Tesco's Fiscal Year 2018 Pretax Profit Beats Expectations -- Earnings Review
April 11 2018 - 4:53AM
Dow Jones News
By Maryam Cockar
Tesco PLC (TSCO.LN) posted earnings for fiscal 2018 on
Wednesday. Here's how the results came in:
PRETAX PROFIT: The U.K.'s largest grocer by market share made a
pretax profit of 1.30 billion pounds ($1.85 billion) in the
financial year ended Feb. 24, beating expectations of GBP1.03
billion, according to FactSet, based on seven analysts' estimates.
Tesco reported a pretax profit of GBP145 million the year
earlier.
REVENUE: The grocer generated revenue of GBP57.50 billion, up
from GBP55.92 billion a year earlier. This was slightly below the
GBP57.66 billion expected, according to FactSet.
WHAT WE WATCHED:
DIVIDEND: As widely expected, Tesco declared its first
end-of-year dividend since fiscal 2014 of 2 pence a share, bringing
the total payout for the year to 3 pence. The company reiterated
its dividend policy to pay around half its earnings to shareholders
in the medium term. Tesco had canceled payments amid an accounting
scandal in 2014.
BOOKER GROUP: Wednesday's results were the first since Tesco's
GBP3.70 billion takeover of U.K. wholesaler Booker Group PLC. Tesco
reiterated its target of GBP200 million acquisition synergies a
year by the third year of ownership. It expects to have a synergy
gain of around GBP60.0 million in the first year and for this to
grow to around GBP140.0 million in the second year.
OUTLOOK: Tesco didn't comment on the outlook for U.K. consumers,
but Laith Khalaf, senior analyst at Hargreaves Lansdown, said Tesco
has done well to increase margins significantly despite the weaker
pound and inflation as it implements its turnaround strategy. He
said the company's target of boosting margins to between 3.5% and
4% by fiscal 2020 is now within reach.
Write to Maryam Cockar at maryam.cockar@dowjones.com
(END) Dow Jones Newswires
April 11, 2018 05:38 ET (09:38 GMT)
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