Tesco (LON:TSCO) , one of the world's leading international retailers with over 2,000 stores worldwide, announced today that it has had an 8.5% increase in group sales (ex-petrol) and a 6.8% rise including petrol, totalling £62.5bn in the year to 27th February. There also reported a 12.3% growth in trading profit and a 10.1% rise in underlying pretax profit. Underlying diluted earnings per share increased 9.2% to 16.62p in the second half, calculated using a constant tax rate. The supermarket giant has proposed a final dividend of 9.16p per share, taking the full-year dividend to 13.05p. This represents an increase of 9.1% on last year's full-year dividend.
Underlying profit before tax rose to £3.395bn, an increase of 10.1%. Group trading profit was £3.412bn, up 12.3% on last year and group trading margin, at 5.9%, rose 25 basis points. These were helped by the fact that Tesco Bank was fully consolidated in 2009/10 and accounted for as a joint venture for most of 2008/9. Net debt was reduced to £7.9bn, ahead of plan; with further reductions planned in 2010/11.
In comparison to European competitors, Tescos has fared well, Reuters analysts said. In particular, both France's Carrefour (CARR.PA) and Germany's Metro (MEOG.DE), both of which posted a drop in 2009 profits, hit by falling food prices and sluggish consumer demand in continental Europe.
Non food products also proved resilient through the down-turn, the company said, particularly in electricals (sales have doubled in the last four years), entertainment (market share doubled in last year), toys (sales grown 25% last year) and clothing (sales grew by 7.5% last year). In addition, non-food sales rose 6.2% to GBP13.1bn, with GBP9.0bn in the UK and GBP4.1bn in International. The announcement reiterated that clothing is now a focus for the Group, where the reception of the F&F brand - for which customer awareness in Central Europe has grown in the last year from 34% to 61% - has enabled growth of the range into the Asian market, taking the total number of countries to ten. The group also enjoyed strong property profits; divestments totalling £1.8bn at attractive yields. Tesco said 18% more UK households redeemed Clubcard vouchers than a year earlier. Terry Leahy, CEO, commented on the results:
'By remaining focused on our strategy Tesco has weathered the economic storm well. Across the Group, we have successfully adapted our cost structures…
