Tesco’s interim results brought with them a huge highlight for me – seeing and speaking to Charles Wilson after his treatment for cancer, which meant he had to relinquish the role of CEO of the group’s UK business.

It was truly wonderful to see this great guy in such good form and long may that continue.

His boss, Dave Lewis, gave a confident performance to investment analysts at his results session.

He said the business remains firmly on track to deliver key targets and metrics set out in October 2016 for delivery in February 2020 around cost reduction, cash generation and, most critically, trading margins of between 3.5% and 4.0%, excluding Booker.

Lewis also reaffirmed the aspiration to deliver £2.5bn of incremental sales through Booker on an unguided time frame.

“The backbone of Tesco is its core British chain, where undoubted progress has been made operationally and financially”

Thereafter, we suspect milestone of margin aspirations will be dropped by Tesco, though it is worth noting that in 2020/21 Tesco expects to harvest around £200m of Booker synergies (£16m were realised in its first half).

Whilst all seems hunkydory at Camp Tesco, the group’s shares had fallen by 8.5% by lunchtime, meaning the market had a more mellow perspective.

We have said many times that the backbone of Tesco is its core British chain, where undoubted progress has been made operationally and financially.

However, it was Thailand where the new and disappointing news emerged.

Tesco has been evolving its highly profitable Thai business for some time, most notably withdrawing from wholesale activity over the last year, materially hitting like-for-like sales.

In a market where competitive intensity has nudged higher this year, management became aware that the evolution of its commercial activities to a more core-chain model – with an adjustment from back to front margin – was progressing slower than anticipated, as was the evolution of the commercial strategy in terms of price and promotional activity.

Accordingly, Asia not only missed our H1 expectations, but the company is guiding to more pain in H2, with the promise of better things to come in 2019/20.

More pizazz

Alongside Thailand, Tesco also laid bare its financial pain in Poland, where the business lost £32m in the first half.

At an underlying level, the group believes it is making progress in this difficult market, but prohibitions on Sunday trade and still competitive intensity mean it is a case of one step forward, one step back.

As such, we are also absorbing the reality that Central Europe will remain hard yards with Poland in tow.

All in all, Tesco is absolutely not all about the core chain in the UK – as today’s stock market reaction shows.

That said, the domestic business is the dominant piece and, in this respect, we believe the company has progressed leaps and bounds – and in a structural manner.

Much time and effort has been spent improving the functional operations of Tesco stores on these shores, but innovation and theatre has perhaps been less evident.

We now seem to be on the threshold of more of the latter coming through, as Tesco progresses through key workstreams, particularly in its private-label architecture and the price-value quotient of its entry-level lines. Its 400 ‘Exclusively at Tesco’ SKUs are giving the German discounters a better run for their money.

“Tesco is now stable, in control of its own density and on track to deliver long-term financial targets”

Further reset work and private-label engineering may make for more pizazz in future months in grocery, while work continues to reduce the drag of general merchandise after the closure of Tesco Direct in July.

Markets and businesses constantly evolve. The likely nudging down of forecasts is always a disappointment, not least as we had felt that they may have nudged higher at this stage, noting a stronger Q2 like-for-like performance in the UK than in Q1, which pleasantly surprised us.

However, such finessing in the grand scheme of things is just that, and we return to the substance of the issue around Tesco: it is now stable, in control of its own density and on track to deliver long-term financial targets.

Tesco, and we, are also blessed to have Charles Wilson back in the fold.

Analysis: Tesco on the up even if its share price isn't