LONDON: Tesco, Britain’s biggest retailer, said on Wednesday its purchase of wholesaler Booker helped support its underlying performance although first-half net profits sank as the supermarket group had booked an exceptional gain last year.
Profit after tax slumped 32 per cent to £426 million ($553 million, 479 million euros) in the six months to the end of August, Tesco said in a results statement.
That compared with £628 million in the same part of the previous year, which was boosted partly by a large gain on the sale of its Korean operations.
Tesco added that its latest underlying operating profit jumped 24 per cent to £933 million, helped greatly by the recent acquisition of British wholesaler Booker.
However this figure undershot analysts’ consensus forecast, contributing to Tesco’s share price tanking 8.3 per cent to 215.70 pence on London’s FTSE 100 index, which was up 0.4 per cent overall.
“Tesco’s Central European operations suffered a setback as trading restrictions on Sundays and public holidays reduced the number of days its stores could open for business in Poland and Slovakia,” noted Laith Khalaf, senior analyst at Hargreaves Lansdown.
“It’s commonly thought that Sunday trading restrictions displace rather than deter consumer activity, but Tesco’s experience suggests otherwise, for the big supermarkets at least.
“The Central European business makes up just over 10 per cent of group sales, so Tesco can probably take this one on the chin while its UK business is ticking along so nicely,” Khalaf added. — AFP
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