First-half profits and sales at Tesco smashed the market's high expectations and Britain's top food seller said it would continue to deliver strong results in the second half of the year.
Underlying pretax profit for the first six months of the year came in at £822m sterling, up 24.4% from a year earlier, and above analysts' forecast range of £761-799m. Group sales rose over 12% to £16.5 billion, against a forecast range of £14.9-15.5 billion.
'We are well-placed to meet the challenges of tougher comparisons during the second half,' Chief Executive Terry Leahy said in a statement.
The group said its Irish stores had traded well in the six months to the end of June. Tesco said its new formats, led by the country's first Extra Tesco at Clare Hall in Dublin, its three Express stores and its three petrol stations, were all well received.
The group added that it has reduced prices in Ireland by €30m so far this year.
Tesco said it now purchases over €420m worth a year of Irish produced food as exports for its stores in UK. This brings the total worth of Irish produce that Tesco purchases annually to €1.5 billion. The products include pizzas, orange juice, choclates, cheese, beef, mineral water, snack foods and ready made meals.
Tesco Ireland has 86 stores throughout the company and employs over 11,000 people.
In Britain, where Tesco makes almost four-fifths of its group turnover, like-for-like sales rose 8.3%, with total sales including new space rising 11.5% to £13.1 billion. UK same-store sales had grown by 7.8% in the first quarter.
Sales at Tesco's international operations, which include a strong presence in eastern Europe and a growing business in southeast Asia, showed a 14.9% increase in sales to £3.4 billion.
The company proposed an interim dividend of 2.29 pence per share, up 10.6% from the 2.07 pence it paid the same time last year.
Tesco has consolidated its leading position in Britain by successfully diversifying into non-food lines as well as financial products and services. Recent press reports suggested a move into mortgages was also on the cards.
