Tesco says Booker's Wilson will head UK retail arm, ups profit guidance

Tesco confirmed that Booker Group boss Charles Wilson will be appointed chief executive of the group's retail and wholesale operations in the UK and Ireland when the takeover is completed, which is pencilled in for 5 March.

The grocery giant, which added that current retail CEO Matt Davies will depart at the end of April, also issued a forecast of "at least £1.575bn" profit before exceptional items for the current financial year to 24 February 2018, with the intention to propose final dividend of 2.0p per share.

Tesco said trading has remained in line with management's expectations since the post-Christmas trading statement on 11 January.

The FTSE 100 group issued the messages as it prepared to send missive to investors and a prospectus containing information on the background and reasons for the proposed merger ahead of a shareholder meeting on 28 February, where the resolution proposing the merger will be put to investors.

On Wilson's appointment, group CEO Dave Lewis said: "He brings substantial commercial and retail experience and has an exceptional track record of increasing performance and driving growth in customer-focused businesses. Charles is ideally suited to lead the UK & ROI business for the combined group in the next phase of our turnaround.

"I would also like to thank Matt for his outstanding contribution to Tesco over the last three years. His values based leadership and invaluable support have been instrumental to the significant progress we have made in the transformation of the UK & ROI business. I wish him well for the future."

Broker Shore Capital noted that the profit guidance was better than its forecast by 2.5%, though the 2.0p final dividend was a smidgen behind.

ShoreCap was pleased to see Wilson, who is held in high regard in the City, "going straight to the heart of the business".

On the new guidance, analyst Clive Black said: "How much safety has been engineered into the estimate, on which its advisors have been consulted, remains to be seen? However, it makes for less guesswork at the preliminary results in April and is further confirmation of the robust progress that CEO, Dave Lewis, is making the Group's profit recovery programme. That programme is time-consuming and hard to deliver. However, we feel that the market will be further encouraged that the business remains on a course to report at least within its 3.5-4.0% target range (ex-Booker) by FY2020."