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Tesco tops FTSE on profits surge and dividend cheer

Shares in UK's biggest retailer jump to the top of the FTSE 100 after 28% surge in annual profits, underlining turnaround.

 
Tesco tops FTSE on profits surge and dividend cheer
 

Shares in Tesco (TSCO) have jumped to the top of the FTSE 100 after the supermarket reported a 28% surge in annual profits, underling the scale of the turnaround under chief executive Dave Lewis.

Tesco rose 5.9% to 222.8p, as the UK blue-chip index edged just two points higher to 7,269.

The supermarket reported profits of £1,644 million for the year to 24 February, up from £1,280 million in 2017 and higher than the £1,575 million guidance.

The supermarket followed November's 1p interim dividend, its first in three years, with a 2p final payout. 

'Tesco is enjoying a renaissance, and its turnaround plan is literally paying dividends to shareholders,' said Laith Khalaf, senior analyst at Hargreaves Lansdown.

'The payment announced today puts the stock on a yield of around 1.5%, not a great deal to write home about, but  after a three-year hiatus investors will be pleased to see the dividend taps flowing again,' he said.

'Looking forward Tesco intends to pay around half its earnings to shareholders, so improved business performance will mean the dividend has scope to grow too.'

Tesco's news helped lift rival supermarkets up the index, with Morrisons (MRW) up 2.4% at 230.7p and Sainsbury's (SBRY) rising 1.2% to 251.5p.

On the FTSE 250, BCA Marketplace (BCA) led the way, up 7.2% at 175.2p after a strong first-half update from the car dealership chain.

On the Alternative Investment Market, shares in Asos (ASOS) dived as the online fashion retailer announced increased spending on technology and logistics, before paring most of those losses to trade at £68.82, down 1.9% on the day.

3 comments so far. Why not have your say?

FrankFrank

Apr 11, 2018 at 17:37

Another jump like this and at last I shall be able to sell this junk and break even

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Hilary hames

Apr 11, 2018 at 19:16

Sadly I have to get to 299p to break even

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King Lodos

Apr 11, 2018 at 20:43

I mentioned in the other article my local Tescos (two of them) are frequently closed, empty shelved, and haemorrhaging staff..

If this is how they're raising margins, be very careful.

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