Tesco has posted a marked increase in its annual profits and called 2017 a “year of strong progress” in its preliminary result for the year.
For the financial year ending 24 February Tesco recorded pre-tax profits of £1.3bn – up from £145m the previous year where its profits were dented by over-expansion and a £250m accounting scandal fine.
The ‘Big Four’ grocer also reported a 2.3% rise in group sales to £51bn compared with £49.9bn in 2016/17.
Additionally its operating margin came in at 3% in the second half of the year, placing it “well on track for it to deliver medium term ambitions” of between 3.5 – 4% in the 2019/20 fiscal year.
Dave Lewis, chief executive, said: “This has been another year of strong progress, with the ninth consecutive quarter of growth. More people are choosing to shop at Tesco and our brand is stronger, as customers recognise improvements in both quality and value.
“We have further improved profitability, with Group operating margin reaching 3.0% in the second half. We are generating significant levels of cash and net debt is down by almost £6bn over the last three years. All of this puts us firmly on track to deliver our medium-term ambitions and create long-term value for every stakeholder in Tesco.
“I am delighted to have completed our merger with Booker, and we are moving quickly to deliver synergies and access new growth, making the most of the complementary skills in our combined business.”
Tesco said it added 260,000 additional shoppers in 2017 and that sales of its fresh food, own-brand products and clothing had performed well.
The group also announced its first end-of-year dividend since 2014, giving shareholders a total payout of 3p a share for 2017.