22nd Apr 2015 06:36
LONDON (Alliance News) - Tesco PLC Wednesday said it swung to a big loss in its recently-ended financial year, after booking a staggering GBP7.0 billion of impairments, writedowns and restructuring charges as it tried to put a difficult year behind it and get back on track.
The UK's largest retailer reported a pretax loss for the year ended February 28 of GBP6.38 billion, compared with a profit of GBP2.26 billion a year earlier, as it booked GBP5.61 billion of impairments, mainly on its property portfolio, GBP570 million of stock-related charges, GBP416 million in restructuring costs, and a GBP208 million adjustment accounting for profit overstatements in previous years.
Its closely-watched trading profit, which excludes the one-off items, dropped by 59% to GBP1.39 billion.
Tesco's revenue fell to GBP62.3 billion, from GBP63.6 billion the year before, although it said UK like-for-like sales volumes were up for the first time in over four years, driven by better availability, service and pricing.
Tesco also said that it has agreed a pension deficit funding plan with its trustee, comprising cash contributions of GBP270 million a year. This comes after some analysts said Tesco would need to raise cash to plug a GBP5 billion hole in its pension fund.
The supermarket chain confirmed that it will not pay a final dividend for the year.
The transformation programme to try and turn the business around is progressing well and its portfolio review is ongoing, Tesco said, adding that over the next 12 months it will continue to focus on its three priorities of regaining competitiveness in the UK business, protecting and strengthening the balance sheet, and rebuilding trust and transparency in the business and the brand.
"The market is still challenging and we are not expecting any let up in the months ahead. When you add to this the fundamental changes we are making to our business and our offer, it is likely to lead to an increased level of volatility in short-term performance," Chief Executive Dave Lewis said in a statement.
"Our clear priority - and the one that will deliver sustainable value for our shareholders - is to improve consistently for customers. The changes we have made and will continue to make put us in a stronger position to do this," he added.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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