Tesco CEO Dave Lewis said his company are on course to complete its turnaround project following strong yearly results.
Britain’s largest retailer posted a group pre-tax profit of £1.674 billion for 2018/19, a rise of 16.7 per cent, thanks to a group like for like sales increase across all goods of 1.4 per cent.
In the UK and Ireland, sales were up 2.9 per cent on the previous financial year, while its new acquisition, Booker, jumped 11.1 per cent in sales performance. Total revenue for global retailer now stands at £63.9bn.
Asia remains a stumbling block for the company however, with a fall in sales of 6.2 per cent, amounting to a £13 million decline in operating profit.
As the company celebrates its 100thanniversary, Lewis said he was “delighted” with the performance in the face of tough trading conditions.
“After four years we have met or are about to meet the vast majority of our turnaround goals. I’m very confident that we will complete the journey in 2019/20,” Lewis said.
“I’m delighted with the broad-based improvement across the business. We have restored our competitiveness for customers - including through the introduction of ‘Exclusively at Tesco’ - and rebuilt a sustainable base of profitability.
“The full year margin of 3.45 per cent represents clear progress and the second half level of 3.79 per cent, even before the benefit of Booker, puts us comfortably in the aspirational range we set four years ago.”
Tesco counted 149,000 more customers this year passing through its doors, while it appears new discount store Jack’s, an early bid to challenge Aldi and Lidl, hasn’t impacted on profits.
The company stated it was “unlocking benefits” of joining forces with Booker, as well as enjoying an improved brand perception following the launch of eight new Exclusively at Tesco brands, and 10,000 new own branded products.
Freddie Lait, CEO of Latitude Investment Management said: “The Tesco turnaround is in full swing and reaching their margin goals of 3.5 – 4 per cent this year (with Booker this will be even better) looks very straightforward.
“The business has generated £8.6bn of retail operating cash flow in the past three years and the most exciting aspect of the financial position which Tesco now finds itself in is that: the pension is under control, debt levels are neutral and cash flow remains high.”