Headlines
· Group sales3 of £28.3bn, up 12.8%
- UK & ROI LFL sales8 up 3.8%, strengthening from 3.5% in 1Q to 4.2% in 2Q
o incl. Tesco UK LFL sales up 2.3% (1Q: 2.1%; 2Q: 2.5%) and Booker LFL sales up 14.7% (1Q: 14.3%; 2Q: 15.1%)
o significant investment in 'Exclusively at Tesco' brands; roll-out 81% complete
- Central Europe LFL sales declined by (1.5)% due to impact of Sunday trading regulations
- Asia LFL sales decline reduced from (9.0)% in 1Q to (4.8)% in 2Q following annualisation of bulk-selling impact; Government-issued welfare cards continue to impact sales in Thailand by c.(2)%
· Group operating profit before exceptional items and amortisation of acquired intangibles4 up 24.4% to £933m
- UK & ROI profit of £685m, up 47.6%; incl. first-time consolidation of £97m Booker profit and £16m synergies
- Central Europe profit of £59m, down (3.3)% reflecting £9m profit on property-related items in prior year
- Asia profit of £100m, down (29.1)% due to combined impact of sales deleverage, price investment and renegotiation of promotional investment
- Bank profit of £89m, up 6.0% mainly due to increased income and ongoing cost reductions
· Group operating margin4 of 2.94% (+29bps); margin of 3.02% excl. Tesco Direct
· Retail operating cash flow6 of £1.1bn, down (1.4)% (up 10.8% before £(139)m timing impact of P&H failure last year)
· £404m retail free cash flow (after net outflow of £(139)m relating to market purchase of shares)
· Interim dividend of 1.67p, up 67% year-on-year; on track to deliver c.2.0x EPS cover in the medium-term
· Statutory revenue up 12.0% to £31.7bn; operating profit down (6.5)% to £819m; profit before tax up 2.0% to £564m
And later;
Dividend:
Reflecting the continued improvement in the business, the interim dividend has been set at 1.67 pence per ordinary share, an increase of 67% year-on-year. The interim dividend was approved by the Board of Directors on 2 October 2018. We anticipate a split of broadly one-third to two-thirds between the interim and final dividend and intend to reach our targeted cover of around two times earnings in the medium term.
The interim dividend will be paid on 23 November 2018 to shareholders who are on the register of members at close of business on 12 October 2018 (the Record Date). Shareholders may elect to reinvest their dividend in the Dividend Reinvestment Plan (DRIP). The last date for receipt of DRIP elections and revocations will be 2 November 2018.
https://www.investegate.co.uk/tesco-plc ... 00057675C/