Tesco sign trees
Tesco’s recovery under ceo Dave Lewis is continuing to gather pace with profits having broken through the £1bn mark once again, boosted by the retailer’s UK supermarket chain, which posted its first full-year like-for-like UK sales growth – up 0.9% - since 2009/2010.
Ahead of City expectations, the retailer this morning reported a 30% hike in group operating profit to £1.28bn in the year to February 25, with the UK business seeing profits surge 60% to £803m.
Group sales, including overseas operations, rose by 3.7% to £55.9bn.
However, pre-tax profits fell to £145m from £202m as the retailer booked a £235m charge after agreeing to pay a £129m fine to the Serious Fraud Office following a lengthy investigation into the accounting scandal in 2014.
Lewis said Tesco was “ahead of where we expected to be at this stage”, having made “good progress on all six of the strategies we shared” in October.
“Today our prices are lower, our range is simpler and our service and availability have never been better, ‘ he said, adding Tesco’s exclusive fresh food brands had strengthened its value proposition, with its food quality perception at its highest level for five years.
At the same time, Tesco had increased profits, generated more cash and “significantly reduced debt”, he said.
Lewis will be hoping the ‘better than expected’ results will give a boost to Tesco’s stuttering campaign to win investor backing for its proposed £3.7bn takeover of wholesaler Booker – the cash & carry group behind the Londis and Budgens chains.
In a move to allay concerns the aquisition would be a distraction, Lewis said the results delivered fresh evidence that Britain’s biggest retailer was “completely focused and committed” to reviving its UK business.
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