Tesco (TSCO)

[pje16]

"The weaker share price reaction in early exchanges relates to the company projecting a lower retail profit given the need for further investment and the impact of inflationary pressures."

"Even so, the market consensus of the shares remains at a "strong buy", reflecting the generally held view that there is still much to go for from an investment perspective."

Source:
https://www.ii.co.uk/secure/my-news-fee ... w-ii523537
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PS I'm keeping mine (and my Sainsburys)

[tjh290633]

The market was spooked by the Outlook section:

Given the significant uncertainties in the external environment, we believe it is appropriate to provide profit guidance in the form of a wider than usual range. Our guidance for the 2022/23 financial year is therefore for retail adjusted operating profit of between £2.4bn and £2.6bn. Three main factors are likely to influence our actual performance:

- the extent of further normalisation in customer behaviour as we come out of the pandemic

- the level of cost inflation that we experience and our ability to partially offset it through accelerating Save to Invest

- the investment required to maintain the strength of our price position relative to the market

We expect Bank adjusted operating profit of c.£120m to £160m.

Our focus on cash flow remains unchanged and we expect another strong retail free cash flow performance within our £1.4bn to £1.8bn range.

TJH

[MDW1954]

I don't know what prior expectations were (since it is the change that matters to the share price), but I'm not sure as an investor the word "good" would be the first I would be choosing.

I think the results were good. But the outlook is bad. Prior expectations can be inferred from the fact that the share price is down 10% since the start of the year (excluding today's fall), so today's announcement (as we are saying) is obviously more downbeat than consensus expectations.

But what did people expect? Tesco is the UK's largest retailer, trading in what will sooon be some of the most challenging market conditions since (in my view) the early 1980s.

"Troubling" might be the word, dealtn! And that's never a positive for a share price.

MDW1954

[pje16]

Tesco is the UK's largest retailer, trading in what will sooon be some of the most challenging market conditions since (in my view) the early 1980s.
MDW1954

People still have to eat , challenging conditions or not
that might be oversimplifying it, but it does have an element of truth

[MDW1954]

Tesco is the UK's largest retailer, trading in what will sooon be some of the most challenging market conditions since (in my view) the early 1980s.
MDW1954

People still have to eat , challenging conditions or not
that might be oversimplifying it, but it does have an element of truth

Of course. But that doesn't mean to say that those who sell them their food are going to see their profits increase.

MDW1954

[idpickering]

Tesco is the UK's largest retailer, trading in what will sooon be some of the most challenging market conditions since (in my view) the early 1980s.
MDW1954

People still have to eat , challenging conditions or not
that might be oversimplifying it, but it does have an element of truth

Of course. But that doesn't mean to say that those who sell them their food are going to see their profits increase.

MDW1954

FWIW, up here in Orkney we have a Tesco and a Lidl. I think it's fair to say that our shopping is evenly split between the two of them.

Ian.

[Dod101]

Tesco is the UK's largest retailer, trading in what will sooon be some of the most challenging market conditions since (in my view) the early 1980s.
MDW1954

People still have to eat , challenging conditions or not
that might be oversimplifying it, but it does have an element of truth

That is oversimplifying it I think. Supermarkets are reverting to type because with the squeeze on incomes we are told is coming, I fancy that food shoppers will likely trade down either to the cheaper lines in Tesco or to the likes of Lidl and Aldi. The food market is unlikely to expand much over the next two or three years and so the supermarkets will simply be fighting each other, and that means reducing or at least keeping current prices as costs rise.

Tesco's outlook seems to confirm that that is what they expect.

I have not held a supermarket since I sold Sainsbury in 2014.

Dod

[idpickering]

Following on from Dod’s comment above, I hold TSCO and SBRY. I must admit that I have mulled over selling both. I’m beginning to wonder if my dosh could work harder for me elsewhere maybe? Hmm?

Ian.

[kempiejon]

Following on from Dod’s comment above, I hold TSCO and SBRY. I must admit that I have mulled over selling both. I’m beginning to wonder if my dosh could work harder for me elsewhere maybe? Hmm?

Ian.

I'm one to avoid selling. I hold Sainsbury's but not Tesco, in some tax planning a few years ago I sold my unsheltered SBRY and haven't felt inclined to buy more. Sainsbury's hasn't done much to increase my wealth - a 10 year share price chart shows my capital has declined with a good series of peaks and troughs - in that time yield has ticked between 3% and 7% with I think 4 years of reducing income. A lucky trader could have bought and sold into the capital swings. As a HYP pick for me back in 2011 they had an OK dividend history - since then not. Tesco looks a little more useful for recent dividend increases and over 5 years the capital has increased a bit. I've had less profitable investments than Sainsbury's but much better ones too.

[Dod101]

Following on from Dod’s comment above, I hold TSCO and SBRY. I must admit that I have mulled over selling both. I’m beginning to wonder if my dosh could work harder for me elsewhere maybe? Hmm?

Ian.

I'm one to avoid selling. I hold Sainsbury's but not Tesco, in some tax planning a few years ago I sold my unsheltered SBRY and haven't felt inclined to buy more. Sainsbury's hasn't done much to increase my wealth - a 10 year share price chart shows my capital has declined with a good series of peaks and troughs - in that time yield has ticked between 3% and 7% with I think 4 years of reducing income. A lucky trader could have bought and sold into the capital swings. As a HYP pick for me back in 2011 they had an OK dividend history - since then not. Tesco looks a little more useful for recent dividend increases and over 5 years the capital has increased a bit. I've had less profitable investments than Sainsbury's but much better ones too.

This is not the HYP Board so I think I can venture the opinion that supermarkets have not been the greatest investment over the last few years.

Dod

[idpickering]

Following on from Dod’s comment above, I hold TSCO and SBRY. I must admit that I have mulled over selling both. I’m beginning to wonder if my dosh could work harder for me elsewhere maybe? Hmm?

Ian.

I'm one to avoid selling. I hold Sainsbury's but not Tesco, in some tax planning a few years ago I sold my unsheltered SBRY and haven't felt inclined to buy more. Sainsbury's hasn't done much to increase my wealth - a 10 year share price chart shows my capital has declined with a good series of peaks and troughs - in that time yield has ticked between 3% and 7% with I think 4 years of reducing income. A lucky trader could have bought and sold into the capital swings. As a HYP pick for me back in 2011 they had an OK dividend history - since then not. Tesco looks a little more useful for recent dividend increases and over 5 years the capital has increased a bit. I've had less profitable investments than Sainsbury's but much better ones too.

This is not the HYP Board so I think I can venture the opinion that supermarkets have not been the greatest investment over the last few years.

Dod

My thanks to you both for sharing your opinions on this matter. Tbh, I’d rather just let them be ideally, but I do agree neither have been the greatest investment too. They offer my portfolio some diversification, and not much else it seems. Something for me to mull over methinks?

Ian.

[MDW1954]

Moderator Message:
This is the Company News board, not the "What should IDP do with his HYP portfolio board?"! Minor deviations are permissible, but anything protracted should be posted on HYP Practical, referencing this News post. -- MDW1954

[Dod101]

Moderator Message:
This is the Company News board, not the "What should IDP do with his HYP portfolio board?"! Minor deviations are permissible, but anything protracted should be posted on HYP Practical, referencing this News post. -- MDW1954

Interesting comment. If one is not a HYPer, why should he/she be obliged to post on the HYP Board? There may be several reasons why one might (or might not) want to invest in a supermarket without being a HYPer and where better to discuss this than on that company's dedicated Board?

I took IDP's postings as no more than a sort of 'thinking out loud' process.

Dod

[77ss]

Moderator Message:
This is the Company News board, not the "What should IDP do with his HYP portfolio board?"! Minor deviations are permissible, but anything protracted should be posted on HYP Practical, referencing this News post. -- MDW1954

Thus stifling broader discussion.

It sometimes seems to me that HYP dogma is the tail wagging the dog.

So someone runs an HYP - big deal! Does that mean that they cannot canvass opinions from those who don't?

[MDW1954]

Moderator Message:
This is the Company News board, not the "What should IDP do with his HYP portfolio board?"! Minor deviations are permissible, but anything protracted should be posted on HYP Practical, referencing this News post. -- MDW1954

Interesting comment. If one is not a HYPer, why should he/she be obliged to post on the HYP Board? There may be several reasons why one might (or might not) want to invest in a supermarket without being a HYPer and where better to discuss this than on that company's dedicated Board?

I took IDP's postings as no more than a sort of 'thinking out loud' process.

Dod

This is the Company News board. Discussions about Ian's HYP are not Company News. I suggested posting on HYP Practical because Ian is a HYPer. Had an oily posted something similar, I'd have suggested the board where oil and gas shares are discussed.

This is NOT "Tesco's dedicated board". It is Tesco's dedicated NEWS board.

MDW1954

[MDW1954]

Moderator Message:
This is the Company News board, not the "What should IDP do with his HYP portfolio board?"! Minor deviations are permissible, but anything protracted should be posted on HYP Practical, referencing this News post. -- MDW1954

Thus stifling broader discussion.

It sometimes seems to me that HYP dogma is the tail wagging the dog.

So someone runs an HYP - big deal! Does that mean that they cannot canvass opinions from those who don't?

See my reply to Dod, above. As I said, short digressions are permissible, for the reason you outline. But this board isn't the place for longer discussions. And I pointed Ian to HYP-P because he is a HYPer, and that is the constituency which he normally consults.

MDW1954

[idpickering]

Moderator Message:
This is the Company News board, not the "What should IDP do with his HYP portfolio board?"! Minor deviations are permissible, but anything protracted should be posted on HYP Practical, referencing this News post. -- MDW1954

Thus stifling broader discussion.

It sometimes seems to me that HYP dogma is the tail wagging the dog.

So someone runs an HYP - big deal! Does that mean that they cannot canvass opinions from those who don't?

See my reply to Dod, above. As I said, short digressions are permissible, for the reason you outline. But this board isn't the place for longer discussions. And I pointed Ian to HYP-P because he is a HYPer, and that is the constuency which he normally consults.

MDW1954

Fair enough Malcolm, thanks for your ever welcome feedback. Enough said on this methinks.

Ian.

[idpickering]

Commencement of Share Buyback Programme.

Tesco PLC announces the buy back of shares with an aggregate market value of up to £750 million by April 2023 as part of its ongoing share buyback programme.

Further to the announcement made on 13 April 2022, Tesco plc (the "Company") announces that it has entered into an arrangement with Citigroup Global Markets Limited ("Citi") to repurchase shares on behalf of the Company.

The arrangement allows Citi to repurchase shares, together with any other ordinary shares in the Company (the "Shares") purchased on the Company's behalf, in accordance with the Company's current buyback authority granted by shareholders at the Company's 2021 Annual General Meeting.

These share purchases will be made on the Company's behalf and in accordance with the arrangement and, in the case of any purchases made during closed periods, shall be made independently of and uninfluenced by the Company.

Any share purchases effected pursuant to the arrangement will be subject to the terms of the arrangement with Citi and in any case will be effected in a manner consistent with both the general authority vested in the Company to repurchase shares, the Market Abuse Regulation 596/2014 as it forms part of UK domestic law and Chapter 12 of the United Kingdom Listing Rules, which require that the maximum price paid be limited to be no more than the higher of (i) 105 per cent of the average middle market closing price of the Company's ordinary shares for the five business days before the purchase is made, and (ii) the higher of the price of the last independent trade and the highest current independent bid on the trading venue where the purchase is carried out. The aggregate purchase price under this arrangement, together with any other Shares purchased on the Company's behalf pursuant to its buyback programme, will not exceed £750 million. The shares will be bought back during the period commencing the date hereof and by no later than April 2023.

The sole purpose of these share purchases is to reduce the Company's share capital.

https://www.investegate.co.uk/tesco-plc ... 00082702J/

[idpickering]

Annual Report and Financial Statements 2022 and Notice of Annual General Meeting 2022.

Tesco PLC (the "Company") announces that it has today published its Annual Report and Financial Statements 2022. In addition, the Company announces that its Notice of Annual General Meeting 2022 (the "Notice") has been sent to shareholders. The 2022 Annual General Meeting will be held at our Heart building, Shire Park, Welwyn Garden City, Herts, AL7 1TW on Friday, 17 June 2022 at 2.00 pm (the "AGM").

https://www.investegate.co.uk/tesco-plc ... 00013413L/

[idpickering]

Transaction in own shares.

Tesco PLC (the "Company") announces that on 27 May 2022 it has purchased, in accordance with the authority granted by shareholders at the 2021 Annual General Meeting of the Company, the following number of ordinary shares of 6 1/3 pence pursuant to its up to £750 million share buyback programme, the details of which was announced on 13 April 2022.

The purchased shares will be cancelled.

https://www.investegate.co.uk/tesco-plc ... 00051576N/

Ian.