LONDON: Britain’s biggest retailer Tesco said on Wednesday it would pay a dividend for the first time since the 2014-15 year when it was mired in crisis, after its first-half profits jumped 27 percent.
The firm also reported a seventh straight quarter of underlying sales growth in its home market, successfully navigating an inflationary trading environment.
Tesco made operating profit before one off items of £759 million (SR 3.77 billion) for the six months to August 26.
That compares with £596 million in the same period last year and analyst forecasts of about £700 million.
Tesco, which in January agreed to buy wholesaler Booker for £3.7 billion, said UK like-for-like sales rose 2.1 percent in the second quarter.
An interim dividend of 1 pence will be paid which “reflects improved performance and board confidence.”
“Sales are up, profits are up, cash generation continues to strengthen and net debt levels are less than half what they were when we started our turnaround three years ago,” Chief Executive Dave Lewis said.
The resumption of the dividend is the strongest sign yet that the British high street giant has returned to a stronger footing, after changing shopping habits, the rise of German discounters Aldi and Lidl and a 2014 accounting scandal all combined to hammer the business.
After stabilizing the company, Lewis has got it growing again with a focus on more competitive prices, new and streamlined product ranges, better customer service and improved supplier relationships.
However, shares in Tesco closed Tuesday at 190 pence, lower than the 230 pence when Lewis joined in September 2014, reflecting concerns over the merits of the Booker deal as well as Tesco’s pension deficit and debt levels.
The group said it had concluded a triennial pension review and that its annual contributions would increase by £15 million to £285 million from April 2018.
Tesco to pay first dividend since 2014 accounting scandal
Tesco to pay first dividend since 2014 accounting scandal
Closing Bell: Saudi Arabia’s main index closes in red at 10,364
RIYADH: Saudi Arabia’s Tadawul All Share Index closed lower on Sunday, shedding 185.05 points, or 1.75 percent, to end the session at 10,364.03.
Total trading turnover on the benchmark index stood at SR2.55 billion ($680 million), with 20 stocks advancing and 237 declining.
The Kingdom’s parallel market Nomu also retreated, falling 0.63 percent, or 147.19 points, to close at 23,371.82.
The MSCI Tadawul Index slipped 1.71 percent to 1,369.56.
Saudi Industrial Export Co. was the top gainer on the main market, with its share price jumping 9.87 percent to SR2.56.
Shares of Naqi Water Co. rose 2.53 percent to SR58.80, while Shatirah House Restaurant Co. advanced 2.18 percent to SR9.39.
On the downside, Gulf Union Alahlia Cooperative Insurance Co. posted the steepest decline, with its share price falling 4.61 percent to SR10.14.
On the announcements front, Scientific & Medical Equipment House Co. said it had been awarded a contract valued at SR260.98 million by the Ministry of Human Resources and Social Development to supply uncooked food materials and catering items to beneficiaries at the ministry’s residential branches across the Kingdom.
The project scope also includes providing cooked meals to selected anti-begging offices over a 24-month period, according to a Tadawul statement. The company added that the financial impact of the contract will begin in the fourth quarter of this year.
It said further developments would be disclosed in due course after all relevant parties sign the final contract and a copy is received.
Shares of Scientific & Medical Equipment House Co. edged up 0.31 percent to SR32.44.
Separately, Dr. Soliman Abdel Kader Fakeeh Hospital Co. and its subsidiaries signed an agreement with Oloof Development Co., a wholly owned subsidiary of Jazan Municipality, to lease a strategic land plot in Jazan City for SR217.99 million.
According to a Tadawul statement, the land, which spans 34,581 sq. meters, will be used to develop an integrated healthcare facility under a 50-year lease.
The company said the financial impact of the agreement is expected to begin once the medical facility is completed and becomes operational.
Shares of Dr. Soliman Abdel Kader Fakeeh Hospital Co. fell 1.92 percent to SR33.74.
