Tesco makes £1.42bn in first half

6th Oct 2009 07:03

UK supermarket giant Tesco made profits of £1.42bn in the six month to August and said it is well-placed for the global recovery.Pre-tax profits were up 1.5% in the 26 weeks ended 29 August, while sales increased by 8.3% to £30.4bn. There was significant petrol deflation in the first half and on an ex-petrol basis, sales rose by 11.4%.Broker Charles Stanley expected profit before tax of £1,450m on sales of £28.25bn. Other brokers were more bearish, with Jefferies forecasting like for like sales growth of 3.5% (excluding VAT and fuel), down from growth of 4.3% in the first quarter, while UBS went for growth of 3.25% and Numis 3%. A dividend of 3.89p per share has been declared, compared with last year's 3.57p.The interim results for the first time include Tesco Personal Finance, which has been renamed Tesco Bank, as a consolidated entity.The group said Tesco Bank delivered a good performance in a 'challenging retail banking market.' Gross profit grew to £359m with a good performance in banking being partly offset by lower profitability in Insurance.The online businesses - including dotcom grocery and Direct - achieved an 11% increase in sales to £1bn, with profits, after losses on Tesco Direct, rising 21% to £58m. Tesco also announced that it created 6,500 jobs in the half-year period.'Last year's acquisitions - Homever in Korea and Tesco Bank - are already making good contributions to sales and profits. In International, the markets with the greatest growth potential for the long-term have been some of the hardest hit in the short-term but we have nevertheless delivered a good performance against strong headwinds,' said chief executive Terry Leahy.'Our UK business is delivering solid growth and improving volumes. This progress across the Group, combined with our strong financial position funding continued investment in new space and new businesses, means we're well-placed for the global recovery,' he added.