Tesco PLC FY Adjusted Operating Profit Declines; Sales Up 5.3% At Constant Rates

Tesco PLC (TSCO.L,TSCDY.PK) reported that its fiscal year Group adjusted operating profit decreased by 7.1% at constant rates, primarily reflecting the impact of lower year-on-year volumes, the ongoing investment in customer offer and significant operating cost inflation, partially offset by a very strong Booker catering recovery and the acceleration of Save to Invest programme. Total retail adjusted operating profit was down 6.3% at constant rates. Group sales increased by 5.3% at constant rates, driven by strong sales performance in all segments as volumes held up relatively well despite cost-of-living pressures and some further post-pandemic normalisation. Statutory revenue rose 7.2% including fuel sales up 23.3%.

Fiscal year profit before tax was 1.0 billion pounds, down 50.8% from last year. EPS from continuing operations declined to 10.08 pence from 19.64 pence, due to impairment charge. Adjusted operating profit declined to 2.63 billion pounds from 2.82 billion pounds, prior year. Adjusted EPS was 21.85 pence compared to 21.86 pence.

Revenue (exc. VAT, inc. fuel) increased to 65.76 billion pounds from 61.34 billion pounds, prior year. Group sales (exc. VAT, exc. fuel) was 57.66 billion pounds compared to 54.77 billion pounds.

The Group proposed to pay a final dividend of 7.05 pence per ordinary share, taking the full year dividend to 10.90 pence per ordinary share, in line with last year. This includes the payment of an interim dividend of 3.85 pence per ordinary share in November 2022. The final dividend will be paid on 23 June 2023 to shareholders who are on the register of members at close of business on 12 May 2023.

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