Tesco's sales up 5.1pc to €2.98bn despite downturn
Irish operation posted strong growth in first half of last year
Tesco's Irish operations reported one of the strongest like-for-like sales performances of any of the retailer's operations in its last financial year despite the state of the economy.
Total sales here rose 5.1pc to €2.98bn in the year to the end of February, while like-for-like sales -- which excludes stores open less than a year -- were 3.9pc higher.
That like-for-like figure excluded petrol sales and the 3.9pc growth rate was the fourth highest within the group after Slovakia, the United States and China.
In the UK, Tesco's like-for-like sales, excluding petrol, rose just 1pc during the financial year. Almost all the growth in Ireland was recorded during the first half of the fiscal period, however, when like-for-like sales were up 7.9pc. In the second half they rose just 0.3pc.
Total group sales excluding VAT rose 7.1pc to £60.9bn (€69.4bn) in what is the company's 2010 -- 2011 financial year, while underlying pre-tax profit was 12.3pc higher at £3.8bn (€4.3bn), according to results released yesterday.
So-called trading profit, which provides the most consistent measure of profitability within the company, was up 7.8pc at £3.7bn (€4.3bn).
The results missed analyst expectations, while losses at its US-based 'Fresh & Easy' chain widened. Shares in the company dropped 1.6pc in London to close at £3.93.
In Ireland, where Tesco commands almost a 28pc share of the grocery market, the company is likely to have posted profits of about €214m during the year based on an estimated profit margin of 7.2pc.
The company doesn't reveal the profitability of its Irish arm. Within mainland Europe, the company's average profit margin is 5.7pc, while in the UK it's 6.1pc.
The company noted it was cashflow positive in Ireland during the financial year, while chief executive Philip Clarke said that it had made progress in Ireland and Hungary despite economic headwinds in both markets.
Tesco now imports many of its products for its Irish outlets directly from the UK, rather than sourcing them from suppliers here.
Tesco Ireland said that online grocery sales here grew by 14.9pc in the last financial year and now account for 1.6pc, or nearly €30m of annual sales. The company invested €176m here last year and now operates 131 stores in Ireland.
Tony Keohane, chief executive of Tesco Ireland, said the market remained challenging. "There is no doubt that Irish consumers are experiencing the pressures of economic downturn and seeking sustained better value from retailers," he said.