International divisions – including Tesco Lotus in Thailand – led a Tesco recovery in the latest quarter, as the global giant revealed a solid turnaround for the full year.
Group-wide like-for-like sales in the three months to February 27 rose 1.6 per cent. Within that, UK sales rose just 0.9 per cent, while the international division rose 3.8 per cent – 4.1 per cent in Europe and 3.5 per cent in Asia, which is now largely its Thai Tesco Lotus operation and Malaysian hypermarket business.
Tesco also reduced its group debt by £6.2 billion, largely due to the contribution from sale of the Homeplus hypermarket chain in Korea.
“We have made significant progress against the priorities we set out in October 2014,” said CEO Dave Lewis commenting on the result.
“We have regained competitiveness in the UK with significantly better service, a simpler range, record levels of availability and lower and more stable prices. Our balance sheet is stronger and we are making good progress in rebuilding trust in Tesco and our investment case.”
The company posted a full year operating profit of £944 million before exceptional items, £277 million of that from Asia and Europe.
Statutory group profit for the year was £1.046 billion – a sharp turnaround from the record loss of £5.75 billion the previous year. ‘Statutory profit’ was £162 million compared with a£6.34 billion loss last year.
“Our process of transformation has generated broad-based positive momentum in the UK and internationally,”said Lewis.
“We set out to start rebuilding profitability whilst reinvesting in the customer offer, and we have done this. More customers are buying more things more often at Tesco.”