Asda increases underlying profits by 24% to £1.1bn

By William Dodds

- Last updated on GMT

Around 6m customers now use the Asda Rewards app. Credit: Asda
Around 6m customers now use the Asda Rewards app. Credit: Asda

Related tags Supermarket

Supermarket chain Asda has revealed its financial results for the full year ending 31 December 2023.

During that 12-month period, Asda increased its adjusted EBITDA after rent to £1.1bn which represents a year-on-year rise of 24%.

This was driven by a 5.4% increase in like-for-like sales (excluding fuel) as well as £81m worth of contributions from the former EG and Co-op stores that are now operated under the Asda Express fascia.

Meanwhile, the retailer has investment in its own label products and launched thousands of new food lines last year, including a refresh of its entire ready meals range.

This news comes not long after Tesco reported pre-tax profits of £2.3bn for the 12 months to 24 August 2024​, a sign that retailers are beginning to recover from some of the economic instability of the past few years.

'Building blocks for long-term success'

Commenting on the results, Asda co-owner Mohsin Issa said that the supermarket's “strong annual results”​ and 18m customer base showed its business was built on “rock-solid foundations”.

“We are committed to doing the right thing for customers, colleagues and local communities – and are putting in place the strategic building blocks to set up Asda for long-term success,”​ he continued.

“As well as investing in price to maintain our position as the cheapest traditional supermarket, we continued to invest in further enhancing the quality of our products, building on the earlier successful launch of the budget-friendly Just Essentials brand with a significant own-label transformation programme.”

Elsewhere, Asda chief financial officer Michael Gleeson hailed the success of its loyalty scheme.

“Around half of all sales are now linked to Asda Rewards and around 6m customers use the app – making it a vital tool for them to manage their household budgets as well as being a key revenue driver for the business,”​ Gleeson said.

“The shareholders have also invested to fill the previous strategic gaps in the business, including acquiring the Co-op and EG UK convenience stores – which have already boosted annual earnings and helped grow Asda to more than 1,000 sites for the first time.

“Asda is a highly cash generative business, with strong liquidity, including more than £1bn in cash on the balance sheet at year end. The significant increase in both underlying free cashflow and adjusted EBITDA after rent last year enabled us to reduce leverage by almost a full turn to 3.0x.”

In other news, Morrisons is facing the threat of strike action by logistics workers based in Cheshire and Wakefield that supply its stores.

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