Tesco Raises Fiscal Year Guidance, Launches GBP500 Million Share Buyback -- Update
06 Ottobre 2021 - 9:16AM
Dow Jones News
By Jaime Llinares Taboada
Tesco PLC on Wednesday raised guidance for the fiscal year after
a strong first half, and said that it is starting a share-buyback
program.
The company said that its sales and profit increased ahead of
expectations in the first half ended Aug. 28, outperforming the
market, and upgraded its adjusted retail operating profit guidance
to 2.5 billion pounds-2.6 billion pounds ($3.41 billion-$3.54
billion) for the year ending in February 2022. The Tesco Bank
business is expected to deliver an adjusted operating profit of at
least GBP120 million.
Tesco, the U.K.'s biggest grocer by market share, made a pretax
profit of GBP1.14 billion in the first half of the fiscal year,
more than doubling from GBP551 million a year earlier.
Revenue grew 5.9% to GBP30.4 billion, and operating profit rose
30% to GBP1.30 billion.
The company's board declared an interim dividend of 3.20 pence a
share, in line with a year earlier.
In addition, Tesco announced the start of a share buyback
program, with a first tranche of GBP500 million to be repurchased
by October 2022.
"Our strong performance to date and our confidence in our
ability to generate cash in the coming years has enabled us to
announce the start of a buyback programme that will balance the
maintenance of a strong capital structure with returning surplus
cash," Chief Executive Ken Murphy said.
Looking forward, the group said that it will aim to generate
GBP1.4 billion-GBP1.8 billion of retail free cash flow annually and
grow the dividend each year, targeting a pay-out of around 50% of
earnings. Capital expenditure will remain between GBP0.9 billion
and GBP1.2 billion.
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
October 06, 2021 03:01 ET (07:01 GMT)
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