Interim Results 2018/19


On a continuing operations basis 
(restated IFRS 15)1
Change at
constant rates
Change at actual rates
Headline measures2:
Group sales3£28.3bn£25.2bn12.5%12.8%
Group operating profit before exceptional items and amortisation of acquired intangibles4£933m£750m23.9%24.4%
Diluted EPS before exceptional and other items56.36p5.37p18.4%
Interim dividend per share1.67p1.00p67.0%
Retail operating cash flow6£1.123m£1.139m(1.4)%
Net debt6,7£(3,126)m£(3,260)m4.1% lower
Statutory measures:
Operating profit£819m£876m(6.8)%(6.5)%
Profit before tax£564m£553m2.2%2.0%
Diluted EPS4.37p5.13p(14.8)%

*Note: Booker consolidated from 5 March 2018 and included in the 2018/19 figures


  • Group sales3 of £28.3bn, up 12.8%
    • UK & ROI LFL sales8 up 3.8%, strengthening from 3.5% in 1Q to 4.2% in 2Q
      • incl. Tesco UK LFL sales up 2.3% (1Q: 2.1%; 2Q: 2.5%) and Booker LFL sales up 14.7% (1Q: 14.3%; 2Q: 15.1%)
      • significant investment in ‘Exclusively at Tesco’ brands; roll-out 81% complete
    • Central Europe LFL sales declined by (1.5)% due to impact of Sunday trading regulations
    • Asia LFL sales decline reduced from (9.0)% in 1Q to (4.8)% in 2Q following annualisation of bulk-selling impact; Government-issued welfare cards continue to impact sales in Thailand by c.(2)%
  • Group operating profit before exceptional items and amortisation of acquired intangibles4 up 24.4% to £933m
    • UK & ROI profit of £685m, up 47.6%; incl. first-time consolidation of £97m Booker profit and £16m synergies
    • Central Europe profit of £59m, down (3.3)% reflecting £9m profit on property-related items in prior year
    • Asia profit of £100m, down (29.1)% due to combined impact of sales deleverage, price investment and renegotiation of promotional investment
    • Bank profit of £89m, up 6.0% mainly due to increased income and ongoing cost reductions
  • Group operating margin4 of 2.94% (+29bps); margin of 3.02% excl. Tesco Direct
  • Retail operating cash flow6 of £1.1bn, down (1.4)% (up 10.8% before £(139)m timing impact of P&H failure last year)
  • £404m retail free cash flow (after net outflow of £(139)m relating to market purchase of shares)
  • Interim dividend of 1.67p, up 67% year-on-year; on track to deliver c.2.0x EPS cover in the medium-term
  • Statutory revenue up 12.0% to £31.7bn; operating profit down (6.5)% to £819m; profit before tax up 2.0% to £564m

Further progress against each of our six strategic drivers

  • Brand health9 continues to strengthen; quality perception +3.6 points10
  • In-year cost savings of £241m; savings of £1.1bn to date towards £1.5bn target
  • Generated £1.1bn of retail operating cash6; net debt of £(3.1)bn is after £(766)m Booker cash consideration
  • Improving the mix across geographies, channels and product; focus on sustainable general merchandise categories by closing Tesco Direct; on track to achieve 3.5-4.0% margin ambition11 by 2019/20
  • Released a further £134m value12 from property; further buyback (Cirencester Extra) announced Sept 2018
  • Innovations including 5,038 of 10,000 own brand products re-launched; eight new ‘Exclusively at Tesco’ brands; launched ‘Jack’s’ as part of celebrating 100 years of great value at Tesco

Dave Lewis, Chief Executive:

“We have made a good start to the year. The step up in Q2 is driven mainly by the UK & ROI and delivers our eleventh consecutive quarter of growth.

At the same time, we have made further strategic progress. We completed our merger with Booker in March and are delighted with performance so far. We announced a strategic alliance with Carrefour in July which goes live this month. And we are now more than half-way through the biggest own brand re-launch in our nearly 100-year history, including a significant investment in over 300 new ‘Exclusively at Tesco’ products at market-leading prices.

We are firmly on track to deliver our medium-term ambitions and are continuing to improve the quality and value of our offer for customers in all of our markets. In doing so, we are well-positioned to deliver strong, sustainable returns for shareholders.”

Like-for-like sales performance8

UK & ROI2.1%2.4%2.3%3.5%4.2%3.8%
 Tesco UK2.2%2.3%2.2%2.1%2.5%2.3%
Central Europe0.1%0.6%0.3%(1.0)%(2.0)%(1.5)%

Headline Group results

26 weeks ended 25 August 2018 

On a continuing operations basis
Year-on-year change
exchange rates)
Year-on-year change
exchange rates)
Group sales (exc. VAT, exc. fuel)3£28,294m£25,163m12.5%12.8%
Revenue (exc. VAT, inc. fuel)£31,734m£28,339m11.8%12.0%
Group operating profit before exceptional items and amortisation of acquired intangibles4 
– UK & ROI£685m£464m47.0%47.6%
– Central Europe£59m£61m(4.9)%(3.3)%
– Asia£100m£141m(29.1)%(29.1)%
– Tesco Bank£89m£84m6.0%6.0%
Include exceptional items and amortisation of acquired intangibles
Group operating profit£819m£876m(6.8)%(6.5)%
Group profit before tax before exceptional items, amortisation of acquired intangibles, net pension finance costs and fair value remeasurements of financial instruments£806m£566m42.4%
Group statutory profit before tax£564m£553m2.0%
Diluted EPS before exceptional items, amortisation of acquired intangibles, net pension finance costs and fair value remeasurements of financial instruments6.36p5.37p18.4% 
Diluted EPS4.37p5.13p
Basic EPS4.40p5.13p
Divident per share1.67p1.00p67.0% 
Net debt6,7£(3.1)bn£(3.3)bn
Cash generated from retail operations6£1.1bn£1.1bn