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Tesco (TSCOLN; Baa3, BBB-, BBB-; S) Q1 Trading update tomorrow

CONSUMER STAPLES
  • Don't expect it to be a mover for credit but keeping an eye on any changes to FY guidance including for retail FCF of £1.4-1.8b.
  • BS is low levered, equity pay-outs expected to be ~£1.9b this year part of that funded from another ~£950m from Tesco bank linked proceeds/divvy's.
  • We have cheap view on the €31s and the new £34s.

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