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Tesco unveils profits of £2.55bn | Tesco unveils profits of £2.55bn |
(about 3 hours later) | |
Tesco, Britain's biggest retailer, has reported a 13% rise in full-year underlying profits to £2.55bn. | Tesco, Britain's biggest retailer, has reported a 13% rise in full-year underlying profits to £2.55bn. |
Group sales rose 10.9% to £46.6bn with its 1,500 UK stores bringing in sales of £35.6bn. | Group sales rose 10.9% to £46.6bn with its 1,500 UK stores bringing in sales of £35.6bn. |
The firm's international expansion continued, with 8.2m square feet of new store space being created abroad and total international sales up 18%. | The firm's international expansion continued, with 8.2m square feet of new store space being created abroad and total international sales up 18%. |
The supermarket chain plans to create 25,000 new jobs worldwide this year and open its first US store in Arizona. | The supermarket chain plans to create 25,000 new jobs worldwide this year and open its first US store in Arizona. |
Shares in the group rose more than 2%, or 9.75 pence, to 465.5p in early trade on the London market. | Shares in the group rose more than 2%, or 9.75 pence, to 465.5p in early trade on the London market. |
Although Tesco has been expanding abroad, the majority of its profits still came from its UK network, with online and non-food sales soaring. | Although Tesco has been expanding abroad, the majority of its profits still came from its UK network, with online and non-food sales soaring. |
Sales growth | Sales growth |
Like-for-like sales excluding petrol in the UK - which exclude the impact of new stores - were up 5.8% in the three months to 24 February, up from sales growth of 5.6% in the third quarter. | Like-for-like sales excluding petrol in the UK - which exclude the impact of new stores - were up 5.8% in the three months to 24 February, up from sales growth of 5.6% in the third quarter. |
TESCO SALES BREAK-DOWN UK - 9% to £35.6bnInternational - up 18% to £11bnUK non-food - up 12% to £7.6mTesco.com - up 29% to £1.2bn Tesco Directory - up 49% to £83.4m Tesco plans fire up town Tesco's local growth | TESCO SALES BREAK-DOWN UK - 9% to £35.6bnInternational - up 18% to £11bnUK non-food - up 12% to £7.6mTesco.com - up 29% to £1.2bn Tesco Directory - up 49% to £83.4m Tesco plans fire up town Tesco's local growth |
The underlying profit figure of £2.55bn excludes the reduction in Tesco's pension liabilities caused by recent changes to pensions regulation. | The underlying profit figure of £2.55bn excludes the reduction in Tesco's pension liabilities caused by recent changes to pensions regulation. |
When that is taken into account, group profit before tax came in at £2.65bn. | When that is taken into account, group profit before tax came in at £2.65bn. |
Tesco's results also gave an update on its plans to realise the value of its property portfolio. | Tesco's results also gave an update on its plans to realise the value of its property portfolio. |
Tesco originally said that the programme would allow it to return at least £1.5bn to shareholders through share buybacks, but it has now said it expects to return at least £3bn. | Tesco originally said that the programme would allow it to return at least £1.5bn to shareholders through share buybacks, but it has now said it expects to return at least £3bn. |
It has already made deals with British Airways Pension Fund and British Land. | It has already made deals with British Airways Pension Fund and British Land. |
With private equity firms circling a number of UK retailers - such as Alliance Boots and Sainsbury's - companies are under pressure to return cash to shareholders. | With private equity firms circling a number of UK retailers - such as Alliance Boots and Sainsbury's - companies are under pressure to return cash to shareholders. |
Competition fears | Competition fears |
Meanwhile, supermarkets are also under pressure from a Competition Commission investigation into the UK's £95bn grocery sector. | Meanwhile, supermarkets are also under pressure from a Competition Commission investigation into the UK's £95bn grocery sector. |
Check Tesco's share price | Check Tesco's share price |
With almost £1 in every £3 being spent on groceries in Tesco stores across the country, the group has mounted a robust defence of what some call its dominant position. | With almost £1 in every £3 being spent on groceries in Tesco stores across the country, the group has mounted a robust defence of what some call its dominant position. |
Tesco currently holds a 31.2% share of the UK grocery market, according to the latest figures from market researchers TNS - more than the combined share of its closest rivals Asda and Sainsbury. | Tesco currently holds a 31.2% share of the UK grocery market, according to the latest figures from market researchers TNS - more than the combined share of its closest rivals Asda and Sainsbury. |
Its latest profit figures prompted calls from Friends of the Earth to "curb the power of the Tesco juggernaut". | Its latest profit figures prompted calls from Friends of the Earth to "curb the power of the Tesco juggernaut". |
"The supermarket giant's market dominance is bad news as it allows it to dictate conditions to suppliers and to drive High Street stores out of existence," said campaigner Vicki Hird. | "The supermarket giant's market dominance is bad news as it allows it to dictate conditions to suppliers and to drive High Street stores out of existence," said campaigner Vicki Hird. |
HAVE YOUR SAY Tesco is a British business doing well and deserves a pat on the back. Scott, Oxfordshire Send us your comments | |
However, the director general of the British Retail Consortium (BRC) dismissed the "myth" that shoppers are forced to use Tesco stores. | However, the director general of the British Retail Consortium (BRC) dismissed the "myth" that shoppers are forced to use Tesco stores. |
"Tesco's competition - Sainsbury, Asda, Waitrose, Somerfield, M&S -- are all very powerful, very formidable and that's why the shopper gets a good deal," Kevin Hawkins added. | "Tesco's competition - Sainsbury, Asda, Waitrose, Somerfield, M&S -- are all very powerful, very formidable and that's why the shopper gets a good deal," Kevin Hawkins added. |
"Consumers have got the benefit in terms of lower prices, better value, more choice." | "Consumers have got the benefit in terms of lower prices, better value, more choice." |