REG - Tesco PLC - Preliminary Results 2024/25
10/04/2025 07:00
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RNS Number : 4125E Tesco PLC 10 April 2025
Preliminary Results 2024/25
Strong performance POSITIONS US to continue winning with customers.
Performance highlights (on a continuing operations basis)(1,2) FY 24/25 FY 23/24 Change at actual rates Change at constant rates
Group sales (exc. VAT, exc. fuel)(3) £63,636m £61,477m 3.5% 4.0%
Group adjusted operating profit(4) £3,128m £2,829m 10.6% 10.9%
of which: Retail adjusted operating profit £2,973m £2,760m 7.7% 8.1%
Free cash flow(5) £1,750m £2,063m (15.2)%
Net debt(6) £(9,454)m £(9,684)m 2.4%
Adjusted diluted EPS(4) 27.38p 23.41p 17.0%
Dividend per share 13.70p 12.10p 13.2%
Statutory measures (on a continuing operations basis)(1)
Revenue (exc. VAT, inc. fuel) £69,916m £68,187m 2.5%
Operating profit £2,711m £2,821m (3.9)%
Profit before tax £2,215m £2,289m (3.2)%
Diluted EPS 23.13p 24.53p (5.7)%
Statutory measures (including discontinued operations)(1)
Profit for the year (after tax) £1,630m £1,192m 36.7%
Diluted EPS 23.51p 16.56p 42.0%
As a result of the disposal of the Group's Banking operations, our Insurance
and Money Services business (IMS) is now reported as part of the UK & ROI
segment. The Retail adjusted operating profit figure of £2,973m (which
excludes IMS adjusted operating profit of £155m) is presented above for the
purposes of comparing to our previously published profit guidance.
Ken Murphy, Chief Executive
"Our continued focus on value and quality, coupled with market-leading
availability, has contributed to another year of increased customer
satisfaction and our highest market share for nearly a decade. We have
invested in bringing great prices to our customers throughout the year, and
continued to innovate with over 1,600 new or improved products including 400
new Finest lines, where overall sales grew 15%.
We are also making significant progress on our long-term growth opportunities,
further enhancing our digital capabilities with increased personalisation,
further improvements to our online experience and an expanded retail media
offering.
None of this would be possible without the dedication of our 340,000
colleagues and I want to thank them for all their hard work. We continue to
invest in our market-leading package of colleague benefits, including over
£900m in pay increases across the last three years.
Building on our strong financial performance, robust balance sheet and
positive momentum, we are setting ourselves up for the year ahead with the
flexibility to continue to win in a highly competitive market. Despite
inflationary headwinds, we are committed to ensuring customers get the best
possible value by shopping at Tesco, and see further opportunities to
strengthen our competitiveness. By putting customers first, we will continue
to create sustainable value for every stakeholder in Tesco."
Strong financial performance and cash generation
• Group LFL(7) sales up +3.1%, including UK +4.0%, ROI +4.6% and CE +2.2%;
Booker LFL sales down (1.8)%, reflecting growth in core retail and catering,
offset by ongoing decline in tobacco market and lower Best Food Logistics
volumes
• Group adjusted operating profit(4) up +10.9% at constant rates to £3,128m
includes strong progress across both segments:
• UK & ROI up +10.3% to £3,016m, supported by strong volume performance and
Save to Invest delivery; includes £155m contribution from IMS, with £46m of
non-recurring items primarily due to a new five-year pet insurance contract
• Central Europe up +28.9% to £112m, driven by improved category mix, volume
growth and further Save to Invest progress
• Adjusted diluted EPS(1,4) up +17.0% to 27.38p, driven by higher Group adjusted
operating profit, lower adjusted net finance costs and the benefit of our
ongoing share buyback programme
• Statutory operating profit(1) of £2,711m, down (3.9)% and statutory diluted
EPS of 23.13p, down (5.7)%, include a £(286)m non-cash net impairment charge
(LY: £28m release), reflecting higher discount rates, driven by increased
government bond rates
• Free cash flow(5) of £1,750m, towards top end of guidance range, reflecting
strong trading performance; compares to £2,063m last year which benefited
from higher trade payables due to elevated input cost inflation; Net debt(6 )
down 2.4% to £(9,454)m
• Return on capital employed(5) of 14.6%, reflecting growth in Group adjusted
operating profit and disciplined capital allocation
Footnotes can be found on page 4.
Ongoing investments in our offer support customer satisfaction improvements
and market share growth
• UK market share +67bps YoY to 28.3%, with share gains for 21 consecutive
four-week periods and reaching highest level since 2016 during the year; ROI
market share +29bps YoY to 23.9%, with share gains for 37 consecutive
four-week periods
• Overall brand perception in UK increased by +185bps YoY, stepping forward
across all drivers, including reputation (+282bps), value (+242bps) and
quality (+153bps)
• Cheapest full-line grocer throughout the year; further improvement in price
position against the market since January 2025
• Delivered market-leading availability and highest net promoter score in five
years
• Announced a +5.2% increase in UK store colleague pay, with hourly rate rising
to £12.64 by end of August 2025
• Launched over 1,000 new products and improved over 600, underscoring our
commitment to quality and innovation
• Finest annual sales of £2.5bn, up 15% YoY; 400 new Finest products launched
• Save to Invest progress, delivering c.£510m of savings in FY 24/25 as we
simplified operations across the Group
• Supporting our communities through Stronger Starts, awarding funding of £13m
since July 2023 to over 12,200 projects; launch of 'Fruit & Veg for
Schools' campaign, supporting 400 schools with over 5m portions of fruit &
veg to date
• Progress towards ambitious climate change targets, with a 65% reduction in
Scope 1 and Scope 2 emissions versus 2015/16 baseline; signed our largest
power purchase agreement to date, at Cleve Hill Solar Park in Kent
Continuing to invest in long-term growth opportunities and capability
• Increase in Clubcard sales penetration across all markets: UK 84%, ROI 87%,
Central Europe 88%; Group-wide Tesco app users at 18.0m, up +12% YoY, with
proportion of digital Clubcard scans in UK +11ppts to 63% of Clubcard
transactions
• Increasingly personalised offer: rollout of Clubcard Challenges to 10m
customers and trial of Your Clubcard Prices
• Growing the Tesco Media and Insight Platform, with over 5,000 in-store
screens; launched video advertising on Tesco.com and app, introduced store
wrap advertising at scale and further enhanced self-serve platform for brands
and agencies
• Expanded Tesco Whoosh rapid-delivery service to over 1,500 stores, including
launch into 42 large stores, helping expand depth of range and reach; active
customers up 48% with further growth in basket size
• Launch of Tesco Marketplace, now offering >400,000 third-party products
across homeware, furniture and electronics, helping us expand our online range
in a capital-light way, with commission earned on the value of each order
• Online launch of F&F clothing scheduled to go live for customers in the
year ahead
CAPITAL RETURN PROGRAMME.
We see our share buyback programme as a critical driver of shareholder
returns, reflecting the strength of our balance sheet and our confidence in
both our strategy and our ability to continue to deliver strong future cash
flows. In addition to £864m of dividends paid across the last year, we have
now completed our April 2024 commitment to buy back £1bn worth of shares.
Since October 2021, we have bought back £2.8bn worth of shares.
OUTLOOK.
Our investments over the last four years have resulted in the most competitive
position and highest market share we have had for many years, leading to a
strong financial position and positive trading momentum. We have delivered
well against the multi-year performance framework we set out in 2021, and
maintained a disciplined approach to capital, leading to strong cash
generation and shareholder returns.
In the last few months, we have seen a further increase in the competitive
intensity of the UK market. We are committed to ensuring that customers get
the best value in the market by shopping at Tesco and we see further
opportunities to protect and strengthen our competitiveness.
We are therefore providing guidance that gives us flexibility and firepower to
be able to respond to current market conditions. As a result, for FY 25/26,
we expect Group adjusted operating profit of between £2.7bn and £3.0bn (FY
24/25: £3,128m). We continue to expect free cash flow within our
medium-term guidance range of £1.4bn to £1.8bn.
We are announcing today a further share buyback totalling £1,450m, to be
completed by April 2026, comprising £750m funded by free cash flow and £700m
funded by the sale of our Banking operations.
FY 25/26 is a 53-week financial year, but for comparability we will also
report our key financial metrics on a 52-week basis. All financial guidance
is provided on a 52-week basis.
STRATEGIC PRIORITIES.
Our strategic priorities ensure that we focus on offering great value, quality
and convenience whilst rewarding loyalty. Through our colleagues, reach and
supplier relationships, we are well-placed to serve our customers wherever,
whenever and however they need us. Our strategy puts customers at the heart
of everything we do, and guides us to deliver top-line growth, grow profit and
generate cash and in doing so, deliver for all our stakeholders.
1) Magnetic Value for Customers - Re-defining value to become the customer's
favourite
• Winning value combination of Aldi Price Match on >600 lines, Low Everyday
Prices on >1,000 lines and around 8,000 Clubcard Prices deals each week;
Clubcard Prices save customers up to £392 off their annual grocery bill
• Exclusive Clubcard deals on everyday services such as no mid-contract price
rises with Tesco Mobile and Clubcard Prices available for car, home, pet and
travel insurance policies
• Further own-brand innovation across all tiers, including launches of the Taste
Discoveries dinner-for-tonight range inspired by Japanese and Korean cuisine,
and health-led High Protein and Gut Sense ranges
• Further progress in customer satisfaction scores at Booker, with 700 prices
locked until June 2025
• Expanded our Low Price Guarantee in Central Europe, adding an average of c.650
products per market
2) I Love my Tesco Clubcard - Creating a competitive advantage through our
powerful digital capability
• Clubcard celebrates 30 years with unrivalled customer reach; over 23m Clubcard
households in the UK with new campaigns including 10,000 bonus points for
customers who use Clubcard vouchers when booking with easyJet Holidays
• Expanding the UK's largest and most generous supermarket reward partner
scheme, with Virgin Red and five new visitor attractions becoming reward
partners; customers can now earn Clubcard Points with the purchase of a new
Vauxhall car
• Tesco Media and Insight Platform saw growth in active advertisers and spend
per campaign, with the team ranked joint #1 in Flywheel's European retail
media rankings and shortlisted for Media Brand of the Year at the Media Week
Awards
• Over 9,000 retail media campaigns delivered; creativity enhancements included
fully integrated Coca-Cola campaign over Christmas, comprising onsite and
offsite media, exclusive competitions and products, and wrapping home delivery
vans
3) Easily the Most Convenient - Serving customers wherever, whenever and
however they want to be served
• Opened 90 stores across the Group: 64 in the UK, 12 in ROI and 14 in Central
Europe
• Refreshed a further 463 stores across the Group including 100 large stores and
245 convenience stores in the UK
• UK online sales up +10.2%, driven by growth in orders per week, with market
share up +173bps YoY to 35.5%
• Increase in UK online customer satisfaction, +8pts YoY and 150 new delivery
vans launched, as we increase capacity; Delivery Saver subscribers at 770k, up
+9% YoY
• Integrated a further 566 net new Booker retail partners, taking the total
outlets to just under 8,000; integration of Venus acquisition progressing
well, with a new Venus distribution hub opened at our Makro branch in
Manchester
4) Save to Invest - Significant opportunities to simplify, become more
productive and reduce costs
• Save to Invest progress, delivering c.£510m of savings for FY 24/25
• Continued progress across all areas, including goods & services not for
resale, operations, property and central overheads
• New robotic automation implemented at our Peterborough distribution centre,
with Aylesford semi-automated distribution centre on track to open summer 2025
• End-to-end review of stock flow from suppliers to store, optimising waste
performance and improving availability
• Simplifying in-store routines, supported by the roll-out of new fresh-food
fixtures which enable faster replenishment
• Taking action to reduce stock loss, including security system enhancements at
checkouts and investments in new technology at our Daventry security hub
• Extending Save to Invest programme; seeking further c.£500m in FY 25/26 to
help offset new operating cost inflation, including the impact of an increase
in National Insurance contributions of £235m
GROUP REVIEW OF PERFORMANCE.
On a continuing operations basis(1)
52 weeks ended 22 February 2025(2,8) FY 24/25 FY 23/24 Change at Change at constant rates
actual rates
Sales (exc. VAT, exc. fuel)(3) £63,636m £61,477m 3.5% 4.0%
Fuel £6,280m £6,710m (6.4)% (6.3)%
Revenue (exc. VAT, inc. fuel) £69,916m £68,187m 2.5% 3.0%
Group adjusted operating profit(4) £3,128m £2,829m 10.6% 10.9%
Adjusting items £(417)m £(8)m
Statutory operating profit £2,711m £2,821m (3.9)%
Net finance costs £(492)m £(538)m
Joint ventures and associates £(4)m £6m
Statutory profit before tax £2,215m £2,289m (3.2)%
Taxation £(611)m £(525)m
Statutory profit after tax £1,604m £1,764m (9.1)%
Adjusted diluted EPS(4) 27.38p 23.41p 17.0%
Statutory diluted EPS 23.13p 24.53p (5.7)%
Dividend per share 13.70p 12.10p 13.2%
Net debt(6) £(9,454)m £(9,684)m 2.4%
Free cash flow(5) £1,750m £2,063m (15.2)%
Capex(9) £1,457m £1,314m 10.9%
Sales(3) increased by 4.0% at constant rates, including a strong contribution
from higher volumes and improved category mix, supported by our continued
investments in value, quality and service. Revenue increased by 3.0% at
constant rates, including a (6.3)% decline in fuel sales, mainly driven by
lower retail prices year-on-year.
Group adjusted operating profit(4) increased by 10.9% at constant rates,
driven by further progress in our core retail markets as higher sales volumes
and a further c.£510m contribution from Save to Invest more than offset net
operating cost inflation. Group adjusted operating profit includes Insurance
and Money Services where adjusted operating profit increased by £86m to
£155m, including £46m of non-recurring items mainly due to a new five-year
pet insurance contract.
Statutory operating profit decreased by (3.9)% year-on-year, as the Group
adjusted operating profit growth described above was more than offset by a
non-cash net impairment charge on non-current assets of £(286)m, mainly due
to an increase in discount rates driven by higher government bond rates
compared to the prior year.
Net finance costs (including adjusting items) were £46m lower year-on-year,
mainly due to lower net interest costs on medium-term notes as a result of net
refinancing activities, and favourable non-cash mark-to-market movements on
certain derivative financial instruments. The higher tax charge this year
was driven by higher operating profit and the full year effect of the increase
in UK corporation tax rates, effective from 1 April 2023.
Adjusted diluted EPS(4) grew by 17.0%, driven by the strong growth in Group
adjusted operating profit described above as well as a benefit from our
ongoing share buyback programme, with a further £1bn of share buybacks
completed in the year. Statutory diluted EPS declined by (5.7)%, driven by
the non-cash net impairment charge as described above. We propose to pay a
final dividend of 9.45 pence per ordinary share, taking the full year dividend
to 13.70 pence, up 13.2% year-on-year.
We generated strong free cash flow(5) of £1,750m compared to £2,063m last
year, with the prior year benefiting from higher trade working capital
balances, driven by elevated levels of input cost inflation.
Net debt(6) reduced by £230m to £(9,454)m, driven by strong free cash flow
generation and the receipt of the £614m Banking operations gross disposal
proceeds, partially offset by cash returned to shareholders via dividends and
our ongoing share buyback programme. The Net debt/EBITDA ratio was 2.0
times, down from 2.2 times in the prior year.
Further commentary on these metrics can be found below and a full income
statement can be found on page 14.
Notes:
1. The performance of the Banking operations has been presented as a discontinued
operation to the date of disposal. The Insurance and Money Services business
(IMS) has been presented on a continuing operations basis and therefore within
headline performance measures. Further details on discontinued operations
can be found in Note 7, starting on page 25.
2. The Group has defined and outlined the purpose of its alternative performance
measures, including its performance highlights, in the Glossary starting on
page 39.
3. Group sales exclude VAT and fuel.
4. Adjusted operating profit and Adjusted diluted EPS exclude adjusting items.
5. Free cash flow and return on capital employed (ROCE) are alternative
performance measures defined and outlined in the Glossary starting on page
39.
6. Net debt now includes Insurance and Money Services, with the prior year
reported on a consistent basis. The impact on the prior year is to reduce
Net debt by £80m. Further information on Net debt can be found in Note 22,
starting on page 37.
7. Like-for-like (LFL) sales growth is a measure of growth in Group sales from
stores that have been open for at least a year and online sales (at constant
exchange rates, excluding VAT and fuel). LFL excludes revenue from
dunnhumby, Insurance and Money Services as this revenue is not directly linked
to the sale of goods.
8. All measures are shown on a continuing operations basis unless otherwise
stated.
9. Capex excludes additions arising from business combinations, property buybacks
(typically stores) and other store purchases and their associated refit
costs. Refer to page 44 for further details.
Segmental review of performance:
Sales performance:
(exc. VAT, exc. fuel)(3,8)
On a continuing operations basis(1) Sales LFL sales change(7) Total sales change at actual rates Total sales change at constant rates
(£m)
- UK 47,486 4.0% 5.1% 5.1%
- ROI 2,974 4.6% 2.9% 5.6%
- Booker 8,990 (1.8)% (1.0)% (1.0)%
UK & ROI 59,450 3.1% 4.0% 4.2%
Central Europe 4,186 2.2% (3.0)% 2.5%
Sales 63,636 3.1% 3.5% 4.0%
Further information on sales performance is included in the appendices
starting on page 48.
Adjusted operating profit(4,8) performance:
Profit
(£m)
On a continuing operations basis(1) Change at actual rates Change at constant rates Margin % at actual rates Margin % change at actual rates
UK & ROI 3,016 10.1% 10.3% 4.6% 30 bps
Central Europe 112 24.4% 28.9% 2.6% 58 bps
Group 3,128 10.6% 10.9% 4.5% 33 bps
Further information on operating profit performance is included in Note 2
starting on page 20.
UK & ROI OVERVIEW:
Like-for-like sales for the UK & ROI segment increased by 3.1%. Volume
growth was particularly strong in the UK and ROI, with growth in every quarter
of the year, and continued market share gains across the year. Whilst Booker
delivered a strong performance in core retail and catering, overall
like-for-like sales reduced by (1.8)% due to the continued decline in the
tobacco market and weakness in some areas of the fast-food market serviced by
Best Food Logistics.
UK & ROI adjusted operating profit was £3,016m, up 10.3% at constant
rates, driven by volume growth and the ongoing delivery of our Save to Invest
programme, which offset net operating cost inflation, including colleague pay
awards. Insurance and Money Services adjusted operating profit, now included
within the UK & ROI segment, increased by £86m to £155m, including £46m
of non-recurring items, mainly reflecting the accounting for upfront
commission income on the signing of a new five-year pet insurance contract.
The year-on-year growth excluding these items was driven by strong underlying
performance in the insurance business.
UK - Growing volumes and market share:
Like-for-like sales grew by 4.0%, with growth both in stores and online.
Volume growth was ahead of our expectations, and we consistently grew ahead of
the market.
Market share grew by +67bps year-on-year to 28.3%, delivering 21 consecutive
four-week periods of market share growth by the end of the year and our
highest market share since 2016 over the Christmas period. We continue to
deliver improvements in our overall brand perception year-on-year, up +185bps
and stepping forward across all drivers, including reputation (+282bps), value
(+242bps) and quality (+153bps).
Food like-for-like sales grew by 4.9%, with full year volume growth supported
by our ongoing investments in product quality and innovation. We launched
over 1,000 new products and improved over 600, including Taste Discoveries
dinner-for-tonight range and health-led High Protein and Gut Sense ranges.
Our Finest range continued to perform well, with sales up 15% year-on-year,
including record sales over the festive period.
We are committed to ensuring that customers get the best value for money by
shopping at Tesco. Over 2,300 products were cheaper at the end of the year
than at the start, with an average reduction of around 9%.
Clothing like-for-like sales grew by 3.0% due to a strong performance in
womenswear, with further development of our F&F Active and F&F Edit
ranges. Home like-for-like sales declined by (2.2)%, which includes a
(5.5)ppts drag from the transition to our new partnership with The
Entertainer. The partnership, which offers customers an even better range of
toys in our stores, means we no longer recognise toy sales, and instead earn
commission income. The transition completed in the second half of the year
and is now in around 750 stores. Excluding this impact, Home like-for-like
sales grew by 3.3%, primarily driven by the launch of our F&F Home range.
Large store like-for-like sales grew by 4.1%, driven by further investment
into our promotional offer over key seasonal events in addition to investments
in service and delivering market-leading availability. These investments
resulted in our highest customer net promoter score in five years.
Convenience like-for-like sales, which includes our One Stop stores, declined
by (0.2)%. Tesco Express like-for-like sales were broadly flat, with a
particularly strong performance in fresh food offset by the impact of the
ongoing decline in the tobacco market. Tesco Express gained +138bps of
market share, supported by a 1.7ppts contribution to sales growth from net new
store openings.
Online sales grew by 10.2%, including a c.3ppts contribution from Tesco
Whoosh. Sales growth was primarily driven by an increase in average online
orders per week which were up 10.8% year-on-year to 1.3 million, with customer
satisfaction also increasing year-on-year. Tesco Whoosh, our rapid delivery
service, saw sales almost double in the year, with a further improvement in
customer satisfaction and growth in average basket size. Tesco Whoosh is now
available in over 1,500 stores, including 42 large stores.
Online performance FY 24/25 YoY change
Sales inc. VAT £6.8bn 10.2%
Orders per week 1.33m 10.8%
Basket size (excluding Whoosh) £109 3.6%
Online % of UK total sales 13.5% 0.6ppts
In June, we launched Tesco Marketplace, offering customers an even broader
range of products online through third-party sellers. We are now offering
over 400,000 products and have built a pipeline of further sellers to join the
platform, with new category launches planned for later in FY 25/26. We are
encouraged with customer satisfaction scores, and trading through Black Friday
was particularly successful. Our priority has been laying the foundations
for growth, adding for instance the capability to offer customers Clubcard
Prices when they shop on Tesco Marketplace.
In November, we completed the disposal of our Banking operations and started
our associated strategic partnership with Barclays. The exclusive ten-year
partnership provides customers access to Tesco-branded banking products and
services, combining Tesco's market-leading brand, physical and digital reach
and relentless customer focus with Barclays' deep financial services
capabilities and expertise in commercial partnerships. We retained all the
existing insurance and money services activities, including ATMs, travel money
and gift cards. In the year, sales from Insurance and Money Services grew by
c.30%, primarily driven by strong growth in the insurance business.
ROI - Ongoing volume growth driving strong market share gains:
Like-for-like sales grew by 4.6% for the full year, driven by volume growth
supported by our continued roll out of our 'fresh first' store refresh
programme and our ongoing investments in product quality and innovation, which
has been recognised with 21 gold medals at the Blas na hÉireann ('Taste of
Ireland') awards. Total sales grew by 5.6% at constant rates, including a
1.0ppts contribution from new stores, driven by the opening of 12 new stores
in the year.
Food like-for-like sales grew by 5.0%, driven by strong volume growth in fresh
food. Our Finest range performed well with year-on-year volume growth of
over 29%.
Non-food like-for-like sales grew by 0.9%, which includes a (3.1)ppts impact
from the transition to our new partnership with The Entertainer, as in the
UK. Excluding toys, non-food like-for-like sales grew by 4.0%, with a strong
contribution from Home driven by a refreshed proposition which has now been
rolled out across 30 stores.
We have now gained market share in ROI for 37 consecutive four-week periods,
taking our share to 23.9% at the end of the year, up +29bps year-on-year.
Clubcard sales penetration stepped up by a further 2ppts year-on-year to 87%.
BOOKER - Growth across core catering and retail following strong performance
last year:
Sales LFL
£m
Core retail 3,234 0.9%
Core catering* 2,621 2.1%
Tobacco 1,694 (8.8)%
Best Food Logistics 1,441 (5.1)%
Total Booker 8,990 (1.8)%
* Includes sales to small businesses and sales from Venus Wine and Spirit
Merchants PLC, which was acquired in June 2024. Venus is excluded from LFL
growth.
Overall like-for-like sales declined by (1.8)%, reflecting the continuing
decline in the tobacco market and weakness in parts of the fast-food market
serviced by Best Food Logistics, whilst the core retail and catering
businesses grew despite a challenging market backdrop.
Core retail like-for-like sales increased by 0.9% year-on-year, growing ahead
of the market, supported by a further 566 net new retail partners in the
year. Whilst the independent convenience sector is seeing some trading
softness, Booker's symbol brands performed strongly, supported by our targeted
promotional plans and improvements in availability. Booker retail customer
satisfaction continued to improve, with gains year-on-year.
Core catering like-for-like sales increased by 2.1%, driven by stronger
volumes, as customers responded well to our value campaigns throughout the
year, with prices now locked on over 700 products until June 2025. Customer
satisfaction levels remained high, growing year-on-year, and availability
improved even further to c.98% by the end of the year.
In June 2024, we acquired Venus Wine and Spirit Merchants PLC, a specialist
wine and spirits merchant, offering our on-trade catering customers an even
larger selection of spirits, wines, lagers, ciders and ales. The integration
of Venus is progressing well, and we are continuing to expand the customer
base, with strong progress towards increasing its geographic presence.
CENTRAL EUROPE - Improved category mix and volume growth driving sales
momentum and profit growth:
Like-for-like sales grew by 2.2%, as improved category mix and volumes
contributed to positive growth, with market share trajectory improving. Food
like-for-like sales grew by 2.4% year-on-year, including c.4% growth in Fresh
volumes. Customer satisfaction scores improved in Central Europe, as
customers respond well to our product innovation and targeted value
investments, with on average c.650 products added to our Low Price Guarantee
per market. Our Finest range performed well, with year-on-year volume growth
of over 23%.
Non-food like-for-like sales grew by 0.6%, with particularly strong
performance over the seasonal Christmas period.
Central Europe adjusted operating profit was £112m, an increase of 28.9%
year-on-year at constant rates, primarily driven by volume growth and further
progress in our Save to Invest programme.
Discontinued operations:
In February 2024, we agreed to sell our Banking operations, comprising
personal loans, credit cards and customer deposits and associated operational
capabilities. In November 2024, we completed the disposal to Barclays for
gross cash proceeds of £614m. In combination with further net cash released
after the settlement of certain regulatory capital amounts and net of
transaction costs, this provides £700m of cash realised from the disposal
which will be returned to shareholders through share buybacks in FY 25/26.
The performance of our Banking operations has been presented as a discontinued
operation and has been excluded from our headline performance measures.
Profit after tax from discontinued operations was £26m which includes
adjusting items of £(65)m primarily relating to the fair value remeasurement
of assets of the disposal group, associated with the sale of our Banking
operations to Barclays.
Adjusting items:
FY 24/25 FY 23/24
£m £m
Net impairment (charge)/release on non-current assets (286) 28
Amortisation of acquired intangible assets (76) (74)
Save to Invest restructuring provisions (43) (50)
Property transactions 2 75
Other* (14) 13
Total adjusting items included within operating profit (417) (8)
Net finance income 44 20
Taxation 79 68
Total adjusting items included within profit after tax from continuing (294) 80
operations
Adjusting items included within discontinued operations (65) (628)
Total adjusting items (including discontinued operations) (359) (548)
* Other comprises Banking operations disposal costs. In the prior year,
other includes a £12m profit on disposal of Booker's Ritter-Courivaud Limited
subsidiary.
Adjusting items are excluded from our adjusted operating profit performance by
virtue of their size and nature, to provide a helpful perspective of the
year-on-year performance of the Group's ongoing business. Total adjusting
items in operating profit (from continuing operations) resulted in a net
charge of £(417)m, compared to £(8)m in the prior year.
In the current year, there was a non-cash net impairment charge on non-current
assets of £(286)m, primarily reflecting an increase in discount rates, as a
result of higher government bond rates. This compares to a £28m non-cash
net impairment release in the prior year.
We continue to present amortisation of acquired intangible assets, principally
relating to the merger with Booker, as an adjusting item. In the current
year, amortisation of acquired intangible assets was £(76)m, compared to
£(74)m in the prior year.
We recognised a £(43)m restructuring charge in the current year, compared to
a £(50)m charge in the prior year relating to our Save to Invest programme.
Adjusting items in discontinued operations of £(65)m primarily relates to the
fair value remeasurement of assets of the disposal group, associated with the
sale of our Banking operations to Barclays. In the prior year, we recognised
a post-tax loss of £(628)m, related to the disposal of our Banking
operations. Further detail on discontinued operations can be found in Note 7
starting on page 25.
Adjusting items in net finance costs and tax are set out below. Further
detail on adjusting items can be found in Note 4, starting on page 22.
Net finance costs:
On a continuing operations basis FY 24/25 FY 23/24
£m £m
Net interest costs (157) (179)
Net finance expenses from insurance contracts (9) (6)
Interest expense on lease liabilities (370) (373)
Adjusted net finance costs (536) (558)
Fair value remeasurements of financial instruments 76 38
Net pension finance costs (32) (18)
Adjusting items in net finance costs 44 20
Net finance costs (492) (538)
Adjusted net finance costs were £(536)m, £22m lower year-on-year mainly due
to lower net interest costs on medium term notes as a result of refinancing
activities.
Within adjusting items, fair value remeasurements of financial instruments led
to a credit of £76m, compared to a £38m credit in the prior year, driven by
non-cash mark-to-market movements on certain derivative financial instruments
that are not hedge accounted and a non-cash gain from a liability management
transaction.
Net pension finance costs increased by £(14)m, reflecting a higher opening
pension deficit in FY 24/25 and a higher discount rate at the start of FY
24/25 than the start of FY 23/24.
We expect a similar level of adjusted net finance costs for FY 25/26.
Further detail on finance income and costs can be found in Note 5 on page 23,
as well as further detail on the adjusting items in Note 4, starting on page
22.
Group tax:
On a continuing operations basis FY 24/25 FY 23/24
£m £m
Tax on adjusted profit (690) (593)
Tax on adjusting items 79 68
Tax on profit (611) (525)
Tax on adjusted Group profit was £(690)m, £(97)m higher than last year,
primarily due to higher profit and the full year impact of the increase in the
UK corporation tax rate from 19% to 25%, effective from 1 April 2023. The
effective tax rate on adjusted Group profit was 26.7% (FY 23/24: 26.0%),
higher than the current UK statutory rate of 25%, primarily due to the
depreciation of assets which do not qualify for tax relief. We expect our FY
25/26 effective tax rate to remain around 27%.
The current year £79m adjusting credit in tax primarily relates to deferred
tax on impairment charges on qualifying assets. The prior year £68m
adjusting tax credit primarily relates to impairment charges on qualifying
assets, as well as a final settlement related to our exit from the Gain Land
Associate in China, in February 2020.
Earnings per share:
On a continuing operations basis FY 24/25 FY 23/24 YoY change
Adjusted diluted EPS 27.38p 23.41p 17.0%
Statutory diluted EPS 23.13p 24.53p (5.7)%
Statutory basic EPS 23.41p 24.80p (5.6)%
On a total basis, including discontinued operations
Statutory diluted EPS 23.51p 16.56p 42.0%
Statutory basic EPS 23.79p 16.74p 42.1%
Adjusted diluted EPS was 27.38p, 17.0% higher year-on-year, due to an increase
in Group adjusted operating profit, the benefit of our ongoing share buyback
programme and a reduction in net finance costs, partially offset by an
increase in tax.
Statutory diluted EPS was 23.13p, (5.7)% lower year-on-year, primarily driven
by the £(286)m non-cash net impairment charge on non-current assets in the
year, compared to a £28m impairment release in the prior year.
On a total basis, including discontinued operations, statutory diluted EPS was
23.51p, 42.0% higher year-on-year due to the effect of the remeasurement loss
recognised last year related to the sale of our Banking operations.
Dividend:
We propose to pay a final dividend of 9.45 pence per ordinary share, which
combined with the interim dividend of 4.25 pence per ordinary share made in
November 2024, takes the full year dividend to 13.70 pence per ordinary
share. The full year dividend is based on our dividend policy to pay a
progressive dividend, broadly targeting a 50% payout of adjusted earnings per
share.
The proposed final dividend was approved by the Board of Directors on 9 April
2025 and is subject to the approval of shareholders at this year's Annual
General Meeting. The final dividend will be paid on 27 June 2025 to
shareholders who are on the register of members at close of business on 16 May
2025 (the Record Date). Shareholders may elect to reinvest their dividend in
the dividend reinvestment plan (DRIP). The last date for receipt of DRIP
elections and revocations will be 6 June 2025.
Summary of Net debt:
Feb-25 Feb-24(*) Movement
£m £m £m
Net debt before lease liabilities (1,738) (2,062) 324
Lease liabilities (7,716) (7,622) (94)
Net debt (9,454) (9,684) 230
Net debt/EBITDA 2.0x 2.2x
* The Net debt APM has been amended to include Insurance and Money Services,
with the prior year presented on a consistent basis. The impact on the prior
year is to reduce Net debt by £80m.
Net debt was £(9,454)m, a decrease of £230m year-on-year, predominantly
driven by strong free cash flow generation of £1,750m and gross proceeds from
Barclays of £614m related to the disposal of our Banking operations. This
exceeded the cash outflows relating to our ongoing share buyback programme of
£(1,016)m and dividend payments of £(864)m.
Lease liabilities of £(7,716)m were £(94)m higher year-on-year, mainly
driven by the opening of a new distribution centre and the leasing back of
stores following the sale of mall properties in Central Europe.
Our Net debt/EBITDA ratio was 2.0 times at the end of the year, down from 2.2
times in the prior year, partially driven by the receipt of cash proceeds from
the sale of our Banking operations which we will return to shareholders in the
coming year.
We had strong levels of liquidity at year-end, totalling £3.6bn, including
cash, highly liquid short-term deposits and money market investments. In
addition, our £2.5bn committed revolving credit facility remained undrawn and
is in place until at least October 2027.
Fixed charge cover was 4.2 times at the end of the year (FY 23/24: 3.8 times),
an improvement year-on-year, primarily due to an increase in EBITDA.
Defined benefit pension schemes:
Feb-25 Feb-24 Movement
£m £m £m
Defined benefit schemes in surplus 56 22 34
Defined benefit schemes in deficit (307) (657) 350
Deferred tax asset/(liability) 71 162 (91)
Deficit in schemes at the end of the year (net of deferred tax) (180) (473) 293
Net of tax, the net IAS 19 pension deficit has improved from £(473)m to
£(180)m, principally reflecting the impact of higher discount rates. The
largest scheme is the main UK Tesco Pension Scheme. The trustees of each
pension scheme are also required to calculate the net surplus/deficit using
Technical Provisions and in accordance with relevant regulations and guidance
issued by the appropriate regulator. On this basis, which is different to
IAS 19, the main UK Tesco Pension Scheme continues to be in a funding surplus
at the year end. The most recent completed triennial funding valuation of
the UK Tesco Pension Scheme was at 31 March 2022 and the next valuation,
relating to the funding position of the scheme as at 31 March 2025, will be
completed during FY 25/26.
Further detail on post-employment benefits can be found in Note 19, starting
on page 34.
Summary free cash flow:
The following table reconciles Group adjusted operating profit to free cash
flow. Further details are included in the reconciliation of cash flow
measures, starting on page 45.
On a continuing operations basis FY 24/25 FY 23/24
£m £m
Group adjusted operating profit 3,128 2,829
Less: Insurance and Money Services adjusted operating (profit)/loss (155) (69)
Retail adjusted operating profit 2,973 2,760
Add back: Depreciation and amortisation 1,680 1,602
Other reconciling items 69 82
Pensions (30) (29)
(Increase)/decrease in working capital (45) 418
Cash generated from operations before adjusting items 4,647 4,833
Cash capex (1,392) (1,289)
Net interest (500) (560)
- Interest related to Net debt before lease liabilities (123) (188)
- Interest related to lease liabilities (377) (372)
Tax paid (355) (214)
Dividends received 2 9
Repayment of capital element of obligations under leases (598) (623)
Own shares purchased for share schemes (54) (93)
Free cash flow 1,750 2,063
Memo (not included in free cash flow definition):
- Special dividend received from Tesco Bank - 250
- Net acquisitions and disposals* (61) (2)
- Property buybacks, store purchases and associated refits, (93) (66)
and disposal proceeds
- Cash impact of adjusting items (55) (98)
*Excluding proceeds from the disposal of the Group's Banking operations.
Refer to Note 7, starting on page 25, for further details.
We delivered another strong year of cash generation, with free cash flow of
£1,750m. This is £(313)m lower year-on-year, primarily due to higher trade
working capital balances in the prior year due to elevated levels of input
cost inflation.
There was a working capital outflow of £(45)m this year. We continue to
tightly manage our working capital balances, with the outflow this year
reflecting lower trade balances in fuel, driven by fuel price deflation.
Cash capital expenditure was £(1,392)m, £(103)m higher than last year driven
by incremental investments in expanding our digital platforms, automating our
distribution network and refreshing our UK store estate.
Net interest paid was £60m lower year-on-year, principally driven by the
impact of the timing of refinancing activities in the prior year.
Tax paid was £(141)m higher year-on-year, mainly due to no longer benefiting
from tax relief related to the one-off pension contribution made in 2021, with
the balance fully utilised by the end of the prior year, and the impact of
higher adjusted operating profit year-on-year. These increases in cash tax
paid were partially offset by a tax deduction arising on the disposal of our
Banking operations.
Within the memo lines shown, the net £(61)m acquisitions and disposals
outflow primarily relates to Booker's acquisition of Venus Wine and Spirit
Merchants PLC. The £(93)m net outflow relating to property transactions
includes the buyback of four supermarkets in the UK, partially offset by
proceeds generated from the sale of mall properties in Central Europe. The
cash impact of adjusting items of £(55)m relates to operational restructuring
changes as part of our Save to Invest programme, which were provided for at
the end of the prior financial year.
Capital expenditure and space:
UK & ROI Central Europe Group
FY 24/25 FY 23/24(2) FY 24/25 FY 23/24 FY 24/25 FY 23/24
Capex £1,347m £1,201m £110m £113m £1,457m £1,314m
Openings (k sq ft) 311 366 84 87 395 453
Closures (k sq ft) (98) (204) (45) (22) (143) (226)
Repurposed (k sq ft)(1) (235) - (145) (342) (380) (342)
Net space change (k sq ft) (22) 162 (106) (277) (128) (115)
Space in the above table is defined as net space in store adjusted to exclude
checkouts, space behind checkouts, customer service desks and customer
toilets. The data above excludes space relating to franchise stores. A
full breakdown of space by segment is included in the appendices starting on
page 48.
1. Repurposed space relates to optimising selling space, such as through
the addition of retail partners.
2. Includes £13m relating to the Banking operations disposal group,
incurred prior to being classified as held for sale.
Capital expenditure shown in the table above reflects expenditure on ongoing
business activities across the Group, excluding property buybacks and other
store purchases and their associated refit costs.
We have been pleased with the results of our continued investment in our store
estate, including refreshing a total of 463 stores and opening two
superstores, 55 Tesco Express stores and seven One Stop stores in the UK. In
ROI, we opened six new large stores and six Tesco Express stores. In Central
Europe, we opened 14 new stores.
Our total capital expenditure for the year was £1,457m, £143m higher
year-on-year. Our capital expenditure for the year includes investing in our
core assets, as well as investing in growth, such as our online customer
proposition, and delivering efficiencies across our operations, including
further automation within our distribution and fulfilment centres. We
continue to see attractive opportunities to commit capital to high-returning
investments, and expect a similar level of capital investment in FY 25/26.
Statutory capital expenditure for the year was £1.6bn.
Further details of current space can be found in the appendices starting on
page 48.
Property:
UK & ROI Central Europe Group
Feb-25 Feb-24 Feb-25 Feb-24 Feb-25 Feb-24
Property(1) - fully owned
- Estimated market value £15.4bn £15.1bn £1.6bn £1.8bn £17.0bn £16.9bn
- Net book value £15.3bn £15.2bn £1.3bn £1.5bn £16.6bn £16.7bn
% store selling space owned 58% 58% 64% 68% 59% 60%
% property owned by value(2) 60% 59% 55% 65% 60% 60%
1. Stores, malls, investment property, offices, distribution centres,
fixtures and fittings, work-in-progress. Excludes joint ventures.
2. Excludes fixtures and fittings.
The estimated market value of our fully owned property as at the year-end
increased by £0.1bn to £17.0bn. In the UK & ROI, we saw an increase of
£0.3bn due to a combination of our refit and remodelling programmes. In
Central Europe, we saw a decrease of £0.2bn, predominantly reflecting the
sale of malls. The market value represents a surplus of £0.4bn over the net
book value.
Our Group store selling space ownership percentage was 59%, marginally down
year-on-year driven by the sale of malls in Central Europe, which more than
offset property buybacks in UK & ROI.
Contacts.
Investor Relations: Chris Griffith 01707 940 900
Andrew Gwynn 01707 942 409
Media: Christine Heffernan 0330 6780 639
Teneo 0207 4203 143
This document is available at www.tescoplc.com/prelims2025.
A webcast including a Q&A will be held today at 9.00am for investors and
analysts and will be available on our website at www.tescoplc.com/prelims2025
(file://///lseg.stockex.local/data/CMData/RNS/CMAR/RNS%20Customer%20Services/PDF%20and%20DOCUMENT%20Upload%20Folder/www.tescoplc.com/prelims2025)
. This will be available for playback after the event. All presentation
materials, including a transcript, will be made available on our website.
We will report our Q1 Trading statement on 12 June 2025.
This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) No. 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018. This announcement is being
released on behalf of Tesco PLC by Sara Thomson, Interim Company Secretary.
Sources.
• UK market share based on Kantar Total Grocers Total Till Roll for 12 weeks
ended 23 February 2025.
• UK volume growth based on Kantar Total Grocery for 12 weeks ended 23 February
2025.
• UK convenience market share based on Kantar Total Grocery convenience channel
for 12 weeks ended 23 February 2025.
• UK online market share based on Kantar Total Grocery online channel for 12
weeks ended 23 February 2025.
• ROI market share based on Kantar Total Till Roll on 12-week rolling basis to
23 February 2025.
• 'Full-line grocers' refers to Tesco, Sainsbury's, Asda and Morrisons and
'Limited-range discounters' refers to Aldi and Lidl.
• UK Price index is an internal measure calculated using the retail selling
price of each item on a per unit or unit of measure basis. Competitor retail
selling prices are collected weekly by a third party. The price index
includes price cut promotions and is weighted by sales to reflect customer
importance.
• Clubcard Prices saving of up to £392 is based on the top 25% of Tesco
Clubcard members and large stores sales between 6 January 2024 and 4 January
2025. Tesco Clubcard Price savings versus regular Tesco price.
• Customer satisfaction and Brand Perception based on YoY changes in YouGov
BrandIndex scores for 12 weeks ended 23 February 2025.
• Availability based on Multi channel tracker. 3 period rolling data.
Responses to: "I Can Get What I Want".
• Number of new Booker retail partners is net of openings and closures,
including national accounts.
• Booker availability is an internal measure, based on the customer's online
order versus delivered.
• Brand NPS is based on BASIS Global Brand Tracker. 3 period rolling data.
Responses to the question: "How likely is it that you would recommend the
following company to a friend or colleague as a place to shop?"
• Colleague satisfaction based on Every Voice Matters colleague engagement
survey result for January 2025. Refers to responses of agreement to 'I would
recommend Tesco as a great place to work'.
Disclaimer.
Certain statements made in this document are forward-looking statements. For
example, statements regarding future financial performance, market trends and
our product pipeline are forward-looking statements. Phrases such as "aim",
"plan", "intend", "should", "anticipate", "well-placed", "believe",
"estimate", "expect", "target", "consider" and similar expressions are
generally intended to identify forward-looking statements. Forward-looking
statements are based on current expectations and assumptions and are subject
to a number of known and unknown risks, uncertainties and other important
factors that could cause actual results or events to differ materially from
what is expressed or implied by those statements. Many factors may cause
actual results, performance or achievements of Tesco to be materially
different from any future results, performance or achievements expressed or
implied by the forward-looking statements. Important factors that could
cause actual results, performance or achievements of Tesco to differ
materially from the expectations of Tesco include, among other things, general
business and economic conditions globally, industry trends, competition,
changes in government and other regulation and policy, including in relation
to the environment, health and safety and taxation, labour relations and work
stoppages, interest rates and currency fluctuations, changes in its business
strategy, political and economic uncertainty, including as a result of global
pandemics. As such, undue reliance should not be placed on forward-looking
statements. Any forward-looking statement is based on information available
to Tesco as of the date of the statement. All written or oral
forward-looking statements attributable to Tesco are qualified by this
caution. Other than in accordance with legal and regulatory obligations,
Tesco undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.
Group income statement
52 weeks ended 52 weeks ended
22 February 2025
24 February 2024
Notes Before adjusting Adjusting Total Before adjusting Adjusting Total
£m
items
£m
items items
£m items
£m
(Note 4) (Note 4)
£m
£m
Continuing operations
Revenue from sale of goods and services 69,191 - 69,191 67,673 - 67,673
Insurance revenue 725 - 725 514 - 514
Revenue 2, 3 69,916 - 69,916 68,187 - 68,187
Cost of sales (63,886) (319) (64,205) (62,832) (4) (62,836)
Insurance service expenses (598) - (598) (454) - (454)
Net expenses from reinsurance contracts held (62) - (62) (48) - (48)
Gross profit/(loss) 5,370 (319) 5,051 4,853 (4) 4,849
Administrative expenses (2,242) (98) (2,340) (2,024) (4) (2,028)
Operating profit/(loss) 2 3,128 (417) 2,711 2,829 (8) 2,821
Share of post-tax profit/(loss) of joint ventures and associates (4) - (4) 6 - 6
Finance income 5 254 - 254 267 - 267
Finance costs 5 (790) 44 (746) (825) 20 (805)
Profit/(loss) before tax from continuing operations 2,588 (373) 2,215 2,277 12 2,289
Taxation 6 (690) 79 (611) (593) 68 (525)
Profit/(loss) for the year from continuing operations 1,898 (294) 1,604 1,684 80 1,764
Discontinued operations
Profit/(loss) for the year from discontinued operations 7 91 (65) 26 56 (628) (572)
Profit/(loss) for the year 1,989 (359) 1,630 1,740 (548) 1,192
Attributable to:
Owners of the parent 1,985 (359) 1,626 1,736 (548) 1,188
Non-controlling interests 4 - 4 4 - 4
1,989 (359) 1,630 1,740 (548) 1,192
Earnings per share from continuing and discontinued operations
Basic 9 23.79p 16.74p
Diluted 9 23.51p 16.56p
Earnings per share from continuing operations
Basic 9 23.41p 24.80p
Diluted 9 23.13p 24.53p
The notes on pages 19 to 38 form part of this condensed consolidated financial
information.
Group statement of comprehensive income/(loss)
Notes 52 weeks ended 22 February 2025 52 weeks ended 24 February 2024
£m £m
Items that will not be reclassified to the Group income statement
Change in fair value of financial assets at fair value through other 4 -
comprehensive income
Remeasurements of defined benefit pension schemes 19 387 (251)
Net fair value gains/(losses) on inventory cash flow hedges 7 (38)
Tax on items that will not be reclassified (95) 62
303 (227)
Items that may subsequently be reclassified to the Group income statement
Change in fair value of financial assets at fair value through other 14 16
comprehensive income
Currency translation differences:
Retranslation of net assets of overseas subsidiaries, joint ventures and (89) (157)
associates
Impact of net investment hedges 33 41
Gains/(losses) on cash flow hedges:
Net fair value gains/(losses) 33 25
Reclassified and reported in the Group income statement (71) (56)
Finance income/(expenses) from insurance contracts issued - (4)
Finance income/(expenses) from reinsurance contracts held 1 1
Tax on items that may be reclassified 6 (6)
(73) (140)
Total other comprehensive income/(loss) for the year 230 (367)
Profit/(loss) for the year 1,630 1,192
Total comprehensive income/(loss) for the year 1,860 825
Attributable to:
Owners of the parent 1,858 820
Non-controlling interests 2 5
Total comprehensive income/(loss) for the year 1,860 825
Total comprehensive income/(loss) attributable to owners of the parent arising
from:
Continuing operations 1,832 1,392
Discontinued operations 7 26 (572)
1,858 820
The notes on pages 19 to 38 form part of this condensed consolidated financial
information.
Group balance sheet
Notes 22 February 24 February
2025
£m 2024
£m
Non-current assets
Goodwill and other intangible assets 5,087 5,066
Property, plant and equipment 10 17,262 17,221
Right of use assets 11 5,569 5,478
Investment property 24 24
Investments in joint ventures and associates 110 102
Other investments 934 1,546
Trade and other receivables 158 36
Reinsurance contract assets 16 124 125
Derivative financial instruments 663 781
Post-employment benefit surplus 19 56 22
Deferred tax assets 47 32
30,034 30,433
Current assets
Other investments 151 206
Inventories 2,768 2,635
Trade and other receivables 1,210 1,349
Derivative financial instruments 172 55
Current tax assets 27 110
Short-term investments 13 2,223 2,128
Cash and cash equivalents 13 2,255 2,340
8,806 8,823
Assets of the disposal group and non-current assets classified as held for 7 50 7,783
sale
8,856 16,606
Current liabilities
Trade and other payables (10,364) (10,264)
Borrowings 15 (1,861) (1,536)
Lease liabilities 11 (618) (584)
Provisions (300) (306)
Insurance contract liabilities 16 (652) (526)
Deposits from central bank - (108)
Derivative financial instruments (12) (25)
Current tax liabilities (13) (1)
(13,820) (13,350)
Liabilities of the disposal group classified as held for sale 7 - (7,122)
Net current liabilities (4,964) (3,866)
Non-current liabilities
Trade and other payables (40) (39)
Borrowings 15 (5,089) (5,683)
Lease liabilities 11 (7,098) (7,038)
Provisions (166) (175)
Deposits from central bank - (800)
Derivative financial instruments (205) (241)
Post-employment benefit deficit 19 (307) (657)
Deferred tax liabilities (503) (269)
(13,408) (14,902)
Net assets 11,662 11,665
Equity
Share capital 20 426 445
Share premium 5,165 5,165
Other reserves 20 3,140 3,131
Retained earnings 2,935 2,930
Equity attributable to owners of the parent 11,666 11,671
Non-controlling interests (4) (6)
Total equity 11,662 11,665
The notes on pages 19 to 38 form part of this condensed consolidated financial
information.
Group statement of changes in equity
Share Share Other reserves Retained earnings Total Non-controlling interests Total
capital
premium
£m
£m
equity
£m
£m (Note 20) £m
£m
£m
Notes
At 24 February 2024 445 5,165 3,131 2,930 11,671 (6) 11,665
Profit/(loss) for the year - - - 1,626 1,626 4 1,630
Other comprehensive income/(loss)
Retranslation of net assets of overseas subsidiaries, joint ventures and - - (89) - (89) - (89)
associates
Impact of net investment hedges - - 33 - 33 - 33
Change in fair value of financial assets at fair value through other - - - 18 18 - 18
comprehensive income
Remeasurements of defined benefit pension schemes 19 - - - 387 387 - 387
Gains/(losses) on cash flow hedges - - 40 - 40 - 40
Cash flow hedges reclassified and reported in the Group income statement - - (69) - (69) (2) (71)
Finance income/(expenses) from reinsurance contracts held - - 1 - 1 - 1
Tax relating to components of other comprehensive income - - 7 (96) (89) - (89)
Total other comprehensive income/(loss) - - (77) 309 232 (2) 230
Total comprehensive income/(loss) - - (77) 1,935 1,858 2 1,860
Transfer from translation reserve to retained earnings - - 36 (36) - - -
Inventory cash flow hedge movements
(Gains)/losses transferred to the cost of inventory - - (4) - (4) - (4)
Total inventory cash flow hedge movements - - (4) - (4) - (4)
Transactions with owners
Own shares purchased for cancellation 20 - - (1,016) - (1,016) - (1,016)
Own shares cancelled 20 (19) - 1,035 (1,016) - - -
Own shares purchased for share schemes - - (204) - (204) - (204)
Share-based payments - - 239 (49) 190 - 190
Dividends 8 - - - (865) (865) - (865)
Tax on items charged/(credited) to equity - - - 36 36 - 36
Total transactions with owners (19) - 54 (1,894) (1,859) - (1,859)
At 22 February 2025 426 5,165 3,140 2,935 11,666 (4) 11,662
Notes Share Share Other reserves Retained earnings Total Non-controlling interests Total
capital
premium
£m
£m
equity
£m
£m (Note 20) £m
£m
£m
At 25 February 2023 463 5,165 3,139 3,469 12,236 (11) 12,225
Profit/(loss) for the year - - - 1,188 1,188 4 1,192
Other comprehensive income/(loss)
Retranslation of net assets of overseas subsidiaries, joint ventures and - - (157) - (157) - (157)
associates
Impact of net investment hedges - - 41 - 41 - 41
Change in fair value of financial assets at fair value through other - - - 16 16 - 16
comprehensive income
Remeasurements of defined benefit pension schemes 19 - - - (251) (251) - (251)
Gains/(losses) on cash flow hedges - - (14) - (14) 1 (13)
Cash flow hedges reclassified and reported in the Group income statement - - (56) - (56) - (56)
Finance income/(expenses) from insurance contracts issued - - (4) - (4) - (4)
Finance income/(expenses) from reinsurance contracts held - - 1 - 1 - 1
Tax relating to components of other comprehensive income - - (4) 60 56 - 56
Total other comprehensive income/(loss) - - (193) (175) (368) 1 (367)
Total comprehensive income/(loss) - - (193) 1,013 820 5 825
Transfer from hedging reserve to retained earnings - - 44 (44) - - -
Inventory cash flow hedge movements
(Gains)/losses transferred to the cost of inventory - - 79 - 79 - 79
Total inventory cash flow hedge movements - - 79 - 79 - 79
Transactions with owners
Own shares purchased for cancellation 20 - - (752) - (752) - (752)
Own shares cancelled 20 (18) - 770 (752) - - -
Own shares purchased for share schemes - - (140) - (140) - (140)
Share-based payments - - 184 11 195 - 195
Dividends 8 - - - (777) (777) - (777)
Tax on items charged/(credited) to equity - - - 10 10 - 10
Total transactions with owners (18) - 62 (1,508) (1,464) - (1,464)
At 24 February 2024 445 5,165 3,131 2,930 11,671 (6) 11,665
The notes on pages 19 to 38 form part of this condensed consolidated financial
information.
Group cash flow statement
Notes 52 weeks ended 22 February 2025 52 weeks ended 24 February 2024
£m £m
Cash flows generated from/(used in) operating activities
Operating profit/(loss) of continuing operations 2,711 2,821
Operating profit/(loss) of discontinued operations 7 35 (659)
Depreciation and amortisation 1,775 1,723
(Profit)/loss arising on sale of property, plant and equipment, investment 1 (53)
property, intangible assets, assets classified as held for sale and early
termination of leases
(Profit)/loss arising on sale of joint ventures and associates - (9)
(Profit)/loss arising on sale of subsidiaries and businesses - (12)
Net impairment loss/(reversal) on property, plant and equipment, right of use 12 298 (28)
assets, intangible assets and investment property
Impairment loss on other investments 10 -
Net remeasurement loss on non-current assets held for sale 7 64 720
Defined benefit pension scheme payments 19 (30) (29)
Share-based payments 18 37 78
Fair value movements included in operating profit/(loss) 9 71
(Increase)/decrease in inventories (141) (150)
(Increase)/decrease in trade and other receivables and reinsurance assets (5) (129)
Increase/(decrease) in trade and other payables and insurance liabilities 158 698
Increase/(decrease) in provisions (10) (77)
Increase/(decrease) in deposits from central bank (908) (72)
Increase/(decrease) in working capital of the Banking operations disposal 53 (7)
group
(Increase)/decrease in working capital((a)) (853) 263
Cash generated from/(used in) operations 4,057 4,886
Interest paid (769) (824)
Corporation tax paid (366) (223)
Net cash generated from/(used in) operating activities 2,922 3,839
Cash flows generated from/(used in) investing activities
Proceeds from sale of property, plant and equipment, investment property, 137 55
intangible assets and assets classified as held for sale
Purchase of property, plant and equipment and investment property (1,247) (1,108)
Purchase of intangible assets (292) (278)
Disposal of subsidiaries, net of cash disposed - 15
Disposal of Banking operations, net of cash disposed 7 157 -
Acquisition of subsidiaries, net of cash acquired (46) (17)
Proceeds from sale of joint ventures and associates - 9
Increase in loans to joint ventures and associates (1) (61)
Investments in joint ventures and associates (15) (9)
Dividends received from joint ventures and associates 2 9
Cash inflows from maturing short-term investments - deposits((b)) 1,910 1,900
Cash outflows on investing in short-term investments - deposits((b)) (1,771) (2,432)
(Investments in)/proceeds from other short-term investments((b)) (234) 25
Proceeds from sale of other investments 966 352
Purchase of other investments (290) (390)
Interest received 255 249
Cash inflows from derivative financial instruments 29 5
Cash outflows from derivative financial instruments (1) (24)
Net cash generated from/(used in) investing activities (441) (1,700)
Cash flows generated from/(used in) financing activities
Own shares purchased for cancellation 20 (1,016) (752)
Own shares purchased for share schemes, net of cash received from employees 18 (54) (93)
Repayment of capital element of obligations under leases (602) (627)
Cash outflows exceeding the incremental increase in assets in a property (92) (62)
buyback
Increase in borrowings 462 1,232
Repayment of borrowings (809) (775)
Cash inflows from derivative financial instruments 485 98
Cash outflows from derivative financial instruments (453) (102)
Dividends paid to equity owners 8 (864) (778)
Net cash generated from/(used in) financing activities (2,943) (1,859)
Net increase/(decrease) in cash and cash equivalents (462) 280
Cash and cash equivalents at the beginning of the year 1,874 1,565
Effect of foreign exchange rate changes (13) 29
Cash and cash equivalents, including cash held in the disposal group, at the 1,399 1,874
end of the year
Less: Cash held in the disposal group - (346)
Cash and cash equivalents at the end of the year 13 1,399 1,528
(a) Comparative (increase)/decrease in working capital has been re-presented
to present increase/(decrease) in deposits from central bank and
increase/(decrease) in working capital of the Banking operations disposal
group separately following the sale of Banking operations. These were
previously included in the subsection relating to Tesco Bank. There is no
impact on net cash generated from operating, investing, or financing
activities, and no impact on any APMs.
(b) Comparative net (investments in)/proceeds from sale of short-term
investments has been re-presented as cash inflows from maturing short-term
investments - deposits, cash outflows on investing in short-term investments -
deposits and (investments in)/proceeds from other short-term investments.
There is no impact on net cash generated from operating, investing, or
financing activities, and no impact on any APMs.
The notes on pages 19 to 38 form part of this condensed consolidated financial
information.
Note 1 Basis of preparation
This preliminary consolidated financial information has been prepared in
accordance with the Disclosure and Transparency Rules of the UK Financial
Conduct Authority, and the principles of UK-adopted IFRS. The accounting
policies applied, and the judgements, estimates and assumptions made in
applying these policies, are consistent with those used in preparing the
Annual Report and Group financial statements 2025, which are the same as those
used in preparing the Annual Report and Group financial statements 2024,
except as noted below. The financial year represents the 52 weeks ended 22
February 2025 (prior financial year 52 weeks ended 24 February 2024). This
preliminary consolidated financial information does not constitute statutory
consolidated financial statements for the 52 weeks ended 22 February 2025 as
defined under section 434 of the Companies Act 2006.
The Annual Report and Group financial statements for the 52 weeks ended 22
February 2025 were approved by the Board of Directors on 9 April 2025. The
report of the auditor on those Group financial statements was unqualified, did
not contain an emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006. The Annual Report and Group
financial statements for 2025 will be filed with the Registrar in due course.
The Annual Report and Group financial statements for the 52 weeks ended 24
February 2024 were approved by the Board of Directors on 9 April 2024. The
report of the auditor on those Group financial statements was unqualified, did
not contain an emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006.
The Directors have, at the time of approving the financial statements, a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future, which reflects a period of
18 months from the date of approval of the financial statements, and have
concluded that there are no material uncertainties relating to going concern.
Thus, they continue to adopt the going concern basis of accounting in
preparing the consolidated Group financial statements. Further information on
the Group's strong liquidity position is given in the Summary of Net Debt
section of the Financial review.
Adoption of new IFRSs
Standards, interpretations and amendments that became effective in the current
financial year have not had a material impact on the consolidated Group
financial statements.
The Group has not applied any standards, interpretations or amendments that
have been issued but are not yet effective. The impact of the following is
under assessment:
- IFRS 18 'Presentation and disclosure in financial statements',
which will become effective in the consolidated Group financial statements for
the financial year ending 26 February 2028, subject to UK endorsement.
Other standards, interpretations and amendments issued but not yet effective
are not expected to have a material impact on the consolidated Group financial
statements.
Discontinued operations
During the prior financial year, the Board approved a plan to dispose of the
Group's regulated Banking operations, which formed the major part of the
previous Tesco Bank segment. The disposal of the Banking operations completed
on 1 November 2024. The net results of the Banking operations are presented as
a discontinued operation in the Group income statement. For further details,
refer to Note 7.
Segmental reporting
Following the disposal of the Group's Banking operations, the Group no longer
presents Tesco Bank as a separate reportable segment. The remaining Insurance
and Money Services business previously reported within the Tesco Bank segment
have been reclassified to the UK & ROI segment, with comparative segmental
reporting restated (refer to Note 2).
Note 2 Segmental reporting
The Group's operating segments are determined based on the Group's
organisational structure and internal reporting to the Chief Operating
Decision Maker (CODM). The CODM has been determined to be the Group Chief
Executive, with support from the Executive Committee, as the function
primarily responsible for the allocation of resources to segments and
assessment of performance of the segments.
As a result of the disposal of the Group's Banking operations, the Group's
organisational structure and internal reporting to the CODM have changed and
Tesco Bank is no longer presented as a separate reportable segment. The
remaining Insurance and Money Services business, previously part of the Tesco
Bank segment, is now reported as part of the UK business within the UK &
ROI segment. The comparative segmental disclosures have been restated.
The activities of the Group are presented in the following reportable
segments:
- UK & ROI - the United Kingdom and Republic of Ireland; and
- Central Europe - Czech Republic, Hungary and Slovakia.
The CODM uses adjusted operating profit, as reviewed at periodic Executive
Committee meetings, as the key measure of the segments' results as it
reflects the segments' trading performance and aids comparability over time.
Adjusted operating profit is a consistent measure within the Group as defined
within the Glossary. Refer to Note 4 for adjusting items. Inter-segment
revenue is not material.
Income statement
The segment results and the reconciliation of the segment measures to the
respective statutory items included in the Group income statement are as
follows:
52 weeks ended 22 February 2025 Notes UK & ROI Central Continuing operations at Foreign exchange Continuing operations at actual exchange
At constant exchange rates
£m
Europe
constant exchange
£m
£m
£m
£m
Revenue 3 65,667 4,580 70,247 (331) 69,916
Less: Fuel sales (6,133) (155) (6,288) 8 (6,280)
Sales 59,534 4,425 63,959 (323) 63,636
Adjusted operating profit 3,022 116 3,138 (10) 3,128
Adjusting items 4 (287) (137) (424) 7 (417)
Operating profit 2,735 (21) 2,714 (3) 2,711
Adjusted operating margin 4.6% 2.5% 4.5% 4.5%
Included within the UK & ROI segment is £155m (2024: £69m) of adjusted
operating profit related to the Insurance and Money Services business. After
adjusting items of £(14)m (2024: £(3)m), operating profit is £141m (2024:
£66m).
52 weeks ended 22 February 2025 Notes UK & ROI Central Continuing operations at actual exchange
At actual exchange rates
£m
Europe
£m
£m
Revenue 3 65,583 4,333 69,916
Less: Fuel sales (6,133) (147) (6,280)
Sales 59,450 4,186 63,636
Adjusted operating profit 3,016 112 3,128
Adjusting items 4 (287) (130) (417)
Operating profit 2,729 (18) 2,711
Adjusted operating margin 4.6% 2.6% 4.5%
Share of post-tax profit/(loss) of joint ventures and associates (4)
Finance income 5 254
Finance costs 5 (746)
Profit before tax 2,215
52 weeks ended 24 February 2024 Notes UK & ROI Central Continuing operations at actual exchange
At actual exchange rates
Europe
£m
(restated*)
£m
£m
Revenue 3 63,691 4,496 68,187
Less: Fuel sales (6,536) (174) (6,710)
Sales 57,155 4,322 61,477
Adjusted operating profit 2,739 90 2,829
Adjusting items 4 16 (24) (8)
Operating profit 2,755 66 2,821
Adjusted operating margin 4.3% 2.0% 4.1%
Share of post-tax profit/(loss) of joint ventures and associates 6
Finance income 5 267
Finance costs 5 (805)
Profit before tax 2,289
* Comparatives have been restated to reflect the reclassification of
Insurance and Money Services from the former Tesco Bank segment to the UK
& ROI segment.
Other segment information
The tables below show the Group's total capital expenditure, depreciation and
amortisation for continuing operations:
52 weeks ended 22 February 2025 UK & ROI Central Total
£m
Europe
£m segments
£m
Capital expenditure (including acquisitions through business combinations):
Property, plant and equipment((a)) 1,264 98 1,362
Goodwill and other intangible assets((b)) 332 10 342
Depreciation and amortisation:
Property, plant and equipment (850) (87) (937)
Right of use assets (501) (49) (550)
Other intangible assets (276) (11) (287)
(a) Includes £1m (2024: £nil) of property, plant and equipment acquired
through business combinations. The prior year includes £65m of land and
buildings related to obtaining control of The Tesco Coral Limited Partnership.
(b) Includes £56m (2024: £17m) of goodwill and other intangible assets
acquired through business combinations.
52 weeks ended 24 February 2024 UK & ROI Central Total
Europe
(restated((c)))
£m segments
£m
£m
Capital expenditure (including acquisitions through business combinations):
Property, plant and equipment((a)) 1,099 99 1,198
Goodwill and other intangible assets((b)) 258 12 270
Depreciation and amortisation:
Property, plant and equipment (810) (86) (896)
Right of use assets (497) (46) (543)
Other intangible assets (243) (12) (255)
(a)-(b) Refer to previous table for footnotes.
(c) Comparatives have been restated to reflect the reclassification of
Insurance and Money Services from the former Tesco Bank segment to the UK
& ROI segment.
Note 3 Revenue
Continuing operations Notes 52 weeks 52 weeks
2025
£m 2024
£m
UK 53,619 51,718
ROI 2,974 2,891
Booker 8,990 9,082
UK & ROI 2 65,583 63,691
Hungary 1,445 1,512
Czech Republic 1,471 1,554
Slovakia 1,417 1,430
Central Europe 2 4,333 4,496
Total Group 2 69,916 68,187
Note 4 Adjusting items
Group income statement
52 weeks ended 22 February 2025
Profit/(loss) for the year included the following adjusting items:
Cost of sales Administrative expenses Total adjusting items included within operating profit Finance income/ Taxation Adjusting items included within discontinued operations
£m
£m
£m
£m
(costs) £m
£m Total adjusting items
£m
Property transactions((a)) 1 1 2 - - - 2
Net impairment (loss)/reversal of non-current assets((b)) (274) (12) (286) - 57 - (229)
Restructuring((c)) (38) (5) (43) - 11 - (32)
Amortisation of acquired intangible assets((d)) - (76) (76) - 19 - (57)
Banking operations disposal costs((e)) (8) (6) (14) - 4 - (10)
Net pension finance income/(costs)((f)) - - - (32) 8 - (24)
Fair value remeasurements of financial instruments((f)) - - - 76 (20) - 56
Total adjusting items from continuing operations (319) (98) (417) 44 79 - (294)
Adjusting items relating to discontinued operations((g)) - - - - - (65) (65)
Total adjusting items (319) (98) (417) 44 79 (65) (359)
(a) Includes profit of £3m relating to the sale of four malls and the
leaseback of the four associated stores in Central Europe. Refer to Note 7. In
the prior year, predominantly related to the disposal of surplus properties
generating a profit before tax of £63m.
(b) Refer to Note 12 for further details on net impairment (loss)/reversal
of non-current assets.
(c) Provisions relating to operational restructuring changes announced as part
of 'Save to Invest', a multi-year programme which commenced in June 2022. The
total cost of the programme
recognised as adjusting since its start date is £(275)m (2024: £(232)m).
Future cost savings will not be reported within adjusting items.
(d) Amortisation of acquired intangibles relates to inorganic business
combinations and does not reflect the Group's ongoing trading performance.
(e) Costs incurred within the continuing Group in relation to the sale of
Banking operations.
(f) Net pension finance costs and fair value remeasurements of financial
instruments are included within adjusting items, as they can fluctuate
significantly due to external market factors that are outside management's
control. Refer to Note 5 for details of finance income and costs. Refer to
Note 19 for details of pension schemes.
(g) Comprises fair value remeasurement of the disposal group of £(64)m
(2024: £(732)m) (refer to Note 7), separation costs incurred within the
disposal Group in relation to the sale of Banking operations of £(23)m (2024:
£(11)m) and the associated tax of £22m (2024: £115m).
52 weeks ended 24 February 2024
Profit/(loss) for the year included the following adjusting items:
Cost of sales Administrative expenses Total adjusting items included within operating profit Finance income/ (costs) Taxation Adjusting items included within discontinued operations
£m
£m
£m
£m
£m
£m
Total adjusting items
£m
Property transactions 6 69 75 - (18) - 57
Disposal of China associate in a prior year - 9 9 - 23 - 32
Net impairment (loss)/reversal of non-current assets 35 (7) 28 - 38 - 66
Restructuring (45) (5) (50) - 12 - (38)
Amortisation of acquired intangible assets - (74) (74) - 18 - (56)
Disposal of subsidiary - 12 12 - - - 12
Banking operations disposal costs - (8) (8) - - - (8)
Net pension finance income/(costs) - - - (18) 5 - (13)
Fair value remeasurements of financial instruments - - - 38 (10) - 28
Total adjusting items from continuing operations (4) (4) (8) 20 68 - 80
Adjusting items relating to discontinued operations - - - - - (628) (628)
Total adjusting items (4) (4) (8) 20 68 (628) (548)
Group cash flow statement
The table below shows the impact of adjusting items on the Group cash flow
statement:
Cash flows from Cash flows from Cash flows from
operating activities
investing activities
financing activities
52 weeks 52 weeks 52 weeks 52 weeks 52 weeks 52 weeks
2025
2024
2025
2024
2025
2024
£m
£m
£m
£m
£m
£m
Property transactions((a)) - - 130 53 - -
Disposal of subsidiaries((b)) - - - 15 - -
Restructuring((c)) (55) (100) - - - -
Disposal of China associate - - - 9 - -
Acquisition of property joint venture - - - - -
7
Special dividend - - - - - (1)
Disposal of Banking operations((d)) (26) - 586 - - -
Total adjusting items from continuing operations (81) (100) 716 84 - (1)
Adjusting items relating to discontinued operations((e)) - (1) (429) - - -
Total (81) (101) 287 84 - (1)
(a) Property transactions include £66m proceeds from the sale of four malls
and the leaseback of the four associated stores in Central Europe, previously
classified as assets held for sale. Refer to Note 7. In the prior year, £14m
related to the sale of stores in Poland not included in the sale of the
corporate business.
(b) In the prior year, the Group disposed of its Booker subsidiary
Ritter-Courivaud Limited, part of the UK & ROI segment.
(c) Cash outflows relating to operational restructuring changes as part of
the multi-year 'Save to Invest' programme, which commenced in June 2022.
(d) Net proceeds from the sale and costs incurred within the continuing
Group in relation to the disposal of the Group's Banking operations. Refer to
Note 7.
(e) The Banking operations disposal group held £429m in cash and cash
equivalents at the date of disposal. Refer to Note 7 for the net book value of
assets disposed.
Note 5 Finance income and costs
Continuing operations Notes 52 weeks 52 weeks
2025
2024
£m
£m
Finance income
Interest income on bank balances 113 133
Interest income on short-term investments 119 117
Interest income on loans to joint ventures and associates 7 2
Interest income on other investments 12 12
Interest income on net investment in leases 1 2
Finance income on reinsurance contracts held 2 1
Total finance income 254 267
Finance costs
GBP MTNs and loans (204) (190)
EUR MTNs (82) (113)
USD bonds (16) (15)
Interest expense on lease liabilities(*) (370) (373)
Finance expense on insurance contracts issued (11) (7)
Interest expense on bank overdrafts (97) (116)
Undrawn committed facility fee (5) (5)
Unwind of discount on provision (5) (6)
Total finance costs before adjusting items (790) (825)
Fair value remeasurements of financial instruments 76 38
Net pension finance income/(costs) 19 (32) (18)
Total finance costs (746) (805)
Net finance costs (492) (538)
* Interest expense on lease liabilities is presented net of £7m hedging
impact (2024: £nil).
Note 6 Taxation
Recognised in the Group income statement
Continuing operations 52 weeks 52 weeks
2025
2024
£m
£m
Current tax (credit)/charge
UK corporation tax 394 351
Overseas tax 88 71
Adjustments in respect of prior years (18) (29)
464 393
Deferred tax (credit)/charge
Origination and reversal of temporary differences 137 133
Adjustments in respect of prior years 6 (4)
Change in tax rate 4 3
147 132
Total income tax (credit)/charge 611 525
Reconciliation of effective tax charge
Continuing operations 52 weeks 52 weeks
2025
2024
£m
£m
Profit/(loss) before tax 2,215 2,289
Tax credit/(charge) at the UK corporation tax rate of 25% (2024: 24.45%) (554) (560)
Effect of:
Non-qualifying depreciation (41) (39)
Expenses not deductible (20) (24)
Property items taxed on a different basis to accounting entries - 6
Net impairment (loss)/reversal of non-current assets (8) 46
Unrecognised tax losses (3) -
Differences in overseas taxation rates 11 15
Adjustments in respect of prior years 12 33
Share of profits/(losses) of joint ventures and associates (1) 2
Change in tax rate (4) (3)
Irrecoverable withholding tax (3) (1)
Total income tax credit/(charge) (611) (525)
Effective tax rate (statutory) 27.6% 22.9%
Reconciliation of effective tax charge on adjusted profit before tax
Continuing operations 52 weeks 52 weeks
2025
2024
£m
£m
Profit/(loss) before tax 2,215 2,289
Exclude: Adjusting items 373 (12)
Adjusted profit before tax 2,588 2,277
Tax credit/(charge) at the UK corporation tax rate of 25% (2024: 24.45%) (647) (557)
Effect of:
Non-qualifying depreciation (41) (39)
Expenses not deductible (21) (23)
Unrecognised tax losses (3) -
Differences in overseas taxation rates 20 19
Adjustments in respect of prior years 12 10
Share of profits/(losses) of joint ventures and associates (1) 2
Change in tax rate (6) (4)
Irrecoverable withholding tax (3) (1)
Total income tax credit/(charge) before adjusting items (690) (593)
Adjusted effective tax rate 26.7% 26.0%
Deferred tax
The following are the major deferred tax (liabilities)/assets recognised by
the Group and movements thereon during the current and prior financial years,
measured using the tax rates that are expected to apply when the liability is
settled, or the asset realised based on the tax rates that have been enacted
or substantively enacted by the balance sheet date. Deferred tax assets are
recognised when it is probable sufficient taxable profits will be available to
utilise deductible temporary differences or unused tax losses. This assessment
is based on the Group's three-year long-term plan which is updated and
approved annually by the Board and is consistent with the Group's longer-term
viability statement and impairment assessments.
Continuing operations Property-related Acquired intangibles Post- Share-based Tax losses Financial Total
£m
employment
payments
£m
instruments
£m
items((a))
£m Short-term
£m
benefits((b))
timing
£m
differences
£m
£m
At 25 February 2023 (434) (95) 255 39 63 146 (9) (35)
(Charge)/credit to the Group income statement (85) 18 2 - 11 (73) (5) (132)
(Charge)/credit to the Group statement of changes in equity - - - 10 - - - 10
(Charge)/credit to the Group statement of comprehensive income/(loss) - - (95) - - - (8) (103)
Discontinued operations 27 - - - - - (3) 24
Foreign exchange and other movements (1) - - - - - - (1)
At 24 February 2024 (493) (77) 162 49 74 73 (25) (237)
(Charge)/credit to the Group income statement (100) 19 2 (5) 8 (68) (3) (147)
(Charge)/credit to the Group statement of changes in equity - - - 22 - - - 22
(Charge)/credit to the Group statement of comprehensive income/(loss) - - (93) - - - 4 (89)
Acquisition - (5) - - - - - (5)
At 22 February 2025 (593) (63) 71 66 82 5 (24) (456)
(a) Property-related items are a deferred tax liability on accelerated tax
depreciation of £610m (2024: £510m), deferred tax liability on rolled-over
gains of £422m (2024: £424m), deferred tax asset on capital losses of £239m
(2024: £242m) and deferred tax asset on IFRS 16 balances of £200m (2024:
£199m).
(b) Post-employment benefits include a tax (charge)/credit to the Group
statement of comprehensive income/(loss) relating to remeasurement
gain/(loss). The closing deferred tax relates to a deferred tax asset on
pension schemes in deficit or a deferred tax liability on schemes in surplus
if no withholding tax applies. Refer to Note 19 for further details.
Note 7 Discontinued operations and assets classified as held for sale
The following table presents a breakdown of the assets and liabilities of
disposal groups and non-current assets classified as held for sale.
2025 2024
Other(*) Banking operations Other(*) Total
£m
£m
£m £m
Assets of the disposal group - 7,698 - 7,698
Non-current assets classified as held for sale 50 - 85 85
Total assets of the disposal group and non-current assets classified as held 50 7,698 85 7,783
for sale
Liabilities of the disposal group - (7,122) - (7,122)
Total net assets of the disposal group and non-current assets classified 50 576 85 661
as held for sale
* Other non-current assets classified as held for sale consist mainly of
properties in the UK (2024: UK and Central Europe) due to be sold within one
year. Due to the individual nature of each property, fair values are
classified as Level 3 within the fair value hierarchy.
Assets classified as held for sale
During the year the Group sold four mall properties in Central Europe, leasing
back four stores within those sites. Net proceeds from the sale and leaseback
transactions were £66m. As the sale and leaseback proceeds did not exceed the
fair value of the stores sold, the proceeds are presented in the investing
category in the Group cash flow statement. The profit on disposal was £3m.
Refer to Note 4. Refer to Note 11 for details on the leaseback of the stores.
Disposal of Banking operations
In February 2024, the Group agreed to sell its banking operations, comprising
personal loans, credit cards, customer deposits, and associated operational
capabilities (Banking operations). The related assets and liabilities were
classified as held for sale in the prior year.
Upon classification as held for sale in the prior year, the Group recognised a
loss of £(732)m on remeasuring the disposal group to fair value less costs to
sell. Of this loss, £(314)m was allocated to goodwill and other assets of the
disposal group within the scope of the measurement requirements of IFRS 5
which were fully written off. The excess loss of £(418)m remaining was
recognised as a reduction in the total assets of the disposal group, which
primarily comprise loans and advances to customers measured under IFRS 9. In
the current year and up until the date of disposal, an additional £(7)m
impairment of non-current assets and excess loss of £(57)m were recognised,
giving rise to a total loss on remeasuring the disposal group to fair value
less costs to sell of £(64)m.
In October 2024, the Group received approval from the High Court of Justice of
England and Wales for the disposal which subsequently completed on 1 November
2024. The net results of Banking operations and the profit/(loss) on disposal
are presented in profit/(loss) for the year from discontinued operations in
the Group income statement.
Income statement of discontinued operations
2025 2024
Banking operations Banking operations
£m £m
Revenue 547 710
Operating costs (448) (637)
Operating profit((a)) 99 73
Net finance costs (1) (6)
Profit before tax 98 67
Taxation (24) (19)
Profit after tax 74 48
Remeasurement of the disposal group to fair value less costs to sell((a)(b)) (64) (732)
Tax on remeasurement of the disposal group to fair value less costs to 16 112
sell((c))
Profit after tax of discontinued operations 26 (572)
(a) Operating profit/(loss) of discontinued operations in the Group cash
flow statement of £35m (2024: £(659)m) comprises operating profit above of
£99m (2024: £73m) and fair value remeasurement of assets of the disposal
group of £(64)m (2024: £(732)m).
(b) Remeasurement of the disposal group to fair value less costs to sell
includes £nil goodwill impairment (2024: £(211)m), £(7)m remeasurements on
non-current assets (2024: £(96)m), £(57)m loss in excess of the carrying
amount of the non-current assets (2024: £(418)m), and in the prior year,
£(7)m of costs already incurred in relation to the sale. This is treated as
an adjusting item.
Refer to Note 4.
(c) Tax on remeasurement of the disposal group to fair value less costs to
sell is included within adjusting items. Refer to Note 4.
The profit/(loss) on disposal of the Group's Banking operations comprises the
following:
2025
£m
Gross proceeds 614
Costs to sell(*) (28)
Proceeds less costs to sell 586
Net book value of assets disposed
Loans and advances to customers (8,071)
Derivative financial instruments (34)
Trade and other receivables (87)
Cash and cash equivalents (429)
Trade and other payables 38
Borrowings 550
Provisions 17
Lease liabilities 15
Deposits from customers 6,926
Derivative financial instruments 14
Excess loss on remeasurement of the disposal group 475
Net book value of assets disposed (586)
Profit/(loss) on disposal of Banking operations -
* Total costs associated with the sale of the Banking operations amounted
to £(35)m, of which £(7)m was expensed in the prior financial year.
Expected credit losses (ECLs) of the Banking operations disposal group
The opening ECL balance was £433m. During the period prior to disposal of the
Group's Banking operations, there was a £(53)m net decrease in ECLs on loans
and advances to customers, principally in relation to write-offs and asset
disposals. During that period, there were no material transfers between the
classification of loans based on the risk levels stages 1, 2 or 3. The total
ECL balance of £380m was derecognised on completion of the sale.
Cash flow statement of discontinued operations
2025 2024
£m £m
Net cash flows from operating activities 171 162
Net cash flows from investing activities (436) (22)
Net cash flows from financing activities (2) 548
Net cash flows from discontinued operations (267) 688
The total cash inflows of £157m presented in the investing category of the
Group cash flow statement in the 'Disposal of Banking operations, net of cash
disposed' line comprise of gross proceeds of £614m, less cost incurred of
£(28)m and cash and cash equivalents disposed of £(429)m.
Note 8 Dividends
2025 2024
Pence/share £m Pence/share £m
Paid prior financial year final dividend((a)) 8.25 576 7.05 506
Paid interim dividend((b)) 4.25 289 3.85 271
Amounts recognised through equity as distributions to owners 12.50 865 10.90 777
(Increase)/decrease in unclaimed dividends - (1) - -
Paid 2021 special dividend - - 50.93 1
Dividends paid in the financial year 864 778
Proposed final dividend at financial year end 9.45 637 8.25 581
(a) Excludes £5m prior financial year final dividend waived (2024: £6m)
and includes the write-back of unclaimed dividends and forfeited shares of
£nil (2024: £4m).
(b) Excludes £2m interim dividend waived (2024: £2m).
The proposed final dividend was approved by the Board of Directors on 9 April
2025 and is subject to the approval of shareholders at the AGM. The proposed
dividend has not been included as a liability as at 22 February 2025. If
approved by shareholders, it will be paid on 27 June 2025 to shareholders who
are on the register of members at close of business on 16 May 2025.
A dividend reinvestment plan (DRIP) is available to shareholders who would
prefer to invest their dividends in the shares of the Company. For those
shareholders electing to receive the DRIP, the last date for receipt of a new
election is 6 June 2025.
For all dividends, including the 2021 special dividend paid following the
disposal of the Thai and Malaysia businesses, the Group has a share forfeiture
programme following the completion of a tracing and notification exercise to
any shareholders who have not had contact with Tesco PLC over the past 12
years, in accordance with the provisions set out in the Company's Articles of
Association. £nil (2024: £2m) of unclaimed dividends in relation to these
shares have been adjusted for in retained earnings.
Note 9 Earnings/(losses) per share and diluted earnings/(losses) per
share
52 weeks ended 22 February 2025 52 weeks ended 24 February 2024
Basic Dilutive share Diluted Basic Dilutive share Diluted
options and awards
options and awards
Profit/(loss) (£m)
Continuing operations* 1,600 - 1,600 1,760 - 1,760
Discontinued operations 26 - 26 (572) - (572)
Total 1,626 - 1,626 1,188 - 1,188
Weighted average number of shares (millions) 6,835 83 6,918 7,097 79 7,176
Earnings/(losses) per share (pence)
Continuing operations 23.41 (0.28) 23.13 24.80 (0.27) 24.53
Discontinued operations 0.38 - 0.38 (8.06) 0.09 (7.97)
Total 23.79 (0.28) 23.51 16.74 (0.18) 16.56
* Excludes profits/(losses) attributable to non-controlling interests of
£4m (2024: £4m).
APM: Adjusted diluted earnings/(losses) per share
Continuing operations Notes 52 weeks 52 weeks
2025
2024
Profit before tax (£m) 2,215 2,289
Exclude: Adjusting items (£m) 4 373 (12)
Adjusted profit before tax (£m) 2,588 2,277
Adjusted profit before tax attributable to the owners of the parent (£m)* 2,584 2,273
Taxation on adjusted profit before tax attributable to the owners of the 6 (690) (593)
parent (£m)
Adjusted profit after tax attributable to the owners of the parent (£m) 1,894 1,680
Basic weighted average number of shares (millions) 6,835 7,097
Adjusted basic earnings per share (pence) 27.71 23.67
Diluted weighted average number of shares (millions) 6,918 7,176
Adjusted diluted earnings per share APM (pence) 27.38 23.41
Refer to previous table for footnote.
Note 10 Property, plant and equipment
2025 2024
Land and Other((b)) Total Land and Other((b)) Total
buildings((a))
£m
buildings((a))
£m
£m £m
£m £m
Net carrying value
Opening balance 14,997 2,224 17,221 14,870 1,992 16,862
Foreign currency translation (77) (14) (91) (124) (21) (145)
Additions((c)(d)) 504 857 1,361 445 753 1,198
Acquired through business combinations - 1 1 - - -
Reclassification (2) 2 - 11 (7) 4
Transfers (to)/from assets classified as held for sale (34) - (34) 103 5 108
Transfer to disposal group classified as held for sale - - - (1) (3) (4)
Disposals (70) (12) (82) (17) (11) (28)
Depreciation charge for the year (464) (473) (937) (449) (450) (899)
Impairment losses((e)) (292) (119) (411) (236) (95) (331)
Reversal of Impairment losses((e)) 197 37 234 395 61 456
Closing balance 14,759 2,503 17,262 14,997 2,224 17,221
Construction in progress included above((f)) 155 361 516 109 280 389
(a) The estimated fair value of land and buildings is £15.0bn (2024:
£15.0bn).
(b) Other assets consist of fixtures and fittings with a net carrying value
of £1,874m (2024: £1,679m), office equipment with a net carrying value of
£269m (2024: £234m) and motor vehicles with a net carrying value of £360m
(2024: £311m). Depreciation charge for the year is £(306)m (2024: £(291)m),
£(75)m (2024: £(69)m) and £(92)m (2024: £(90)m), respectively.
(c) Prior year includes £65m of land and buildings related to obtaining
control of The Tesco Coral Limited Partnership, which was not impaired on
acquisition.
(d) Includes £199m (2024: £107m) relating to store buybacks, direct store
purchases and refits associated with both direct store purchases and business
combinations.
(e) Refer to Note 12.
(f) Construction in progress does not include land.
Commitments for capital expenditure contracted for, but not incurred, at 22
February 2025 were £191m (2024: £160m) principally relating to store
development and distribution investment.
Note 11 Leases
Group as lessee
Right of use assets
2025 2024
Land and Other Total Land and Other Total
buildings
£m
£m
buildings
£m
£m
£m
£m
Net carrying value
Opening balance 5,365 113 5,478 5,387 113 5,500
Additions (including sale and leaseback transactions) 476 66 542 305 39 344
Acquired through business combinations 5 - 5 - - -
Depreciation charge for the year (512) (38) (550) (508) (36) (544)
Impairment losses((a)) (223) (2) (225) (213) (1) (214)
Reversal of impairment losses((a)) 130 - 130 131 - 131
Derecognition on acquisition of property joint venture - - - (17) - (17)
Transfer to disposal group classified as held for sale - - - (9) - (9)
Other movements((b)) 190 (1) 189 289 (2) 287
Closing balance 5,431 138 5,569 5,365 113 5,478
(a) Refer to Note 12.
(b) Other movements include lease terminations, modifications and
reassessments, foreign exchange, reclassifications between asset classes and
entering into finance subleases.
Lease liabilities
The following table shows the discounted lease liabilities included in the
Group balance sheet and the contractual undiscounted lease payments:
2025 2024
£m
£m
Current 618 584
Non-current 7,098 7,038
Total lease liabilities 7,716 7,622
Total undiscounted lease payments 10,876 10,757
A reconciliation of the Group's opening to closing lease liabilities balance
is presented in Note 22.
Sale and leaseback related to assets previously classified as held for sale
During the year the Group sold four mall properties previously classified as
held for sale in Central Europe, leasing back four stores within those sites.
Refer to Note 7 for details of the net proceeds and profit from the
transaction. The stores are being leased back over 30-year lease terms at
market rentals with options to extend. These store leases have resulted in
lease liability additions of £23m. The sale and leaseback transaction allows
the Group to relinquish control over the malls while continuing to operate the
stores within those sites.
Note 12 Impairment of non-current assets
Goodwill
There was no impairment of goodwill balances in the current year (2024: £211m
related to the sale of the Group's Banking operations).
Other non-current assets
The tables below summarise the Group's pre-tax impairment losses and reversals
on other non-current assets, aggregated by segment due to the large number of
individually immaterial cash-generating units. This includes any
(losses)/reversals recognised immediately prior to classifying an asset or
disposal group as held for sale but excludes any changes in fair value less
costs to sell post classification as held for sale. There were no impairment
losses or reversals in the year (2024: £nil) with respect to investments in
joint ventures and associates. Impairments are typically treated as adjusting
where there is significant volatility arising from inputs outside the control
of management.
UK & ROI Central Europe Total Net
52 weeks ended 22 February 2025 Impairment Impairment reversal Impairment Impairment reversal Impairment Impairment reversal Impairment (loss)/reversal
loss
£m
loss
£m
loss
£m
£m
£m
£m
£m
Group balance sheet
Other intangible assets (35) 8 - - (35) 8 (27)
Property, plant and equipment (336) 233 (75) 1 (411) 234 (177)
Right of use assets (165) 125 (60) 5 (225) 130 (95)
Investment property - 1 - - - 1 1
Total impairment (loss)/reversal of other non-current assets (536) 367 (135) 6 (671) 373 (298)
Group income statement
Cost of sales((a)) (517) 360 (134) 5 (651) 365 (286)
Administrative expenses((b)) (19) 7 (1) 1 (20) 8 (12)
Total impairment (loss)/reversal from continuing operations (536) 367 (135) 6 (671) 373 (298)
(a) Of which £(274)m is adjusting (2024: £35m).
(b) Of which £(12)m is adjusting (2024: £(7)m).
UK & ROI Central Europe Total Net
52 weeks ended 24 February 2024 Impairment Impairment reversal Impairment Impairment reversal Impairment Impairment reversal Impairment (loss)/reversal
loss
£m
loss
£m
loss
£m
£m
£m
£m
£m
Group balance sheet
Other intangible assets (26) 13 - - (26) 13 (13)
Property, plant and equipment (306) 449 (25) 7 (331) 456 125
Right of use assets (187) 122 (27) 9 (214) 131 (83)
Investment property - - (1) - (1) - (1)
Total impairment (loss)/reversal of other non-current assets (519) 584 (53) 16 (572) 600 28
Group income statement
Cost of sales((a)) (518) 584 (46) 15 (564) 599 35
Administrative expenses((b)) (1) - (7) 1 (8) 1 (7)
Total impairment (loss)/reversal from continuing operations (519) 584 (53) 16 (572) 600 28
Refer to previous table for footnotes.
The net impairment loss is primarily due to increases in discount rates, as a
result of the continued upward trend in government bond rates, as well as
future cost pressures. The gross non-current asset impairment losses and
reversals largely reflect normal fluctuations expected from store-level
performance, as well as any specific store closures.
Impairment methodology
The impairment methodology is unchanged in the period from that described in
Note 14 of the Annual Report and Financial Statements 2024.
Key assumptions and sensitivity
Key assumptions
For value in use calculations, the key assumptions to which the recoverable
amounts are most sensitive are discount rates, long-term growth rates and
future cash flows (incorporating sales volumes, prices and costs). For fair
value less costs of disposal calculations, the key assumption is property fair
values.
The discount rates and long-term growth rates relating to the goodwill
carrying values that are significant to the Group's total goodwill are:
UK
2025 2024
%
%
Pre-tax discount rates 9.1 8.6
Post-tax discount rates 6.8 6.4
Long-term growth rates 2.0 2.0
The discount rates and long-term growth rates for the Group's portfolio of
store cash-generating units, aggregated by segment due to the large number of
individually immaterial store cash-generating units, are:
UK & ROI Central Europe
2025 2024 2025 2024
%
%
%
%
Pre-tax discount rates 8.2-9.1 7.8-8.5 8.9-12.9 8.2-12.6
Post-tax discount rates 6.8-7.2 6.4-6.8 7.0-8.5 6.5-8.3
Long-term growth rates 2.0 2.0 2.0-3.0 1.8-3.1
Sensitivity
The Group has carried out sensitivity analyses on the reasonably possible
changes in key assumptions in the impairment tests for (a) the goodwill
carrying values that are significant compared to the Group's total goodwill
and (b) for its portfolio of store cash-generating units.
(a) Neither a reasonably possible increase of 1.0%pt in discount rates, a 5.0%
decrease in future cash flows nor a 0.5%pt decrease in long-term growth rates
would indicate impairment in the goodwill carrying values that are significant
compared to the Group's total goodwill.
(b) While there is not a significant risk of an adjustment to the carrying amount
of any one store cash-generating unit that would be material to the Group as a
whole in the next financial year, the table below summarises the reasonably
possible changes in key assumptions which most impact the impairment of the
Group's entire portfolio of store cash-generating units, presented in
aggregate due to the large number of individually immaterial store
cash-generating units. For the probability-weighted cash flow scenarios, the
impairment is most sensitive to the downside scenario relating to geopolitical
and global supply issues (weighting 6.5%). Impairment is not highly sensitive
to the climate or upside scenarios. The reasonably possible change below
applies the corresponding change to the base scenario.
Key assumption Reasonably possible change Impact on impairment 2025
£m
Post-tax discount rates* Increase of 1.0%pt for each geographic region Increase (342)
Decrease of 1.0%pt for each geographic region Decrease 316
Future cash flows Increase of 5.0% for each geographic region Decrease 138
Decrease of 5.0% for each geographic region Increase (142)
Long-term growth rates Increase of 0.5%pt for each geographic region Decrease 94
Decrease of 0.5%pt for each geographic region Increase (92)
Property fair values Increase of 10.0% for each geographic region Decrease 190
Decrease of 10.0% for each geographic region Increase (200)
Geopolitical and global supply downside scenario weighting Increase of 5.0%pt for each geographic region Increase (127)
Decrease of 2.5%pt for each geographic region Decrease 63
* Sensitivities are applied to post-tax discount rates used to derive
the pre-tax discount rates.
Note 13 Cash and cash equivalents and short-term investments
Cash and cash equivalents
2025 2024
£m
£m
Cash at bank and on hand 2,190 2,300
Short-term deposits 65 40
Cash and cash equivalents in the Group balance sheet 2,255 2,340
Bank overdrafts (856) (812)
Cash and cash equivalents in the Group cash flow statement 1,399 1,528
Short-term investments
2025 2024
£m
£m
Money market funds, deposits and similar instruments 2,223 2,128
Cash and cash equivalents include £26m (2024: £30m) of restricted amounts
mainly relating to unclaimed dividends, the Group's pension schemes and
employee benefit trust.
Note 14 Commercial income
Below are the commercial income balances included within inventories and trade
and other receivables, or netted against trade and other payables.
2025 2024
£m
£m
Current assets
Inventories (14) (12)
Trade and other receivables
Trade/other receivables 110 86
Accrued income 142 136
Current liabilities
Trade and other payables
Trade payables 173 138
Note 15 Borrowings
Borrowings are classified as current and non-current based on their scheduled
repayment date, and not their maturity date. Repayments of principal amounts
are classified as current if the repayment is scheduled to be made within one
year of the balance sheet date. During the year ended 22 February 2025, within
continuing operations, the Group made principal repayments of: €473m (2024:
£775m) relating to a Euro MTN which matured July 2024; €88m partial
repayment on the Euro 2047 MTN; principal repayments on amortising secured
debt of £56m; and the Insurance and Money Services business (previously part
of the Tesco Bank segment) repaid Senior MREL Notes of £146m. In addition,
there has been a £350m (2024: £682m) bond issuance, maturing in May 2034.
Current
2025 2024
£m
£m
Bank loans and overdrafts 882 838
Borrowings 979 698
1,861 1,536
Non-current
2025 2024
£m
£m
Borrowings 5,089 5,683
Borrowing facilities
The Group has a £2.5bn undrawn committed facility available at 22 February
2025 (24 February 2024: £2.5bn), in respect of which all conditions precedent
had been met as at that date, consisting of a syndicated revolving credit
facility expiring in more than two years. The cost of the facility is linked
to three ESG targets and incurs commitment fees at market rates which would
provide funding at floating rates.
There were no drawings under the facility during the year (2024: £nil).
Note 16 Insurance
Balances disclosed in this note relate to the Group's subsidiary, Tesco
Underwriting Limited (TU), part of the UK & ROI segment.
Insurance contract liabilities and reinsurance contract assets
The breakdown of portfolios and groups of insurance contracts issued and
reinsurance contracts held is set out in the table below:
2025 2024
Insurance contract liabilities Reinsurance contracts held Insurance contract Reinsurance contracts held((a)) Net (liabilities)/
liabilities
£m £m Net (liabilities)/
£m assets((a))
£m
assets £m
£m
(Liabilities)/assets for remaining coverage (270) 181 (89) (260) 168 (92)
(Liabilities)/assets for incurred claims (382) (57) (439) (266) (43) (309)
(652) 124 (528) (526) 125 (401)
Contracts measured under premium allocation approach (PAA) (510) 71 (439) (364) 62 (302)
Contracts not measured under PAA((b)) (142) 53 (89) (162) 63 (99)
(652) 124 (528) (526) 125 (401)
(a) Comparatives have been re-presented due to the reclassification of quota
share funds withheld of £346m from Asset for remaining coverage (ARC) to
Asset for incurred claims (AIC).
(b) Contracts not measured under PAA are measured using the general
measurement model (GMM).
Measurement components of insurance contract liabilities and reinsurance
contract assets are set out in the table below. The estimate of the present
value of future cash flows is adjusted for events since the actuarial
valuation:
At 22 February 2025 At 24 February 2024
Present value of future cash flows Risk adjustment CSM Total Present value of future cash flows Risk adjustment CSM Total
£m £m £m £m £m £m £m £m
Insurance contract liabilities (557) (24) (71) (652) (437) (16) (73) (526)
Reinsurance contract assets 83 7 34 124 95 6 24 125
Net (liabilities)/assets (474) (17) (37) (528) (342) (10) (49) (401)
Note 17 Financial instruments
The expected maturity of financial assets and liabilities is not considered to
be materially different to their current and non-current classification.
Fair value of financial assets and liabilities measured at amortised cost
The table excludes cash and cash equivalents, short-term investments, trade
receivables/payables, other receivables/payables and accruals where the
carrying values approximate fair value. The levels in the table refer to the
fair value measurement hierarchy.
22 February 2025 24 February 2024
Level Carrying Fair Carrying Fair
value
value((a))
value
value((a))
£m
£m
£m
£m
Financial assets measured at amortised cost
Investments in debt instruments at amortised cost((b)(c)) 1 and 2 196 201 1,033 838
Joint ventures and associates loan receivables 2 97 105 96 97
Financial liabilities measured at amortised cost
Borrowings
Amortised cost 1 (4,916) (4,651) (5,067) (4,794)
Bonds in fair value hedge relationships 1 (2,034) (2,088) (2,152) (2,211)
(a) Refer to the fair value measurement by level of fair value hierarchy
section below for details on Level 2 methodology.
(b) Investment securities previously held by Tesco Bank have been wound down
in advance of the sale of the Group's Banking operations.
(c) These are principally Level 1 instruments.
Fair value measurement by level of fair value hierarchy
The following tables present the Group's financial assets and liabilities that
are measured at fair value, by level of fair value hierarchy:
- quoted prices (unadjusted) in active markets for identical assets or
liabilities (Level 1);
- inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices) (Level 2); and
- inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs) (Level 3).
Level 2 assets and liabilities are valued by discounting future cash flows
using externally sourced market yield curves, including interest rate curves
and foreign exchange rates from highly liquid markets. Refer to the Level 3
instruments section below for details on Level 3 valuation methodology.
At 22 February 2025 Level 1 Level 2 Level 3 Total
£m
£m
£m
£m
Assets
Investments at fair value through other comprehensive income 855 - 19 874
Short-term investments at fair value through profit or loss 1,386 - - 1,386
Cash and cash equivalents at fair value through profit or loss - 61 - 61
Other investments at fair value through profit or loss - - 15 15
Derivative financial instruments:
Interest rate swaps - - 24 24
Cross-currency swaps - - 138 138
Index-linked swaps - - 646 646
Foreign currency forward contracts - 27 - 27
Total assets 2,241 88 842 3,171
Liabilities
Derivative financial instruments:
Interest rate swaps - - (74) (74)
Cross-currency swaps - - (130) (130)
Foreign currency forward contracts - (11) - (11)
Diesel forward contracts - (2) - (2)
Total liabilities - (13) (204) (217)
Net assets 2,241 75 638 2,954
At 24 February 2024 Level 1 Level 2 Level 3 Total
£m
£m
£m
£m
Assets
Investments at fair value through other comprehensive income 682 - 19 701
Short-term investments at fair value through profit or loss 889 - - 889
Cash and cash equivalents at fair value through profit or loss - 35 - 35
Other investments at fair value through profit or loss - - 18 18
Derivative financial instruments:
Interest rate swaps - 29 15 44
Cross-currency swaps - - 182 182
Index-linked swaps - - 583 583
Foreign currency forward contracts - 25 - 25
Diesel forward contracts - 2 - 2
Total assets 1,571 91 817 2,479
Liabilities
Derivative financial instruments:
Interest rate swaps - (9) (96) (105)
Cross-currency swaps - - (139) (139)
Foreign currency forward contracts - (20) - (20)
Diesel forward contracts - (2) - (2)
Total liabilities - (31) (235) (266)
Net assets 1,571 60 582 2,213
During the financial year, there were no transfers (2024: no transfers)
between Level 1 and Level 2 fair value measurements.
Level 3 instruments
The valuation techniques and significant unobservable inputs are unchanged in
the year from that described in Note 26 of the Annual Report and Financial
Statements 2024.
The following table presents the changes in Level 3 instruments:
2025 2024
Uncollateralised derivatives Unlisted Uncollateralised derivatives Unlisted
£m
£m
investments investments
£m
£m
At the beginning of the year 545 37 379 34
Gains/(losses) recognised in finance costs((a)) (14) (1) 9 (2)
Gains/(losses) recognised in other comprehensive income not reclassified to - 4 - -
the income statement
Gains/(losses) recognised in other comprehensive income that may subsequently 35 - 15 -
be reclassified to the income statement
Impairment recognised in cost of sales - (10) - -
Additions - 5 - 5
Settlements 38 - - -
Transfers of assets into Level 3((b)) - - 142 -
Transfer of assets from Level 3((c)) - (1) - -
At the end of the year 604 34 545 37
(a) Net unrealised gains/(losses) of £105m (2024: £7m) are attributable to
those assets and liabilities held at the end of the year and have been
recognised in finance costs in the Group income statement.
(b) There were £nil transfers of unlisted investments (2024: £nil) and
£nil of derivative assets (2024: £142m derivative liabilities) to Level 3
from Level 2 and £nil (2024: £nil) to Level 3 from Level 1.
(c) There were £1m transfers from Level 3 to Level 2 (2024: £nil) and
£nil transfers from Level 3 to Level 1 (2024: £nil).
Note 18 Share-based payments
The table below shows amounts charged to the Group income statement in respect
of share-based payments:
2025 2024
£m £m
Income statement
Equity-settled share-based payment charge((a)) 119 123
Cash-settled National Insurance contributions((b)) 17 5
136 128
(a) Includes £4m (2024: £6m) in relation to discontinued operations.
(b) Includes £1m (2024: £2m) in relation to discontinued operations.
The table below shows amounts included in the Group cash flow statement in
relation to share-based payments and own shares purchased for share schemes:
2025 2024
£m £m
Share-based payment charge included in operating profit/(loss) (136) (128)
Share-based payments non-cash movement 37 78
Increase/(decrease) in trade and other payables(*) 99 50
Included in Group operating cash flows - -
Cash paid to purchase own shares including related fees and taxes (123) (146)
Cash received from employees exercising SAYE options 69 53
Included in Group financing cash flows (54) (93)
* Shares withheld from employees in order to settle their tax liability
and National Insurance.
Note 19 Post-employment benefits
Pensions
The Group operates a variety of post-employment benefit arrangements, covering
both funded and unfunded defined benefit schemes and defined contribution
schemes.
The principal defined benefit pension plan within the Group is the Tesco PLC
Pension Scheme (the Scheme), a UK scheme closed to future accrual. The latest
triennial actuarial pension funding valuation for the Scheme as at 31 March
2022 using a projected unit credit method showed a funding surplus of £0.9bn.
The Scheme remained in a funding surplus as at 22 February 2025.
IFRIC 14
For schemes in an accounting surplus position, these surpluses are recognised
on the balance sheet in line with IFRIC 14, as the Group has an unconditional
legal right to any future economic benefits by way of future refunds following
a gradual settlement.
Movement in the Group pension surplus/(deficit) during the financial period
Net defined benefit
surplus/(deficit)
2025 2024
£m
£m
Opening balance (631) (391)
Current service cost (17) (15)
Finance income/(cost) (32) (18)
Included in the Group income statement (49) (33)
Remeasurement gain/(loss):
Financial assumptions gain/(loss) 981 720
Demographic assumptions gain/(loss) 17 261
Experience gain/(loss) (62) (182)
Return on plan assets excluding finance income (550) (1,050)
Foreign currency translation (1) -
Included in the Group statement of comprehensive income/(loss) 385 (251)
Employer contributions 17 15
Additional employer contributions 23 24
Benefits paid 7 5
Other movements 47 44
Closing balance (248) (631)
Withholding tax on surplus((a)) (3) (4)
Closing balance, net of withholding tax (251) (635)
Consisting of:
Schemes in deficit (307) (657)
Schemes in surplus((b)) 56 22
Deferred tax asset/(liability)((c)) 71 162
Surplus/(deficit) in schemes at the end of the period, net of deferred tax (180) (473)
(a) The movement in the year is recognised through other comprehensive
income in remeasurements of defined benefit pension schemes.
(b) Schemes in surplus in the UK are presented on the balance sheet net of a
25% (2024: 35%) withholding tax.
(c) Including £(6)m deferred tax liability relating to the ROI scheme in
surplus where no withholding tax is applicable (2024: £(2)m).
Scheme principal assumptions
The principal assumptions, on a weighted average basis, used by external
actuaries to value the defined benefit obligation of the Scheme were as
follows:
2025 2024
%
%
Discount rate 5.7 5.1
Price inflation 3.0 2.9
Rate of increase in deferred pensions* 2.6 2.5
Rate of increase in pensions in payment*
Benefits accrued before 1 June 2012 2.9 2.8
Benefits accrued after 1 June 2012 2.6 2.5
* In excess of any guaranteed minimum pension (GMP) element.
Sensitivity analysis of significant actuarial assumptions
The sensitivity of significant assumptions upon the Scheme defined benefit
obligation is detailed below:
2025 2024
Financial assumptions - Increase/(decrease) in UK defined benefit obligation Discount rate Inflation rate Discount rate Inflation rate
£m
£m
£m
£m
Impact of 0.1% increase of the assumption (157) 146 (191) 167
Impact of 0.1% decrease of the assumption 168 (135) 191 (167)
Impact of 1.0% increase of the assumption (1,459) 1,492 (1,686) 1,770
Impact of 1.0% decrease of the assumption 1,829 (1,279) 2,153 (1,483)
Mortality assumptions - Increase/(decrease) in UK defined benefit obligation 2025 2024
£m
£m
Impact of 1 year increase in longevity 292 335
Impact of 1 year decrease in longevity (325) (371)
The sensitivities reflect the range of recent assumption movements and
illustrate that the financial assumption sensitivities do not move in a linear
fashion. Movements in the defined benefit obligation from discount rate and
inflation rate changes may be partially offset by movements in assets.
Note 20 Share capital and other reserves
Share capital
2025 2024
Ordinary shares of 6⅓p each Ordinary shares of 6⅓p each
Number £m Number £m
Allotted, called-up and fully paid:
At the beginning of the financial period 7,038,930,440 445 7,318,341,195 463
Shares cancelled (302,088,678) (19) (279,410,755) (18)
At the end of the financial period 6,736,841,762 426 7,038,930,440 445
No shares were issued during the current or prior financial period in relation
to share options or bonus awards. The holders of Ordinary shares are entitled
to receive dividends as declared from time to time and are entitled to one
vote per share at general meetings of the Company.
Other reserves
The tables below set out the movements in other reserves:
Notes Capital redemption reserve Hedging Translation Own Merger Insurance finance reserve Total
£m
reserve
reserve
shares
£m
£m
held(*) reserve( £m £m
£m ) £m
At 24 February 2024 61 75 206 (315) 3,090 14 3,131
Other comprehensive income/(loss)
Retranslation of net assets of overseas subsidiaries, joint ventures and - - (89) - - - (89)
associates
Impact of net investment hedges - - 33 - - - 33
Gains/(losses) on cash flow hedges - 40 - - - - 40
Cash flow hedges reclassified and reported in the Group income statement - (69) - - - - (69)
Finance income/(expenses) from reinsurance contracts held - - - - - 1 1
Tax relating to components of other comprehensive income 6 - 7 - - - - 7
Total other comprehensive income/(loss) - (22) (56) - - 1 (77)
Transfer from translation reserve to retained earnings - - 36 - - - 36
Inventory cash flow hedge movements
(Gains)/losses transferred to the cost of inventory - (4) - - - - (4)
Total inventory cash flow hedge movements - (4) - - - - (4)
Transactions with owners
Own shares purchased for cancellation - - - (1,016) - - (1,016)
Own shares cancelled 19 - - 1,016 - - 1,035
Own shares purchased for share schemes - - - (204) - - (204)
Share-based payments 18 - - - 239 - - 239
Total transactions with owners 19 - - 35 - - 54
At 22 February 2025 80 49 186 (280) 3,090 15 3,140
* Including 37.1 million shares held by the Tesco International Employee
Benefit Trust (2024: 70.0 million). The number of shares held by the Tesco
International Employee Benefit Trust represents 0.55% of called-up share
capital at the end of the year (2024: 0.99%).
Notes Capital redemption reserve Hedging Translation Own Merger Insurance finance reserve Total
£m
reserve
reserve
shares
£m
£m
held(*) reserve( £m £m
£m ) £m
At 25 February 2023 43 27 322 (359) 3,090 16 3,139
Other comprehensive income/(loss)
Retranslation of net assets of overseas subsidiaries, joint ventures and - - (157) - - - (157)
associates
Impact of net investment hedges - - 41 - - - 41
Gains/(losses) on cash flow hedges - (14) - - - - (14)
Cash flow hedges reclassified and reported in the Group income statement - (56) - - - - (56)
Finance income/(expenses) from insurance contracts issued - - - - - (4) (4)
Finance income/(expenses) from reinsurance contracts held - - - - - 1 1
Tax relating to components of other comprehensive income 6 - (5) - - - 1 (4)
Total other comprehensive income/(loss) - (75) (116) - - (2) (193)
Transfer from hedging reserve to retained earnings - 44 - - - - 44
Inventory cash flow hedge movements
(Gains)/losses transferred to the cost of inventory - 79 - - - - 79
Total inventory cash flow hedge movements - 79 - - - - 79
Transactions with owners
Own shares purchased for cancellation - - - (752) - - (752)
Own shares cancelled 18 - - 752 - - 770
Own shares purchased for share schemes - - - (140) - - (140)
Share-based payments 18 - - - 184 - - 184
Total transactions with owners 18 - - 44 - - 62
At 24 February 2024 61 75 206 (315) 3,090 14 3,131
Refer to previous table for footnote.
Own shares purchased for cancellation
302.1 million (2024: 279.4 million) shares were purchased for cancellation at
an average price of £3.36 per share (2024: £2.69). This represented 4.5% of
the called-up share capital as at 22 February 2025 (24 February 2024: 4.0%).
The total consideration was £1,016m (2024: £752m) including expenses of
£16m (2024: £2m).
Insurance finance reserve
Insurance finance reserve includes the impact of changes in market discount
rates on insurance and reinsurance contract assets and liabilities.
Note 21 Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed
in this note. Transactions between the Group and its joint ventures and
associates are disclosed below:
Transactions
Joint ventures Associates
2025 2024 2025 2024
£m
£m
£m
£m
Sales to related parties 645 606 - -
Purchases from related parties 109 126 - -
Dividends received 2 9 - -
Injection of equity funding 10 9 5 -
Sales to related parties consist of service/management fees and loan interest.
Transactions between the Group and the Group's pension plans are disclosed in
Note 19.
Balances
Joint ventures Associates
2025 2024 2025 2024
£m
£m
£m
£m
Amounts owed to related parties (7) (7) - -
Amounts owed by related parties 57 80 - -
Lease liabilities payable to related parties((a)) (1,840) (1,844) - -
Loans to related parties((b)) 97 96 - -
(a) Lease liabilities payable to related parties represent leases entered
into by the Group for properties held by joint ventures.
(b) A 12-month ECL allowance is recorded on initial recognition. In the
current and prior financial years, the ECL allowance was immaterial.
Amounts owed to and owed by related parties are measured at amortised cost and
the carrying values approximate fair value. The undiscounted cash flow amounts
owed to related parties are due within one year and do not differ from the
amounts included in the table above.
Note 22 Analysis of changes in net debt
2025 2024
£m £m
Borrowings, excluding overdrafts (6,094) (6,407)
Lease liabilities (7,716) (7,622)
Net financing derivatives 602 544
Liabilities from financing activities (13,208) (13,485)
Cash and cash equivalents in the balance sheet 2,255 2,340
Overdrafts((a)) (856) (812)
Cash and cash equivalents (including overdrafts) in the cash flow statement 1,399 1,528
Short-term investments 2,223 2,128
Joint venture loans 97 96
Interest and other receivables 19 23
Net operating and investing derivatives 16 26
Net debt APM((b)) (9,454) (9,684)
(a) Overdraft balances are included within borrowings in the Group balance
sheet, and within cash and cash equivalents in the Group cash flow statement.
Refer to Note 13.
(b) Following the disposal of the Group's Banking operations, Net debt is
now presented on a Group continuing operations basis including Insurance and
Money Services, rather than on a Retail basis including Retail discontinued
operations. The comparative has been restated.
The tables below set out the movements in liabilities arising from financing
activities:
Borrowings, excluding overdrafts Lease liabilities Net financing derivative financial instruments((a)) Share purchase obligations((b)) Liabilities from Group financing activities((a))
£m £m £m £m £m
At 24 February 2024 (6,407) (7,622) 544 - (13,485)
Cash flows arising from financing activities 347 600 (32) 1,016 1,931
Cash flows arising from operating activities:
Interest paid 210 377 85 - 672
Non-cash movements:
Fair value gains/(losses) (92) - 96 - 4
Foreign exchange 58 25 - - 83
Interest income/(charge) (210) (377) (91) - (678)
Acquisitions and disposals - (5) - - (5)
Lease additions, terminations, modifications and reassessments - (714) - - (714)
Share purchase agreements - - - (1,016) (1,016)
At 22 February 2025 (6,094) (7,716) 602 - (13,208)
(a) Net financing derivatives comprise those derivatives which hedge the
Group's exposures in respect of lease liabilities and borrowings. Net
operating and investing derivatives of £16m (2024: £26m), which form part of
the Group's Net debt APM, are not included in liabilities from Group financing
activities.
(b) Share purchase obligations form part of the liabilities arising from the
Group's financing activities, but do not form part of Net debt. Cash flows
arising from financing activities exclude £(91)m (2024: £(91)m) cash
outflows relating to other cancellable arrangements and prepayments, and £69m
(2024: £53m) cash received from employees exercising SAYE options.
Borrowings, excluding overdrafts Lease liabilities Net financing derivatives financial instruments((a)) Share purchase obligations((b)) Liabilities from Group financing activities((a))
£m £m £m £m £m
At 25 February 2023 (6,451) (7,727) 472 (55) (13,761)
Cash flows arising from financing activities (457) 627 4 807 981
Cash flows arising from operating activities:
Interest paid((c)) 192 373 125 - 690
Non-cash movements:
Fair value gains/(losses) (124) - 50 - (74)
Foreign exchange 101 46 - - 147
Interest income/(charge)((c)) (217) (373) (108) - (698)
Acquisitions and disposals - 3 - - 3
Lease additions, terminations, modifications and reassessments - (588) - - (588)
Share purchase agreements - - - (752) (752)
Transfer to disposal group 549 17 1 - 567
At 24 February 2024 (6,407) (7,622) 544 - (13,485)
(a)-(b) Refer to previous table for footnotes.
(c) Interest paid and Interest income/(charge) have been re-presented in the
prior year.
Note 23 Contingent liabilities
As previously reported, Tesco Stores Limited (TSL) (along with all the major
supermarkets) has received claims from current and former hourly-paid store
colleagues alleging that they do equal work to that of colleagues working in
its distribution centres and that differences in terms and conditions relating
to pay are not objectively justifiable (the Equal Pay Claims). The claimants
are seeking the differential between the pay terms looking back, and
equivalence of pay terms moving forward. As at the date of this disclosure,
there are approximately 59,000 claims against TSL, with the number of claims
expected to continue to increase as the litigation progresses.
UK equal pay law provides that an employee is entitled to the same terms in
relation to pay as those of a comparator of the opposite sex in the same
employment if they are employed to do equal work. The legislation achieves
this by implying a clause into the contract of employment, which has the
effect of importing into the employee's contract the more favourable term(s)
of the comparator.
Equal pay claims are typically heard in three stages and the claimants have to
win at every stage in order to succeed. The first stage is comparability,
which is effectively a technical gateway to the claims proceeding. The
claimants have to show that there is a valid basis in law for comparing their
pay and the pay of any comparator. One of the legal bases here is that pay
terms are set by the same body. Following a European court ruling on this, TSL
has made a concession on comparability.
The subsequent stages comprise an equal work assessment and the consideration
of TSL's material factor defences (non-discriminatory reasons for
differentials in pay terms). The employment tribunal hearing of TSL's material
factor defences is due to commence on 1 September 2025. The employment
tribunal hearing for the equal value assessment is due to commence on 1
February 2027. The Equal Pay Claims have been split into three tranches (with
tranche 1 being heard first) and the stages apply to each tranche. Although
the claims that have been heard to date involve female claimants, male store
workers (being close to 50% of the current store worker population) may also
bring claims by comparing themselves against any successful female claimants.
Male claimants who have pre-emptively brought such claims currently make up
approximately 46% of the Equal Pay Claims against TSL in the employment
tribunal. The ultimate determination of all claims is likely to take many
years, including as a result of appeals.
At present, the total number of Equal Pay Claims that may be received, the
merits, and likely outcome of those claims and of TSL's defences to them, and
the potential impact on the Group, are subject to various and substantial
uncertainties. There are multiple factual and legal defences to these claims
and the Group intends to defend them vigorously, while at the same time taking
appropriate steps to mitigate the risks. The Group therefore cannot make an
assessment of the likely outcome of the litigation, or the potential quantum
of its liability or the potential impact on the Group at this stage. Depending
on the outcome at the various stages of the Equal Pay Claims, and dependent on
the number of any ultimately successful claims, the potential quantum of its
liability could be material.
There are a number of other contingent liabilities that arise in the normal
course of business, which if realised, are not expected to result in a
material liability to the Group.
Note 24 Events after the reporting period
There were no material events after the reporting period requiring disclosure.
Glossary - Alternative performance measures
Introduction
In the reporting of financial information, the Directors have adopted various
Alternative performance measures (APMs).
These measures are not defined by International Financial Reporting Standards
(IFRS) and therefore may not be directly comparable with other companies'
APMs, including those in the Group's industry. APMs should be considered in
addition to, and are not intended to be a substitute for, or superior to, IFRS
measures.
Purpose
The Directors believe that these APMs assist in providing additional useful
information on the trends, performance and position of the Group. APMs aid
comparability between geographical units or provide measures that are widely
used across the industry. They also aid comparability between reporting
periods; adjusting for certain costs or incomes that derive from events or
transactions that fall within the normal activities of the Group but which, by
virtue of their size or nature, are adjusted, can provide a helpful
alternative perspective on year-on-year trends, performance and position that
aids comparability over time.
The alternative view presented by these APMs is consistent with how management
views the business, and how it is reported internally to the Board and
Executive Committee for performance analysis, planning, reporting,
decision-making and incentive-setting purposes.
Further information on the Group's adjusting items, which is a critical
accounting judgement, can be found in Note 4.
Some of the Group's IFRS measures are translated at constant exchange rates.
Constant exchange rates are the average actual periodic exchange rates for the
previous financial period and are used to eliminate the effects of exchange
rate fluctuations in assessing performance. Actual exchange rates are the
average actual periodic exchange rates for that financial period.
All income statement measures are presented on a continuing operations basis.
Changes to APMs
Following the disposal of the Group's Banking operations, management has
reviewed the definition of each APM, with the following changes:
- EBITDA (previously Retail EBITDA) has been refined to include the continuing
Insurance and Money Services business. This reflects the Group's new segmental
reporting structure (refer to Note 2) and ensures that all continuing
operations are included in the APM. Comparatives have been restated.
- Net debt has been refined to include the continuing Insurance and Money
Services business and exclude all discontinued operations. This reflects the
Group's new segmental reporting structure (refer to Note 2) and ensures that
all continuing operations are included in the APM. Comparatives have been
restated.
- The Group no longer makes the distinction between Retail and Tesco Bank
(refer to Note 2). Accordingly, Retail free cash flow is now called Free cash
flow. Free cash flow does not include cash generated directly by the Insurance
and Money Services business but does include any ordinary cash dividends this
business pays to Tesco PLC.
In addition to the changes set out above, management has made the following
clarifications:
- Free cash flow and Capex have been refined to also exclude refit costs
directly associated with store purchases (including those acquired through
business combinations). Such costs are a necessary and directly attributable
cost of such acquisitions. The impact is immaterial to both the current and
prior year, and as such comparatives have not been restated.
- The Group has updated the name Adjusted total finance costs to Adjusted net
finance costs to reflect that this APM includes finance income as well as
finance cost. This name change does not change the composition or
quantification of the amount in the current or prior year.
Management has introduced one additional APM:
- Return on capital employed (ROCE), which is defined as Adjusted operating
profit divided by the average of opening and closing capital employed from
continuing operations. This metric represents the profit generated as a
proportion of the total average capital that the business has utilised in the
period. Management believes this is a useful measure to assess performance.
Management has discontinued two APMs:
- Total indebtedness and Total indebtedness ratio are no longer used as APMs
by management as they do not drive decision making and therefore have less
relevance in assessing performance.
Group APMs
APM Closest equivalent IFRS measure Adjustments to reconcile to IFRS measure Definition and purpose
Income statement
Revenue measures
Sales Revenue Fuel sales - Excludes the impact of fuel sales made at petrol filling stations.
This removes volatilities outside of the control of management, associated
with the movement in fuel prices.
- This measure is presented on a country, segmental and Group
continuing operations basis.
- This is a key management incentive metric.
Growth in sales No direct equivalent Ratio N/A - Growth in sales is a ratio that measures year-on-year movement in
Group sales for continuing operations for 52 weeks ended 22 February 2025 (52
weeks ended 24 February 2024). It shows the annual rate of increase in the
Group's sales and is considered a good indicator of how rapidly the Group's
core business is growing.
- This measure is presented at both actual and constant foreign
exchange rates.
Like-for-like (LFL) sales growth No direct equivalent Ratio N/A - LFL sales growth is a measure of growth in Group online sales and
sales from stores that have been open for at least a year (but excludes prior
year sales of stores closed during the year) at constant foreign exchange
rates.
- It excludes revenue from dunnhumby, Insurance and Money Services as
this revenue is not directly linked to the sale of goods.
- It is a widely used indicator of a retailer's current trading
performance and is important when comparing growth between retailers that have
different profiles of expansion, disposals and closures.
Profit measures
Adjusted operating profit Operating Adjusting items((b)) - Adjusted operating profit is the headline measure of the Group's
profit from continuing operations((a)) performance, based on operating profit from continuing operations before the
impact of adjusting items. Refer to the APM Purpose section of the Glossary
for further information on adjusting items.
- Amortisation of acquired intangibles is included within adjusting
items because it relates to inorganic business combinations and does not
reflect the Group's ongoing trading performance (related revenue and other
costs from acquisitions are not adjusted).
- This measure is presented on a segmental and Group continuing
operations basis.
- This is a key management incentive metric.
Adjusted net Net finance costs Adjusting items((b)) - Adjusting items within net finance costs include net pension finance
finance costs
income/(costs) and fair value remeasurements on financial instruments. Net
pension finance income/(costs) are impacted by corporate bond yields, which
can fluctuate significantly and are reset each year based on external market
factors that are outside management's control. Fair value remeasurements are
impacted by changes to credit risk and various market indices, applying to
financial instruments resulting from liability management exercises, which can
fluctuate significantly outside of management's control. This measure helps to
provide an alternative view of year-on-year trends in the Group's net finance
costs.
Adjusted profit before tax Profit before Adjusting items((b)) - This measure is the summation of the impact of all adjusting items
tax on profit before tax. Refer to the APM Purpose section of the Glossary.
Adjusted operating margin No direct equivalent Ratio N/A - Adjusted operating margin is calculated as adjusted operating profit
divided by revenue. Progression in Adjusted operating margin is an important
indicator of the Group's operating efficiency.
Adjusted diluted earnings per share Diluted Adjusting items((b)) - This metric shows the adjusted profit after tax from continuing
earnings per share from continuing operations operations attributable to owners of the parent divided by the weighted
average number of ordinary shares in issue during the financial period,
adjusted for the effects of dilutive share options.
EBITDA (earnings before adjusting items, interest, tax, depreciation and Operating Adjusting items((b)) - This measure is widely used by analysts, investors and other users of
amortisation)
profit from continuing operations((a))
the accounts to evaluate comparable profitability of companies, as it excludes
Depreciation and amortisation the impact of differing capital structures and tax positions, variations in
tangible asset portfolios, and differences in identification and recognition
of intangible assets. It is used to derive the Net debt/EBITDA ratio, and
Fixed charge cover APMs.
Tax measures
Adjusted effective tax rate Effective tax rate Adjusting items((b)) - Adjusted effective tax rate is calculated as total income tax
credit/(charge) excluding the tax impact of adjusting items, divided by
adjusted profit before tax. This APM provides an indication of the ongoing tax
rate across the Group.
(a) Operating profit is presented on the Group income statement and is a
generally accepted profit measure.
(b) Refer to Note 4.
APM Closest equivalent IFRS measure Adjustments to reconcile to IFRS measure
Definition and purpose
Balance sheet measures
Net debt No direct equivalent N/A - Net debt excludes the net debt of discontinued operations to reflect
the net debt obligations of the continuing business.
- Net debt comprises borrowings, lease liabilities and net derivative
financial instruments, offset by cash and cash equivalents, short-term
investments, joint venture loans, and interest and other receivables.
- It is a useful measure of the progress in generating cash and
strengthening of the Group's balance sheet position, and is a measure widely
used by credit rating agencies.
Net debt/EBITDA ratio No direct equivalent Ratio N/A - Net debt/EBITDA ratio is calculated as Net debt divided by the
rolling 12-month EBITDA. It is a measure of the Group's ability to meet its
payment obligations, showing how long it would take the Group to repay its
current net debt if both net debt and EBITDA remained constant. It is widely
used by analysts and credit rating agencies.
Fixed charge cover No direct equivalent Ratio N/A - Fixed charge cover is calculated as the rolling 12-month EBITDA
divided by the sum of net finance costs (excluding net pension finance costs,
finance charges payable on lease liabilities, capitalised interest and fair
value remeasurements on financial instruments) and all lease liability
payments from continuing operations. It is a measure of the Group's ability to
meet its payment obligations and is widely used by analysts and credit rating
agencies.
Capex Property, plant and equipment, intangible asset, and investment property Additions relating to property buybacks and store purchases - Capex excludes additions arising from business combinations,
additions, excluding those from business combinations
buybacks of properties (typically stores), purchases of store properties,
Additions relating to decommissioning provisions and similar items refits associated with business combinations and purchases of store
properties, as well as additions relating to decommissioning provisions and
similar items.
- Property buybacks and purchases of store properties are variable in
timing, with the number and value of transactions dependent on opportunities
that arise within any given financial year. Excluding property buybacks and
store property purchases therefore gives an alternative view of trends in
capital expenditure in the Group's ongoing trading operations.
- Additions relating to decommissioning provisions and similar items
are adjusted because they do not result in near-term cash outflows.
Return on capital employed (ROCE) No direct equivalent Ratio N/A - Return on capital employed (ROCE) is Adjusted operating profit
divided by the average of opening and closing capital employed from continuing
operations.
- Capital employed from continuing operations is defined as net assets
of the Group excluding: the pension deficit/surplus; net assets of the
disposal group and non-current assets classified as held for sale; current and
deferred tax balances and an adjustment to remove the impact of deferred tax
liabilities recorded against identified assets acquired in business
combinations; and Net debt.
- This metric represents the profit generated as a proportion of the
total average capital that the business has utilised in the period.
- Management believes this is a useful measure to assess performance.
Cash flow measures
Free cash flow No direct equivalent N/A - Free cash flow includes:
- Continuing cash flows from operating activities of the business,
excluding Insurance and Money Services and adjusting operating cash flows.
- Investing cash flows excluding Insurance and Money Services relating
to: the purchase of property, plant and equipment (excluding property buybacks
and store purchases and refits associated with both store purchases and
business combinations) and investment property; purchase of intangible assets;
dividends received from Tesco Insurance and Money Services (excluding special
dividends); dividends received from joint ventures and associates; and
interest received.
- Financing cash flows excluding Insurance and Money Services relating
to: market purchase of shares net of proceeds from shares issued in relation
to share schemes; and repayment of obligations under leases.
- Directors and management believe this provides a view of free cash
flow generated by the Group's trading operations, excluding Insurance and
Money Services, that is more predictable and comparable over time, and
reflects the cash available to shareholders. Insurance and Money Services is
excluded because free cash flow is not a common metric within this industry.
- This is a key management incentive metric.
Refer to previous table for footnotes
APMs: Reconciliation of income statement measures
Sales
A reconciliation of Sales is provided in Note 2.
Growth in sales and Like-for-like (LFL) sales growth
Continuing operations Notes 2025 2024
Revenue - current year (£m) 2, 3 69,916 68,187
Revenue - prior year (£m) 2, 3 68,187 65,322
Revenue growth 2.5% 4.4%
Exclude: Fuel impact 1.0% 3.0%
Growth in sales at actual rate 3.5% 7.4%
Exclude: Foreign exchange 0.5% (0.2)%
Growth in sales at constant rate 4.0% 7.2%
Exclude: Revenue from dunnhumby and Insurance and Money Services (0.4)% (0.2)%
Exclude: Underlying net new space impact (0.5)% (0.2)%
Like-for-like sales growth 3.1% 6.8%
Adjusted operating profit and EBITDA
Continuing operations Notes 2025 2024
(restated*)
£m £m
Operating profit 2 2,711 2,821
Exclude: Adjusting items 4 417 8
Adjusted operating profit 2 3,128 2,829
Include: Depreciation and amortisation before adjusting items 1,697 1,619
EBITDA 4,825 4,448
* Following the disposal of the Group's
Banking operations, EBITDA is now presented on a Group continuing operations
basis including Insurance and Money Services rather than on a Retail basis.
Comparatives have been restated.
Adjusted profit before tax
A reconciliation of Adjusted profit before tax is provided in the Group income
statement.
Adjusted operating margin
A reconciliation of Adjusted operating margin is provided in Note 2.
Adjusted diluted earnings per share
A reconciliation of Adjusted diluted earnings per share is provided in Note 9.
Adjusted effective tax rate
A reconciliation of Adjusted effective tax is provided in Note 6.
APMs: Reconciliation of balance sheet measures
Net debt
A reconciliation of Net debt is provided in Note 22.
Reconciliation from Free cash flow to Net debt
Notes 2025 2024
(restated*)
£m £m
Opening Net debt 22 (9,684) (10,049)
Free cash flow 1,750 2,063
Other cash movements:
Own shares purchased for cancellation (1,016) (752)
Dividends paid to equity owners (864) (778)
Adjusting items included in operating cash flow activities (81) (100)
Repayments of capital element of obligations under leases 600 625
Interest paid on lease liabilities 377 373
Net other interest paid/(received) 136 202
Proceeds from sale of property, plant and equipment, investment property, 137 55
intangible assets and assets held for sale
Cash outflows attributable to property buybacks and store purchases (225) (121)
Disposal of Banking operations, net of costs to sell 7 586 -
Other cash movements (21) (91)
Non-cash movements in Net debt:
Fair value movements 20 (80)
Foreign exchange movements 44 126
Net interest charge (144) (175)
Non-cash movements in lease liabilities (1,066) (916)
Non-cash movement arising from acquisitions and disposals (5) (68)
Other non-cash movements 2 2
Closing Net debt 22 (9,454) (9,684)
* Following the disposal of the Group's Banking operations, Net debt is
now presented on a Group continuing operations basis including Insurance and
Money Services, rather than on a Retail basis including Retail discontinued
operations. Comparatives have been restated.
Net debt/EBITDA ratio
Notes 2025 2024
(restated*)
£m £m
Net debt 22 9,454 9,684
EBITDA 4,825 4,448
Net debt/EBITDA ratio 2.0 2.2
* Following the disposal of the Group's
Banking operations, EBITDA is now presented on a Group continuing operations
basis including Insurance and Money Services rather than on a Retail basis.
Net debt is now presented on a Group continuing operations basis including
Insurance and Money Services, rather than on a Retail basis including Retail
discontinued operations. Comparatives have been restated.
Adjusted net finance costs and Fixed charge cover
Notes 2025 2024
(restated((a)))
£m £m
Net finance costs 5 492 538
Exclude: Net pension finance income/(costs) 5 (32) (18)
Exclude: Fair value remeasurements of financial instruments 5 76 38
Adjusted net finance costs((b)) 536 558
Exclude: Interest expense on lease liabilities((c)) 5 (377) (373)
Adjusted net finance cost, excluding finance charges payable on lease 159 185
liabilities
Include: Total lease liability payments 980 1,000
Exclude: Discontinued operations total lease liability payments (3) (3)
1,136 1,182
EBITDA 4,825 4,448
Fixed charge cover (ratio) 4.2 3.8
(a) Following the disposal of the Group's Banking operations, EBITDA is now
presented on a Group continuing operations basis including Insurance and Money
Services rather than on a Retail basis. Comparatives for EBITDA and Fixed
charge cover (ratio) have been restated. All other components of this APM were
on a Group continuing operations basis so have not been restated.
(b) Adjusted net finance costs were previously called Adjusted total finance
costs. The amended name more clearly reflects the inclusion of both finance
and income costs. The composition of the APM has not changed.
(c) Interest expense on lease liabilities is presented gross of £7m hedging
impact (2024: £nil).
Capex
Notes 2025 2024
£m £m
Property, plant and equipment additions((a)) 10 1,361 1,198
Goodwill and other intangible asset additions((a)) 286 275
Exclude: Additions from obtaining control of property joint venture((b)) 10 - (65)
Exclude: Additions from property buybacks 10 (157) (78)
Exclude: Additions from store purchases and associated refits 10 (24) (29)
Exclude: Additions from refits associated with business combinations 10 (18) -
Exclude: Additions relating to decommissioning provisions and similar items 9 13
Capex 1,457 1,314
(a) Excluding amounts acquired through business combinations.
(b) Acquisition of The Tesco Coral Limited Partnership in 2024.
Return on capital employed (ROCE)
Notes 2025 2024
£m £m
Adjusted operating profit 2 3,128 2,829
Capital employed from continuing operations:
Net assets 11,662 11,665
Exclude: Pension deficit/(surplus) gross of deferred tax 19 251 635
Exclude: Assets of the disposal group and non-current assets classified as (50) (7,783)
held for sale
Exclude: Liabilities of the disposal group classified as held for sale - 7,122
Exclude: Net current tax (asset)/liability (14) (109)
Exclude: Deferred tax assets (47) (32)
Exclude: Deferred tax liabilities 503 269
Exclude: Adjustment to remove the impact of deferred tax liabilities recorded (133) (128)
against identified assets acquired in business combinations
Exclude: Net debt 22 9,454 9,684
Capital employed 21,626 21,323
Average capital employed from continuing operations* 21,475 21,072
Return on capital employed (ROCE) 14.6% 13.4%
* The opening capital employed for 2024 is for the Retail business only
because Banking operations were not classified as held for sale at 25 February
2023. The closing capital employed for 2024, opening capital employed for 2025
and closing capital employed for 2025 all include Insurance and Money
Services. The 2025 ROCE would have been c.25bps lower had Insurance and Money
Services been excluded. The impact on 2024 of including Insurance and Money
Services would also have been immaterial.
APMs: Reconciliation of cash flow measures
Free cash flow
Continuing operations excluding Insurance and Money Services Insurance and Money Services Discontinued Tesco Group
operations
52 weeks ended 22 February 2025 Before adjusting items Adjusting items Total Total Total Total
£m
£m
£m £m £m £m
Operating profit/(loss) of continuing operations 2,973 (403) 2,570 141 - 2,711
Operating profit/(loss) of discontinued operations - - - - 35 35
Depreciation and amortisation 1,680 78 1,758 17 - 1,775
Net impairment loss/(reversal) on property, plant and equipment, right of use 12 286 298 - - 298
assets, intangible assets and investment property
Net remeasurement (gain)/loss on non-current assets held for sale - - - - 64 64
Defined benefit pension scheme payments (30) - (30) - - (30)
Share-based payments 39 - 39 (6) 4 37
Fair value movements included in operating profit/(loss) - - - (7) 16 9
Other reconciling items((a)) 18 (15) 3 8 - 11
Cash generated from/(used in) operations excluding working capital 4,692 (54) 4,638 153 119 4,910
(Increase)/decrease in working capital (45) (1) (46) (860) 53 (853)
Cash generated from/(used in) operations 4,647 (55) 4,592 (707) 172 4,057
Interest paid (755) - (755) (13) (1) (769)
Corporation tax paid (355) - (355) (11) - (366)
Net cash generated from/(used in) operating activities 3,537 (55) 3,482 (731) 171 2,922
Include the following cash flows generated from/(used in) investing
activities:
Purchase of property, plant and equipment and investment property((b)) (1,112) - (1,112) (2) - (1,114)
Purchase of intangible assets (280) - (280) (5) (7) (292)
Dividends received from joint ventures and associates 2 - 2 - - 2
Interest received 255 - 255 - - 255
Include the following cash flows generated from/(used in) financing
activities:
Own shares purchased for share schemes, net of cash received from employees (54) - (54) - - (54)
Repayment of capital element of obligations under leases (598) - (598) (2) (2) (602)
Free cash flow 1,750
(a) Other reconciling items consist of individually immaterial items,
primarily relating to (profit)/loss arising on sale of property, plant and
equipment, investment property, intangible assets, assets classified as held
for sale and early termination of leases. Refer to the Group cash flow
statement.
(b) Total purchase of property, plant and equipment and investment property
in the Group cash flow statement of £(1,247)m (2024: £(1,108)m) excluding
£(133)m (2024: £(59)m) of store buybacks, direct store purchases and refits
associated with both direct store purchases and business combinations.
During the year, the Insurance and Money Services business divested of an
investment portfolio, included in Proceeds from sale of other investments in
the Group cash flow statement, and used the proceeds to settle deposits from
central bank of £908m drawn under the Bank of England's Term Funding Scheme
with additional incentives for small and medium-sized enterprises (TFSME). The
repayment of the deposit is included in (Increase)/decrease in working capital
above.
No ordinary dividends were received by Tesco PLC from the Insurance and Money
Services business (2024: £nil).
Free cash flow
Continuing operations excluding Insurance and Money Services Insurance and Money Services Discontinued Tesco Group
operations
52 weeks ended 24 February 2024 Before adjusting items Adjusting items Total Total Total Total
£m
£m
£m
£m £m £m
Operating profit/(loss) of continuing operations 2,760 (5) 2,755 66 - 2,821
Operating profit/(loss) of discontinued operations - - - - (659) (659)
Depreciation and amortisation 1,602 75 1,677 17 29 1,723
Net impairment loss/(reversal) on property, plant and equipment, right of use - (28) (28) - - (28)
assets, intangible assets and investment property
Net remeasurement (gain)/loss on non-current assets held for sale - (12) (12) - 732 720
Defined benefit pension scheme payments (29) - (29) - - (29)
Share-based payments 75 - 75 (3) 6 78
Fair value movements included in operating profit/(loss) 6 - 6 3 62 71
Other reconciling items((a)) 1 (84) (83) 9 - (74)
Cash generated from/(used in) operations excluding working capital 4,415 (54) 4,361 92 170 4,623
(Increase)/decrease in working capital 418 (44) 374 (104) (7) 263
Cash generated from/(used in) operations 4,833 (98) 4,735 (12) 163 4,886
Interest paid (809) - (809) (14) (1) (824)
Corporation tax paid (214) - (214) (9) - (223)
Net cash generated from/(used in) operating activities 3,810 (98) 3,712 (35) 162 3,839
Include the following cash flows generated from/(used in) investing
activities:
Purchase of property, plant and equipment and investment property((b)) (1,039) - (1,039) (10) - (1,049)
Purchase of intangible assets (250) - (250) (6) (22) (278)
Dividends received from joint ventures and associates 9 - 9 - - 9
Interest received 249 - 249 - - 249
Include the following cash flows generated from/(used in) financing
activities:
Own shares purchased for share schemes, net of cash received from employees (93) - (93) - - (93)
Repayment of capital element of obligations under leases (623) - (623) (2) (2) (627)
Free cash flow 2,063
Refer to previous table for footnotes.
Glossary - Other
BPS
Basis points, or bps, is a unit of measurement equal to 1/100(th) of 1%.
CPI
Consumer price index.
Dividend per share
This is calculated as interim dividend per share paid plus final dividend per
share declared in respect of that financial year.
Enterprise value
This is calculated as market capitalisation plus net debt.
Expected credit loss (ECL)
Credit loss represents the portion of the debt that a company is unlikely to
recover. The expected credit loss is the projected future losses based
on probability-weighted calculations.
ESG
Environmental, social and governance.
FTE
Full-time equivalents.
LPI
Limited price index.
Market capitalisation
The total value of all Tesco shares calculated as total number of shares
multiplied by the closing share price at the year end.
MTN
Medium term note.
MREL
Minimum requirements for own funds and eligible liabilities (European Banking
Authority).
Net promoter score (NPS)
This is a loyalty measure based on a single question requiring a score between
0-10. The NPS is calculated by subtracting the percentage of detractors
(scoring 0-6) from the percentage of promoters (scoring 9-10). This generates
a figure between -100 and 100 which is the NPS.
RPI
Retail price index.
SONIA
Sterling Overnight Index Average.
Total shareholder return
The notional annualised return from a share, measured as the percentage change
in the share price, plus the dividends paid, with the gross dividends
reinvested in Tesco shares. This is measured over both a one and five-year
period.
Appendices
Appendix 1
One-year like-for-like sales performance (exc. VAT, exc. fuel)
Like-for-like sales
Q1 Q2 Q3 Q4 H1 H2 FY
2024/25
2024/25
2024/25
2024/25
2024/25 2024/25 2024/25
UK & ROI 3.6% 2.5% 2.8% 3.6% 3.1% 3.2% 3.1%
UK 4.6% 3.5% 3.8% 4.3% 4.0% 4.1% 4.0%
ROI 4.4% 5.1% 4.2% 4.5% 4.7% 4.4% 4.6%
Booker (1.3)% (2.5)% (2.6)% (0.6)% (1.9)% (1.6)% (1.8)%
Central Europe 0.6% 0.6% 2.8% 4.8% 0.6% 3.8% 2.2%
Like-for-like sales growth 3.4% 2.4% 2.8% 3.7% 2.9% 3.2% 3.1%
Appendix 2
Growth in sales (exc. VAT, exc. fuel)
Actual rates Constant rates
H1 H2 FY H1 H2 FY
2024/25 2024/25 2024/25 2024/25 2024/25 2024/25
UK & ROI* 4.1% 3.9% 4.0% 4.2% 4.1% 4.2%
UK* 5.4% 4.8% 5.1% 5.4% 4.8% 5.1%
ROI 3.6% 2.2% 2.9% 5.6% 5.6% 5.6%
Booker (1.7)% (0.3)% (1.0)% (1.7)% (0.3)% (1.0)%
Central Europe (4.2)% (1.9)% (3.0)% 0.9% 4.0% 2.5%
Growth in sales* 3.5% 3.5% 3.5% 4.0% 4.1% 4.0%
* H1 restated to include the Insurance and Money Services business.
Country level revenue detail is provided in Note 3.
Appendix 3
UK sales area by size of store
22 February 2025 24 February 2024
Store size (sq. ft.) No. of stores Million sq. ft. % of total No. of stores((a)) Million sq. ft.((a)) % of total
sq. ft. sq. ft.
0-3,000 2,716 5.9 15.4% 2,675 5.8 15.0%
3,001-20,000 281 3.0 7.7% 279 2.9 7.5%
20,001-40,000 302 9.0 23.3% 279 7.6 19.6%
40,001-60,000 192 9.7 25.2% 174 8.5 22.0%
60,001-80,000 111 7.6 19.6% 139 9.4 24.3%
80,001-100,000 31 2.7 7.0% 40 3.5 9.0%
Over 100,000 6 0.7 1.8% 10 1.0 2.6%
Total((b)) 3,639 38.6 100.0% 3,596 38.7 100.0%
(a) The prior year has been re-presented for sales areas remeasurements.
(b) Excludes Booker and franchise stores.
Appendix 4
Actual Group space - store numbers((a))
2023/24 Openings Closures/ Net gain/ 2024/25 Repurposing/
disposals
year end (reduction)((b)) year end extensions((c))
Large 809 2 (2) - 809 30
Convenience 2,048 55 (9) 46 2,094 -
Dotcom only 6 - - - 6 -
Total Tesco 2,863 57 (11) 46 2,909 30
One Stop((d)) 733 7 (10) (3) 730 -
Booker 190 - - - 190 -
UK((d)) 3,786 64 (21) 43 3,829 30
ROI 170 12 - 12 182 -
UK & ROI((d)) 3,956 76 (21) 55 4,011 30
Czech Republic((d)) 184 3 (3) - 184 14
Hungary 197 1 - 1 198 49
Slovakia((d)) 169 10 - 10 179 16
Central Europe((d)) 550 14 (3) 11 561 79
Group((d)) 4,506 90 (24) 66 4,572 109
UK (One Stop) 317 54 (17) 37 354 -
Czech Republic 119 1 (6) (5) 114 -
Franchise stores 436 55 (23) 32 468 -
Total Group 4,942 145 (47) 98 5,040 109
Actual Group space - '000 sq. ft.((a))
2023/24 Openings Closures/ Repurposing/ Net gain/ 2024/25
disposals
year end((e)) extensions((c)) (reduction)((b)) year end
Large 31,344 38 (55) (235) (252) 31,092
Convenience 5,455 188 (28) - 160 5,615
Dotcom only 716 - - - - 716
Total Tesco 37,515 226 (83) (235) (92) 37,423
One Stop((d)) 1,208 12 (15) - (3) 1,205
Booker 7,951 - - - - 7,951
UK((d)) 46,674 238 (98) (235) (95) 46,579
ROI 3,499 73 - - 73 3,572
UK & ROI((d)) 50,173 311 (98) (235) (22) 50,151
Czech Republic((d)) 4,101 61 (45) (32) (16) 4,085
Hungary 5,372 4 - (60) (56) 5,316
Slovakia((d)) 3,213 19 - (53) (34) 3,179
Central Europe((d)) 12,686 84 (45) (145) (106) 12,580
Group((d)) 62,859 395 (143) (380) (128) 62,731
UK (One Stop) 459 73 (23) - 50 509
Czech Republic 108 1 (6) - (5) 103
Franchise stores 567 74 (29) - 45 612
Total Group 63,426 469 (172) (380) (83) 63,343
(a) Continuing operations.
(b) The net gain/(reduction) reflects the number of store openings less the
number of store closures/disposals and, for sq. ft. tables, adjustments for
repurposing/extensions.
(c) Repurposing of retail selling space.
(d) Excludes franchise stores.
(e) The prior year has been re-presented for sales areas remeasurements.
Group space forecast to 28 February 2026 - '000 sq. ft((a))
2024/25 Openings Closures/ disposals Repurposing/ Net gain/ 2025/26
year end
year end extensions((c)) (reduction)((b))
Large 31,092 73 - 8 81 31,173
Convenience 5,615 150 (22) 3 131 5,746
Dotcom only 716 - - - - 716
Total Tesco 37,423 223 (22) 11 212 37,635
One Stop((d)) 1,205 17 (2) - 15 1,220
Booker 7,951 - (12) - (12) 7,939
UK((d)) 46,579 240 (36) 11 215 46,794
ROI 3,572 82 - - 82 3,654
UK & ROI((d)) 50,151 322 (36) 11 297 50,448
Czech Republic((d)) 4,085 33 (3) (17) 13 4,098
Hungary 5,316 16 (3) (49) (36) 5,280
Slovakia((d)) 3,179 116 - (33) 83 3,262
Central Europe((d)) 12,580 165 (6) (99) 60 12,640
Group((d)) 62,731 487 (42) (88) 357 63,088
UK (One Stop) 509 11 - - 11 520
Czech Republic 103 - (1) - (1) 102
Franchise stores 612 11 (1) - 10 622
Total Group 63,343 498 (43) (88) 367 63,710
Refer to previous table for footnotes.
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