"Many Photos" - Tesco unwraps bumper profits and ups dividend payouts as recovery nears completion

Tesco is well and truly on the road to recovery, its boss said today, as a bumper profits haul marked a landmark moment in its turnaround story. 

The UK's biggest supermarket unwrapped a near-30 per cent jump in full-year profits to £1.7billion, thanks to vastly improved margins and sales growth of 11 per cent. 

Chief executive Dave Lewis said: 'After four years we have met or are about to meet the vast majority of our turnaround goals. I'm very confident that we will complete the journey in 2019/20.'

Tesco, the UK's biggest supermarket unwrapped a near-30 per cent jump in full-year profits to £1.7billion

Tesco has been on a mission to revive its fortunes since the discovery of an accounting scandal in 2014 sent the firm spiralling and wiped more than £2billion off its value. 

Putting the past firmly behind it today, the supermarket nearly doubled the final dividend to 4.1p, giving a full-year return of 5.77p per share. 

'I'm pleased that we are able to accelerate the recovery in the dividend as a result of our continued capital discipline and strong improvement in cash profitability,' Lewis said.  

A drastic cost-cutting strategy has triggered significant job losses at Tesco, with the firm revealing earlier this year that up to 9,000 jobs are at risk amid plans to axe deli counters at 90 of its stores.  

The firm's £3.7billion acquisition of cash-and-carry business Booker helped Tesco to achieve the expectation-topping results during what is a period of huge upheaval in the UK supermarket sector. 

The retail industry is being knocked by weak consumer confidence amid ongoing Brexit uncertainty. Lewis said that there was 'fatigue' among shoppers over the never-ending drama at Westminster, but added: 'I'm not seeing any change in buying behaviour.' 

Meanwhile supermarkets face rising costs and strong competition from the fast-growing discounters Aldi and Lidl. In a move to counter the threat, Lewis launched his own rival discount chain, Jack's, during the period. 

Tesco launched Jack's to supposedly rival the German discounters Aldi and Lidl

Other pressures include the looming possibility of Amazon taking a bite out of the UK grocery sector, M&S's new tie up with Ocado and a proposed merger between Sainsbury's and Asda, but this is struggling to get regulator approval. 

Lewis said: 'I'm delighted with the broad-based improvement across the business. We have restored our competitiveness for customers - including through the introduction of 'Exclusively at Tesco' - and rebuilt a sustainable base of profitability.'       

Commenting on today's results, Neil Wilson from Markets.com said:  'Job done: Tesco can confidently say the turnaround under Dave Lewis is as good as complete.

'Full year numbers were better than expected, with margins now approaching a mightily impressive 4 per cent,' he thundered.

'Booker is a big plus but across the board this was a strong year for Britain's biggest retailer.'  

Tesco shares rose 2 per cent in early trading to £2.39.

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News Photo Tesco unwraps bumper profits and ups dividend payouts as recovery nears completion
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