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Tesco unveils profits of £2.55 bln

Tesco, Britain's biggest retailer, has reported a 13% rise in full-year underlying profits to £2.55 billion.

Sales for the whole group rose 10.9% to £46.6 billion with its 1,500 UK stores making sales of £35.6 billion ($70.8 billion), about £1 in every £8 spent on the UK High Street. The firm's international expansion continued, with 8.2 million square feet of new store space being created abroad and total international sales up 18%. The supermarket chain plans to create 25,000 new jobs worldwide this year. Although Tesco has been expanding abroad, the majority of its profits still came from its UK network. Like-for-like sales - which exclude the impact of new stores - in the UK were up 5.8% in the three months to 24 February when petrol sales were excluded. This was up from sales growth of 5.6% in the Q3. The underlying profit figure of £2.55 billion ($5 billion) excludes the reduction in Tesco's pension liabilities caused by recent changes to pensions regulation. When that is taken into account, group profit before tax came in at £2.65 billion.

Tesco's results also gave an update on its plans to realize the value of its property portfolio. Tesco originally said that the program would allow it to return at least £1.5 billion to shareholders through share buybacks, but it has now said it expects to return at least £3 billion. It has already made deals with British Airways Pension Fund and British Land. Earlier this month, Tesco launched a robust defense of its position in response to a Competition Commission probe into Britain's £95 billion grocery sector. Property ownership is a key part of the Competition Commission's investigation. The company currently holds a 31.2% share of the UK grocery market, according to the latest figures from market researchers TNS. It unveiled two new measures earlier this month to help increase the price UK dairy farmers receive for their milk.

Tesco also recently announced that its first US store would be based in the state of Arizona, trading under the Fresh & Easy brand. Amid widespread media interest, the firm opened its first store under its own name in the Chinese capital Beijing in January. (BBC NEWS)