Tesco PLC

Good morning everyone and a very happy new year to you all. Thank you for joining us on what I know is a very busy day for you. I'm here in Welland with Imran and in a moment we'll be delighted to take your questions. Before that I want to make a few opening remarks. I'm not planning on running through everything that's in the statement but I will call out a few highlights. I want to start this morning by thanking every one of our fantastic colleagues. The momentum in our business is really thanks to their hard work and commitment. Given all of the challenges over the last few years, what they've achieved is truly remarkable. I want them to know their contribution is highly appreciated. I'd like to also say a big thank you to our suppliers who helped us do a brilliant job for our customers throughout. We are really pleased with our performance over the third quarter and particularly over the Christmas period. To grow on top of last year's exceptional performance with nearly 9% like for like sales on a two year stack is a fantastic result and even ahead of our own expectations. Overall, COVID actually had a negative impact on like for like sales performance due to the pretty comprehensive lockdown we had last year. However, we did have a short-term boost in sales versus our own expectations as more customers stayed home due to the Omicron variant this Christmas. Importantly, our underlying momentum continues to be strong. Our unwavering commitment to value is continuing to resonate with customers and they are recognising the improvements we are making in range and quality too. These factors have all contributed to our strong market share performance, both in stores and online, with switching gains in the UK for 22 consecutive periods. Although we end up focusing a lot on the UK business on these calls, I would like to touch on performance across the group. Our Irish business has delivered another exceptionally strong performance. Booker has delivered record sales in both retail and catering, despite the hospitality challenges, and Central Europe is growing well and gaining share. We are clearly navigating some significant challenges, including growing cost pressures and the well-documented supply chain issues in the industry. The recent wave of Omicron has also led to increased absence. But despite this, our outperformance in sales has led us to increase our guidance for this year. We now expect retail operating profit to be slightly above the top end of our previous range of 2.5 to 2.6 billion. We are also expecting our bank operating profit to be higher than previously guided and now between 160 and 200 million. Looking further ahead, We know the environment will continue to be challenging and the impact from COVID is far from clear. What I can tell you is that we are absolutely committed to continuing to deliver great value for customers and that the momentum in our business gives us even more confidence in the medium-term ambitions we set out in October. So with that, let's go straight to Q&A.

And we'll take our first question. from Andrew Pertus in HSBC.

Morning, team, and congratulations on the Christmas performance. Really impressive. A couple from me. I guess the first one really is thinking about the year ahead. You know, there's lots of sort of puts and takes, but, you know, I appreciate you're not going to give guidance at this stage, but I guess a simple question. Do you think growth is a likely outcome over the next year, both at the sales and profit level?