Tesco Raises Share Buyback Programme to £950 Million and Increases First-Half Dividend
Key Facts
On 8 October 2026, Tesco reported results for the first half of financial year 2026/27, covering the 26 weeks ended 29 August, and increased its interim dividend and expanded its share buyback programme. The company raised the dividend per share to 5.05 pence from 4.80 pence in the comparable period, an annual increase of 5.2%. It also increased the value of its buyback programme for the current financial year to £950 million, from £750 million previously. The company said the expansion was supported by the strength of its balance sheet and continued cash generation. The decisions put shareholder returns at the centre of the results announcement, alongside growth in earnings for the period.
Group adjusted operating profit rose to £1,783 million from £1,674 million a year earlier, an increase of 6.5% at actual exchange rates. Sales excluding VAT and fuel were £33,776 million, compared with £33,051 million, up 2.0% at actual exchange rates and 1.6% at constant exchange rates. Statutory profit before tax increased to £1,455 million from £1,305 million, a rise of 11.5%. Adjusted diluted earnings per share rose 12.2% to 17.3 pence, compared with 15.4 pence. Tesco attributed the increase in earnings per share mainly to higher adjusted operating profit and a lower average number of shares.
Tesco raised the floor of its adjusted operating profit guidance for financial year 2026/27, forecasting a range of £3.15 billion to £3.30 billion, compared with the previous range of £3.0 billion to £3.3 billion. The company kept its full-year free cash flow guidance at £1.5 billion to £2.0 billion, in line with its medium-term guidance range. Free cash flow in the first half was £1,570 million. Tesco said this figure benefited from a net benefit of about £250 million, mainly due to the timing of the payroll cycle. It added that this benefit would reverse in the second half, putting the period’s result in the context of its full-year outlook.
Tesco set the interim dividend under its policy of making it equivalent to 35% of the previous full financial year’s dividend. The dividend was scheduled to be paid on 20 November 2026 to shareholders on the register at close of business on 16 October. After announcing its results on 8 October, the company announced on 30 October an agreement to sell its businesses in the Czech Republic and Slovakia to Ahold Delhaize. The businesses generated combined sales of £2.9 billion and contributed most of the £115 million adjusted operating profit for the Central Europe region in the previous 52-week period. Tesco expected the sale to be completed in the second half of 2027, subject to antitrust and other regulatory approvals.
Tesco said it expected to return most of the net proceeds from the sale to shareholders through an additional share buyback programme after completion of the transaction. The commitment is separate from the current £950 million programme, whose expansion was announced before the sale. In the market reaction to the first-half results, Tesco shares rose 1.9% to 485 pence on 8 October, while the FTSE 100 was trading lower that day. EL7 data showed the stock listed under ticker TSCDY closed at $21.63 on 3 November 2026. It had closed at $22.05 in the previous session, on 2 November.