Tesco's profits and sales surge

The group said UK and Ireland underlying operating profits leapt 21.1 per cent higher to £471m 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 per cent, although this was down slightly on the 2.3 per cent 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 £27.3bn to £28.3bn, while on a statutory basis, pre-tax profits rose from £71m to £562m 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.

it would pay a dividend for the first time since the 2014-15 year when it was mired in crisis.