Tesco profit rise expected amid first update since Booker takeover

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Tesco forecast

Tesco is poised to report its first trading update since completing its £3.7 billion takeover of Booker, with analysts expecting a rise in full year profits.

The Big 4 retailer is expected to report a 22 per cent rise in operating profit to £1.56 billion for the year to February, according to a consensus of City analysts.

Barclays is forecasting a 2.1 per cent uptick in like-for-like sales in the fourth quarter, which would mean a second consecutive year of growth.

Experts also expect Tesco to announce its first end of year dividend since 2014.

The results, to be unveiled next week, would mark another step on Tesco’s road to recovery under chief executive Dave Lewis, who has been led a turnaround since taking the helm in 2014.

Tesco’s figures will also come after a record Christmas performance, and a month after it completed its deal to buy wholesale and convenience retailer Booker.

Despite this, investors are expected to be looking for more detail regarding the takeover, especially in terms of cost savings.

“Comments around the integration, including on the £200 million of revenue and cost synergies that were targeted at the time of the original announcement, will be closely scrutinised,” Hargreaves Lansdown analyst Nicholas Hyatt added.

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