Tesco shareholders hoping for a payday as chain reveals results

TESCO SHAREHOLDERS will eagerly be hoping for a payday this week as the company gives them the best behind- the- scenes look at how it coped with Covid- 19.

The supermarket’s half- year results will be presented by new boss Ken Murphy, who will only have led the company through six days of the last six months after taking over on Thursday.

Investors will be hoping he might want to impress with a nice payout, slicing up some of the cake from recent big windfalls, such as the sale of Tesco’s Asia business, analysts said.

“Look out for comments on the planned special £ 5bn cash distribution once the Thai and Malaysian disposal goes through, that equates to around 51p per share,” AJ Bell investment director Russ Mould said. Investors will be eagerly eyeing up the dividend that bosses decide to pay out too.

Mr Mould explained that lockdown had increased supermarket sales, as people were unable to go to restaurants and pubs, however, Tesco still lost some ground to its competitors.

“Tesco has lost market share over the past year, albeit only one 10th of a percentage point, according to data from Kantar Worldpanel, in what remains a fiercely competitive market,” he said.

Three months ago shareholders got a peek behind the curtain when the company showed that like- for- like sales had grown by 7.9 per cent, and had shot up even quicker, 8.7 per cent, as online sales soared by nearly half.

However, Mr Mould said this will likely have slowed a little recently.

“It seems logical to assume that the rate of growth eased a bit for the June- to- August period as people began to venture out again and were actively encourage to do so by the Eat Out To Help Out scheme,” he said.

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown said: “In terms of sales, supermarkets have been among the big winners during the pandemic, as people raced to stock up on lockdown supplies.”

She said that Tesco had managed to steal back some of its lost customers from Aldi through online deliveries. Analysts expect it to reach sales of £ 58.5bn in the full financial year.