Tesco returns to profit despite mixed sales figures

British supermarket giant Tesco has returned to growth, reporting group-wide increases in profits despite continually fluctuating sales figures.

The firm made a pre-tax profit of £162m in the 52 weeks to February 27, in comparison to a loss of £6.3bn before tax in the same period the year previous.

But while profits grew steadily over the 12 months, the company’s sales picture paints a different story. Although like-for-like sales increased across Tesco’s entire business during Q4, with the UK and Ireland up 0.9%, full-year sales fell by 0.6% domestically and 0.7% including Ireland.

Internationally Tesco fared better, with sales up 2.3%. The firm saw its strongest increases in Europe at 3.5%, with Asia delivering sales growth of 0.6%.

During the 12 months to the end of February, Tesco managed to bring its net debt down to £5.1bn from £8.5bn the year previous. The movement represents a drop of 39.7%.

Dave Lewis, the firm’s chief executive, commented: “We have made significant progress against the priorities we set out in October 2014. We have regained competitiveness in the UK with significantly better service, a simpler range, record levels of availability and lower and more stable prices.

“Our balance sheet is stronger and we are making good progress in rebuilding trust in Tesco and our investment case.”

He continued: “Our process of transformation has generated broad-based positive momentum in the UK and internationally.

“We set out to start rebuilding profitability whilst reinvesting in the customer offer, and we have done this. More customers are buying more things more often at Tesco.”

Speaking further, Mr Lewis said he is confident the investments being made are leading to “sustainable improvements” for Tesco’s customers.