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Tesco posts £2.21 billion profit

25/04/2006

Supermarket giant Tesco has revealed that it made an underlying profit of £2.21 billion last year, up 17 per cent on the previous year.

Releasing performance results for the year ending February 25th 2006, the supermarket chain announced strong sales both at home and abroad, with total sales across the group up by 13 per cent to £41.8 billion.

Core UK sales increased by 10.7 per cent, while foreign sales saw a 23 per cent rise.

Meanwhile, the supermarket's expansion into new business areas has helped boost its profits, with online sales at Tesco.com up 31.9 per cent to almost £1 billion.

Tesco Personal Finance also reported a profit of £139 million, while over 1.5 million customers are now using the company's telecommunications service, Tesco Telecom.

Tesco says that it plans to release £5 billion in cash from property transactions over the next five years, £1.5 billion of which will be used to buy back shares, while the remainder will be invested in growth.

Welcoming the retailer's performance, Tesco chief executive Terry Leahy said the results represented good progress across the group in a "challenging year".

"By investing to improve the shopping experience for customers in our businesses around the world, we have been able to deliver another strong sales performance, manage the impact of higher oil-related and other external costs and improve returns for shareholders," he said.

But Tesco's continued healthy figures have drawn criticism from unions, with the Transport and General Workers union (T&G) claiming this money does not filter through to all workers

The union is calling a meeting of shop stewards representing more than 4,000 union members who distribute Tesco goods, where the supermarket's profits will be discussed in relation to the situation facing drivers and warehouse workers.

"Farming is on its knees and food processors are issuing repeated profit warnings as they struggle to meet the demands of the Tesco monopoly," said Brian Revell, T&G national organiser for food and agriculture.

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