireland were up 5pc.
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Overall like-for-like sales in Ireland and the UK increased 2.1pc to £19bn, as the company’s brand health continued to strengthen.
The group’s margin also improved during the period, rising to 2.7pc from 2.2pc last year.
Retail operating cash flow at the group, which employs over 13,000 across Ireland, was £1.1bn, a 19.3pc increase year-on-year.
Tesco said that it would pay an interim dividend of 1.0p per share reflecting its improved performance and board confidence. This is the first dividend it has paid since 2014-15.
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Profit before tax at the grocery chain increased massively in the six months to £562m from £71m in the same period last year.
The company, which also has operations in Central Europe and Asia, generated further cost savings of £259m in the six month period. Tesco has a medium-term target of £1.5bn in cost savings.
Innovations introduced by the grocery chain during the six month period included the introduction of the contactless Clubcard, the nationwide roll-out of same-day delivery service and the introduction of a further 807 new products on its shelves.
"Sales are up, profits are up, cash generation continues to strengthen and net debt levels are less than half what they were when we started our turnaround three years ago.
All of this is possible because of the focus we have placed on serving shoppers a little better every day. Our offer is more competitive and more customers are shopping at Tesco," Dave Lewis, Tesco CEO, said.