Profits at the UK’s biggest retailer fell by more than half in the first half of its financial year, according to its latest figures. Life-for-like sales were down by 1.1% and the group warned that trading conditions remained challenging as profits dipped from £779 million to £354 million a year ago.
However, the figures were better than some in the City had feared and pre-tax profit was £74m, compared with a loss of £19m for the same period last year. Tesco added that it was on track to deliver £400m annual cost savings from Group restructuring investment.
Boss Dave Lewis, who joined the company last year, said: "We have delivered an unprecedented level of change in our business over the last twelve months and it is working. The first half results show sustained improvement across a broad range of key indicators.
“In the UK, we continue to improve all aspects of our offer for customers, resulting in volume growth which is allowing us to create a virtuous circle of investment.
“Our transformation programme in Europe has accelerated growth and reduced operating expenses, and in Asia, we have gained market share in challenging economic conditions.
“We have concluded our portfolio review with the sale of Homeplus, our business in Korea, enabling us to take a significant step forward on our priority of strengthening the balance sheet. Further progress will be driven by continuing to increase the level of cash generated from our retained assets."
