Tesco overcomes tough times to report £3.2bn profit

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The Independent Online

Tesco will announce record-breaking pre-tax profits of £3.2bn at full- year results on Tuesday, and is also expected to confirm plans to launch a current account by year's end.

City analysts forecast that UK trading profits will be up by as much as 13.2 per cent to £2.7bn for the year to February, defying a difficult 12 months for customers. Revenue is expected to be £58.575bn, up more than £4bn on the previous year.

"Tesco is set to report yet another solid set of full-year results, despite tough economic conditions in many of its markets," said Sam Hart, a retail analyst at Charles Stanley. "The good performance will reflect a combination of resilient underlying sales and good cost control."

Analysts also expect an update from Tesco's boss, Terry Leahy, on plans to expand its banking operation, which is likely to post a profit of £245m, up from only £40m the year before. "We expect a timetable to be set for the launch of a current account at the results. It could be within a year," said Mr Hart, adding, "Tesco Bank is now pretty much independent after it bought RBS's 50 per cent stake in the joint venture."

Tesco shares closed at 434.65p on Friday, down 8.05p on start of day's trading. This gives the retailer a market capitalisation, or value, of around £34.5bn.