Tesco turnaround continues as half-year profits jump

Supermarket giant Tesco has reported a surge in half-year profits and rising sales as it hailed efforts to keep prices low amid Brexit-fuelled inflation.

The group said UK and Ireland underlying operating profits leapt 21.1% higher to £471 million in its first half after it notched up its seventh quarter in a row of rising sales.

UK like-for-like sales in the second quarter lifted 2.1%, although this was down slightly on the 2.3% recorded in the previous three months.

Chief executive Dave Lewis said the group was now "more competitive and more customers are shopping at Tesco" as it sought to keep prices low.

He added: "We are continuing to make strong progress. Sales are up, profits are up, cash generation continues to strengthen and net debt levels are less than half what they were when we started our turnaround three years ago."

Sales rose from £27.3 billion to £28.3 billion, while on a statutory basis, pre-tax profits rose from £71 million to £562 million and Mr Lewis confirmed that Tesco would resume paying a dividend.

"Today's announcement that we are resuming our dividend reflects our confidence that we can build on our strong performance to date and in doing so, create long-term, sustainable value for all of our stakeholders," the chief executive said.