Tesco Group has posted a loss before tax of £6.38 billion for the full year to 28 February 2015, the worst set of results in its 96-year history.
The loss was driven in part by a massive write-down in the value of its property portfolio, to the tune of £4.7 billion.
The retailer posted a group trading profit for the year of £1.39 billion, a 58.2-per-cent decline (at actual exchange rates) year on year.
In what was always going to be a tumultuous set of results for the retail giant, group trading profit fell by 78.8 per cent in the UK. Group sales totalled £69.65 billion.
Commenting, Tesco chief executive Dave Lewis said, “It has been a very difficult year for Tesco. The results we have published today reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years. We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we’ve done so far.
“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.”
Commenting on the retailer's performance, Clive Black of Shore Capital said, "What we will state is that whilst the challenges are considerable and there is no quick fix to Tesco's problems, with little or no hope to our minds of achieving the performance levels of halcyon days of old, we are pleased with the management team that has been put into place, which gives us some confidence of improvement and better times ahead.
"Tesco is doing the right things for its stakeholders, prioritising customers, and management was at pains to point out that if it needs to invest more to compete, then it will. ‘Reinvestment’ was the watchword of the presentation, which sends a cautionary note to the rest of the sector, in our view."
© 2015 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones.
