Tesco has reported a strong trading performance, largely driven by the UK and ROI. Once again, online was a key growth engine with c.80% sales growth. Despite an increase in the COVID-19-related costs (+£85m to £810m for FY20/21), the company has maintained annual retail operating profit (excluding the business rate payment) to be at least equal to the previous year. We maintain a positive outlook for the stock’s valuation.
