Asda, Britain's third biggest supermarket group, has reported a 24% rise in annual earnings, reflecting a 7.1% rise in total sales and also said it had cut its debt.
Asda, owned by brothers Zuber and Mohsin Issa and private equity firm TDR Capital, said 2023 adjusted EBITDA after rent, its preferred profit measure, was £1.08 billion (€1.25 billion) on total sales, excluding fuel, of £21.9 billion (€25.40 billion).
It said like-for-like sales rose 5.4%.
Market Performance
Monthly industry data has, however, shown Asda consistently underperforming its bigger rivals – market leader Tesco and No. 2 Sainsbury's.
Data from market researcher Kantar, published last month, showed Asda had a 13.8% share of Britain's grocery market, down 50 basis points on the year.
Asda has been burdened by finance costs due to high levels of debt since the Issas and TDR bought the business from Walmart in a £6.8 billion (€7.89 billion) deal in 2020 which left the U.S. giant retaining a 10% stake.
Asda said its net debt at the end of 2023 was £3.8 billion (€4.41 billion), net of more than £1 billion (€1.16 billion) of cash on the balance sheet.
It said more than 90% of this debt is secured on fixed rates of interest and it is "fully committed to further deleveraging".
'Rock-solid foundations'
"Asda is a supermarket powerhouse built on rock-solid foundations – as our strong annual results and the 18 million customers who shop with us every week demonstrate," commented Mohsin Issa, Asda’s co-owner. "Our strategy is all about growth and Asda increased underlying profit to more than £1 billion and like-for-like sales by over 5% last year, while significantly growing free cashflow and reducing leverage.
We are committed to doing the right thing for customers, colleagues and local communities – and are putting in place the strategic building blocks to set up Asda for long-term success."
Additional reporting by ESM
