Tesco raises profit forecast, names Booker’s Wilson its UK boss

LONDON: Tesco, Britain’s biggest retailer, has forecast profit for the full 2017-18 year slightly ahead of analysts’ expectations and confirmed it would pay a final dividend.

Ahead of the publication of the circular and prospectus for its £3.7bil (US$5.22bil) takeover of wholesaler Booker, Tesco said it had traded in line with management expectations since it last updated on Jan 11.

Tesco is buying Booker in the boldest move yet by its chief executive Dave Lewis ( pic), who took over in 2014, providing the supermarket group with access to the faster growing catering segment of Britain’s £195bil food market.

After the deal, the well-regarded Booker boss Charles Wilson will become CEO of Tesco’s retail and wholesale operations in the UK and Ireland.

The current UK boss, Matt Davies, will step down after supporting a handover and leave Tesco at the end of April.

“(Wilson) brings substantial commercial and retail experience and has an exceptional track record of increasing performance and driving growth in customer-focused businesses,” Lewis said.

Tesco shareholders will vote on the deal at a meeting on Feb 28 and completion is expected to take place on March 5.

The supermarket group forecast an operating profit before exceptional items of at least £1.575bil for the year to Feb 24 2018.

That compares to analysts’ current average forecast of £1.564 bil, according to Tesco’s website, and £1.28bil made in 201617.

Tesco said it intended to pay a final dividend of two pence per share for the year, having announced an interim dividend of one pence in October.

The interim payment was its first since the 2014-15 year when it was mired in crisis.

Tesco shares were down 1.1% at 0805 GMT. — Reuters