Scandal hits Tesco earnings

A fortnight after being fined by the Serious Fraud Office, supermarket giant Tesco confirmed that it fell into an annual loss of 40 million pounds (47 million euros, $50 billion), but that sales growth surpassed one billion pounds.

Tesco, the biggest retailer in the United Kingdom, was handed 241 million pounds in penalties last month for the company's former accounting practice.

The aftermath has clearly bumped the company, but operating profits rose by a third to 1.28 billion pounds for 2016/17. Sales grew for the first time in seven years by 3.5 pe cent to 55.9 billion pounds, while Tesco's operating profits were up almost 30 percent.

Fierce competition

Tesco has faced tough competition in recent years from German-owned Aldi and Lidl, Sainbury's, Morrisons and Wal-Mart or Asda.

"We are confident that we can build on this strong performance in the year ahead," said the Chief Executive Dave Lewis in a statement.

"On top of this, our proposed merger with Booker will bring together two complementary businesses, driving additional value for shareholders by realizing substantial synergies and enabling us to access the faster growing 'out of home' food market."

After a vast property writedown in 2014,  Tesco lost around 5.7 billion pounds in investments. Several Tesco executives are expected to stand trial over false reporting of accounts.

rd/hg (AFP, Reuters)