7 October 2020
SUPPORTING CUSTOMERS THROUGH CHALLENGING TIMES
| On a continuing operations basis | 1H 2020/21 |
1H 2019/201 |
Change at actual rates |
Change at constant rates | |
|---|---|---|---|---|---|
| Headline measures2: | |||||
| Group sales3 | £26.7bn | £25.0bn | 6.6% | 6.8% | |
| – UK & ROI | £24.3bn | £22.4bn | 8.6% | 8.5% | |
| – Central Europe | £1.9bn | £2.0bn | (4.3)% | (1.5)% | |
| – Tesco Bank | £0.4bn | £0.6bn | (31.4)% | (31.4)% | |
| Group operating profit before exceptional items and amortisation of acquired intangibles4 | £1,037m | £1,229m | (15.6)% | (15.8)% | |
| – Retail | £1,192m | £1,142m | 4.4% | 4.2% | |
| – Tesco Bank | £(155)m | £87m | n/m | n/m | |
| Retail free cash flow5 | £554m | £645m | (14.1)% | ||
| Net debt5 | £(12.5)bn | £(12.6)bn | down 0.4% | ||
| Interim dividend per share | 3.20p | 2.65p | 20.8% | ||
| Statutory measures: | |||||
| Revenue | £28.7bn | £28.5bn | 0.7% | ||
| Operating profit | £1,007m | £1,054m | (4.5)% | ||
| Profit before tax | £551m | £428m | 28.7%
|
||
Cash profitability
- Response to COVID-19 leading to £(533)m 1H UK costs as we prioritise customer and colleague safety
- Retail operating profit before exceptional items and amortisation of acquired intangibles4 of £1,192m, +4.4%, margin 4.2%;
- UK & ROI volume and business rates relief offset COVID-19 costs; CE held back by COVID-19 costs and new Hungarian tax
- UK & ROI £1,133m, +6.4%, margin 4.3%
- Central Europe £59m, (23.4)%, margin 3.0%
- UK & ROI volume and business rates relief offset COVID-19 costs; CE held back by COVID-19 costs and new Hungarian tax
- Bank operating loss before exceptional items £(155)m driven by provision for potential bad debts and reduced income; continue to expect operating loss of £(175)m-£(200)m this year; capital ratios and liquidity remain strong
- Retail EBITDA8 £1,994m, +4.1% higher YoY
Cash flow
- Retail free cash flow5 of £554m; stable YoY exc. £(148)m relating to buyback of five UK stores and lower property proceeds
- Interim dividend 3.20p; 35% of last year’s full year dividend, in line with policy
- Net debt5 of £(12.5)bn, down £0.1bn year-on-year
Sales of businesses in Thailand, Malaysia and Poland progressing well
- £8.2bn9 sale of Thailand and Malaysia businesses approved by shareholders in May; regulatory approval and completion expected by the end of the calendar year, to be followed immediately by shareholder meeting to approve c.£5bn capital return and £2.5bn one-off contribution to eliminate pension funding deficit
- Sale of Polish business to Salling Group A/S agreed in June; completion expected Spring 2021
Imran Nawaz to join Board as CFO in April 2021 – as separately announced this morning
Ken Murphy, Chief Executive:
“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.”
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