Tesco shares climb following positive half-year results

The Tesco share price has upped 11.5p to 240p today following the publication of positive half-year results showing a rise in pre-tax profits of almost one fifth.

The group announced that sales rose by 17% in the period to £14.9 billion, netting £628 million in ore-tax profits. Overall, total international sales grew by 30% to £3 billion, catapulting international operating profits by £98 million – and increase of 66.1%.

On the back of these figures, Tesco said that it intends to create around 22,000 extra jobs this year – building on their total headcount of 307,000.

The UK underlying operating profit was up 16.2% to £624 million and sales were up 14.2% to £12 billion - of which 6.3% came from existing stores and 7.9% from net new stores, including 4.8% from T&S.

Terry Leahy, Chief Executive, said: "It has been an outstanding first half. Customers have told us what they want and we have been doing a better job for them right across the group. Our results show all four parts of the strategy are delivering for customers and shareholders."

The Board has proposed an interim dividend of 2.07p (2002 – 1.87p), which represents an increase of 10.7%

The group says that it has a strong balance sheet and operating cashflow stands at £1.2 billion up 42%.

Net debt at the half year was £5 billion up £0.3 billion of which £0.1 billion was due to the purchase of C Two-Network. "We anticipate debt increasing to £5.2 billion at the year end," the group said.

Tesco said that their development programme in the UK was "on track" with 39 stores opening in the first half. "We are planning to open 1.4 million sq. ft. of new selling space this year. This includes 21 extras and 35 convenience express stores," the company confirmed.

(gmcg)