Tesco rings up record £1.6bn profits

Tesco today highlighted its dominance of the UK supermarket sector by posting another set of record annual results.

Pre-tax profits rose 17.6% to £1.6 billion, with the underlying figure at the upper end of City expectations at £1.71 billion, a gain of 21.9%.

Sales worldwide were £33.6 billion - up 18.7% - while £26.9 billion was rung up at the tills of the Hertfordshire-based group's UK supermarkets.

The figures, which cover 53 weeks to February 28, include like-for-like sales growth of 6.7% in the UK - a performance described by Tesco as one of its strongest in recent times.

Chief executive Sir Terry Leahy said: "Today's figures demonstrate what a great British success Tesco is at home and abroad. The last year has been an exciting time for retail and a great year for Tesco."

Tesco has 1,981 stores in the UK, with an additional 300 outlets abroad, including Hungary, Poland, Thailand, South Korea and Japan.

In the UK, the group faces increasing competition following Morrisons' takeover of Safeway, although it said it had invested £140 million so far this year in order to maintain its position on prices.

Analysts expect annual profits at the group to have broken the £2 billion barrier in two years' time.