Tesco gears up to announce interim results amid sector’s driver chaos
Supermarket behemoth Tesco is expected to reveal a big share buyback programme this week, alongside setting out plans to overcome supply chain disruption.
Tesco’s buyback scheme will run in parallel to its normal dividend, The Sunday Times reported, with no expected plans for a special dividend.
The grocer will post its interim results on Wednesday, amid retailers racing to get ready for Christmas while beleaguered by a shortfall of HGV drivers.
Tesco CEO Ken Murphy – who has been overseeing the retailer for a year – will outline how he intends to drive sales and profits.
“There are not going to be any exciting adventures. Tesco did enough of that in the past and destroyed quite a lot of value,” source close to the company told The Sunday Times.
The supermarket giant sold its Thai and Malaysian business to buyer CP Retail Development Company last year for £8bn.
Christmas plans
Its shares are around a fifth lower than their pre-pandemic level, closing at 247p on Friday. However, its share price has been boosted 8.2 per cent in the past six months.
Bosses at the company have warned consumers may experience increased food prices this autumn as the sector’s supply chain struggles with labour shortages.
“We’re probably looking at, for food overall…mid-single digit increases which is much higher than we’ve had in recent years,” Tesco’s chairman John Allan, told ITV last week.
The supermarket also said it intends to expand its use of train services to transport products from Spain.
Tesco’s results come as a US private equity firm Clayton, Dubilier & Rice beat Fortress Investment consortium at auction for Morrisons with a bid of £7bn.
Clayton, Dubilier & Rice (CD&R) bid 287p per share – 2p per share above their existing offer and just a penny above the 286p offered by a consortium led by SoftBank-owned Fortress Investment.