Tesco Annual Report

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TESCO PLC ANNUAL REVIEW AND SUMMARY FINANCIAL STATEMENT 2002

ifc1 TESCO PLC

TESCO PLC ifc1

UNITED KINGDOM

REPUBLIC OF IRELAND

HUNGARY

POLAND

CZECH REPUBLIC

SLOVAK REPUBLIC

THAILAND

TESCO OPERATES

979 STORES , EMPLOYS 260,000
SOUTH KOREA

PEOPLE ,

GIVING

US

ACCESS

TO

A

POPULATION

OF

TAIWAN

280 MILLION

ACROSS OUR

10 MARKETS
MALAYSIA

Our world-class team of people is building a world-class business by working harder to deliver great value for customers, in every store, in every country, every day.

FINANCIAL HIGHLIGHTS
3
CHAIRMAN ’ S STATEMENT

OUR MARKETS

GROUP SALES GROUP PROFIT BEFORE TAX †

UP UP UP UP

4 6 8 10

AT A GLANCE UK EUROPE ASIA

EARNINGS PER SHARE † (adjusted diluted) DIVIDEND PER SHARE

12.7% 14.1% 13.9% 12.4%

WHY WE ARE N O 1

12

CHIEF EXECUTIVE ’ S REVIEW

14 16

ONE TEAM CATERING FOR ALL TASTES

2002
52 weeks

2001
52 weeks

18 20

ONE - STOP SHOP UNDERSTANDING LOCAL CUSTOMERS

Group sales

(including value added tax) (£m)

25,654

22,773

Profit on ordinary activities before tax † (£m)

1,221

1,070

22

INVESTING AND INNOVATING

Earnings per share † (adjusted

diluted) (p)

12.14

10.66 ‡

24 26 28

FIRST FOR FINANCE

Dividend per share
E -@ SY SHOPPING SUPPORTING OUR LOCAL COMMUNITIES

(p)

5.60

4.98

Group enterprise value
(market capitalisation plus net debt) (£m)

21,290

21,590



THE DIRECTORS AND THE ACCOUNTS



Excluding net loss on disposal of fixed assets and goodwill amortisation. Restated due to the adoption of Financial Reporting Standard (FRS) 19, ‘Deferred Tax’.

30 32

BOARD OF DIRECTORS SUMMARY DIRECTORS ’ REPORT

34

SUMMARY FINANCIAL STATEMENT

36

INVESTOR INFORMATION

TESCO PLC

3

This year marks the arrival of Tesco as an International Group with market leading positions in six of our ten countries and 65,000 staff overseas. Our success is underpinned by the strength of our core UK business, and growth in all parts of our strategy which moves UK profit growth of 10.3% to a Group profit growth of 14.1%. We continue to deliver great value for customers in every community in which we operate.

Following excellent results last year the Tesco Group has achieved another year of outstanding organic growth. Group sales have risen by 12.7% to £25.7bn and underlying pre-tax profits are up by 14.1% to £1.2bn, with adjusted diluted earnings per share increasing 13.9% to 12.14 pence, the highest growth for the last ten years. DIVIDEND The board has recommended a final dividend of 3.93 pence. This, together with the interim dividend of 1.67 pence, gives a total for the year of 5.60 pence up 12.4% and a dividend cover of 2.17 times. P E R F O R M A N C E These results reflect the outstanding performance from all aspects of the Tesco strategy, the core UK business, non-food, retailing services and international, all of which have contributed to growing Group profits. Our organic growth momentum continues to be driven by our determination to deliver for customers wherever we operate. We are now profitable in seven of our nine overseas businesses. Our strategy of being in developing markets is clearly working and we are well

positioned to become the leading retailer in Central Europe and South East Asia. We are delighted with the progress that retailing services has made this year. Tesco Personal Finance has increased its profit sevenfold on last year. Tesco.com now operates successfully in four countries. None of these achievements would have been possible without the considerable effort of the entire Tesco team. Worldwide we employ 260,000 people, 65,000 of whom are overseas. We will create a further 21,000 jobs in the coming year. Our people share in our success and it is my pleasure to thank everyone in the Group for all they have done. The effort and capability of the entire Tesco team has driven this...
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