Tesco PLC (LSE:TSCO) attributed buoyant sales volume growth across the UK and Ireland to an easing off of inflationary pressure in today’s preliminary results, but expects minimal profit growth this year.
Group sales (excluding VAT and fuel) increased to £61.5 billion, marking a year-on-year growth rate of 7.4%, or 7.2% at constant currency rates.
Adjusted retail operating profit was up 18.8% to £2.76 billion, while the dividend per share was up 11% to 12.1p.
Tesco sold the majority of its banking operations to Barclays in the period; the pared-back offering, comprising insurance and money services, enjoyed a 213% rise in operating profit to £69 million. This meant group operating profit was £2.82 billion.
"Inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year," said chief executive Ken Murphy.
The supermarket mentioned developing AI technology solutions to enhance its operational efficiency via a new range optimisation tool, which automates the selection of products based on store location and demographic characteristics.
For the 2024/25 financial year, Tesco expects retail adjusted operating profit of "at least £2.8 billion" and total adjusted operating profit from the retained Tesco Bank business of around £80 million.
Tesco said it plans to create approximately 2,000 additional UK roles across new stores and technology and online teams.
A further £1 billion share buyback programme was announced, partially funded by a special dividend from the Tesco Bank disposal.