Tesco – Business Communication Essay Sample

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Produce a brief written report on what the information shows about the performance of the business or part of the business. This report should be suitable for the directors or the senior management of the business and should include a spreadsheet or graph to help explain the financial situation. Introduction

This task is part of p2 where I will be writing a brief written report on the financial performance of Tesco. The information I have obtained is from the Tesco annual report 2012-13 which I obtained online through the Tesco site. Results

The graph above shows Tesco’s financial figures from different continents that Tesco operate in and also the Tesco bank. The UK as always generated the most revenue and is the main component for Tesco’s success, the revenue growth for the UK has increased by 1.8% this year. Asia also increased 6% in revenue growth, Europe decreased revenue growth by (5.5%) and Tesco bank decreased revenue by (2.2%). Trading profit growth decreased for all the different areas, the UK by 8.3%, Asia by 10.3%, and Europe by 37.8% and Tesco bank by 15.1%. The financial results for the year reflected the steps being taken to ensure that Tesco can deliver sustainable and attractive returns and long-term growth for shareholders. Hence, while they continued to see sales growth, of 1.3%, Group trading profit was down (13.0)% on last year and underlying profit before tax down by (14.5)%, reflecting their previously announced investment in the shopping trip for customers in the UK, in addition to the impact of regulatory restrictions on opening hours in South Korea and the effects of deteriorating economic conditions, particularly in Central Europe. Statutory profit before tax fell by (51.5)%, due to the impact of a number of significant but one-off charges related to the important steps we are taking to reshape the business, including a write-down of our UK property following an in-depth review of our forward pipeline, our exit from the US and goodwill impairment of businesses in Poland, Czech Republic, and Turkey. Return on capital employed (‘ROCE’) decreased during the year as expected, reflecting the impact of the decline in trading profit as described above. Prior to the impact of one-off charges, Group ROCE was 12.7%. We continued our long record of strong dividend pay-outs to shareholders, with the full year dividend maintained at 14.76p.

The overall group sales including tax were £72,363m, excluding tax the group revenue is £64,826 and the group trading profit being £3,453m. Recommendation I recommend that Tesco focus more on their foreign operations in Asia and Europe as they can be just as successful as the UK. To increase revenue Tesco can expand their stores to sell more goods such as their Tesco express stores that only sell groceries. They can also introduce new promotion with Tesco bank as people are wanting loans they can have low interest rate loans so that people come to them instead of the larger banks. Conclusion

Overall Tesco are doing well and should maintain this, Tesco UK will increase growth as the economy is in a recovery stage, when the economy reaches the boom stage we should see revenue rising as people should have more disposable income. Tesco in foreign lands will continue to grow and expand as the people know of the brand and it becomes a household name. The reason why Tesco will constantly improve is because we have a wide range of customers, we supple the people with more money with branded products and for those with less disposable income we have created out Tesco value range so that they can afford to shop at Tesco’s.

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