Tesco sees leap in half-year profits as supermarket turnaround continues

Tesco has reported a surge in its half-year profits as it continues to see rising sales, and will resume dividend payments to investors.

The supermarket giant said UK and Ireland underlying operating profits leapt 21.1% higher to £471 million, as it sought to keep prices low amid Brexit-fuelled inflation.

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.

Dave Lewis, the group's CEO, said: "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."

Mr Lewis confirmed that Tesco would resume paying a dividend, a move that had been widely anticipated after the company notched up its seventh quarter in a row of rising sales.

Re-starting dividend payments puts Mr Lewis, who has guided the supermarket's turnaround, in line for an £860,000 windfall.

"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," Mr Lewis said.

Tesco saw sales rise from £27.3 billion to £28.3 billion, while on a statutory basis, pre-tax profits rose from £71 million to £562 million.