If you'd invested in: Tesco and Associated British Foods

published 27 July 2018

If only...

Tesco (LSE: TSCO), the UK's biggest retailer, has seen its market value rise almost 50% in a year. In April, barely three years after it reported the second largest loss in UK corporate history, it posted pre-tax profits of nearly £1.3bn in the year to the end of February, up from £145m the year before. This came from sales that rose 2.8% to £57.5bn. It also cut net debt by nearly 30% to £2.6bn. The results prompted it to announce a 3p dividend, the first payout in three years. In July, Tesco and its French counterpart Carrefour joined forces to fend off competition from discounters.

Associated British Foods (LSE: ABF) is a clothing as well as a food retailer, as it owns Primark. Last November it reported a 50% rise in pre-tax profits to £1.6bn, which was due to brisk business at Primark, a rebound in sugar profits and a boost from sterling's weakness. Yet the shares fell after the firm said it would be reducing the size of US Primark stores. This month ABF said profits would be higher than expected as the heatwave has boosted sales at Primark. But ABF also warned of lower annual profits at its sugar business as European sugar prices are currently low.

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Alice grew up in Stockholm and studied at the University of the Arts London, where she gained a first-class BA in Journalism. She has written for several publications in Stockholm and London, and joined MoneyWeek in 2017.

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