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Asda has generated underlying profits of more than £1bn as sales increased for four consecutive quarters in 2023.

Co-owner Mohsin Issa said the annual results were “strong” and called the group “a supermarket powerhouse built on rock-solid foundations”.

In the year ended 31 December 2023, adjusted EBITDA after rent rose 24% to £1.1bn, driven by like-for-like sales growth of 5.4% from its “continued focus on value for customers” and the impact of strategic acquisitions, including £54m contribution from the Co-op petrol stations picked up by Asda.

Total sales - excluding fuel - jumped by 7.1% to £21.9bn for the year.

Underlying free cashflow at the group increased 31% to £776m, helping Asda repay £200m of the loan borrowed to buy the Co-op forecourts.

Issa added: “Our strategy is all about growth and Asda increased underlying profit to more than £1bn and like-for-like sales by over 5% last year, while significantly growing free cashflow and reducing leverage. 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.

“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. This saw us launch thousands of new and improved food lines to drive quality perception among consumers, including a refresh of our entire ready meals range.”

Morning update

Vape supplier Chill Brands has suspended its CEO as part of an investigation into allegations around the use of inside information.

The group appointed law firm Fieldfisher to conduct the investigation and said it would be engaging with the relevant authorities, including the Financial Conduct Authority.

Callum Sommerton has been suspended as CEO in connection with these allegations, but the business said in the short statement to the stock exchange that the move did not constitute disciplinary action or a disciplinary penalty and did not imply any assumption of guilt or misconduct.

The process of appointing an interim CEO is underway.

“Vendors, customers and shareholders should be assured that the company continues to operate as normal,” the statement said. “Further announcements will be made as appropriate.”

PayPoint is expecting underlying EBITDA in excess of £80m for the year ended 31 March 2024 and underlying pre-tax profits in line with forecasts.

A short post-close trading update said the strength of its performance - underpinned by sustained strong cashflow and confidence in the delivery of continued growth and achieving financial targets - enabled the board to be active considering a share buyback programme to further enhance shareholder returns.

Further details will be released when the group reports its full-year results on 13 June.

The FTSE 100 surged 1.2% to 7,991.33pts this morning.

Early risers included Ocado, up 2.4% to 355.5p, THG, up 4% to 62.1p and Glanbia, up 3.4% to €18.10.

Fallers so far included Nichols, down 1% to 989.9p, and AG Barr, down 0.7% to 545p.

This week in the City

It is looking busy this week as a raft of major grocery and fmcg giants report financials.

Primark and Allied Bakeries owner Associated British Foods reports first-half results tomorrow morning, while over in the US there are first-quarter results from PepsiCo, Philip Morris and Kimberly-Clark. Kantar also releases the latest grocery market share data tomorrow.

Wednesday brings Q1 results from Reckitt Benckiser and trading updates from Vimto maker Nichols and personal care group PZ Cussons, with Heineken and Carrefour reporting in Europe.

The big news of the week for the grocery industry comes on Thursday when Sainsbury’s follows Tesco and Asda in publishing annual results.

WH Smith also files interims on Thursday and Unilever and Nestlé both release first-quarter numbers, with quarterly results also from Pernod Ricard, HelloFresh and Delivery Hero.

Colgate-Palmolive rounds out the week, reporting quarterly results in the US on Friday, while, in the UK, the closely watched GfK monthly consumer confidence index is out first thing.