Tesco records £2.25bn profit success

Tesco has revealed record breaking underlying profits of £2.25 billion, 17 per cent up on the year before.

The retailer, which remains way ahead of its competitors with a 30 per cent market share, said the results represented “good progress in a more challenging year”.

UK sales rose 10.7 per cent, while its overseas operations saw a rise of 23 per cent.

Total sales rose 13 per cent to £41.8bn, while like-for-like sales - which exclude new store openings - at its UK outlets rose 7.5 per cent.

Group profit before tax - another measure of profitability - came in 16.7 per cent higher at £2.21bn.

Tesco boss Sir Terry Leahy said he was satisfied with the firm's performance over the past year.

"By investing to improve the shopping experience for customers in our businesses around the world, we have been able to deliver another strong sales performance," Sir Terry said.

The retailer said it also planned to release £5bn in cash from property transactions over the next five years, £1.5bn of which will be used to buy back shares.

However, the chain denied claims it was sitting on land purely to deny competitors the opportunity to expand.

"There is no such thing as a land bank," Sir Terry told the BBC. "We only own land in order to develop it for Tesco," he added, stressing that all land owned by Tesco was in the process of being developed. "If we cannot develop it for Tesco, we sell the land on."

In the UK, the retailer plans to open another 130 Express convenience stores during the current year.

The retailer opened 238 new stores overseas last year and plans a further 419 international store openings in the current year.