Tesco announces profits dip
Tesco’s annual profits have fallen for the second year in succession while latest UK sales figures showed a worsening decline, putting renewed pressure on embattled chief executive Philip Clarke.
Underlying pre-tax profits at Britain’s biggest supermarket were down 6.9% to £3.05bn (€3.69bn) for the year to February 22 while like-for-like sales dipped by 3% in the fourth quarter, the group said.
Tesco admitted that it had done worse than expected amid increasingly tough competition, saying: “Our performance in the year was not where we had planned it to be.” Like-for-like sales for the year in the UK were down 1.4%.
The supermarket warned that the challenging environment would continue in the current financial year.
It also revealed a one-off charge of £801m (€970m) mainly relating to a write-down of assets in Europe, as well as a £540m (€653m) impairment relating to its Chinese business.
Group trading profit was down 6% to £3.3bn (€4bn) while statutory profit before tax was up 9.8% to £2.3bn (€2.8bn), reflecting the impact of one-off charges in this year and last year’s results.
Mr Clarke said: “Our results today reflect the challenges we face in a trading environment which is changing more rapidly than ever before. We are determined to lead the industry in this period of change.”
Meanwhile, Tesco Ireland has seen revenues increase to €2.97bn to the year ending February 2013.
The company added it created over 180 jobs with investment in seven new stores during the 12-month period.
Like for like sales were up 5.5%.
