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Tesco Half Yearly

Practical discussions about equity High-Yield Portfolios (HYP) for income
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idpickering
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Tesco Half Yearly

#85579

Postby idpickering » October 4th, 2017, 7:04 am

Positive sales2 and profit3 growth, strong cash5 generation

· Group sales2 up 3.3% to £25.2bn - seventh consecutive quarter of growth

· UK like-for-like sales7 up 2.2%; transactions up 0.4%; volumes8 up 0.3%

· Strong fresh food volume growth in the UK of 1.5% driven by ongoing improvements in our offer

· Group operating profit before exceptional items3 up 27.3% to £759m; UK & ROI up 21.1% to £471m

· Group operating margin3 up to 2.7% from 2.2% last year; on track for 3.5-4.0% ambition by 2019/20

· Improved profit margin in Central Europe (up 132 basis points) and in Asia (up 146 basis points)

· Retail operating cash flow5 up 19.3% to £1.1bn; Retail free cash flow5 of £586m

· Triennial pension review concluded; annual contributions to increase by £15m to £285m from April 2018

· Interim dividend of 1.0p per share reflects improved performance and Board confidence

· Statutory revenue up 3.7% to £28.3bn; Profit before tax up £491m to £562m


https://www.investegate.co.uk/tesco-plc ... 00056178S/

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Re: Tesco Half Yearly

#85582

Postby Arborbridge » October 4th, 2017, 7:11 am

"· Interim dividend of 1.0p per share reflects improved performance and Board confidence"

Well, some cheery news for a dull day. The long wait is over.

Thanks, Ian.

Arb.

idpickering
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Re: Tesco Half Yearly

#85583

Postby idpickering » October 4th, 2017, 7:12 am

Later on, to save you looking lol;

Dividend:

Reflecting the improved performance in the business and the Board's confidence in the plans that we have set out, today we are announcing the restoration of the dividend. The interim dividend has been set at 1.0 pence per ordinary share. We anticipate a broadly one-third, two-thirds split 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 24 November 2017 to shareholders who are on the register of members at close of business on 13 October 2017 (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 3 November 2017.


https://www.investegate.co.uk/tesco-plc ... 00056178S/

idpickering
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Re: Tesco Half Yearly

#85584

Postby idpickering » October 4th, 2017, 7:14 am

Arborbridge wrote:"

Well, some cheery news for a dull day. The long wait is over.

Thanks, Ian.

Arb.


You're welcome Arb.

Ian.

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Re: Tesco Half Yearly

#85585

Postby Horsey » October 4th, 2017, 7:17 am

Nice to see debt down by over a billion as well

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Re: Tesco Half Yearly

#85595

Postby Arborbridge » October 4th, 2017, 8:34 am

Like Lloyds, Tesco was an interesting experiment illustrating the HYP "SI" idea, and self healing.

Naturally, there will always be discussion about whether waiting for self-healing is worthwhile, and I take no position on that since I do not know the answer. Even worse, I'm not sure there is a way finding the answer for any given investor or epoch. And by the time you have the answer, it is almost certainly too late to apply it :lol:

Anyhow, I took the view with Tesco and Lloyds that it was worth hanging in there, and so far I can comfort myself with at least the thought that is has not so far ended in a CLLN type disaster. Got away with it!

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Re: Tesco Half Yearly

#85605

Postby Dod1010 » October 4th, 2017, 9:07 am

I am not sure that Tesco is or ever was like Lloyds. The wait for resumption of even a modest dividend was surely far longer with Lloyds than with Tesco. In any case I still feel that the future of the supermarket sector is still very uncertain. We are getting some semblance of normality again but that still leaves these pesky discounters and a rather fickle bunch of shoppers.

Still, best of luck to those who do hold.

Dod

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Re: Tesco Half Yearly

#85607

Postby OLTB » October 4th, 2017, 9:10 am

Arborbridge wrote:

Naturally, there will always be discussion about whether waiting for self-healing is worthwhile, and I take no position on that since I do not know the answer. Even worse, I'm not sure there is a way finding the answer for any given investor or epoch.


From my experience with Tesco, I held the shares when I dabbled with TMF's '5 shares to retire on' quite a few years ago before I started my HYP. I only held a relatively small sum with the '5' so figures were pretty meaningless overall. Anyhoo, when TSCO got into trouble and shares dived and dividend ceased, I sold and bought HSBC. It turns out that this decision was a good one (so far!), but I could quite as easily have bought Carillion and now where would I be :?

Therefore, I won't be selling Carillion as the capital has lost so much value, any replacement would crystallise this loss and I don't know if I'd be investing any proceeds into Carillion 2.0

Anyway, this is a thread about Tesco and for all that have held on, well done and I hope that the 1p is the start of a sustained and increasing dividend for you all.

Cheers, OLTB.

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Re: Tesco Half Yearly

#85620

Postby richfool » October 4th, 2017, 9:48 am

Tesco share price - 2.42% down currently. I assume the market isn't so happy about something.

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Re: Tesco Half Yearly

#85632

Postby daveh » October 4th, 2017, 10:50 am

Dod1010 wrote:I am not sure that Tesco is or ever was like Lloyds. The wait for resumption of even a modest dividend was surely far longer with Lloyds than with Tesco. In any case I still feel that the future of the supermarket sector is still very uncertain. We are getting some semblance of normality again but that still leaves these pesky discounters and a rather fickle bunch of shoppers.

Still, best of luck to those who do hold.

Dod

From my records Lloyds paid 35.9p in 07/08 and a 11.4p interim only in 08/09 and then restarted divis in 2015/16 with 2.75p (including a 0.5p special); 2016/17 was 3.05p and they have started with a 1p interim for 17/18 - so still a long way to go. (I haven't accounted for the rights issues etc at the time of the crisis, just the per share dividend as recorded in my spreadsheet).

Tesco last paid 14.79p in 12/13 and 14.79p again in 13/14 before the cut, a 1p interim suggests a full year of ~3p which compared to Lloyds means they have started paying sooner and even in the first year the resumed divi is likely to be a bigger percentage of the last full divi than Lloyds is paying now.

I did pick up a lot of Lloyds shares in the Nov 09 rights issue at 37p and also bought more on the dividend resumption at 68p, so this years Lloyds payment is almost the same my last year pre cash payment (which was one years final plus the next years interim), but of course I invested more money, a rough calculation suggests on cash invested terms the dividend payment is still ~40% down on the last pre cash payment.

idpickering
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Re: Tesco Half Yearly

#85652

Postby idpickering » October 4th, 2017, 12:23 pm

Some might be interested in one of TMF's writers view on this stock;

Will Tesco plc pay its shareholders a dividend this year?

It’s no secret that Tesco (LSE: TSCO) has been a dividend stock disappointment in recent years.

Only six years ago, it was considered to be a core holding among UK dividend investors. The UK’s largest supermarket had racked up an impressive 27 years of consecutive dividend growth, and the payout was generous. However, after paying out three identical dividend payments of 14.8p between 2012 and 2014, it shocked investors in 2015 when it cut its first half dividend by 75%. Since then, shareholders have received no dividend at all.


http://www.fool.co.uk/investing/2017/10 ... this-year/

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Re: Tesco Half Yearly

#85656

Postby Arborbridge » October 4th, 2017, 12:27 pm

Dod said "I am not sure that Tesco is or ever was like Lloyds."
Taken out of context: of course Tesco isn't "like" Lloyds, but what I wrote was that " Tesco was an interesting experiment illustrating the HYP "SI" idea, and self healing. " - like Lloyds, an interesting experiment.
I think the meaning is clear, but it wasn't the meaning to which you twisted it.



Arb.

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Re: Tesco Half Yearly

#85736

Postby vrdiver » October 4th, 2017, 4:28 pm

Arborbridge wrote:Like Lloyds, Tesco was an interesting experiment illustrating the HYP "SI" idea, and self healing.

Naturally, there will always be discussion about whether waiting for self-healing is worthwhile, and I take no position on that since I do not know the answer. Even worse, I'm not sure there is a way finding the answer for any given investor or epoch. And by the time you have the answer, it is almost certainly too late to apply it :lol:

Anyhow, I took the view with Tesco and Lloyds that it was worth hanging in there, and so far I can comfort myself with at least the thought that is has not so far ended in a CLLN type disaster. Got away with it!


I remember making a small experiment and using Gengulphus's G-HYP to back test a likely scenario of selling out of my holdings that cut and using the cash to purchase whichever of the GHYP candidates were current: obviously not scientific, since unless I held exactly the same as GHYP it would be perfectly possible to prefer to buy something different from GHYP's relevant purchase. However, the experiment removed survivorship bias and hindsight bias, as the GHYP purchases were all done "real time".

Overall, had I followed that methodology I would have come out slightly ahead, but that was partly down to holding Lloyds Tesco and BP amongst others!

As I've written previously, once a cutter has taken the hit on capital, I'm as interested in the capital recovery as the dividend, so usually wait to see how things pan out. Whether it's the most profitable tactic I have no idea nor evidence, other than it at least avoids dealing costs!

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Re: Tesco Half Yearly

#85744

Postby Dod1010 » October 4th, 2017, 4:45 pm

Arborbridge wrote:Dod said "I am not sure that Tesco is or ever was like Lloyds."
Taken out of context: of course Tesco isn't "like" Lloyds, but what I wrote was that " Tesco was an interesting experiment illustrating the HYP "SI" idea, and self healing. " - like Lloyds, an interesting experiment.
I think the meaning is clear, but it wasn't the meaning to which you twisted it.



Arb.


Sorry Arb. You are perhaps being a bit over sensitive and I did not mean either to take it out of context or to twist anything.

To your substantive point, it looks as though Tesco may, in hindsight, (as these things always are) have been a suitable case for what is called self healing but Lloyds certainly was not. Self healing it is not either. The judgement needs to be whether the damage done is likely to be fixable in say a couple of years, by competent management or not. I never ever saw either RBS or Lloyds in that category although I was much more sanguine about Tesco. Of the three I have held only Lloyds and as is well documented, sold most of my holding in January 2008. Self healing would mean just let it carry on and it will fix itself!

Dod


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