Tesco operating profits jumped by 71.8% to £885m in the half year to August 26.
The result has prompted the UK’s largest grocer to declare its first dividend in three years.
Its revenue for the half year rose to £28.3bn up from £27.3bn.
The increase in profit is largely down to the £235m fine recorded in the comparison period from last year which was due to the accounting scandal.
Its group sales rose 3.3% to £25.2bn, up from £24.4bn in the same period the year before.
During the period the supermarket raised £175m in property-related proceeds.
It sold 50 sites and repurposed 400,000 sq ft of space. Notable transactions included the unwind of its joint venture with British Land, with which it owned seven stores. Tesco regained ownership of these stores and realised a net gain of £21m in the transaction.
A 3.5 acre Tesco site in Hackney, E9, was chosen by the council to be the centrepiece of a 1m sq ft retail development in a deal that made Tesco a £44m profit.
The company said its proposed merger with Booker Group has moved to a phase two review by the Competition & Markets Authority.
It said it has made good progress in its medium-term goals and remains on track to reduce its costs by £1.5bn, generate £9bn of retail cash from operations and improve margins to between 3.5% and 4% by 2019-20.
Chief executive Dave Lewis said: “We are continuing to make strong progress. Sales are up, profits are up, cash generation continues to strengthen and net debt levels are less than half what they were when we started our turnaround three years ago.”
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