UK-based retail giant Tesco has announced that underlying profit before tax increased 8.6 per cent through the first half of the year, increasing to £1.57bn (€1.7bn, US$2.5bn), with group revenue up 9.3 per cent to £27.8bn (€30.3bn, US$44.4bn).
Despite the competitive market conditions and weak economy, domestic UKsales rose 2.8 per cent to £20.6bn (€22.5bn) year-on-year, with UK trading profitup 7.4 per cent to £1.2bn (€1.3bn).
European trading profit fell amid a background of falling output, growing unemployment and deflation, Tesco said, down 5 per cent at actual exchange rates to £191m (€208.4m). The company did see an increase in sales across the segment, up 9 per cent to £4.8bn (€5.2bn).
In Asia, sales grew 38.3 per cent at actual exchange rates to £4.4bn (US$7bn),driven by new space and the Homever acquisition in Korea. On thisbasis, trading profit for the region jumped 20.7 per cent to hit £175m (US$279m).
The group's US Fresh & Easy Neighbourhood operation saw sales growth of 115.4 per cent for the six-month period to £168m (US$268m), although trading profit slumped 41.7 per cent to a loss of £85m (US$135.6m).
Overall net debt at the group dropped to £9.5bn (€10.4bn, US$15.2bn) from £9.6bn (€10.5bn, US$15.3bn) at the end of2008/09, with the company 'on track' to achieve its year-end target of£8.5bn (€9.3bn, US$13.4bn).
'Tesco's core strengths are even more important as we tackle successfully the challenges of recession,' said group CEO Terry Leahy. 'Our focus on the customer, the consistency of our strategy, an efficient business model, strong management teams and spirit of innovation and knowledge sharing have enabled us to improve the shopping trip for customers – by investing in consistent value they can trust and in rewarding their loyalty through Clubcard – whilst at the same time delivering a robust financial performance.
'Last year's acquisitions – Homever in Korea and Tesco Bank – are already making good contributions to sales and profits,' Mr Leahy added. 'In international, the markets with the greatest potential for growth in 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. Our UK business is delivering solid growth and improving volumes. This progress across the group, combined with out strong financial position funding continued investment in new space and new businesses, means we are well-placed for the global recovery.'
Click here for a comprehensive breakdown of the group's results
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