Tesco raises profit forecast and names new UK boss

Tesco forecasts an operating profit at least £1.57bn for the year to February 24 2018

Booker boss Charles Wilson will lead Tesco's operations in the UK and Ireland (Reuters)

Tesco on Monday forecast profit for the full 2017-18 year slightly ahead of analysts’ expectations and confirmed it would pay a final dividend.

Ahead of the publication of the circular and prospectus for its £3.7bn takeover of wholesaler Booker, Tesco said it had traded in line with management expectations since it last updated on January 11.

Tesco is buying Booker in the boldest move yet by its chief executive Dave Lewis, who took over in 2014, providing the supermarket group with access to the faster growing catering segment of Britain’s £195bn food market.

After the deal, the well-regarded Booker boss Charles Wilson will become CEO of Tesco’s retail and wholesale operations in the UK and Ireland.

The current UK boss, Matt Davies, will step down after supporting a handover and leave Tesco at the end of April.

“(Wilson) brings substantial commercial and retail experience and has an exceptional track record of increasing performance and driving growth in customer-focused businesses,” Mr Lewis said.

Tesco shareholders will vote on the deal at a meeting on February 28 and completion is expected to take place on March 5.

The supermarket group forecast an operating profit before exceptional items of at least £1.575bn for the year to February 24 2018.

That compares to analysts’ current average forecast of £1.564bn, according to Tesco’s website, and £1.28bn made in 2016-17.

Tesco said it intended to pay a final dividend of 2.0 pence per share for the year, having announced an interim dividend of 1 pence in October.

The interim payment was its first since the 2014-15 year when it was mired in crisis.

Reuters