(Alliance News) - Tesco PLC on Wednesday posted a substantially higher interim profit, with an excellent online performance, and said it has appointed Tate & Lyle PLC's current chief financial officer as its own CFO.
Shares in Tesco were up 2.3% at 219.00 pence in London in morning trading.
Supermarket chain Tesco, which is headquartered in Welwyn Garden City, recorded a GBP551 million pretax profit for the 26 weeks ended August 29, up 29% from GBP428 million the year before.
This as revenue increased to GBP28.72 billion from GBP28.51 billion after a particularly strong performance in its UK & Republic of Ireland region, where revenue rose 1.7% to GBP26.34 billion from GBP25.90 billion.
Group sales were up 6.5% at actual exchange rates, with a 69% increase in online sales - the rate of growth hitting 90% in the second quarter.
The smaller statutory revenue increase compared to sales includes a 42% drop in fuel sales to GBP2.1 billion, resulting from a significant drop in travel amid lockdown restrictions. However, this had recovered to around 75% of pre-Covid-19 demand levels by August end.
In terms of outlook, Tesco is expecting to report a "broadly even balance to the year in terms of 1H/2H retail profitability" with retail operating profit in its current financial year to be at least the same level as financial 2020 on a continuing operations basis.
It expects Tesco Bank to report a loss of between GBP175 million and GBP200 million in financial 2021.
"Whilst headline profitability is impacted in the short term, the Bank's capital ratios and liquidity remain strong," Tesco said.
Tesco will report its third quarter and Christmas trading statement on January 14.
The grocer has increased its interim dividend per share by 21% to 3.20p from 2.65p.
Chief Executive Ken Murphy said: "The first half of this year has tested our business in ways we had never imagined, and our colleagues have risen brilliantly to every challenge, acting in the best interests of our customers and local communities throughout. I would like to thank all our colleagues for their amazing contribution and I am delighted and proud to be part of such an incredible team.
"We are absolutely committed to continuing to invest in value for customers and safety for all in these uncertain times.
"Tesco is a great business with many strategic advantages. I'm excited by the range of opportunities we have to use those advantages to create further value for our customers and, in doing so, create value for all of our other stakeholders."
Imran Nawaz, finance chief at food ingredients business Tate & Lyle, will join Tesco as CFO in April 2021.
Tesco said: "Imran Nawaz has a proven track record of financial leadership and extensive knowledge of the global food industry as CFO and executive director of Tate & Lyle and senior vice president of Finance for Mondelez Europe.
"He started his career with Deloitte and then with Philip Morris in corporate audit. He spent 16 years working at Mondelez and Kraft Foods in a variety of roles gaining broad financial, business and international experience."
Tate & Lyle's board has started the process to appoint Nawaz's successor, with a further announcement to following "in due course".
Shares in Tate & Lyle were down 0.7% at 674.20p in London on Wednesday morning.
By Anna Farley; annafarley@alliancenews.com
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