Tesco 2003 Annual Report Download - page 5

TESCO PLC 3
1 year 3 years 5 years
TOTAL SHAREHOLDER RETURN
RELATIVE TO THE FTSE 100
37.5 37.5 42.1 42.1
((7.97.9))
99 00 01 0302
UK SALES GROWTH %
7.9
9.1
8.5
7.4
8.0
4.14.1 6.26.2 4.84.8 4.24.2 4.04.0
TOTAL
LIKE-FOR-LIKE
The Board has proposed a final dividend of 4.33p
(2002 – 3.93p) giving a total dividend for the year
of 6.20p (2002 – 5.60p).This represents an increase
of 10.7% and dividend cover of 2.25 times.
Total recognised gains and losses in the year
were £968m (2002 – £842m), comprising profit
for the year of £946m and gains on foreign
currency translation of £22m.
Group shareholders’funds, before minority
interests, increased by £986m.This was due to
retained profits of £503m, new shares issued less
expenses of £461m, and gains on foreign currency
translation of £22m. As a result, return on
shareholders’funds was 23.3%.
Total shareholder return, which is measured as
the percentage change in the share price plus the
dividend, has been 10.7% over the last five years,
compared to the FTSE 100 average of (26.8)%.
Over the last three years it has been 7.0%, compared
to the FTSE 100 average of (35.1)%. In the last
year, total shareholder return in Tesco was (31.9)%
compared to the FTSE 100 average of (24.0)%.
UK Sales grew by 7.9% to £23,407m (2002 –
£21,685m). Of this, 4.1% came from existing stores
and 3.8% from net new stores, which includes
0.7% relating to the acquisition of T&S Stores PLC.
UK underlying operating profit was 6.9%
higher at £1,297m (2002 – £1,213m) with an
operating margin held flat at 6.0%.
The tesco.com operations achieved sales
of £447m (2002 – £356m) and excluding USA
and South Korea start-up losses, made a profit
of £12m (2002 – £0.4m).
As part of our store development programme
we opened 62 new stores comprising six Extras,
21 Superstores, one Metro and 34 Express
stores. Including extensions and refits, we opened
1.4m sq ft of new space and expect to open
a further 1.4m sq ft in the coming year.
During the year we purchased T&S Stores PLC,
a leading convenience retailer.Total consideration
was £366m, which consisted of £358m of issued
shares and £8m of other acquisition costs.The
convenience market is a £20bn market in the UK
and this acquisition increases our share from 1%
to 5%.T&S has 870 convenience outlets.We plan
to convert 450 to the Tesco Express format over
the next three to four years bringing the Tesco
range and value offer to many more customers
in neighbourhood locations.
REST OF EUROPE In the Rest of Europe sales
rose by 22.5% to £3,032m (2002 – £2,475m)
and contributed an underlying operating profit
of £141m, up from £90m last year.
Sales in the Republic of Ireland grew by 8%.
We have 77 stores, giving us 1.7m sq ft, and have
plans for a further six stores in 2003/04.
In Central Europe we opened 18 hypermarkets
in the year giving us 83 in total.This gives us total
space in Central Europe of 8.9m sq ft.
The acquisition of HIT, a chain of Polish
hypermarkets, during the year has doubled the
size of our Polish operation and are now market
leader. Total consideration was cash of £400m.
ASIA In the year, our Asian businesses had sales
of £2,174m (2002 – £1,494m), up 45.5% on the
previous year and made an underlying operating
profit of £71m (2002 – £29m).
Our business in Thailand, comprising 42
hypermarkets, had strong sales growth of 21%.
We currently have 4.8m sq ft of selling space
in Thailand which will increase to 5.4m sq ft by
the end of next year.
In South Korea we opened seven hypermarkets,
giving us 21 in total, with sales up 66%.
In Taiwan we have a total of three
hypermarkets. Expansion has been slower than
planned but we are now seeing opportunities
to buy sites at lower prices.
In Malaysia we opened our first three
stores this year.The performance of the stores
is encouraging and we have a good number
of planning applications in the pipeline.
JOINT VENTURES AND ASSOCIATES Our total
share of profit before goodwill amortisation, from
joint ventures and associates was £72m compared
to £42m last year. Our share of Tesco Personal
Finance pre-tax profit, post minority interests has
grown significantly to £48m (2002 – £20m).
99 00 01 0302
UK SALES AREA OPENED
000 sq ft
1,433 1,2961,296 1,2981,298 1,2161,216 837837