Supermarket giant Tesco has been boosted by a recovery in global markets as it announced an 12pc increase in first-half pre-tax profit to £1.6bn.
The result came as growth in global markets, particularly Asia, offset "modest" UK sales growth in the 26 weeks to August 28, the company said on Tuesday
Terry Leahy, chief executive went on to suggest that developed markets like the UK could be stabilised in the wake of Asian growth, avoiding a fall back into recession.
"My starting point is the global economy, which is in a pretty robust recovery," he said. "If you look at the customer psychology and the pulling power of the developing markets, I think they will pull Europe and the United States into a stable and established recovery."
Robust global recovery was contrasted with slow, albeit steady, UK recovery. The company said UK like-for-like sales excluding petrol rose 1.3pc in the second quarter, compared with 1.1pc in the first quarter – but, adjusting for VAT sales, the figure was just 0.3pc higher over the half-year.
Finance director Lawrie McIlwee described the UK economy as "pretty stagnant", although there were "signs of a recovery".
"Modest" UK sales growth in the first half were a result of higher fuel costs as customers spent more at the pump instead of in store and due to low food inflation. However, Mr Leahy said the retailer – which plans to create 9,000 jobs in the UK this year – was experiencing "the tailwinds of recovery".
Tesco, the world's third-biggest retailer behind France's Carrefour and US leader Wal-Mart, said group sales rose 7pc, excluding VAT sales tax, to £29.8bn, just below analysts average forecast of £30bn.
The company expects its loss-making US supermarket business, Fresh & Easy, to break even by the end of 2012/13 financial year.
Mr McIIwee stated Tesco Bank, with revenues of £474m in the first half, and Tesco Insurance, were significant part of the group business. Mr McIlwee said Tesco hoped to offer mortgages next year, with a current account to follow, following regulatory approvals from the Financial Services Authority (FSA).
The results arrive in an important week for gauging the mood of the British consumer, with updates from rival Sainsbury's and high street retailer Marks & Spencer later this week.
http://www.telegraph.co.uk/finance/newsbysector/epic/tsco/8043148/Tesco-sees-no-repeat-of-UK-recession-as-profits-rise-to-1.6bn.html
Robust global recovery was contrasted with slow, albeit steady, UK recovery. The company said UK like-for-like sales excluding petrol rose 1.3pc in the second quarter, compared with 1.1pc in the first quarter – but, adjusting for VAT sales, the figure was just 0.3pc higher over the half-year.
Finance director Lawrie McIlwee described the UK economy as "pretty stagnant", although there were "signs of a recovery".
"Modest" UK sales growth in the first half were a result of higher fuel costs as customers spent more at the pump instead of in store and due to low food inflation. However, Mr Leahy said the retailer – which plans to create 9,000 jobs in the UK this year – was experiencing "the tailwinds of recovery".
Tesco, the world's third-biggest retailer behind France's Carrefour and US leader Wal-Mart, said group sales rose 7pc, excluding VAT sales tax, to £29.8bn, just below analysts average forecast of £30bn.
The company expects its loss-making US supermarket business, Fresh & Easy, to break even by the end of 2012/13 financial year.
Mr McIIwee stated Tesco Bank, with revenues of £474m in the first half, and Tesco Insurance, were significant part of the group business. Mr McIlwee said Tesco hoped to offer mortgages next year, with a current account to follow, following regulatory approvals from the Financial Services Authority (FSA).
The results arrive in an important week for gauging the mood of the British consumer, with updates from rival Sainsbury's and high street retailer Marks & Spencer later this week.
http://www.telegraph.co.uk/finance/newsbysector/epic/tsco/8043148/Tesco-sees-no-repeat-of-UK-recession-as-profits-rise-to-1.6bn.html
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