18th Jun 2020 08:40
(Alliance News) - Tesco PLC on Thursday said it has agreed to sell its business in Poland to Denmark-based retailer Salling Group AS for GBP181 million.
The FTSE 100-listed grocer said the disposal includes the sale of 301 stores as well as associated distribution centres and the head office.
In financial 2020, ended February 29, Tesco Polska generated sales of GBP1.37 billion and an operating loss before exceptional items of GBP27 million. The 301 stores being sold generated sales of GBP947 million and a pretax loss of GBP107 million.
Tesco said the net cash payment of GBP165 million will be used for general corporate purposes.
It added that it has made "good progress" in selling the remainder of its Polish assets outside the Salling transaction. Over the past 18 months, the company has sold, or agreed the sale, of 22 stores for net proceeds of around GBP200 million.
Salling Group is wholly-owned by the Salling Foundations and has an annual turnover of around GBP7 billion.
"We have seen significant progress in our business in Central Europe, but continue to see market challenges in Poland. Today's announcement allows us to focus in the region on our business in Czech Republic, Hungary and Slovakia, where we have stronger market positions with good growth prospects and achieve margins, cashflows and returns which are accretive to the group," said Tesco Chief Executive Dave Lewis.
Tesco shares were trading 1.1% higher at 229.40 pence each on Thursday morning in London. The stock has fallen 10% in the year-to-date.
By Ife Taiwo; [email protected].
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