Supermarket giant Tesco today reported that profits in its last financial year had soared to more than £2.8billion, but also revealed it expects group profits to fall in the current 12-month period.
The adjusted operating profits at the multinational retailer were £2.825billion, a massive 58% rise on the previous year, while group sales increased by 2.5% to £54.768billion.
The profits figure breaks down to £2.649billion from retail, while Tesco Bank also made a significant contribution - profits of £176million compared to losses of £175million the year before when there had been an increase in potential bad-debt provision.
However, in its guidance for the 2022-23 financial year, the group is predicting retail operating profits of between £2.4billion and £2.6billion, while the bank's profit will be around £120million to £160million.
Tesco said the following three main factors are likely to influence its actual performance in retail:
- The extent of further normalisation in customer behaviour coming out of the pandemic.
- The level of cost inflation and the firm's ability to partially offset it.
- The investment required to maintain the strength of Tesco's price position relative to the market.
Chief executive Ken Murphy said in his statement with the results: "Over the last year, we delivered a strong performance across the group - growing share in every part of our business.
"We did this by staying focused on our customers and doing the right thing for our colleagues, our supplier partners and the communities we serve.
"I want to thank all of our colleagues who did a brilliant job navigating the ongoing pandemic, dealing with the supply-chain challenges in the industry and tackling the onset of increasing inflation."
Mr Murphy said Tesco is at its best when it puts customers first.
He added: "It's what we did during the pandemic, and it is what we will continue to do now.
"Clearly, the external environment has become more challenging in recent months. Against a tough backdrop for our customers and with household budgets under pressure, we are laser-focused on keeping the cost of the weekly shop in check - working in close partnership with our suppliers, as well as doing everything we can to reduce our own costs.
"Through our powerful combination of Aldi price match, low everyday prices and Clubcard prices, we are making more products more affordable, in more places than anyone else.”
Also in his statement, Mr Murphy said that the entire Tesco family of 360,000 colleagues was thinking of all the people affected by the war in Ukraine.
He went on: "The impact is particularly close to home for our colleagues in Central Europe, who are supporting with logistics and donations of food and clothing, as well as helping to transport donations to the Red Cross at the Ukrainian border.
"Combining our own donations and matching those of customers, together we have raised almost £4million to support the vital work of the Red Cross, as well as more than £500,000 for humanitarian organisations in Central Europe. We continue to offer support to those in Ukraine however we can."
FTSE 100
The UK's top share index, the FTSE 100, opened this morning down 20 points at 7,556, following yesterday's dip of 41 points.
Brent crude futures were up 0.23% earlier today at $104.96 a barrel.
Companies reporting today
- Finals: Tesco
- Trading updates: PageGroup, PZ Cussons
Other announcements
- ONS consumer price inflation figures for March