Tesco bounces back with £1.3bn profits

Tesco bounces back with £1.3bn profits

Tesco has recorded a massive 769.7% rise in pre-tax profits for its 2017-18 financial year as it raked in over £50bn worth of sales.

The group also announced its first end of year dividend since 2014, with a final payout of 2p, giving a 3p full-year divi for shareholders.

Tesco's Lewis said that despite "difficult circumstances", which include a tough United Kingdom market and an inquiry by the Serious Fraud Office into accounting problems dating to 2014 the company was "slightly ahead of where we thought we might be at this stage".

Here's what we learned about Tesco's multichannel retailing strategy from its full-year report.

The shares up 5.5% to 221.9p as fourth quarter sales top expectations and the company posts a 28% year-on-year increase in operating profit.

"Meanwhile, this performance has enabled the return of dividend payments, cost savings remain firmly on track with previous targets and the narrowing gap between wage growth and inflation could play into the company's hands by way of a more confident consumer".

Tesco's strategy of repurposing space in larger stores has so far seen 75,000 sq ft f space in 20 United Kingdom stores turned into concessions for retailers including Aradia Group, Holland & Barrett, Dixons Carphone and Next, while, following Tesco's merger with wholesaler Booker, a new Booker Chef Central concept stores has opened within its Bar Hill, Cambridge, store, which is aimed at professional caterers but is open to all customers.

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But he warns: "Competition in the grocery market is still fierce, with the discounters Aldi and Lidl piling on the pressure, alongside the likes of Morrison and Sainsbury's". They now have $9.50 target price on the stock.

Mr Hunter agrees and suggests that for the moment at least there "are not many clouds on the horizon".

The Shareholder Yield is a way that investors can see how much money shareholders are receiving from a company through a combination of dividends, share repurchases and debt reduction.

This time around, revenues rose by 1.3% year-on-year and operating profits by 76.6%, while the retailer's brand health has also continued to strengthen, with quality perception gaining 2.7 points and value perception 2.0 points.

Shares in United Kingdom retail giant Tesco rallied 5.18% to trade at 221.15 Wednesday after the company reported a 28% increase in operating profits.

The results cement the turnaround steered by Tesco chief executive Dave Lewis, who has led a massive overhaul of the business, selling off overseas divisions, cutting thousands of management jobs and slashing prices in a bid to lure back customers.

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