Supermarket giant Tesco has delivered full year results in line with latest market consensus, as it announced plans to slash capital expenditure in the current fiscal year.
Underlying profit before tax in the 52 weeks 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. Sales in the UK, excluding petrol and VAT were down 0.6% on the previous year.
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
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."
The group said that capital expenditure in the current financial year will 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.
More to follow ...
JH
