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Tesco has revealed a £ 533 million hit from the costs of the coronavirus crisis, but a jump of more than 20% in shareholder rewards thanks to increased sales.
The UK’s largest supermarket chain said the vast COVID-19 The cost bill was also offset by a £ 249 million trade fee relief in the first half of the year.
Tesco reported a group profit before tax of 551 million pounds, an increase of almost 29% over the same period in 2019 despite a 7% drop in operating profit, as bad debt provisions on its banking arm resulted in a 155 million pound hit.
Empty shelves in the pasta aisle of a Tesco store in the run up to the UK closing in March
Group sales rose more than 6% to £ 26.7bn, with sales in the UK and Ireland rising 8.6% to £ 24.3bn at a time when the grocery sector adapted to feed customers as economies went into hibernation to curb rising infection rates. .
Chains were forced to shell out security equipment such as PPE and increase online delivery services in the face of the public health emergency, and supply chains were severely tested by demand for household essentials.
Handling the crisis turned out to be the final act for CEO Dave Lewis, who resigned last week after pushing for a business overhaul since 2014, a time when the chain was bleeding customers and mired in an earnings scandal.
Investors were generously rewarded for their patience on Wednesday.
In a break with the behavior of many companies during the crisis to date, Tesco said it would not only keep an interim dividend, but raise it by 21% to 3.2 pence a share.
Another £ 5bn will be returned to shareholders as part of a special dividend related to the sale of £ 8bn from its Asian operations earlier this year.
The shares were up more than 4% in early trading.
Staff were also rewarded with a 10% bonus during the period from March 9 to May 30.
The chain hired 16,000 workers in August as it progressed to strengthen its leadership position in the market.
New CEO Ken Murphy said, “The first half of this year has tested our business in ways that never have before.
imagined, and our colleagues have met every challenge brilliantly, acting in the best interest of our customers and local communities at all times. “
He added: “Tesco is a great company with many strategic advantages. I am excited about the variety of opportunities we have to use those advantages to create more value for our customers and, in doing so, create value for all of our other stakeholders.”
Tesco also confirmed a Sky News story that he had appointed a new CFO to replace Alan Stewart once he leaves next year.
Imran Nawaz will join the company from Tate & Lyle.
