Tesco Ireland reports strong first half as parent records big profit rise
Retailer said figures were boosted by acquisition of wholesaler Booker, strong summer sales
Tesco said its profit rose 24 per cent in the first six months of the year. Photograph: iStock
Tesco’s Irish business performed strongly in the first half of the year with like-for-like sales rising 3.1 per cent, and the retailer posting revenues of €1.32 billion here for the period.
This compares to a 2.7 per cent increase in sales for the same six months a year earlier and comes as the parent reported a weaker-than-expected performance due to a drop in revenues in mainland Europe and Asia.
The retailer, which had 152 stores in the Republic at the end of August, said own brand sales increased by 9 per cent during the first half.
A breakdown shows Irish sales were up 3 per cent in the first three months of 2018, and grew 3.1 per cent in the second quarter. For the corresponding reporting period a year earlier, like-for-like sales were up 1.1 per cent and 4.3 per cent respectively.
“The Irish market continues to be really competitive. We’re working hard to give our customers the best experience when they shop in Tesco. Through continued investment, our prices are lower, our service is improving and our range, particularly Tesco brand, has never been stronger,” said Kari Daniels, who succeeded Andrew Yaxley as chief executive of the Irish business earlier this month.
Europe and Asia
Overall, the grocery giant recorded a 24.4 per cent rise in profits in the first half, boosted by the contribution from newly acquired wholesaler Booker and by strong summer sales in the core business. However, the company’s overall performance was weaker than expected, held back by the sales decline in mainland Europe and Asia.
Sales fell by 2 per cent in Europe and by 4.8 per cent in Asia during the reporting period.
Tesco said UK and Republic of Ireland profit for the first half totalled £685 million, up 47.6 per cent, although this includes a first-time consolidation of £97 million profit from Booker and an additional £16 million in “synergies”.
Total group sales rose 12.8 per cent to £28.3 billion.
Tesco, which spent nearly £4 billion buying Booker, said on Wednesday it made an operating profit before one-off items of £933 million for the six months to August 25th, up from £750 million in the same period last year.
The group is aiming to make cost savings of £1.5 billion, generate £9 billion of retail cash and earn between 3.5 and 4 pence of operating profit for every pound customers spend by the end of its 2019-20 financial year. It had a margin of 2.94 per cent in the first half.
– Additional reporting Reuters