- Supermarket giant Tesco reported a more than doubling of first-half profit and upgraded its annual guidance on the back of higher sales, lower Covid-19 costs and an improved performance at its banking unit.

The company also announced that it would kick off an 'ongoing' share buyback programme, with a first tranche worth £500 million to be repurchased by no later than next October.

Pre-tax profit for the six months through June jumped to £1.14 billion, up from £551 million year-on-year, as revenue climbed 5.9% to £30.4 billion.

Adjusted operating profit rose 41% to £1.46 billion amid a 3.0% rise in headline sales, which exclude fuel, to £27.33 billion.

Retail like-for-like sales rose 2.3%, including UK retail like-for-like sales growth of 1.2%.

Tesco's banking unit notched an adjusted operating profit of £72 million, swinging from a year-on-year loss of £155 million.

The company held its interim dividend steady at 3.2p per share. It confirmed it intended to pay a progressive dividend, broadly targeting a pay-out of around 50% of earnings.

Looking forward, Tesco forecast full-year adjusted retail operating profit of between £2.5 billion and £2.6 billion.

'We've had a strong six months; sales and profit have grown ahead of expectations, and we've outperformed the market,' chief executive Ken Murphy said.

'For shareholders, our strong performance to date and our confidence in our ability to generate cash in the coming years has enabled us to announce the start of a buyback programme that will balance the maintenance of a strong capital structure with returning surplus cash.'

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