Tesco posts surge in full year profits
Tesco has a posted a 58% uplift in adjusted operating profit which surged to £2.8 billion in the year to 26 February.
In addition, revenue grew by 2.5% in the period to reach £54.8 billion while UK like-for-like sales climbed by 0.4% on last year and by 8.2% on pre-pandemic levels two years ago.
Meanwhile, statutory pre-tax profit rose to £2.03 billion from £636 million a year earlier and retail adjusted operating profit grew by 34.9% to £2.6 billion.
During the year, the supermarket expanded its price matching initiative against Aldi to around 650 lines and said Aldi Price Match products now feature in 99% of large baskets. It also relaunched its Low Everyday Prices campaign on 1,600 lines, with a particular emphasis on household and health and beauty products.
Ken Murphy, Tesco chief executive, said: “Over the last year, we delivered a strong performance across the group, growing share in every part of our business. We did this by staying focused on our customers and doing the right thing for our colleagues, our supplier partners and the communities we serve. I want to thank all of our colleagues who did a brilliant job navigating the ongoing pandemic, dealing with the supply chain challenges in the industry and tackling the onset of increasing inflation.”
Looking ahead, Tesco said it was appropriate to provide profit guidance “in the form of a wider than usual range” and that it expects retail adjusted operating profit for the new financial year to come in at between £2.4 billion and £2.6 billion.
The supermarket said its performance will be influenced by three main factors including the extent of the further normalisation in customer behaviour following the Covid-19 pandemic, the level of cost inflation and its ability to partially offset it, and the investment required to maintain the strength of its price position.
Tesco said it will remain laser-focused on keeping the cost of the weekly shop in check as customers struggle against the cost of living crisis.
Murphy added: “We are confident that taking this approach will enable us to deliver on the multi-year performance framework we shared in October, driving sustainable growth and generating strong retail free cash flow. This confidence, and our strong performance to date is reflected in the increased pace and scale of our capital return programme, with a commitment to repurchase shares worth £750 million over the next twelve months.”
