London: Tesco, the world's No 4 retailer, said the global economic recovery was taking hold and saw little risk of a dip back into recession in its main British market despite a slowdown in recent sales growth.
The group, which runs more than 4,300 stores across 14 countries, met forecasts yesterday with an 8.7 per cent rise in annual profit, boosted by acquisitions in Asia and financial services, and said it was stepping up expansion plans in the year ahead.
Capital spending will rise this fiscal year to £3.5 billion (Dh19.6 billion) from £3.1 billion in the year just ended, with the group expecting to create 16,000 jobs worldwide and open around 80 per cent of new selling space overseas, much of it in Asia.
"The recovery has taken hold — strongly on a worldwide basis, which is good for Tesco, and slower but steady in the UK. There won't be a double dip [recession]," chief executive Terry Leahy told Reuters in an interview.
Profit before tax and one-off items was £3.4 billion in the year ended February 27, helped by the first full-year contributions from its purchase of the Homever chain in South Korea and its full ownership of Tesco Bank.
That figure was up 10.1 per cent versus the previous 52 weeks and 8.7 per cent on a 53-week basis.
Sales
Sales, excluding VAT, rose 7.1 per cent and 5.6 per cent on a 53-week basis to £56.91 billion. Analysts had forecast a profit of £3.38 billion on sales of £58.4 billion in a Reuters poll of 13.
Tesco, which makes about three-quarters of its profits in the United Kingdom, said sales at British stores open at least one year rose 2.7 per cent excluding fuel and VAT sales tax in its fiscal second half, down from 3.7 per cent in the first half, due mainly to a steep fall in food price inflation.
