Tesco reports half-year profit growth

Tesco chief executive Terry Leahy attributed the group’s performance to a number of factors, including a “focus on the customer, the consistency of our strategy, an efficient business model” and “strong local management teams”.

Tesco recorded a 1.5% hike in profit before tax to £1.42bn during the six months to 29 August 2009.

Leahy said Tesco’s UK business was “delivering solid growth and improving volumes”, while acknowledging that some of its international business faced challenges.

In Europe, sales were up a marginal 0.9% to £4.77bn, but trading profit fell 5% to £191m, largely due to challenging trading conditions in Hungary and Ireland.

In the US, sales at Tesco’s Fresh & Easy business – a newcomer on the US retail scene – were up 115.4% to £168m, but trading losses grew 41.7% to £85m.

“In international, the markets with the greatest growth potential for the long-term have been some of the hardest hit the short-term, but we have nevertheless delivered a good performance against strong headwinds,” Leahy said.

Group revenues (excluding VAT) increased 9.3% to £27.8bn, group trading profit rose 14% to £1.55bn and underlying profit was up 8.6% to £1.57bn.

Leahy concluded that Tesco was well-placed for the global economic recovery.

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