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Tesco posts worst results in its history with £6.4bn loss

Staff writer ▼ | April 22, 2015
Tesco has reported the worst results in its history with a record statutory pre-tax loss of £6.4bn for the year to the end of February. That compares with annual pre-tax profit of £2.26bn a year earlier.
Tesco   Retails company had a very bad period
It is the biggest loss suffered by a UK retailer and one of the largest in the country's corporate history. Around £4.7bn of the losses were the result of the fall in property value of its UK stores, 43 of which it said would close earlier this month. The decline in the value of its property portfolio comes as a direct result of declining footfall in many of its out of town superstores.

Tesco chief executive Dave Lewis admitted it had been "a very difficult year for Tesco". He added: "The results we have published today reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years.

"We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we've done so far."

He added that he expected conditions in the coming financial year to remain challenging.

Annual group trading profit, which counts sales through the supermarket's tills was also down 60% at £1.4bn, compared with £3.3bn a year earlier. UK like-for-like sales excluding fuel declined by 3.6% in the year.

The company said the performance of its European stores disappointed as a result of "strong competition from discount retailers" which held back its sales performance, particularly in Ireland which saw a like-for-like sales fall 6.3% in the year.

In Asia, Tesco said trading profit was £565m, once currency fluctuations were stripped out, 15.3% lower than a year earlier a result of sales falling in South Korea, Thailand, and Malaysia.

Tesco said it had also agreed a plan with the trustees of its pension scheme to pay £270m a year to help mend its £3.89bn pension deficit.