Poor Results from Tesco

There is no denying that Tesco has posted very poor results. Its not much comfort to hear the new CEO saying he expected this or that the global economy is bad. We all know that, and we expect the CEO of a global company to have taken steps to mitigate the downside. Group sales were up but profit was down 11.6% a big drop and worse listening to the presentation its not just the UK global sales are also down. Perhaps the only bright side was Tesco Bank which more than doubled. The company maintained dividends so while the share price may drop a bit on this news the dividend of around 5% remains a comfort. The CEO says things are improving and towards the end of the quarter there was an uptick...lets hope so.


Financial headlines
Group sales up 1.4% to £36.0bn* (up 3.2% at constant rates); Group sales exc. petrol up 1.6% (up 3.7% at constant rates)
Statutory profit before tax down (11.6)% to £1.7bn; Underlying profit before tax down (8.5)% to £1.8bn
Group trading profit of £1.6bn, down (10.5)% – UK down (12.4)% to £1.1bn; International down (17.1)% to £0.4bn; Tesco Bank up 114% to £94m
Underlying diluted EPS reduction of (7.9)%**
Interim dividend per share maintained at 4.63p
Group capital expenditure brought down from £2.1bn to £1.6bn; on track for a full year reduction to c.£3.2bn