TSCDY Tesco PLC (PK)

   By Maryam Cockar 
 

Tesco PLC (TSCO.LN) on Wednesday declared its first year-end dividend in four years and said that its pretax profit increased multifold.

The U.K.'s No. 1 grocer by market share made a profit of 1.30 billion pounds ($1.85 billion) in the financial year ended Feb. 24, compared with GBP145.0 million the year earlier when it booked a GBP235.0 million charge related to a 2014 accounting scandal. The consensus estimate was for a profit of GBP1.03 billion, according to FactSet and based on seven analysts' forecasts.

Revenue rose to GBP57.50 billion from GBP55.92 billion a year earlier. Group sales growth was 2.3% and U.K. like-for-like sales growth was 2.2%.

FTSE 100-listed Tesco declared a dividend of 2 pence a share, its first end-of-year dividend since fiscal 2014, when it axed payments due to the accounting scandal. The full-year dividend is 3 pence.

Tesco, which recently bought food wholesaler Booker Group PLC for GBP3.70 billion, said it expects a synergy benefit of about GBP60 million in the first year, growing to around GBP140.0 million in the second year and reaching a recurring run rate of GBP200 million a year by the end of the third year of ownership.

The company said it is on track to deliver the medium-term targets it set out in October 2016 to reduce costs by GBP1.50 billion, to generate GBP9.00 billion of retail cash from operations and to improve operating margins to between 3.5% and 4% by fiscal 2020.

Write to Maryam Cockar at maryam.cockar@dowjones.com

(END) Dow Jones Newswires

April 11, 2018 02:46 ET (06:46 GMT)

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