Tesco announces profits dip

Tesco’s annual profits have fallen for the second year in succession while latest UK sales figures showed a worsening decline, putting renewed pressure on embattled chief executive Philip Clarke.

Tesco announces profits dip

Tesco’s annual profits have fallen for the second year in succession while latest UK sales figures showed a worsening decline, putting renewed pressure on embattled chief executive Philip Clarke.

Underlying pre-tax profits at Britain’s biggest supermarket were down 6.9% to £3.05bn (€3.69bn) for the year to February 22 while like-for-like sales dipped by 3% in the fourth quarter, the group said.

Tesco admitted that it had done worse than expected amid increasingly tough competition, saying: “Our performance in the year was not where we had planned it to be.” Like-for-like sales for the year in the UK were down 1.4%.

The supermarket warned that the challenging environment would continue in the current financial year.

It also revealed a one-off charge of £801m (€970m) mainly relating to a write-down of assets in Europe, as well as a £540m (€653m) impairment relating to its Chinese business.

Group trading profit was down 6% to £3.3bn (€4bn) while statutory profit before tax was up 9.8% to £2.3bn (€2.8bn), reflecting the impact of one-off charges in this year and last year’s results.

Mr Clarke said: “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.”

Meanwhile, Tesco Ireland has seen revenues increase to €2.97bn to the year ending February 2013.

The company added it created over 180 jobs with investment in seven new stores during the 12-month period.

Like for like sales were up 5.5%.

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