Tesco profits jump on 'elevated' pandemic sales

London (AFP) –

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British supermarket giant Tesco on Wednesday posted a near 70-percent surge in first-half net profit on the back of higher pandemic sales and its "resilient" supply chain.

Profit after tax jumped to £781 million ($1.1 billion, 917 million euros) in the six months to the end of August, the nation's biggest retailer said in a statement.

That compared with £465 million a year earlier, when the group was also buoyed by the Covid pandemic.

Tesco experienced "sustained strong UK sales, a reduction in Covid-19 related costs in our retail businesses and a return to profitability in Tesco Bank", it said.

Revenue rose six percent to £30.4 billion as it "continued to benefit from elevated sales as a result of the Covid-19 pandemic".

Tesco also ramped up its annual profit forecast and unveiled a £500-million share buyback.

"We've had a strong six months; sales and profit have grown ahead of expectations and we've outperformed the market," said chief executive Ken Murphy.

He pointed to "the resilience of our supply chain and the depth of our supplier partnerships" as a key factor.

The group however took a £193-million hit from settling claims relating to its misstatement of profits in 2014.

Operating profit leapt 28 percent to £1.3 billion in the reporting period.

And Tesco lifted its annual operating profit target to between £2.5 billion and £2.6 billion.

"Although we do not yet know how the external environment and consumer behaviour will evolve in the second half, we have assumed that some of the elevated sales fall away and that we will continue to invest in our customer offer," it noted.