StockMarketWire.com - Supermarket giant Tesco reported a rise in adjusted earnings and hiked its dividend, as initial panic buying triggered by the Covid-19 crisis started to abate.

Pre-tax profit for the year through March declined to £1.32bn, down from £1.62bn on-year.

But sales edged up 0.2% to £44.9bn and operating profit before exceptional items rose 14% to £2.96bn.

Tesco declared a full-year dividend of 9.15p per share, up 59% on-year.

'Initial panic buying has subsided and service levels are returning to normal,' chief executive Dave Lewis said.

'There are significant extra costs in feeding the nation at the moment but these are partially offset by the UK business rates relief.'

'Tesco is a business that rises to a challenge and this will be no different.'

Looking forward, Tesco estimated that the Covid-19 crisis could put a dent in its performance of between £650m and £925m, due to additional payroll, distribution and store expenses.

However, Tesco said that if customer behaviour returned to normal by August it was likely the cost headwinds would be 'largely offset' by food volume increases, business rates relief and 'prudent operations management'.

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