Oct 6, 2021

Tesco raises profit forecast and announces £500m share buyback

Tesco said it would buy back £500m worth of shares and upgraded its full-year profit forecast after a stronger than expected first-half performance. The UK's largest food retailer said it now expected full-year adjusted operating profit to be between £2.5bn and £2.6bn, having previously limited itself to predicting a "Strong recovery in profitability", as the costs of coping with the coronavirus pandemic receded. Analysts have pencilled in annual adjusted operating profit of just below £2.5bn, according to estimates collated by Tesco. "We've had a strong six months; sales and profit have grown ahead of expectations, and we've outperformed the market," said chief executive Ken Murphy. Operating profit in the six months to August 28 was £1.3bn, a 29 per cent rise compared to a year earlier when the costs of hiring new staff and putting in place additional cleaning and protective screens in stores weighed heavily on the bottom line.

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