In what will be a key set of results – both for the sector and the UK economy as a whole – Mr Clarke will announce muted like-for-like sales on the retailer’s home turf but strong growth from its international arm. Just over a month after the departure of Sir Terry Leahy, Mr Clarke’s predecessor, analysts will focus on the new chief’s ability to cope with rising costs and declining household spending in the UK. Consensus forecasts estimate he will point to record pre-tax profits of £3.4bn from sales of £61.4bn, with much of its uplift driven by double-digit sales growth in international markets. Profits from its Asian supermarkets in 2010 are likely to have eclipsed Europe for the first time. But he is likely to acknowledge that the UK – where Tesco generates the majority of its sales – has proven a tough market. Mike Tattersall, retail analyst at UBS, says all of the “Big Four” – Tesco, Sainsbury’s, Asda and Morrisons – are trading against a backdrop that is “as challenging as at any time in the past 20 years”. It means any increase this year in the supermarket’s UK like-for-like sales is likely to be unspectacular. Mr Tattersall expects Tesco to have clocked up 1.5pc annual growth, including VAT. Tesco’s non-food businesses are expected to have made progress, with Tesco Bank achieving almost £1bn in sales ahead of the launch of mortgage products in the autumn and current accounts shortly afterwards. Mr Clarke may also outline his medium-term plans to replace the £5bn in financing secured from selling and renting back many of Tesco’s UK supermarkets in the past five years. However, he is likely to remain reticent about making trading and earnings predictions for the year ahead.Asia pushes Tesco to record profits
Tesco’s chief executive Philip Clarke is to take centre stage on
Tuesday as he unveils record profits in the region of £3.4bn against
a trading backdrop the City is describing as one of the most
challenging in 20 years.
Sunday, 17 April 2011
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