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British supermarket giant Tesco returns to profit

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LONDON: Supermarket group Tesco, Britain’s biggest retailer, said on Wednesday it returned to profit in the first half as its campaign to attract customers with low food prices paid off. Net profit came in at £637 million ($846 million, 719 million euros) in the six months to August, the world’s third-largest supermarket group said in a statement. That compared with an after-tax loss of £91 million a year earlier.


“We are continuing to make strong progress,” Chief Executive Dave Lewis, as the group also announced it would resume dividend payments to shareholders.


Tesco shares initially jumped 2.0 per cent on the news, but subsequently fell by a similar amount as traders’ attention switched to the high cost of the group’s planned £3.7 billion takeover of wholesaler Booker.


Hargreaves Lansdown analyst, Laith Khalaf, said there were not “many things more telling about the health of company than its ability to pay a dividend, and Tesco’s return to the register after a three-year hiatus speaks volumes about the progress the company has made.”


Nevertheless, “the Booker merger is increasingly looking like a potential banana skin for management,” the analyst said.


Tesco said revenues grew by 3.7 per cent to £28.3 billion over the reporting period, with customers attracted to Tesco stores and its online offerings by the “lowest level of food price inflation... amongst peers” operating in the UK.— AFP


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