UK supermarket group Tesco has reported a 21.9% rise in full-year profit, boosted by higher sales and a strong performance across most of its operations.
The UK’s largest supermarket chain posted underlying pre-tax profit of £1.71bn (US$3.1bn) for the year to 28 February, compared to £1.40bn in the previous year. Group sales increased 18.7% to £33.6bn. The company reduced its debt to £4.1bn from £4.7bn.
In the UK, sales rose 16.3% to £26.9bn, with like-for-like growth of 6.7%. International sales increased 29% to £6.7bn and contributed £306m to underlying operating profits, up 44% on last year. Tesco.com made a profit of £28m, up from £12m in the previous year, and achieved sales of £577m, up 29% on last year.
The company’s European operations, not including the UK, posted a 27.5% sales rise to £3.8bn and contributed an underlying operating profit of £184m, up 30.5% on last year. In Asia sales were up 31.1% to £2.8bn and underlying operating profit was £122m, up 71.8% on last year.
The company opened 37 hypermarkets during the year and plans to open a further 51 hypermarkets and 51 other stores in its international markets next year.
During the year Tesco purchased KIPA, a small hypermarket business in Turkey, and C Two-Network, a convenience operator in Japan.
In Hungary, where Tesco said it has seen strong like-for-like growth, the company opened seven hypermarkets in the year giving it 33 in total.
In Poland market conditions are tougher and consumer spending is tight. Tesco opened four further hypermarkets this year giving a total of 38 and market leadership.
In Slovakia Tesco said it is also market leader. This year it opened six new stores giving a total of 23. In the Czech Republic market conditions are challenging, the retailer said. It opened five stores there this year bringing its total to 22.
Tesco said that in the Republic of Ireland it has seen strong sales and profit growth. It opened eight new stores during the year, including its first Extra store.
In Thailand Tesco has seen strong sales, increased market share and improved margins. During the year the company opened five hypermarkets, four compact hypermarkets and three Express stores.
The company also opened seven stores in Korea, bringing its total there to 28. Tesco also has four hypermarkets in Taiwan and five in Malaysia.