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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Tesco Plc | TSCO | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 2.50 | 0.71% | 353.40 | 16:35:11 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 353.60 | 351.90 | 355.60 | 353.40 | 350.90 |
| Industry Sector |
|---|
| FOOD & DRUG RETAILERS |
| Top Posts |
|---|
Posted at 10/11/2024 10:24 by xtrmntr Supermarkets and banking were never the most obvious bedfellows. Tesco (TSCO) and J Sainsbury's (SBRY) now agree with this and have concluded that their experiment with selling loans and credit cards to the British public distracted from their core grocery offerings. Shareholders should benefit from a more efficient allocation of capital.At one time, Tesco Bank and Sainsbury's Bank were considered challenger banks who could make inroads against the hegemony of the big players. The grocers' strategy was to extend their brand power into the growth area of financial services, and the UK's two biggest supermarkets originally moved into the market through joint ventures in 1997. But their recent disposal of banking assets means the journey has come to an end.Last week, Tesco announced it had completed the sale of its credit cards, unsecured personal loans, deposits and banking operating infrastructure to Barclays (BARC) for £600mn. Sainsbury's sale of its own core banking business, to NatWest (NWG), is expected to complete in the first half of 2025 after management tried and failed to find a buyer during the pandemic. The supermarket will pay NatWest £125mn alongside the handover of £2.5bn in assets and £2.6bn in liabilities. Sainsbury's previously sold its mortgage book to the Co-operative Bank for £464mn last year, and has also announced the sale of its ATM network for an undisclosed figure in September, which includes profit-sharing provisions.Shore Capital analyst Clive Black told Investors' Chronicle that Tesco and Sainsbury's banking arms made "derisory returns given acquisition costs and capital expenditure". He added that shareholders should be "happy the supermarkets aren't now throwing good money after bad".Expectations were certainly sizeable. Tesco argued back in 2008, when it bought out Royal Bank of Scotland's half of its banking joint venture for £950mn, that it could ultimately make £1bn in annual profit from non-food areas such as financial services and telecoms.But profits haven't been awe-inspiring. Over the past six financial years, Tesco posted an annual adjusted operating profit of around £150mn-£200mn, while Sainsbury's was stuck below the £50mn mark.Low market share (Tesco Bank has around 5mn customers and Sainsbury's Bank under 2mn) in an environment where it is difficult for challengers to scale up against dominant incumbents, combined with a strict regulatory landscape, conspired to bring down banking hopes.Black argued that the supermarkets "totally underestimated how costly, bureaucratic and onerous financial services regulation would become in the UK".The grocers' retrenchment also ties in with a renewed focus on food as they deal with the growth of Aldi and Lidl. Sainsbury's chief executive, Simon Roberts, has spearheaded a 'food first' strategy, and the latest news on this front was the announcement of an extension of its Aldi price match scheme at smaller stores ahead of its interim results on 7 November. Tesco boss Ken Murphy said its banking sale would let it fix its attention on "continuing to grow our core retail business".Capital returnsOne effect of the banking disposals will be the return of capital to shareholders. Tesco plans a £700mn additional buyback, on top of the £250mn special dividend Tesco Bank paid out last year. Once the sale to NatWest completes, Sainsbury's expects to return £250mn to shareholders that had been ringfenced because of capital requirements.But this is also about a more efficient use of capital, with billions of capital-intensive assets being removed from balance sheets. The grocers are still benefiting from strategic partnerships in the banking space and retained financial services assets, which they both described as "capital-light, profitable businesses".Tesco expects to post £80mn-£100mn of adjusted operating profit each year from a partnership with Barclays and its insurance and money services assets (which include ATMs and travel money). Sainsbury's forecasts at least £40mn of annual income from insurance and branded ATMs and travel money services, alongside a partnership with NewDay, to which it has agreed to sell its Argos financial services cards portfolio for around £720mn.Tesco and Sainsbury's sales are part of a wider trend of consolidation in the UK banking sector. Nationwide completed its £2.9bn acquisition of Virgin Money last month, while Coventry Building Society is in the process of buying the Co-operative Bank for £780mn.Elsewhere in the grocery and banking crossover space, Marks & Spencer (MKS) this week said that it had taken a £7.5mn charge in its half year to 28 September in relation to redress for insurance product miss-selling at M&S Bank. It expects to record net charges of £94.9mn over the next seven years. HSBC (HSBA) has owned M&S's financial services division for two decades, but M&S is entitled to a share of the profits. The pair signed a new seven-year partnership in April. |
Posted at 02/11/2024 17:44 by hazl To be honest a long time ago l realised that people didn’t want long wordy posts. A bit of newsreasons for investing and perhaps a bit of banter were enough. I’d forgotten when l realised this but it proved to be so. You get all types investing and many people that have pensions and funds that they know nothing about. Then of course you get right through to people that have gone into everything with a fine tooth comb. I do know that some big investors like Buffet though have returned to a lot of cash so l think we will have to be careful. But people have to eat simply put so l remain here. |
Posted at 02/11/2024 06:14 by misca2 Tesco Bank sale sparks share buybackBy City & Finance Reporter THIS IS MONEY Updated: 21:50 GMT, 1 November 2024 Tesco will return £700m to shareholders after completing the sale of its banking business to Barclays. Britain's largest supermarket group said it would begin a share buyback after completing a previous £1billion buyback programme that is still ongoing. Shares rose almost 1.7 per cent, or 5.8p, to 348p yesterday. They are up by 20 per cent for the year to date. Investors have been attracted by record profits and growing market share – despite fierce competition from discount rivals Aldi and Lidl since the cost-of-living crisis. The grocer has now begun a ten-year partnership with Barclays, which will supply Tesco-branded banking products. Barclays has paid around £600m for Tesco's credit cards, unsecured personal loans, and savings business. The supermarket continues to operate its own insurance business as well as cash points and travel money services. Vim Maru, chief executive of Barclays' UK operations, added: 'We will bring the strength of both businesses together, benefiting customers and colleagues.' |
Posted at 07/10/2024 09:44 by philanderer Tasty opportunities at Tesco, says HargreavesTasty first-half results have given Tesco (TSCO) confidence to upgrade full-year guidance and, despite a run-up on the shares, Hargreaves Lansdown says there’s further to go. The Citywire Elite Companies AA-rated stock reported a 4% rise in first-half sales to £31.5bn, ignoring fuel and exchange rates, with retail underlying operating profit boosted 10% to £1.6bn. This allowed the grocer to increase its dividend by 10.4p to 4.25p and increase full-year profit guidance to £2.9bn from £2.8bn. Analyst Aarin Chiekrie said easing that inflationary pressures and a commitment to keeping food prices low had helped Tesco fend off competition from the likes of Aldi and Lidl. While at the other end of the spectrum, its Finest range helped it to ‘poach customers off more premium supermarkets’. ‘Both of these actions have left Tesco on a high at the half-year mark,’ said Chiekrie. ‘The strong volume-led growth has given management the confidence to upgrade full-year profit guidance. With a strong start to the year and the all-important Christmas period just around the corner, this upgraded target looks well within reach.’ There is also ‘plenty of cash pumping around the business too, which is helping to fund share buybacks and a double-digit increase in dividends.’ Chiekrie said ‘market-leadin The shares fell 0.9% to 360.8p on Friday, but have gained 33.3% over the last 12 months. citywire.com |
Posted at 04/10/2024 05:16 by hazl TescoThe supermarket giant saw its shares gain ground this morning, leaving it as one of the best performers in the FTSE-100. The move came off the back of interim results which showed a modest uptick in revenues but a significant rise in profitability. Investors stand to see a 10% increase in the interim dividend, whilst management also noted that the volume growth posted during the first half of the year was above expectations. Full year guidance was increased slightly and the Tesco share price was just over 2% higher in early trade. |
Posted at 25/4/2024 21:05 by philanderer Daily Telegraph Questor tipQuestor says: buy Ticker: TSCO Share price at close: 289.8p |
Posted at 23/3/2024 09:57 by johnwise Roll on November welcome back Mr President.Donald Trump could get £2.6bn windfall after investors approve plans to take his social media platform public Trump Media & Technology Group (TMTG) – the firm behind the former US president's Truth Social site – is expected to list on New York's Nasdaq exchange next week. |
Posted at 08/3/2024 06:48 by superiorshares pusI think shares have lifted a little due to the expected interest rate reductions. In the EU that will happen, it's a basket case. In the US they are all talking about June? That I wouldn't bet on. Although there will probably be some election interest rate cuts by those independent Central Banks. I think it's all ready well and truly in the price. It's the SHRINK that Investors in Tesco need to keep a close eye on. TRUMP2024 SS |
Posted at 03/2/2024 16:05 by superiorshares InvestorsThe jobs data coming out of the States suggests over the pond you may get no interest rate cuts this year? SS |
Posted at 04/1/2024 20:29 by geckotheglorious "What to expect from Tesco at next week’s update"After a strong 2023, shares in the UK’s biggest supermarket trade near a two-year high. But what will be revealed in its trading update for Christmas and the third quarter? A “cool, calm and collected”&nbs A note by Jefferies previewing next week’s trading update adds that Tesco’s “ample and consistent” levels of cash generation should resonate strongly with investors. The bank expects UK retail like-for-like sales growth of 4.9% over Christmas, rising to 7% across the third quarter. That’s ahead of the consensus view of 3.5% and 6% respectively. Earlier this week, Kantar Worldpanel reported the supermarket sector’s best December since 2019 as Tesco gained 0.1 percentage points of share to now hold 27.6% of the market. With Jefferies not ruling out upgrades to Tesco’s cash generation and earnings guidance in the 11 January update, it said the market leader entered 2024 in a “sure-footed manner”. Shares have risen by about 25% to above 300p in the past year but the base case of Jefferies analysts is a decade high valuation of 350p. The upside scenario is 420p, the downside 280p. The bank regards the shares as still undervalued on less than 12 times 2024 earnings and a free cash flow yield of about 9%. It highlights the potential for 5% buybacks annually from next year and “appreciable&r It added: “We remain of the view that the broader competitive context should support solid earnings progress at Tesco, and ample and consistent levels of free cash generation.” Tesco told investors at October’s interim results that it expects free cash flow of between £1.8 billion and £2 billion this year, ahead of medium-term guidance of £1.4 billion-£1.8 billion. Jefferies said it has written extensively about the improving relative strength of Tesco’s customer offering, which should support strong levels of cash generation. It continued: “The recent change in rates expectations has driven investors' interest towards more cyclically geared UK peers. This may start changing if progress on inflationary challenges becomes more gradual, and the employment outlook continues to normalise. “In this context Tesco’s absolute attractions should resonate even more strongly with investors at a time when the group's absolute and relative valuation remain supportive.” Jefferies continues to model for retail earnings of £2.76 billion in the financial year to the end of next month, above current guidance of between £2.6 billion and £2.7 billion and the City consensus of £2.72 billion. |
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