Tesco (TSCO)

TESCO (TSCO)

INTRO
(ALISON IS LAYING ON HER SOFA.
SHE’S MAKING HER SHOPPING LIST OF EVERYTHING SHE NEEDS.
ALISON IS TALKING OUT LOUD AS THOUGH SHE IS THINKING TO HERSELF.)

Er…what else?
Oh yes, must nip to Tesco’s…
Definitely need to get milk …and tea bags… what else?...
Oh yes, cereal, bread, …er… pair of jeans… um… mobile phone, DVD player, petrol, a new car….um, mortgage advice, dental insurance, garden shed, get a manicure, lawnmower, a new house…

(GRADUALLY FADE TO BLACK AS THE LIST GETS MORE RIDICULOUS – BASICALLY A LIST OF EVERYTHING TESCO NOW SELLS)

MAIN
‘A loss of form’?
‘Below par?’
Yup, those were the words of the boss whose company posted record annual profits of £3.8 billion – the kind of figure that most retailers would sell their children for.
The figures were greeted with disappointment for missing forecasts, but Tesco’s downbeat response is, cynics say, a technique that helps it stave- off charges of market dominance, so it can carry on taking over the world.
New chief exec, Phil Clarke, another former Tesco shelf stacker, slipped into the shoes of Sir Terry Leahy in March, ushering in a spirit of openness and disclosure.
Following the shareholder revolt last year, Clarke overhauled executive pay and launched a basket of performance-boosting initiatives.
Tesco Bank, in the final stages of transitioning systems and offering mortgages, was a bright spot in first quarter updates which – surprise, surprise - fell short of expectations.
As shoppers divert food money into their fuel tanks, Clarke is fighting back with new home-grown brands while heralding Tesco’s online expansion as a ‘multichannel retailer’.
It’s doubling the number of ‘click and collect’ stores, launching an Amazon-style marketplace late this year or early next, has
a majority share in online movie streamer Blinkbox, as well as online second-hand cars, in-store beauty salons and ‘cash for gold’.
The UK still accounts for nearly 70% of trading profit but Clarke knows Tesco’s salvation lies overseas - group profits driven by soaring success across Asia and Eastern Europe.
He insists troubled US venture Fresh & Easy will break even by 2013 and revenue from China will quadruple by 2015.
And in June, the world’s second fastest growing economy, India, said it would open its doors to Tesco within four months.
Just two weeks after Leahy announced his retirement, an American who keeps most investments Stateside, upped his stake in Tesco to over 3%, saying they had a ‘smart guy’ at the top.
And shareholders know that if it’s good enough for Warren Buffet, it’s probably good enough for them.

STATS PACK
Tesco’s shares currently trade at around 398p
They hit a 52-week low of 364.90p in March and a 52-week high of 446.56p last December.
Tesco reported an impressive 11.3% rise in pre-tax profits to £3.53 billion over the year to 26 February 2011.
EPS is 33.1
And the retailer paid a dividend of 14.46p