Sunday, 24 October 2021

Tesco to report jump in profit

LONDON: Britain’s biggest retailer, is expected to report on Wednesday a 27 percent jump in full-year profit, putting it firmly on track to meet the medium-term targets Chief Executive Dave Lewis set out in 2016, despite the cloud of Brexit.

The supermarket group, currently celebrating its 100th year, is being rebuilt by Lewis following a 2014 accounting scandal.

Analysts on average expect Tesco to report operating profit before exceptional items of 2.08 billion pounds ($2.72 billion) for its financial year ended Feb. 23, up from 1.64 billion pounds in 2017-18.

The group will also report sales for its fourth quarter. Having reported twelve consecutive quarters of like-for-like growth, a 13th is expected.

Tesco has a leading 27.4 percent share of Britain’s grocery market, according to the latest industry data, and looks set to retain that place after the competition regulator said in February it was minded to block Sainsbury’s 7.3 billion pound takeover of Walmart’s Asda.

Former Unilever executive Lewis has steered a steady recovery after the accounting scandal capped a dramatic downturn in Tesco’s trading.

The 2018-19 results reflect transformed relationships with suppliers, lower prices versus major competitors, simplified and better quality product ranges and improved store standards.

Lewis has also been active in pursuing growth avenues. He has bought wholesaler Booker for nearly 4 billion pounds, formed a global purchasing alliance with France’s Carrefour and launched a new discount format called Jack’s.

Shares in Tesco have risen by nearly a quarter this year.

Bernstein analyst Bruno Monteyne said the results “will focus investors’ minds on the quality of the turnaround, the level of cash generation from the core business and the level of growth from Booker.”

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