Tesco annual profit gains 9.1pc
British retailer Tesco said annual profit rose 9.1pc as sales increased in the UK and at the Homeplus unit in Korea.
Net income climbed to £2.33bn (€2.65bn) in the year ended February 27, from £2.13bn a year earlier, the company said in a statement today.
That matched the £2.3bn median estimate of 12 analysts surveyed by Bloomberg. So-called trading profit, the earnings measure preferred by most analysts, rose 12pc.
Tesco doubled rewards on the Clubcard loyalty program and cut prices on its ‘Finest’ food range to lure shoppers as food price inflation slowed.
The retailer’s UK market share rose to 30.3pc in the three months through March 21, according to Kantar Worldpanel data.
Revenue at Homeplus grew 33pc, making Korea one of its best-performing international markets.
The results “reflect a combination of resilient underlying sales and good cost control,” Sam Hart, an analyst at Charles Stanley & Co, said in a report before the release.
“Tesco’s long-term growth prospects are the best in the UK food retail sector, given potential in overseas markets and retailing services.”
Net debt was reduced to £7.9bn from £9.6bn a year earlier after the retailer sold property assets and reduced inventory by stocking less food in its backroom storage.
Tesco said it expects to cut borrowings to £7.5bn by the end of the new financial year.
The grocer will pay a final dividend of 9.16 pence a share, increasing the total for the year by 9.1pc to 13.05 pence.
Tesco stock has climbed 2.2pc this year, compared with Sainsbury’s 6.6pc increase and Carrefour SA’s 13pc gain.