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Tesco profit rises 29%

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Christian Fernsby |
Tesco   Adjusted operating profit rose 34% to GBP2.21 billion

Tesco said that pretax profit rose 29% in fiscal 2019 and that it is making progress toward its cost savings target.

The U.K. supermarket chain said pretax profit was 1.67 billion pounds ($2.18 billion) in the year ended Feb. 23, compared with GBP1.3 billion in fiscal 2018.

Adjusted operating profit, Tesco's preferred metric that strips out exceptional and other one-off items, rose 34% to GBP2.21 billion, compared with a FactSet forecast of GBP1.57 billion based on five analysts estimates.

Sales for the year were up 11% at GBP63.91 billion, compared with a forecast of GBP64.07 billion, according to a FactSet-provided consensus of 12 analyst estimates.

Tesco, which has been fighting to maintain its market share against discount grocers, said it reduced in-year costs by GBP532 million, with savings of GBP1.4 billion toward its target of GBP1.5 billion.

Some of the measures of the savings program included closing Tesco Direct and developing more sustainable general merchandise categories, the company said. The board declared a final dividend of 4.10 pence a share, bringing the total payout to 5.77 pence, up from 3.0 pence the year before.

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