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Tesco (TSCO) has reported group like-for-like sales grew by 0.9% in the 13 weeks to 28 May, including its second quarter of like-for-like UK growth for the first time in more than five years.

Including a small contribution from new store openings, total sales grew by 1.1% at constant currency rates. At actual exchange rates, sales grew by 1.8% including a 0.7% boost from currencies due to the weakening of the pound against European currencies.

Group like-for-like sales had been up 1.5% in the previous quarter.

Like-for-like sales growth in its combined UK & ROI business was 0.3%, slightly down from the 0.9% growth it saw in the final quarter of the 2015/16 financial year. UK like-for-likes were also up 0.3%.

Meanwhile, Tesco has also announced the proposed sale of Harris + Hoole to Caffè Nero. The announcement follows the agreement of the sale of Dobbies Garden Centres and the Giraffe restaurant chain earlier this month. “Together, these sales allow us to place even greater focus on our core UK business,” Tesco said.

CEO Dave Lewis commented: “We have delivered a second quarter of positive like-for-like sales growth across all parts of the Group in what remains a challenging market with sustained deflation.

“In both the UK and Internationally, we are putting customers at the centre of everything we do and re-configuring our business to serve them a little better every day. Our new fresh food brands are performing very well, with over two-thirds of our customers having bought products from the new range.

“We are encouraged by the progress we are making. By growing volumes, transforming the way we work together with our suppliers, and further optimising our store operating model we are rebuilding profitability in a sustainable way. I am confident that the improvements we are making for customers are working and will create long-term value for our shareholders.”

In the UK, it said its seven new fresh food “farm” brands launched in March were traded by “a significant number of customers” and they had a total deflationary impact on sales of around 0.7%. Two thirds of customers have now bought products from the new ranges and customer satisfaction scores of quality and taste are “exceptionally high”, at more than 90%.

International like-for-like sales grew by 3.0%, with a positive result in both Asia and Europe for the fourth consecutive quarter.

Tesco shares have jumped 2.4% to 170.5p in early trading this morning.

Morning update

Today’s big news is the EU referendum, with voting starting at 7am this morning. The result will become clearer in the early hours of tomorrow morning, with the final result expected around breakfast time on Friday.

This morning, packaging firm DS Smith (SMDS) has announced its full-year results this morning, with revenues up 6% to £4bn and by 9% on a constant currency basis.

Revenue growth was principally driven by the contribution from acquisitions, which contributed 8% growth on a constant currency basis. Organic growth contributed a further 1%. Corrugated box volumes have grown by 3.1% on a like-for-like basis with growth in all regions.

Adjusted operating profit increased by 16% on a constant currency basis to £379m and by 13% on a reported basis, driven by volume growth (contributing 10%) and from acquired businesses (contributing 6%).

Miles Roberts, chief executive, said: “The year has seen the group further strengthen our offering to pan-European customers, who increasingly require an international partner who not only designs and produces high quality packaging, but also works collaboratively with them to manage their supply chains and drive sales in a multi-channel retail environment.”

The FTSE 100 is 0.6% up again this morning to 6,301.3pts as the bookies give Remain an almost 80% chance of prevailing in today’s EU referendum.

Along with Tesco, DS Smith is a big riser this morning, climbing 4.2% to 403.3p. Other risers include Ocado (OCDO), up 6.5% to 265.4p, Hilton Food Group (HFG), up 2.2% after Tesco’s strong fresh sales in the quarter and McColl’s Retail Group (MCLS), up 2.1% to 145p.

Fallers include Carr’s Group (CARR), down 2.1% to 146.8p and Hotel Chocolat Group (HOTC), down 1.1% to 195.3p.

Yesterday in the City

The City held its nerve ahead of today’s referendum on the UK’s continued membership of the EU, with the FTSE 100 rising another 0.6% to 6,261.1pts. The FTSE 100 is now 3.1% up over the past five days as Brexit fears have eased as polls started suggesting the country is leaning towards remain.

There were few big movers amongst the grocery and fmcg firms, with Ocado (OCDO) the most notable riser, continuing its recovery by climbing 1.5% to 249.1p.

Other risers included Tesco ahead of its Q1 update, rising 1.4% to 166.5p, Tesco meat supplier Hilton Food Group (HFG), up 1.7% to 513.5p and Diageo (DGE), up 1.1% to 1,842.5p.

Despite the positive sentiment over the EU vote, there were some notable fallers including Associated British Foods (ABF), which dropped 3.4% to 2,802p after a downgrade from broker Morgan Stanley. The broker downgraded ABF to equal-weight with a 2650p price target.

Also falling was Majestic Wine (WINE), which dropped 5.7% to 424.5p taking the gloss off its share price rise on Monday after posting its first retail like for like growth in four years.

Other fallers included Marks & Spencer (MKS), down 0.7% to 361.3p and Imperial Brands (IMB), down 1% to 3630.5p.

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