Tesco has announced a bumper full-year profits haul as the grocery chain continues an impressive turnaround under boss Dave Lewis.
The supermarket giant reported a 28.8% rise in annual pre-tax profits to £1.67 billion, while revenue grew 11.2% to £63.9 billion.
Like-for-like sales increased by 2.9% over the 52 weeks to February 23, which included a 1.7% jump at Tesco and 11.1% at wholesaler Booker.
Comparable sales were up 1.9% in the fourth quarter in the UK and Ireland.
Mr Lewis said: “After four years we have met or are about to meet the vast majority of our turnaround goals. I’m very confident that we will complete the journey in 2019/20.
“I’m delighted with the broad-based improvement across the business. We have restored our competitiveness for customers – including through the introduction of ‘Exclusively at Tesco’ – and rebuilt a sustainable base of profitability.
“I’m pleased that we are able to accelerate the recovery in the dividend as a result of our continued capital discipline and strong improvement in cash profitability.”
The group issued a final dividend of 4.1p, giving a full-year return of 5.77p per share.
Tesco said its annual profit margin of 3.45% represents “clear progress” and puts it “comfortably in the aspirational range” that Mr Lewis set four years ago.
The results come at a difficult time for the retail sector as consumer confidence takes a knock from Brexit worries.
In addition, supermarkets are battling rising costs and fierce competition in the sector as Lidl and Aldi continue their relentless march.
Sainsbury’s and Asda have also agreed to merge, but are awaiting the competition watchdog’s approval.
As part of efforts to position Tesco to meet the challenges of a rapidly changing market, Mr Lewis forked out £3.7 billion to acquire cash-and-carry business Booker and launched Jack’s, a discount chain that will supposedly rival the German discounters.
However, January also saw Tesco announce that up to 9,000 jobs are at risk across its head office and stores as part of a major cost-cutting drive.