Apr 11, 2018
Tesco to issue annual dividend after profits eclipse £1bn
Annual profits have surged at Tesco as chief executive Dave Lewis completed an overhaul of the business to defy the gloom affecting the British high street and served up the group's first annual dividend in five years. On an operating profit basis, which excludes the effects of heavy exceptional costs Mr Lewis has paid out to restructure Tesco's business, annual earnings rose by 28 per cent to £1.6bn. "We are generating significant levels of cash and net debt is down by almost £6bn over the past three years," Mr Lewis said. Tesco's rival Wm Morrison issued a special dividend to shareholders last March after its own profits climbed 17 per cent and its annual same-store sales rose 2.8 per cent. On Thursday, Tesco reported that the integration of Booker was "Well under way" and that it anticipated £60m of "Synergies" such as cost savings in the first year, "Growing to a cumulative c£140m in the second year and reaching a recurring run-rate of c£200m per year by the end of the third year." These were "Both stronger numbers than we assumed in our model," analysts at Barclays said, as they raised their price target for Tesco's shares to 265p. Tesco proposed an annual dividend of 3p per share.
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