Tesco PLC preliminary results announcement 2013/14

Philip Clarke, Tesco Chief Executive announced preliminary results for the 52 weeks ended 22 February 2014: “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.”

“Having strengthened the foundations of our business in the UK, we are now accelerating our growth in new channels and investing in sharper prices, improved quality, stronger ranges and better service. Since setting out these plans just seven weeks ago, we have already made a substantial investment in price, launched Clubcard Fuel Save and re-launched our general merchandise ranges across the business. We are going faster with our work to transform our Extra stores to create more compelling destinations and will complete more than 50 in the first half alone.

“During the year, we have maintained our focus on cash and capital discipline. We have significantly reduced our new investment in Europe, focusing the majority of our overseas capital on targeted, high-returning investments in Korea, Malaysia and Thailand. We have completed our exit from the U.S. and established partnerships with CRE in China and Tata in India which provide continued access to two of the world’s most exciting markets, consistent with a sustainable level of future investment.”

Highlights:
> £3.3bn trading profit – year-on-year decline reflects challenges in UK and Europe
> Final dividend maintained at 10.13p, giving full-year dividend of 14.76p (cover 2.1 times)
> UK sales exc. petrol up +0.8%, with lower net new space contribution as planned
> Strong UK growth in online grocery +11% and Express LFL +1.1%
> UK LFL inc. VAT, exc. petrol (1.3)% held back by work on the transformation of general merchandise and a weaker and an increasingly competitive grocery market in the second half
> Nearly 300 UK stores refreshed this year – typical sales uplift +3% to +5%
> Ongoing multichannel focus – grocery home shopping launched in five countries
> Consistent approach to capital discipline, returns and cash

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