Tesco FY profits up 30%...

[Horsey]

Recovery reported to be on-track, dividend resumption expected in financial year 2017/2018

http://investegate.co.uk/tesco-plc--tsc ... 00082573C/

Continue to hold, awaiting the recovery.....

[idpickering]

... first sales growth since 2009/10.

"Tesco reported a 29.9% rise in group full year operating profits to £1.28bn as it delivered its first growth in like-for-like sales since 2010.

The figures exclude an exceptional charge of £235m, including a deferred prosecution agreement between Tesco and the UK Serious Fraud Office overstating profits in 2014 and the subsequent fine from the UK Financial Conduct Authority.

Pre-tax profits, which included exceptionals, fell to £145m from £202m a year ago.

Group sales rose 4.3% to £49.9bn, helped by currency headwinds, while profits at the company's UK arm soared 60% to £803m.

The company said it intended to resume dividend payments in 2017/18."

http://www.digitallook.com/news/news-an ... 19438.html

SP down nearly 5% as I type.

[minerjoe]

Although the share is not "HYP" I think this is a good recovery play for value and some dividends

[idpickering]

And from our previous gaff;

Is Tesco plc heading back to 300p?

"Shares of Tesco (LSE: TSCO) fell by 3.5% to 188p this morning, despite the UK’s largest supermarket reporting its first like-for-like annual sales growth for seven years.

Sales, excluding VAT and fuel, rose 4.3% to £49.9bn, while like-for-like sales were 0.9% higher. Tesco’s adjusted operating profit lifted 24.9% to £1,280m. Operating cash flow from the group’s retail business rose 9.1% to £2,279m, which helped fund a 27% reduction in net debt to £3.7bn.

A notable success was that Tesco’s underlying operating margin rose from 1.8% to 2.3%. This suggests to me that the group’s target of 3.5-4.0% by 2019/20 may be achievable."

http://www.fool.co.uk/investing/2017/04 ... k-to-300p/

[Dod1010]

Group sales rose 4.3% to £49.9bn, helped by currency headwinds, while profits at the company's UK arm soared 60% to £803m.

Helped by currency tailwinds I should think. It is not often that headwinds help progress and here the reference seems to be to Group sales which obviously includes overseas operations.

Dod

[Raptor]

I have information that the uk did far better than was thought likely. Thankfully it means my bonus is double what they announced last year....

Raptor.

[Deev8]

Although the share is not "HYP" ...

Certainly not a current candidate for a HYP, but once upon a time it was - so it may be held in some HYPers portfolios.

Dave

[Arborbridge]

Although the share is not "HYP" ...

Certainly not a current candidate for a HYP, but once upon a time it was - so it may be held in some HYPers portfolios.

Dave

Agreed: "classic" Hypers will still be holding - and I am.


Arb.

[OLTB]

Before I started on the HYP journey I followed TMF's advice on '5 shares you can retire on' and bought into Tesco (not a lot). When the troubles started and the dividend was stopped / share price fell, I sold and bought HSBC instead.

With HSBC I've seen a 50% increase in SP (not that I'm bothered about that of course ) and ongoing dividends.

Now that I follow the HYP journey and plan to be mostly inactive, would I follow the same path? Trouble is that one decision has turned out to be ok but I can't guarantee they will all be like that - and what if Tesco turns out to trounce HSBC over the next few decades?

I far prefer SI as it means I don't have to worry about decisions (or have I just made a decision to stick with SI - what if that turns out to be wrong... )

Cheers, OLTB

[monabri]

The TMF recommended Tesco as one of 5 to retire on in March 2013 (look for 5 shares to retire on / kmi consultants ).

The market cap of Tesco was £27M at the time ( just under £15M today).

(I bought and sold before the compo dates mentioned in Boulversee's posting!) .

I did actually buy a "half share" today to tuck away for a better day..... ...

I hope my HYP club membership is not revoked ..Gulp!

[Arborbridge]

OLTB - you're mentioning just two shares here. Surely, the consideration should be for the whole portfolio,in which case a reasonably diversified HYP would just trundle along, even with a few that go badly off the boil for some years.

At least, that's what I've found over the past seven years of HYPing.

[OLTB]

Absolutely agree Arb - it's a portfolio approach (I'm just learning this!).

It was just an observation on Tesco that I used to hold, that's all and how my approach would be different this time round. My decision last time (just based on Tesco v HSBC) seems to have benefitted me in the short term but I didn't have the scope or variety (or knowledge) of HYP back then. Certainly I wouldn't worry so much now as the rest of my HYP is sufficiently diverse and I have time for the recovery cycle.

Cheers, OLTB.

[Gengulphus]

The market cap of Tesco was £27M at the time ( just under £15M today).
...
I hope my HYP club membership is not revoked ..Gulp!

I'm afraid it has to be... Confusing "M"s and "B"s totally destroys your credibility as an investor of any type, let alone a HYPer! ;-)

Gengulphus

[Dod1010]

The lesson for OLTB is to ignore anything that TMF articles say. Secondly, that he will be better off with HSBC than Tesco at least over the next say five years, I expect. HSBC has said it will maintain its dividend, and will presumably increase it in time, whereas Tesco currently pays no dividend and even when it does resume payments it will take some time to yield anything like HSBC's current yield.

A portfolio approach is fine and is indeed the essence of a HYP but to will fully hang on to the likes of Tesco with better offers around?

Dod

[Arborbridge]

Secondly, that he will be better off with HSBC than Tesco at least over the next say five years, I expect.

I'm not sure that is a lesson learned, Dod, just an opinion about the future

What we cannot know is whether HSBC or Tesco will prove the better investment for here on, and although some of us would be willing to have a guess, that is all it is.

HYP suggests we are better off just choosing and sticking with those choices: that is exceedingly difficult to prove, but I am staying with that idea for now wherever I feel there is a decent case for doing so. I don't believe Tesco has turned into a basket case, so it's staying in my HYP.

Arb.

[OLTB]

The lesson for OLTB is to ignore anything that TMF articles say.

I have learned my lesson

I have come to realise that the way TMF have (and continue to) structure their articles is similar to click-bait. Statements at the beginning of articles such as 'Could this be...' or, 'Is this possibly the best...' etc. are designed to tempt (some) readers in (worked with me a few years ago!) but after following all of the conversations on the Lemonfool HYP board, steer well clear these days.

Yes, I aim to be a non-tinkerer and as I am in the building phase, would aim to re-distribute dividends if companies cut or yield is below levels to qualify them for HYP. I would possibly take different action if I was drawing income and in retirement though - it would depend on my cash reserve. I am aware of the ongoing debate regarding tinkering and may change my view in the future.

Cheers, OLTB.

[Dod1010]

I don't think Tesco is a basket case, at least not any more than the rest of the supermarkets. They may be on their way to an ever brighter future but my point is HSBC has a now yield and apparently it is sustainable; Tesco's yield nil with a promise for the future and no one knows at what sort of level it will start, but I expect it will be well below HSBC's current yield.

Dod

[monabri]

The market cap of Tesco was £27M at the time ( just under £15M today).

Hey, what's a few zeroes here and there? It's all part of the Tesco "accounting scandal". A mere slip of the pen, m'lud!

(Well spotted Gengulphus. )


I do agree with OLTB, the TMF articles do seem to be written with "clickbait" headers. I learned my lesson about the TMF "Stories" (their description of their articles not mine) after Interserve. It was especially galling after several positive "stories" on the company and the subsequent cessation of dividends (about one week after I bought in). What peeved me was the next story rushed out by TMF on the very same morning that Interserve announced the dividend suspension! It would have been more palatable if they simply had said "yeah, we got that one wrong".

[Arborbridge]

Dod,

I agree with your basic point: if buying now, HSBC is clearly the better choice. Further, HSBC has been the better choice for some years, even though Tesco was the bees' knees on here (TMF) at one time not too long ago. I appreciated the way HSBC kept paying dividends through the worst financial crisis in a generation: that must put it in the top drawer.

I guess I was trying to justify why I'm hanging on to Tesco.

[Ivyrobert]

I am also staying with Tesco. It is part of a diversified holding and seems more at threat to Dave's "kitchen sinking" than going bankrupt. To cash in at these levels would require a good few years of 5% divis from using the proceeds. Blue chip is an unreliable description in my experience of the last 5(0!) years.