Tesco Resumes Dividend Payments; 1st Half Pretax Profit Rises Eight-Fold

By Dimitrios KontosFeaturesDow Jones Newswires

Tesco PLC (TSCO.LN) reported Wednesday an eight-fold rise in first-half pretax profit and returned to the dividend list after a three-year hiatus.

The U.K.'s biggest grocer by market share made a pretax profit of 562 million pounds ($744.5 million) for the 26 weeks ended Aug. 26, compared with a pretax profit of GBP71 million a year earlier.

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Pretax profit stripping out exceptional items was GBP575 million, compared with GBP353 million for the same period in fiscal 2017, beating analysts' consensus forecasts of GBP496.3 million.

Group revenue rose to GBP28.3 billion, compared with GBP27.34 billion a year earlier, with comparable sales in the U.K. and Ireland growing 2.1%. Goldman Sachs had forecast revenue of GBP27.8 billion for the period.

The supermarket chain declared an interim dividend of 1.0 pence per share, its first payout since December 2014, as the board had sought to reduce costs.

The company said its pension deficit fell to GBP2.4 billion. The deficit had risen to GBP5.5 billion at February 2017 due to the reduction in bond yields following the U.K.'s vote to leave the European Union.

Tesco added that it has reduced its capital expenditure due to improved efficiency and it now expects it to remain within a range of GBP1.1 billion to GBP1.4 billion annually.

Write to Dimitrios Kontos at dimitrios.kontos@dowjones.com

(END) Dow Jones Newswires

October 04, 2017 02:58 ET (06:58 GMT)