Tesco turnaround as yearly profits soar by 28% to reach £1.64bn
Tesco has defied mounting gloom on the high street to post a better-than-expected jump in annual profits as revival efforts steer the group back to its former glory.
The supermarket reported a 28.4% leap in underlying operating profits to £1.64bn for the year to February 24, while bottom line pre-tax profits soared to £1.3bn from £145m the previous year.
Tesco notched up like-for-like sales growth of 2.2% in the UK after a 2.3% rise in the final three months - marking more than two years in a row of rising sales.
The group also announced its first end-of-year dividend since 2014, with a final payout of 2p, giving a 3p full-year dividend for shareholders.
Shares surged more than 5% on the profits and dividend cheer.
Tesco is Northern Ireland's biggest grocer, according to a report this week from research body Kantar Worldpanel.
It has a 35.2% share of the local market.
Yesterday's results mark yet another step on the road to the supermarket's recovery under chief executive Dave Lewis, who has been embarking on a turnaround since taking the hot seat in 2014.
They also come just a month after the group sealed its £3.7bn takeover of wholesaler Booker.
Mr Lewis said: "With three years under our belt, Tesco is growing again, recovering profitability and generating significant cash."
He said the Booker deal would help the group "build on this trajectory", but added there was still more work to do, with its profit margins yet to hit target.
"It's definitely not job yet done ... we're very clear that there's more to do," he added.
He confirmed the group was on track to deliver at least £200m of annual cost savings within three years following the Booker deal - a move that will see the chain expand into supplying food for restaurants, bars and smaller grocers.
The group also gave some insight into the retailer's plans following the Booker takeover, confirming it has started offering Booker catering supply ranges in its Tesco stores.