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Tesco confirms final dividend and says Booker CEO will head retail arm after merger

Tesco confirmed it will pay a final dividend of 2p and expects to report a profit of at least £1.575bn

Tesco
Tesco resumed dividend payments at its interim results last year

Tesco PLC (LON:TSCO) said Booker Group PLC (LON:BOK) chief executive Charles Wilson will head the retail and wholesale operations after the planned merger is complete.

The supermarket chain also confirmed it will pay a final dividend of 2p and expects to report a profit of at least £1.575bn for the year to 24 February 2018, compared to £1.45bn last year.

Tesco resumed dividends at its interim results in October last year, three years after it cancelled payments following an accounting scandal that led to it record one of the biggest losses in British corporate history. 

READ: Tesco to cut 800 jobs as it streamlines operations amid tough competition

The return to dividend payments underlined Tesco’s confidence in its turnaround progress under chief executive Dave Lewis.

The overhaul has included job cuts, shedding non-core operations and improving its customer offering as the UK’s largest supermarkets lose market share to discounters Aldi and Lidl.

Tesco’s guidance for current financial year operating profit of at least £1.575bn shows the business is making steady progress in rebuilding its fortunes since overstating profits in 2014," said AJ Bell investment director  Russ Mould.

"The latest earnings guidance implies a second year in a row of growth in both operating profit and margins."

Tesco Booker merger

In the face of fierce competition, Tesco has agreed to buy wholesaler Booker for £3.7bn and in December received final clearance from the Competition and Markets Authority.

READ: Tesco and Booker given final clearance by CMA for £3.7bn merger

Wilson will be appointed the chief executive of Tesco's retail and wholesale operations in the UK and Republic of Ireland.

He took the helm of Booker in 2007 after the company was demerged from frozen foods grocer Iceland and listed as a separate company.

Previous to joining Booker, Wilson was the right-hand man to Marks & Spencer Group PLC’s then (LON:MKS) chief executive Stuart Rose between 2004 and 2005. 

“Wilson is considered to be one of the best names in the retail industry and a potential successor to Tesco boss Dave Lewis longer term," said Mould. 

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