Supermarket giant Tesco has delivered full year results in line with latest market consensus, and said it would pump one billion pounds into a revamp of its UK operations.
The firm's UK woes were highlighted as it reported UK sales, excluding petrol and VAT, were down 0.6% on the previous year.
Profits at the UK operation fell 1% to £2.5bn compared with the year before.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Like-for-like sales in the UK, excluding VAT and petrol, fell 1.6% in its fourth quarter, with analysts saying the company had taken its eye of its home market while chasing expansion in Asia and the US.
Tesco said the new investment in the UK, its most important market, would lead to improved staffing levels, giving stores a 'warmer look and feel' and offering better prices and product ranges.
Overall, underlying pre-tax profits for the year to February 25th rose 1.6% to £3.9bn, marginally ahead of market expectations of £3.6bn.
Group sales excluding value added tax (VAT) rose 6.8% to £64.5bn, versus market expectations of £65.8bn.
The full year dividend has been upped by 2.1% to 14.76p, some way below the 15.06p expected by analysts tracking the share, as the company seeks to conserve cash to invest in turning around its UK operations.
Chief Executive Officer Phillip Clarke said: "whilst our International business is delivering excellent growth, contributing £1.1bn of profit to the Group, we fully recognise that we need to raise our game in the UK".
"As a result, we are committing over £1bn to make the UK shopping trip better for customers: more staff giving improved service in-store; refreshed stores that are better and easier places to shop; lower prices and even more value from an improved product range," he said.
The group said that capital expenditure in the current financial year would total £3.3bn, down from £3.8bn in the year just ended.
The US venture, Fresh & Easy, saw its losses reduce for the first time and is expected to break even during the 2013/14 financial year, later than previously indicated.
