Tesco pre-tax profit drops 39%

Tesco has reported a 39.1% fall in pre-tax profit following a fine by the Serious Fraud Office and the Financial Conduct Authority.

Tesco pre-tax profit drops 39%

Pre-tax profit dropped to £145m from £202m, a 39.1% fall in terms of constant rates, according to Tesco's preliminary results released this morning for the 2016/17 financial year.

The report noted a £235m exceptional charge which was implemented as a fine from the Serious Fraud Office and the Financial Conduct Authority after the supermarket overstated profits in 2014.

Group sales were reported at £49.9bn, and operating profit was also up 11.8% to £1bn. This was up 0.9% on a like for like basis, the first growth since its 2009/10 financial year.

Dave Lewis, chief executive of Tesco, said that the retailer’s fresh food brands have "strengthened our value proposition" and that the perception of its food quality its "at its highest level for five years".

He added: "At the same time, we have increased profits, generated more cash and significantly reduced debt.

"We are ahead of where we expected to be at this stage, having made good progress on all six of the strategic drivers we shared in October. We are confident that we can build on this strong performance in the year ahead, making further progress towards our medium-term ambitions.

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