- Supermarket group Tesco reported a 20% drop in annual profit after a rise in grocery sales was offset by lower fuel sales, costs associated with adapting to the pandemic and a writedown on its banking operation.

Pre-tax profit for the year through March fell to £825 million, down from £1.03 billion year-on-year, as revenue edged back 0.4% to £57.89 billion.

Sales excluding fuel, on a continuing operations basis, rose 7.1% to £53.4b billion.

Operating profit, before exceptional items and amortisation of acquired intangibles, fell 28% to £1.82 billion.

Tesco held its annual dividend steady at 9.15p per share.

The company said it expected a 'strong improvement in profitability' in the current financial year, albeit with trading conditions likely to remain volatile.

"Tesco has shown incredible strength and agility throughout the pandemic,' chairman Ken Murphy said.

'While the pandemic is not yet over, we're well-placed to build on the momentum in our business.'

Murphy said the Decision to 'protect and hold the dividend flat' demonstrated a commitment to shareholders.

'We believe we can create significant further value for them and every stakeholder in our business by continuing to focus on value, loyalty and convenience for customers, underpinned by strong capital discipline,' he said.

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