Tesco PLC (TSCO) - Preliminary Results.

[idpickering]

Strong sales performance across the Group, with Retail LFL8 sales up 6.8%; inflation fell throughout the year, with volume growth in the UK and Republic of Ireland across the second half

- UK & ROI LFL sales up 7.3%, including UK up 7.7%, ROI up 6.8% and Booker up 5.4%

- Central Europe LFL sales up 0.2% in a challenging trading environment, with our investments in value supporting an improving volume trajectory during the second half

· Statutory revenue £68,187m, up 4.4%, includes impact of (17.2)% lower fuel sales, primarily due to reduced retail prices

· Retail adjusted operating profit5 £2,760m, up 10.9% at constant rates, including Save to Invest delivery of c.£640m

- UK & ROI adjusted operating profit £2,670m, up 15.7%, as a strong trading performance and accelerated cost savings offset significant cost headwinds and our investments in value, quality and service

- Central Europe adjusted operating profit £90m, down (50.0)%, primarily driven by cost inflation headwinds and regulatory actions in Hungary

· Statutory operating profit1 £2,821m, up 100.1%, reflects last year's £(982)m non-cash impairment charge compared to a £28m net release this year

· Strong retail free cash flow6 £2,063m, including a positive working capital inflow of £418m

· Net debt6,7 reduced by £729m due to strong cash flow and Bank special dividend of £250m; net debt/EBITDA ratio at 2.2x

· Supporting returns to shareholders through ongoing buyback programme; £750m of shares purchased during 23/24

· Proposed final dividend of 8.25pps, with full year dividend of 12.10pps, up 11.0% year-on-year

And later;

The proposed final dividend was approved by the Board of Directors on 9 April 2024 and is subject to the approval of shareholders at the AGM. The proposed dividend has not been included as a liability as at 24 February 2024. It will be paid on 28 June 2024 to shareholders who are on the Register of members at close of business on 17 May 2024.

A dividend reinvestment plan (DRIP) is available to shareholders who would prefer to invest their dividends in the shares of the Company. For those shareholders electing to receive the DRIP, the last date for receipt of a new election is 7 June 2024.

https://www.investegate.co.uk/announcem ... ts/8129414

Also posted on Company News here; viewtopic.php?p=658751#p658751

I hold these in my HYP, and I know others here do too, so this may be of interest here.

Ian.

[Arborbridge]

One of my Dogs is having a nice day! One of the best increases in dividend among my holdings for the moment, and the price has been trending the right way for a while. It even has a TR in positive territory (measured since 2012) for just about the first time ever.

It's still well in the dog-house, though, compared with other shares in my HYP!

Arb.

[idpickering]

One of my Dogs is having a nice day! One of the best increases in dividend among my holdings for the moment, and the price has been trending the right way for a while. It even has a TR in positive territory (measured since 2012) for just about the first time ever.

It's still well in the dog-house, though, compared with other shares in my HYP!

Arb.

Thanks for your input. I've held TSCO since 2021, with an average buying price of 257.56p ps, and am up 15% as I type. That doesn't matter to much to me in itself, as I bought for the dividend, and diversification they bring to my HYP too.

Ian.

[Arborbridge]

One of my Dogs is having a nice day! One of the best increases in dividend among my holdings for the moment, and the price has been trending the right way for a while. It even has a TR in positive territory (measured since 2012) for just about the first time ever.

It's still well in the dog-house, though, compared with other shares in my HYP!

Arb.

Thanks for your input. I've held TSCO since 2021, with an average buying price of 257.56p ps, and am up 15% as I type. That doesn't matter to much to me in itself, as I bought for the dividend, and diversification they bring to my HYP too.

Ian.

"Time in the market" being more important than "timing the market" is only partially true, in my view. I sometimes wonder if it was coined by someone who had a disastrously timed investment and then decided the only way out was to convert to LTBH!
Both with Tesco and Aviva timing played a big part. You've done much better than I with Tesco due to the accident (or skill) of your timing. I checked just now, to find my first purchase was in Jan 2011 at 436p, so my ten years extra "time in the market" were not very helpful! Indeed, I am still 15% underwater on capital value and only in positive TR due to the dividends paid out.

However, this turn up in the dividend (even with the caveats about the coming "tough times") is welcome and shows that Tesco is a well run outfit which isn't going to disappear anytime soon. I have thought many times about ditching it, of course, but here's a thought: what would I have bought instead? Around the time Tesco shares where plummeting, say 2014-15, what was I buying? One company was Carillion - that would have ended well, NOT.

So, chopping and changing isn't always for the better.

Arb.

[daveh]

Thanks for your input. I've held TSCO since 2021, with an average buying price of 257.56p ps, and am up 15% as I type. That doesn't matter to much to me in itself, as I bought for the dividend, and diversification they bring to my HYP too.

Ian.

"Time in the market" being more important than "timing the market" is only partially true, in my view. I sometimes wonder if it was coined by someone who had a disastrously timed investment and then decided the only way out was to convert to LTBH!
Both with Tesco and Aviva timing played a big part. You've done much better than I with Tesco due to the accident (or skill) of your timing. I checked just now, to find my first purchase was in Jan 2011 at 436p, so my ten years extra "time in the market" were not very helpful! Indeed, I am still 15% underwater on capital value and only in positive TR due to the dividends paid out.

However, this turn up in the dividend (even with the caveats about the coming "tough times") is welcome and shows that Tesco is a well run outfit which isn't going to disappear anytime soon. I have thought many times about ditching it, of course, but here's a thought: what would I have bought instead? Around the time Tesco shares where plummeting, say 2014-15, what was I buying? One company was Carillion - that would have ended well, NOT.

So, chopping and changing isn't always for the better.

Arb.

I bought at a similar time (May 2011-2012) at an average price of 453 after the consolidation in 2021 (with special for sale of the Malaysian business?). This was (AFAIR) when Tesco had a decent but not massive yield, had been increasing its dividend regularly and was touted on the old TMF boards as a good safe buy for a good, but not spectacular dividend that would grow. I reinvested the special back into more TSCO shares which pulls my average price down to 401.

So I'm still sitting on a capital loss, but am showing a small +ve total return due to dividends received.

[idpickering]

"Time in the market" being more important than "timing the market" is only partially true, in my view. I sometimes wonder if it was coined by someone who had a disastrously timed investment and then decided the only way out was to convert to LTBH!
Both with Tesco and Aviva timing played a big part. You've done much better than I with Tesco due to the accident (or skill) of your timing. I checked just now, to find my first purchase was in Jan 2011 at 436p, so my ten years extra "time in the market" were not very helpful! Indeed, I am still 15% underwater on capital value and only in positive TR due to the dividends paid out.

However, this turn up in the dividend (even with the caveats about the coming "tough times") is welcome and shows that Tesco is a well run outfit which isn't going to disappear anytime soon. I have thought many times about ditching it, of course, but here's a thought: what would I have bought instead? Around the time Tesco shares where plummeting, say 2014-15, what was I buying? One company was Carillion - that would have ended well, NOT.

So, chopping and changing isn't always for the better.

Arb.

Wise words indeed Arb, thanks again. For me, with regards to luck vs skill, I'm certainly not an expert, and have howlers like everyone else I guess. For me, I tend to be very draconian, follow my gut feeling, and act accordingly. As far as CLLN. I dumped them before they went under. To do so seemed obvious to me at the time.

Best regards,

Ian.

[Arborbridge]

"Time in the market" being more important than "timing the market" is only partially true, in my view. I sometimes wonder if it was coined by someone who had a disastrously timed investment and then decided the only way out was to convert to LTBH!
Both with Tesco and Aviva timing played a big part. You've done much better than I with Tesco due to the accident (or skill) of your timing. I checked just now, to find my first purchase was in Jan 2011 at 436p, so my ten years extra "time in the market" were not very helpful! Indeed, I am still 15% underwater on capital value and only in positive TR due to the dividends paid out.

However, this turn up in the dividend (even with the caveats about the coming "tough times") is welcome and shows that Tesco is a well run outfit which isn't going to disappear anytime soon. I have thought many times about ditching it, of course, but here's a thought: what would I have bought instead? Around the time Tesco shares where plummeting, say 2014-15, what was I buying? One company was Carillion - that would have ended well, NOT.

So, chopping and changing isn't always for the better.

Arb.

Wise words indeed Arb, thanks again. For me, with regards to luck vs skill, I'm certainly not an expert, and have howlers like everyone else I guess. For me, I tend to be very draconian, follow my gut feeling, and act accordingly. As far as CLLN. I dumped them before they went under. To do so seemed obvious to me at the time.

Best regards,

Ian.

What's not so obvious is why Tesco was such a good buy when you bought it

[Arborbridge]

I bought at a similar time (May 2011-2012) at an average price of 453 after the consolidation in 2021 (with special for sale of the Malaysian business?). This was (AFAIR) when Tesco had a decent but not massive yield, had been increasing its dividend regularly and was touted on the old TMF boards as a good safe buy for a good, but not spectacular dividend that would grow. I reinvested the special back into more TSCO shares which pulls my average price down to 401.

So I'm still sitting on a capital loss, but am showing a small +ve total return due to dividends received.

I remember too, that Tesco was held up on these boards as a desirable share by many. An example of best in class, the biggest company in a steady sector ("people will always need to buy food"), with a yield which was actually quite modest - just about within HYP guidelines. Even WB thought it was a good investment, for goodness sake! So, at the time (2011) it seemed a pretty safe buy as a non-spectacular divi payer. What could possibly go wrong?

I don't feel it was a poor decision to buy except when looking in the rear view mirror. Which is probably what WB thought also.

Arb.