Tesco expected to post 22pc rise in profits in wake of Booker buyout
TESCO WILL report to the market this week for the first time since completing its £3.7bn takeover of wholesaler Booker, with analysts expecting a healthy rise in full-year profits.
The supermarket giant is forecast to post a 22 per cent rise in operating profit to £1.56bn for the year to February, according to a consensus of City analysts.
Barclays predicts like-for-like sales, a key industry benchmark, rose 2.1 per cent in the fourth quarter, which would result in a second consecutive year of growth.
It will represent yet another step on the road to the supermarket’s recovery under chief executive Dave Lewis, who has been embarking on a turnaround since taking the hotseat in 2014.
Underlining the recovery, experts also expect Tesco to announce its first end-of-year dividend for four years.
Nicholas Hyatt, equity analyst at Hargreaves Lansdown, said: “We expect to see profitability rise, while Dave Lewis will confirm the first end-of-year dividend since 2014.”
Tesco’s figures will also be buoyed by a record Christmas performance, which included its biggest ever sales week with 58 million customer transactions and 770,000 online grocery deliveries.
Next week’s results come after Tesco completed its deal to buy Booker last month, creating the UK’s largest food business.
Tesco has more than 3,000 stores across the UK, while Londis and Budgens owner Booker is the country’s largest wholesaler supplying more than 5,000 stores under the Premier, Londis, Budgens and Family Shopper brands, as well as thousands of independent retailers and caterers.