Profits up at Tesco as turnaround plan kicks in

Tesco has announced improved performance for the 2018/19 financial year in its preliminary results, despite ‘uncertain’ market conditions.

Group operating profit was up by 34 per cent to £2.2bn, with improved margins as a result of cost cuttings and increased efficiency. Group sales were up by 11.5 per cent, to £56.9bn, with like-for-like sales in the UK and Ireland growing by 2.9 per cent, including the Booker chain.

The retailer has made progress on a number of its long-term objectives.

“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,” says Tesco chief executive Dave Lewis.

“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% represents clear progress and the second half level of 3.79%, even before the benefit of Booker, puts us comfortably in the aspirational range we set four years ago. I’m pleased that we are able to accelerate the recovery in the dividend as a result of our continued capital discipline and strong improvement in cash profitability.”

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