Tesco 2006 Annual Report Download - page 5

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3Tesco plc
3
We regularly
ask customers
for ideas on
how we can
improve.
4
We have introduced
more self-service
checkouts –offering
customers a choice
when they get to the
checkouts.
International Total International sales grew
by 40.7% to £10.5bn (last year £7.4bn) and
by 31.8% at constant exchange rates. On a
52-week basis, International sales increased by
23% to £9.2bn and at constant exchange rates,
sales grew by 15.5%.
International contributed £492m to operating
profit, up 24.2% on last year. International
pre-property operating profit rose 28.8% on
a52-week basis. At constant exchange rates,
International pre-property operating profit grew
by 21.6%. On a 52-week basis, International
operating profit increased by 17.4% to £465m.
At constant exchange rates profit grew by 10.8%.
In Asia, sales grew by 50.5% to £4.7bn (last year
£3.1bn). At constant rates, sales grew by 39.0%.
Operating profit increased by 49.7% to £229m
(lastyear £153m) and by 38.2% at constant
rates. On a 52-week basis, Asia operating profit
increased by 30.7% to £200m. At constant
exchange rates profit grew by 20.6%. Asia pre-
property operating profit rose 30.1% to £203m
on a 52-week basis.
In the Rest of Europe, sales rose by 33.8% to
£5.8bn (last year £4.3bn). At constant rates, sales
grew by 26.7%. Operating profit increased by
8.2% to£263m (lastyear £243m) and by 3.9%
at constant rates. On a 52-week basis, Rest of
Europe operating profit increased by 9.1% to
£265m. At constant exchange rates profit grew
by 4.7%. Operating profit growth was impacted
by the existence of a one-off £31m property
profit in the prior year. Rest of Europe pre-
property operating profit rose 22.7% to £271m
on a 52-week basis.
UK UK sales increased by 10.7% to £32.7bn
(lastyear £29.5bn), with like-for-like growth of
7.5% (including volume of 7.6%) and 3.2%
from net new stores. Deflation overall was 0.1%,
despitethe effect of rising oil prices on our petrol
business. We saw deflation of 1.8% in our stores
as we continued to invest in lowering prices for
customers.
Petrol continues to have a significant impact on
sales growth, helped by our efforts to keep fuel
prices down, although its contribution to like-for-
like sales during the second half, against last
year’s exceptionally strong growth, was lower
than in the first half.
Fourth quarter like-for-like sales growth,
excluding petrol, was 4.9%. Including petrol,
like-for-like sales grew by 6.2%. Total sales grew
by 9.4% in the quarter, including 3.2% from
net new stores. In the final seven weeks of the
year, like-for-like sales growth was 4.0%
excluding petrol and adjusting for the different
timing of Easter. We saw slower like-for-like
growth in January but the rate of growth picked
up in February and again in the early weeks
of the current year.
Through good costcontrol and productivity we
have absorbed significant external cost increases
during the year, particularly during the second
half,arising mainly from higher oil-related costs
and increases in local business taxes.
Consequently, UK operating profit was 14.9%
higher at £1,788m (lastyear £1,556m). UK pre-
property operating profit rose 10.6% to £1,698m,
leaving the operating margin unchanged at 5.7%.
Joint ventures and Associates Our share
of profit (net of tax and interest) was £82m
compared to£74m lastyear. Tesco Personal
Finance profit was £139m, of which our share
was £70m, down 1.4% on last year, due
tothe change in provisioning policy for bad debts
under IFRSs and the competitive nature of the
motor insurance market. On a pre-IFRS basis,
profit was slightly higher than last year, including
growth of 2.4% in the second half.