Today supermarket giant Tesco said that pre-tax profits had climbed by 11.3% from the same period a year ago to £3.53bn, on sales up by 8.1% to £67.57bn. However, Tesco said it had not met its planned growth for the year, which was "only partly attributable to the deterioration in the consumer environment during the second half." Internationally, Asian sales were up by 9.7% at constant exchange rates to £11.02bn, Europe sales grew 7.4% to £10.56bn and sales in the US were up by 38.1%, though its California-focused Fresh & Easy chain saw losses increase. "A generally improving global economic environment provides a helpful background for Tesco in most of our markets in Asia and Europe as well as in the United States."

The latest results from grocer Tesco serve to illustrate the sheer scale of this immense international cash generating machine. Any disappointment on group-wide growth has to be viewed in context against the international trend, especially as the rate of growth in Asia has more than offset losses closer to home. For Galvan Research, this is more than enough to back the not inconsiderable buy argument.

While Tesco shares have been largely rangebound either side of the 400p level in recent months, the March bear trap below 370p and subsequent rebound suggests that while above the 20 day moving average at 393p the stock will return to the last January / February resistance zone through 315p.

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