Tesco Stores Limited: Corporate Credit & Risk Profile
Executive Summary
Tesco Stores Limited (Company Number [00519500](/company/00519500)) is the main UK retail trading operating subsidiary of Tesco PLC, operating 2,909 grocery and general merchandise stores across England, Scotland, Wales, and Northern Ireland. For the 52 weeks ended 22 February 2025, the company recorded turnover of £50.837bn (2024: £49.247bn) and operating profit of £1.975bn (2024: £1.798bn), backed by net assets of £5.126bn. The company operates with a significant net current liability position of £5.644bn, supported by an undrawn £2.5bn committed revolving credit facility and strong negative working capital cash conversion dynamics inherent to grocery retail.
What the Numbers Show
Financial data filed with Companies House under UK GAAP FRS 101 demonstrates sustained top-line growth and margin recovery following cost-of-living and supply chain pressures in 2022/23. Turnover expanded by 3.2% in FY2025, building on 3.7% growth in FY2024. Operating margins widened from 1.35% in FY2023 to 3.65% in FY2024 and 3.88% in FY2025, benefiting from the internal 'Save to Invest' efficiency programme and volume growth.
Five-Year Financial Snapshot
| Accounting Period End | Turnover (£m) | Operating Profit (£m) | Profit After Tax (£m) | Net Assets (£m) | Cash at Bank (£m) | Average Employees |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 22 February 2025 | 50,837 | 1,975 | 1,259 | 5,126 | 696 | 249,663 |
| 24 February 2024 | 49,247 | 1,798 | 1,133 | 4,402 | 673 | 243,820 |
| 25 February 2023 | 47,481 | 642 | 341 | 4,385 | 863 | 241,340 |
Balance Sheet, Liquidity and Working Capital
Tesco Stores Limited maintains a net current liability posture typical of major fast-moving consumer goods retailers, collecting cash from retail sales faster than trade creditors are paid:
- Current Assets (2025): £3.053bn (including inventories of £1.758bn, cash at bank of £696m, prepayments of £75m, and other debtors of £178m).
- Current Liabilities (2025): £8.697bn (including trade creditors of £5.032bn, other creditors of £723m, and accruals of £419m).
- Net Working Capital Deficit (2025): -£5.644bn (compared to -£4.611bn in 2024 and -£5.758bn in 2023).
- Long-term Liabilities (2025): £6.941bn, down from £7.365bn in 2024 and £7.147bn in 2023.
To manage liquidity risk, the company retains access to an undrawn £2.5bn committed revolving credit facility and bilateral facilities. The independent auditor, Deloitte LLP, issued an unqualified audit opinion for FY2025, confirming that the directors' use of the going concern assumption remains appropriate and identifying no material uncertainties.
Dividend Distributions and Share Capital
In the period ended 22 February 2025, the company declared and paid an interim dividend on ordinary shares of £850m (2024: £900m interim; 2023: £1.250bn final). No final ordinary dividend was declared for FY2025. Share capital comprises £1.325bn in ordinary shares (carrying 150,000 votes per share), alongside 'A' preference shares (6.08% fixed dividend, redeemable at par) and 'B' irredeemable preference shares linked to the Reference Gilt Rate and RPI. Dividends on both preference share classes were formally waived for current and prior accounting periods.
Directors and Ownership
Tesco Stores Limited is a wholly owned operating subsidiary within the ultimate group structure headed by Tesco PLC, a FTSE 100 entity listed on the London Stock Exchange.
Persons with Significant Control (PSC)
According to the public register maintained under the Companies House register, the sole recorded Person with Significant Control is:
- Tesco Holdings Limited (Company Number 00243011), notified on 6 April 2016. Holds 75% to 100% of voting rights, 75% to 100% of share capital, and the right to appoint and remove directors.
Board Composition and Secretarial Appointments
The registered board of directors and company secretaries as of May 2026 includes key senior management executives from the group structure:
- Ken Murphy (Director, appointed 1 October 2020) - Group Chief Executive Officer, Irish nationality, resident in the United Kingdom, born September 1966.
- Imran Nawaz (Director, appointed 1 May 2021) - Group Chief Financial Officer, Luxembourger nationality, resident in the United Kingdom, born September 1973.
- Kay Elizabeth Majid (Director, appointed 18 July 2024) - British nationality, resident in the United Kingdom, born December 1975.
- Ashwin Prasad (Director, appointed 19 June 2025) - New Zealander nationality, resident in the United Kingdom, born March 1976.
- Christopher Jon Taylor (Company Secretary, appointed 14 April 2025).
Recent corporate secretarial and board filings confirm the resignation of director Matthew Campbell Barnes on 19 June 2025 (appointed 14 March 2024) and company secretary Sara Thomson on 14 April 2025 (appointed 17 December 2024, following the resignation of long-serving secretary Robert John Welch on 17 December 2024).
Recent Activity and Legal Filings
A detailed review of statutory disclosures, charges, and statutory notices published via The Gazette shows active management of security interests, intragroup lease liabilities, and ongoing employment tribunal litigation.
Fixed Property Charges and Pension Commitments
To secure obligations under the Tesco PLC Pension Scheme, the company has granted a fixed charge over a portfolio of real estate assets:
- Property Portfolio Charge: A fixed charge over a portfolio of corporate properties with a net carrying value of up to £820m as at 22 February 2025 (2024: £829m; 2023: £783m). The charge is callable only in the event that the company defaults on its pension funding obligations. Financial counterparty risk and register updates can be verified via a targeted company charge check.
- Group Guarantees: Tesco Stores Limited acts as a co-guarantor alongside Tesco PLC for the £2.5bn undrawn committed revolving credit facility.
Contingent Liabilities and Equal Pay Litigation
The company faces a major legal contingent liability arising from store-based operational employment structures:
- Equal Pay Claims: As of 22 February 2025, approximately 59,000 hourly paid current and former store colleagues have lodged Equal Pay Claims against Tesco Stores Limited in employment tribunals (up from approximately 49,000 claims in 2024 and 42,000 claims in 2023). The claimants argue that store-based roles are of equal value to distribution centre roles and deserve equal pay rates.
- Legal Position: While Tesco Stores Limited has made a formal concession regarding job comparability, the directors intend to contest the claims on merits and objective justification grounds. Due to complex legal and factual uncertainties, the financial impact remains unquantifiable in the notes to the accounts, though any adverse final determination could represent a material financial outlay.
Supplier Early-Funding Arrangements and Related Parties
- Commercial Income Audit: In the FY2025 audit report, Deloitte LLP highlighted commercial income recognition from supplier buying arrangements as a primary focus area for fraud risk and testing procedures.
- Supplier Financing: Notes to the 2024 accounts show that trade creditors included £726m (2023: £521m) due to suppliers operating under early-funding supply chain finance arrangements.
- Joint Venture Lease Liabilities: Lease liabilities owed to joint venture entities stood at £1.727bn as at 22 February 2025 (2024: £1.732bn; 2023: £1.831m).
Risk Indicators and What to Watch
Corporate finance advisers, lenders, and counterparty credit analysts evaluating Tesco Stores Limited should track five core exposure indicators:
1. Equal Pay Claim Escalation: Monitor the progression of tribunal test cases. Claim volumes expanded by 40.5% between FY2023 (42,000) and FY2025 (59,000). Settling or funding retroactive pay adjustments across tens of thousands of personnel could impact annual cash flow.
2. Working Capital Expansion: Track trade creditor terms and accruals balance changes against current asset cover. Current liabilities (£8.697bn) exceed current assets (£3.053bn) by £5.644bn.
3. Property Security Enforceability: Monitor property portfolio valuations supporting the £820m fixed charge to the Tesco PLC Pension Scheme.
4. Intragroup Financing Balances: Verify amounts owed by joint ventures (£55m in 2025) and owed to joint ventures (£7m in 2025), alongside interest-bearing intragroup balances (£550m at 6.09% in 2024).
5. Supply Chain and Macroeconomic Exposures: Operational risks flagged by directors include wage inflation, energy cost volatility, cybersecurity, and food safety compliance.
Before entering high-value supply contracts, property leases, or lending facilities with major UK enterprises, credit managers routinely execute a full winding up search to ensure no undisclosed court actions exist.
How to Validate This Manually vs Corp Intel
Validating a multinational corporate balance sheet and legal liability profile requires searching multiple disparate public registers and legal databases.
The Manual Verification Method
To conduct a manual review without institutional software, a corporate intelligence specialist must:
1. Download full accounts (Form AA02/FRS 101) directly from the Companies House register.
2. Review Note disclosures on contingent liabilities, related party transactions, and financial guarantees.
3. Check insolvency registers managed by the Insolvency Service and conduct a court cause list check at the High Court (Chancery Division) for petitions.
4. Search The Gazette official public record for winding up notices, reduction of capital announcements, or board restructuring.
5. Inspect the mortgage register (Form MR01 filings) to map land charges registered against specific property titles.
The Automated Corp Intel Approach
Corp Intel consolidates these workflows into real-time visual feeds:
- Instant Insolvency Risk Checks: Automated cross-referencing against daily court lists, petition logs, and Gazette filings via a dedicated winding up petition search.
- Charge Register Aggregation: Live mapping of all fixed and floating security interests registered against corporate assets.
- Continuous Monitoring: Receive instant email alerts regarding officer changes, PSC filings, accounts submission, or legal notices by setting up free company monitoring.
How to Run a Winding Up Petition Search
When verifying major trading entities or commercial debtors, performing a structured litigation check protects creditors from court-ordered freezing orders under s.127 of the Insolvency Act 1986. A formal check requires three procedural steps:
1. High Court Cause List Review: Query the High Court, Companies Court, and regional Chancery district registries for active petitions filed by trade creditors, local authorities, or HMRC.
2. The Gazette Notice Verification: Search statutory insolvency notices published under s.122 / s.124 Insolvency Act 1986.
3. Live Register Cross-Check: Search Companies House status indicators to confirm active registration status.
Running a prompt winding up search flags petitions within hours of filing, well before winding up orders are granted or listed on the public index.
For Credit Teams, Lenders and Suppliers
Credit risk managers, commercial lenders, and procurement teams entering into high-value supply agreements with UK operating companies must maintain rigorous pre-completion screening. Failing to identify fixed charges over property portfolios, undisclosed High Court petitions, or expanding legal contingent liabilities can lead to unexpected trade credit defaults or subordination behind secured creditors. Legal advisers and financial analysts rely on Corp Intel's enterprise intelligence to complete pre-completion due diligence, monitor counterparty solvency, and run targeted corporate searches instantly.
Frequently Asked Questions
What is the primary business activity of Tesco Stores Limited?
Tesco Stores Limited is the principal UK trading subsidiary of Tesco PLC, operating 2,909 grocery retail stores and associated commercial activities across England, Scotland, Wales, and Northern Ireland under SIC codes 47110, 47290, 47710, and 47750.
Who ultimately controls Tesco Stores Limited?
The ultimate parent company is Tesco PLC. The immediate parent entity holding between 75% and 100% of the voting rights and share capital is Tesco Holdings Limited (Company Number 00243011), registered as a Person with Significant Control on Companies House.
Why does Tesco Stores Limited operate with net current liabilities?
Major grocery retailers collect cash immediately from retail consumers at the point of sale while benefiting from standard trade credit terms from suppliers (trade creditors equalled £5.032bn in FY2025). This generates negative working capital, allowing the business to fund non-current assets and operations without drawing on expensive short-term cash balances.
What are the major legal contingent liabilities recorded in the accounts?
The company is defending approximately 59,000 Equal Pay Claims brought in employment tribunals by hourly paid store colleagues alleging unequal pay relative to distribution centre personnel. The company intends to defend the claims vigorously, and the financial liability remains unquantified due to legal uncertainties.
How are pension liabilities secured against the company's assets?
Tesco Stores Limited has granted a fixed charge over a portfolio of operational properties with a net carrying value up to £820m in favour of the Tesco PLC Pension Scheme, exercisable if the company defaults on its statutory funding obligations.
How can a credit manager verify if Tesco Stores Limited is facing court action?
A credit manager can run an automated winding up petition search on Corp Intel or inspect High Court cause lists and The Gazette to confirm no winding up petitions or court notices have been filed by third-party creditors.
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